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The Masked Tulip

One In Three House Sales Are Failing To Complete Due To Fears Of New Recession

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One in three house sales are failing to complete due to fears of new recession

Nearly a third of house sales collapsed in the first six months of this year as nervous buyers and sellers pulled out of deals, according to a report.

A leading firm of property lawyers said 29 per cent of deals fell through in the first half of the year – up from 21 per cent in 2009.

The figures highlight the moribund state of the housing market and the reluctance of many would-be buyers to splash out in uncertain economic times.

Read more: http://www.dailymail.co.uk/news/article-2015192/One-house-sales-failing-complete-fears-new-recession.html#ixzz1SFapkLwi

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The number of homes on the market has shrunk considerably since the housing bubble burst in the financial crisis. Sellers hoping for a strong rebound in prices have been disappointed.

‘Expectations have not always been met,’ said Mr Montgomery.

‘Modest price rises after the initial post-credit crisis fall had raised the hopes of property-owners regarding what they might get on the market. This unrealistic idea of property values was reflected in the number of sellers aborting transactions once they realised they wouldn’t be getting what they wanted.’

Read more: http://www.dailymail.co.uk/news/article-2015192/One-house-sales-failing-complete-fears-new-recession.html#ixzz1SFduX3Ap

So greedy sellers who do not need to sell are pulling out when they do not get their ludicrous asking price!

This just reinforces the need to find sellers who are desperate to sell as opposed to those who are just hoping to cash in - the former being keen to complete the sale, the latter just wanting a lottery win.

Edited by The Masked Tulip

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A higher proportion of sellers than buyers are pulling out of sales. This strikes me as being a bit odd. The only explanations that I can come up with are :

- Sellers hope that accepting offers will attract competition / gazumping which would lead to a higher eventual selling price. Clearly this isn't happening so sellers are pulling out waiting for things to improve.

- The market is sticky and downsizers cannot extract the "margin" that they think they "deserve" and are pulling out waiting for things to improve.

In both cases, the "shadow inventory" is increasing creating a large supply overhang a bit above the current market which will keep a lid on prices.

Selling into a declining market that is far from its trough requires a lot of discipline. Fortunately for us, most sellers do not have the required discipline.

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Well, let's put it this way, on the surface it doesn't exactly smack of desperation on the part of sellers does it?

Perhaps they're pulling out because although they've dropped their price to get a buyer, they can't do the same for themselves yet. (good theory)

So perhaps the market is still in a very mixed state with large bodies of people believing fundamentally different things about the state of the market.

Agreed. I was trying to make the point that sellers are greedy, complacent and optimistic rather than fearful and desperate.

If someone wants to sell at the current point in the market cycle, fear should override greed in my opinion.

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Certainly noticed a lot of properties coming back on the market with sales falling through. Do know of one instance of seller pulling out. This was because the buyer wanted the sale to move 'quickly' (about 4 months) and seller did not want to be rushed! Also looks like it might have been a bit of not having found anywhere herself.

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I think there is a good explanation as to why sellers are pulling out.

Many like to have their place sold before they commit to their own purchase...this gives them their "deposit" (its a funny description of what it actually is IMPO).

They then see the target house, knock down the price, as they were, THEN they go for the mortgage.

THEN they get their surprise.....so they borrowed 6, 7 maybe 8 times their salary when they last moved....they think they are a top credit score, so they apply for the same.

They are rejected, OR, the price is MUCH higher to repay than last time.

Remember...in the run up to the peak, IO was VERY common, High LTVs de rigour, and no checks.

meanwhile, the guys making the offer on the place at bottom end also find they cant get a mortgage.

FTBs in the market would probably have the means already or are going into a newbuild.

Therefore, the chains break as mid links are snookered by 2007 expectations, and 2011 reality.

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Therefore, the chains break as mid links are snookered by 2007 expectations, and 2011 reality.

Nice summary above.

Anecdotally, two different folk I know have 'sold' their houses respectively two and three times. I understand EAs are getting fed up with numpties who somehow think any credit crunch wont involve them.

At the end of the day, this state of ignorance / denial goes on because the MSM have done a p*ss poor job of informing people what's really been happening.

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I think there is a good explanation as to why sellers are pulling out.

Many like to have their place sold before they commit to their own purchase...this gives them their "deposit" (its a funny description of what it actually is IMPO).

They then see the target house, knock down the price, as they were, THEN they go for the mortgage.

THEN they get their surprise.....so they borrowed 6, 7 maybe 8 times their salary when they last moved....they think they are a top credit score, so they apply for the same.

They are rejected, OR, the price is MUCH higher to repay than last time.

Remember...in the run up to the peak, IO was VERY common, High LTVs de rigour, and no checks.

meanwhile, the guys making the offer on the place at bottom end also find they cant get a mortgage.

FTBs in the market would probably have the means already or are going into a newbuild.

Therefore, the chains break as mid links are snookered by 2007 expectations, and 2011 reality.

the only flaw to this i see is that the seller will then use their almost protactoral knowledge of the angles, come off 3 cushions and slam the object ball in the side pocket with a bit of stun via a 150% together mortgage from the new Northern Rock

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Therefore, the chains break as mid links are snookered by 2007 expectations, and 2011 reality.

Nice summary. The sellers pulled out three times on the houses my ex was trying to buy. She was a cash buyer in rented and not particularly aggressive in her offer prices. All were accepted and in every case the vendors stated they couldn't afford to move. A combination of lower mortgage offers, past MEW catching up and not being able to dump the stamp duty and legal/EA fees on the new mortgage.

In every case, the vendors could only downsize and bailed out accepting they're now trapped in their current houses.

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the only flaw to this i see is that the seller will then use their almost protactoral knowledge of the angles, come off 3 cushions and slam the object ball in the side pocket with a bit of stun via a 150% together mortgage from the new Northern Rock

one hundred and EIGHTEEEEEEEE

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I think the Daily Mail article fingers a key reason for seller behaviour - the withdrawal of HIPs, which placed a financial obligation on sellers and forced them to think seriously rather than speculatively about property transactions. The Tories abolished it (to the general approval, I recall, of posters on this forum) and selfish short termism has reentered the market.

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I think the Daily Mail article fingers a key reason for seller behaviour - the withdrawal of HIPs, which placed a financial obligation on sellers and forced them to think seriously rather than speculatively about property transactions. The Tories abolished it (to the general approval, I recall, of posters on this forum) and selfish short termism has reentered the market.

I wouldn't worry about that.. once EAs have felt enough pain they will refuse to market unsaleable (is that a word?!) houses. Not worth the petrol, time and advertising costs otherwise.

Either prices will adjust, time wasters will be removed or EAs will start imposing an upfront fee.

Personally I think EAs are on our side at the moment.. I'm sure a lot of the price decreases we see on RM come from EAs having a little "heart to heart" with delusional vendors.

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Personally I think EAs are on our side at the moment..

Those that

1) have more than 15 years experience and know what a falling market looks like and

2) aren't already up to their eyes in BTLs they're having second thoughts about right now

are on our side.

Judging by the majority of comments on the EA Today site, such EAs are still a minority I'm afraid. A lof of them have been as brainwashed as the rest of the population. They aren't screaming for lower prices, they're screaming for the banks to lend as before.

Edited by rantnrave

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Judging by the majority of comments on the EA Today site, such EAs are still a minority I'm afraid. A lof of them have been as brainwashed as the rest of the population. They aren't screaming for lower prices, they're screaming for the banks to lend as before.

Just had a long conversation with a Swansea West EA who put all the problems down to the banks not lending and absolutely nothing to do with greedy and ludicrous asking prices.

Was convinced that Londoners would buy up houses in Swansea West due to Swansea prices, no matter how high they are, being cheaper than London.

Trying to explain the global sovereign debt crisis was impossible.

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Just had a long conversation with a Swansea West EA who put all the problems down to the banks not lending and absolutely nothing to do with greedy and ludicrous asking prices.

Was convinced that Londoners would buy up houses in Swansea West due to Swansea prices, no matter how high they are, being cheaper than London.

Trying to explain the global sovereign debt crisis was impossible.

Next time you see him might well be behind the counter at McDonalds.

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Just had a long conversation with a Swansea West EA who put all the problems down to the banks not lending and absolutely nothing to do with greedy and ludicrous asking prices.

Was convinced that Londoners would buy up houses in Swansea West due to Swansea prices, no matter how high they are, being cheaper than London.

Trying to explain the global sovereign debt crisis was impossible.

its a common view...the lenders fault they wont cover the high prices any more.

You cant blame them, as the CDO MBS fraud did provide an unlimited risk free wave of money over the nation.....except it wasnt a wave of money, but of credit, and it wasnt risk free.

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A higher proportion of sellers than buyers are pulling out of sales. This strikes me as being a bit odd. The only explanations that I can come up with are :

- Sellers hope that accepting offers will attract competition / gazumping which would lead to a higher eventual selling price. Clearly this isn't happening so sellers are pulling out waiting for things to improve.

- The market is sticky and downsizers cannot extract the "margin" that they think they "deserve" and are pulling out waiting for things to improve.

In both cases, the "shadow inventory" is increasing creating a large supply overhang a bit above the current market which will keep a lid on prices.

Selling into a declining market that is far from its trough requires a lot of discipline. Fortunately for us, most sellers do not have the required discipline.

MK-Ultra Mass Population Control - that's why Brown let in another 5,000 USA CIA operatives masquerading as "anti-terrorist investigators"!

Oh & putt_ing 2+2 together - those suspicious new USA "GOLF-BALLS" in Yorkshire! Look more like amplifiers!

http://www.subbrit.o.../f/fylingdales/

"codenamed Project Tea Bag" (hint T-Bags are now 'Pyramid' - shaped :ph34r:)

Pyra-mid Pyra-nnees

Edited by erranta

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  • 311 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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