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ravedave

Starting To View Again

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As per the title...

Back in late 2006 I bid on a property and it went sale agreed. I was subsequently gazumped by another bidder close to completion date. In the intervening time prices had risen so much I was totally priced out of the market. The house that was sale agreed was in my 4th choice area.

I viewed probably two more properties and then bowed out of the market and never returned since.

In the intervening time I have saved a deposit - now sitting at around £100k.

I have spoken to a FA in the Post Office who advised me that I would be able to get a mortgage agreement in principal from them to use as 'bait' when bidding.

Before I start looking again I intend to do the following:

1. Speak to my previous solicitor to ensure they are willing to take on any possible conveyancing (sp?) that may arise if I obtain Sale Agreed on a property.

2. Obtain a signed mortgage argeement in principle to show to the EA's - to prove I'm a serious and dependable potential purchaser.

3. Ensure my deposit money is in accounts which can be accessed relatively easily/short notice.

4. Anything I'm missing?

My theory is that armed with the above and the fact that I am a FTB will make me quite attractive to any potential sellers and hopefully the EA will push for me as I am better sale prospect.

However, reading _Sundances thread has left me feeling deflated as not much seems to have changed since 2007 - 2 cash bidders with ~£145,000 on the one property, both 'keen to buy'. Seems like nothing has changed!

When I go to register with the EA's in order to get notification of suitable properties, they previously asked me what I was able to spend. Now I understand the reason for this *might be* so they can send me only the relevant and affordable properties in their listings. However, I feel that as a buyer it is not a wise move to inform the seller of my financial clout. How do I side step this without appearing like an ar$e (risking alienating myself from the EA*) or showing my hand?

* Yes, I know some of you will say f*** 'em. But I'd prefer to keep things as relaxed and cordial as possible - I can be two faced as well... ;)

My other main question at present is - is there anything else I need to do or consider in order to prepare myself better this time for house hunting?

I admit that I am not fully up to speed with property, but unfortunately due to circumstances I am having to do this alone so I've no experienced sidekick to help me out.

Thanks for reading and in advance of any useful replies,

Edited by ravedave

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When I go to register with the EA's in order to get notification of suitable properties, they previously asked me what I was able to spend. Now I understand the reason for this *might be* so they can send me only the relevant and affordable properties in their listings. However, I feel that as a buyer it is not a wise move to inform the seller of my financial clout. How do I side step this without appearing like an ar$e (risking alienating myself from the EA*) or showing my hand?

Pre-empt the question. Tell them the spec. of property you're seeking and (based on your research into prices) the price you think it should be. Show your hand. Show it to be a somewhat miserly hand.

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However, reading _Sundances thread has left me feeling deflated as not much seems to have changed since 2007 - 2 cash bidders with ~£145,000 on the one property, both 'keen to buy'. Seems like nothing has changed!

In 2007 the bids may have been closer to £250k

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Some facts that might be helpful to you:

1. Cash buyers are at the same prevalence as they were in total numbers as in 2007, however they now make up a larger percentage of the market because:

2. Net new mortgage lending had fallen from £116Bn a year in 2007 to £3Bn in 2010, i.e. there has 97.5% fall in mortgage lending, which is why the market has ground to a halt.

So, don't be too disconcerted by cash buyers, they are no more of a threat than in the boom times. The lack of mortgage lending means you have the bargaining power. Obviously there is still a massive amount of seller delusion out there to overcome, but providing you have patience you could get yourself a good deal. Personally I'm waiting for the capitulation and fear stage before looking at buying, I've come too far to give up now.

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Some facts that might be helpful to you:

1. Cash buyers are at the same prevalence as they were in total numbers as in 2007, however they now make up a larger percentage of the market because:

2. Net new mortgage lending had fallen from £116Bn a year in 2007 to £3Bn in 2010, i.e. there has 97.5% fall in mortgage lending, which is why the market has ground to a halt.

So, don't be too disconcerted by cash buyers, they are no more of a threat than in the boom times. The lack of mortgage lending means you have the bargaining power. Obviously there is still a massive amount of seller delusion out there to overcome, but providing you have patience you could get yourself a good deal. Personally I'm waiting for the capitulation and fear stage before looking at buying, I've come too far to give up now.

My limited experience recently is that many vendors are happier to hang on for a better offer than proceed quickly for what they see as a loss.

You seem to be doing all the right things, but don't overestimate the leverage it gives you. I.e. proceedable offer of £150k on a £165k house or risky chain offer of £165k - which do you think most vendors will plump for?

The optimism (misplaced) and naievety (understandable) of many vendors has astonished me. Not to mention EAs. Every 1 out of 30 mug sales at asking or kite flying price, only reinforces this attitude. The other 29 sales - or no sales - don't seem to come into it.

Anyway, it's all about patience and timing. Everything is going your way and you are in a good position. I'm sure it was hard earned - don't give it away easy. Good luck.

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Some facts that might be helpful to you:

1. Cash buyers are at the same prevalence as they were in total numbers as in 2007, however they now make up a larger percentage of the market because:

2. Net new mortgage lending had fallen from £116Bn a year in 2007 to £3Bn in 2010, i.e. there has 97.5% fall in mortgage lending, which is why the market has ground to a halt.

So, don't be too disconcerted by cash buyers, they are no more of a threat than in the boom times. The lack of mortgage lending means you have the bargaining power. Obviously there is still a massive amount of seller delusion out there to overcome, but providing you have patience you could get yourself a good deal. Personally I'm waiting for the capitulation and fear stage before looking at buying, I've come too far to give up now.

Actually your comments are somewhat misleading, in my view.

CML

Gross lending in 2010 totalled £136 billion, down from a peak of £363 billion in 2007[drop of 62%]. The number of transactions in the UK has declined from 1.6 million to fewer than 900,000 [drop of 43%].

To get a net lending figure you, I presume, subtracted the amount paid inwards in mortgage repayments and redemptions from that paid out. Therefore, it is incorrect to state, as a fact, that there has been a '97.5% fall in mortgage lending'. The actual reduction in 'lending' is closer to 63% and as the average price has reduced you have to allow for that. The reduction in mortgage volume is around 43%, according to the Council of Mortgage Lenders.

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Hi Dave. I tried to send you an e-mail but for some reason my message bounced baqck into my own e-mail account.

I started looking again at houses just a few months ago after being disillusioned when i dipped my foot into the water this time last year. Things have definately changed in those 12 months. But mostly in the price range of under £100,000. Still not much giving in the price range i am looking at which is around 150,000 in county Tyrone.

Personally, i think there is only a downside to buying now. Prices can only go down against the economic backdrop. Still, i have shown interest in 3 houses. Two were houses that came up within the last 2 months in my area and i bid on them because they were unique to my tastes. In a perfect world i would have wished they came on the market in a years time when i think prices will have fallen further. However, in a years time the same houses might not be for sale so i acted now. Both houses are in desired locations where houses seldom ever come onto the market. Both these houses only came onto the market as they were estate sales following the owners passing away. So they would probably not be typical and interest in them would be quite high. In the house i bid on last i put on 140,000 which was a little more than i thought the house was worth but as i mentioned it was unique to my tastes and i was happy paying a reasonable premium for it. I better say the estate agent said it was not normal for two cash bidders to bid on the same property though.

I am interested in another house at the moment which is comparable to the house i lost out on. Infact i prefer it so it has worked out well that i missed out on the other house. Seller wants 165,000. Estate agents values it at 125,000 for mortgage purposes. Its been on for 4 weeks and i will wait for another month to decide how to progress.... I think it will be hard to mortgage for a buyer so if no one has bid on it by then i will be in a stronger position. The sellers expectations will be lower and my bid will have more weight. If someone antes up with the full asking price then good luck to them. They will have paid too much. Someone with a 10% deposit has two hopes of getting a mortgage for 165,000 on this property die to its likely bank valuation - no hope and bob hope! Thats not to say though that a cash buyer will decide to pay full asking price. I doubt it though. Reckon i just got unlucky last time to run into another cash buyer who liked the same house and could proceed quickly.

If my posts have given the impression things have not changed i would wish to correct that. They have changed and things are definately moving in the right direction. Still a bit to go yet though in the price range i am looking at in the area i live.

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I am probably not the best person on this forum to ask for specific advice. This forum has a lot of very intelligent people with more experience and understanding of the housing market than myself. I have learned a great deal by reading the opinions of others on this forum so i am happy to offer my own opinions when asked - whatever they may be worth.

All i can really talk about though with any authority is my own limited experiences of trying to bid on a few houses in the area where i live. Also my wishlists for a house are unique to myself. Location and a nice garden are things which appeal to me a lot and putting a price on those two things can sometimes put me at odds with things like rateable value as a guideline.

I wish you well Dave. In terms of seeking advice this forum is a fantastic place. Advice on here is always very impartial and generally excellent. Some of the posters on here are as insightful as you will find on any forum. Its a delight to read some of the thoughts and analysis posted on here

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Sundance = everyone's experience counts here. We are working in the dark in a non transparent housing market and every bit of information adds to the sum of knowledge of the board.

This is particularly important when the information is regional when it can be patchy. You never know whether a guest reading your posts gets some info to help him.

Keep posting --we'll get there one day. You've got your head screwed on right holding back a little just now. I am doing the same - I;ve seen a house on propertynews which interests me - it dropped a few k 9 weeks ago -- no offers -- but I won't even view it until it has dropped another 20k. If I miss out - so what - like a number 4 bus there will be another along which might be even better.

+1

Sundance, you will get your 'dream home' eventually and it will be well worth the wait. When that happens you won't need forum opinions to persuade you that you are doing the right thing, you will know yourself intuitvely that it stacks up as a good deal because you will have done your homework. There's no point in challenging EAs opinions on value, pricing etc. No doubt you can put forward a very articulate case as to why the asking price is too high but 'so fecking what' if you are right - don't expect an EA to capitualate and drop the price by £50k just because you can demonstrate you are a clever dick when it comes to property values. Money talks in this market, so its offers that speak the loudest, so either make one or not, either put up or shut up but don't take on the EA in some pissing highest up the wall competition on the state of the housing market and world economics. Be patient, you just never know how motivated some sellers will become over the next few months - some recent examples I've seen have been quite astounding.

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As per the title...

Back in late 2006 I bid on a property and it went sale agreed. I was subsequently gazumped by another bidder close to completion date. In the intervening time prices had risen so much I was totally priced out of the market. The house that was sale agreed was in my 4th choice area.

I viewed probably two more properties and then bowed out of the market and never returned since.

In the intervening time I have saved a deposit - now sitting at around £100k.

I have spoken to a FA in the Post Office who advised me that I would be able to get a mortgage agreement in principal from them to use as 'bait' when bidding.

Before I start looking again I intend to do the following:

1. Speak to my previous solicitor to ensure they are willing to take on any possible conveyancing (sp?) that may arise if I obtain Sale Agreed on a property.

2. Obtain a signed mortgage argeement in principle to show to the EA's - to prove I'm a serious and dependable potential purchaser.

3. Ensure my deposit money is in accounts which can be accessed relatively easily/short notice.

4. Anything I'm missing?

My theory is that armed with the above and the fact that I am a FTB will make me quite attractive to any potential sellers and hopefully the EA will push for me as I am better sale prospect.

However, reading _Sundances thread has left me feeling deflated as not much seems to have changed since 2007 - 2 cash bidders with ~£145,000 on the one property, both 'keen to buy'. Seems like nothing has changed!

When I go to register with the EA's in order to get notification of suitable properties, they previously asked me what I was able to spend. Now I understand the reason for this *might be* so they can send me only the relevant and affordable properties in their listings. However, I feel that as a buyer it is not a wise move to inform the seller of my financial clout. How do I side step this without appearing like an ar$e (risking alienating myself from the EA*) or showing my hand?

* Yes, I know some of you will say f*** 'em. But I'd prefer to keep things as relaxed and cordial as possible - I can be two faced as well... ;)

My other main question at present is - is there anything else I need to do or consider in order to prepare myself better this time for house hunting?

I admit that I am not fully up to speed with property, but unfortunately due to circumstances I am having to do this alone so I've no experienced sidekick to help me out.

Thanks for reading and in advance of any useful replies,

If you are concerned about registering with EAs, then don't - register with property news and property pal to get daily e-mail notifications of properties you might be interested in. So you might get them a little later than from the EA direct but so what, it's not as if property is being snapped up as soon as its listed.

Don't be put off by coming up against another cash buyer. You would be unlucky but anyone still with cash in this market has probably had their head screwed on as long as you, so if the property is a good buy then don't be surprised if some other savvy buyer gets interested as well. There will always be another dream house come on to the market next month or the month after, so when I hear that a cash buyer has bought, I just think there's another one out of the way to give us a free run when its our turn.

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There is an awful lot said about these cash buyers, if anything, I think their importance or number is quite overstated. How many people here know of someone who bought their house for cash? Out of the dozens of folks I know, I can only think of one person who bought with cash. In fact, I doubt there are enough people to even slow the rate of house price reductions, let alone stop the process.

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Every time I get a bit disillusioned by the housing market I find that something happens that gives me a bit more faith that prices are going to tumble even further, such as a flood of house prices dropping. This gives me confidence that it is worth holding on for a while yet. Without this forum I would not have been wise to the tricks of EA's etc and by using sites such as Irish House hunter this allows me to see what vendors are now starting to panic out there and gives me valuable research that I simply would not be given from an EA, nor a vendor. Typically any houses that I see that have dropped in price are relisted as if they are 'new properties' for sale ... yet IHH tells me that it has been on for perhaps 2 years and has dropped considerably. So my advice is not to hit the panic button ... let those who seek unrealistic expectations panic as they will leave you with a bargain at some point in the near future. I find that newly listed houses still carry unrealistic asking prices based on current 'market price'

Personally I wouldn't tell the EA anything that they don't need to know. The reason why an EA wants info from you is so that they can use that against you ... knowledge is power. The less they know the stronger the position you will be in. EA's (like any sales person) feel confident when they have the 'upper hand', when they don't have the upper hand they feel out of their depth. If you tell them your budget is £150k they will immediately point you towards all of the over valued properties they have in this price range. EA's don't warm to cash buyers because they know they don't (and shouldn't) have the upper hand in a cash buyers transaction. I would recommend that you browse their listings and arrange viewings based on what you like ... forget about price to a certain extent. EA's are deliberately overvaluing properties by 10-15% at present knowing that it is common for ppl to bid this less than the asking price. It is an amateur tactic that some may fall for ... but really just a sticking plaster over a very deep cut. It can be like a game of poker, mostly bluffing .. don't show your cards too soon.

I feel your pain, its a real head scratcher at times why the housing market hasn't collapsed further. The answer is that there are too many VI's out there fighting hard to prevent it. Sooner or later they will realise that they can't. This is when the fear will kick in ... all the evidence is there to see.

The economy forecasts are bleak. The BOE MPC committee who control interest rates in the UK are now all unanimously in favour of holding interest rates at record lows as a result of the poor economic growth. They are worried that by increasing interest rates that the stack of cards that is the housing market (nevermind the fragile economy) will crash and put too many out of their homes. We have made the point many times on this forum that interest rate rises will be one of the nails in the coffin to the high prices and expectations for the housing markets, and many including myself thought this would happen sooner rather than later. Some are more ignorant to the impact this will have. There was an interesting 'Tonight programme' on a few weeks ago highlighting this very issue. As unwelcoming as it may be watching someone lose their home it is a necessary evil to correct the mistakes of the bubble. They had this lady with a child on it at risk of losing her home if she didn't come up with some money. She sold her car ... it was all very 'heart string' stuff, then I seen her car. An Audi TT ... this sums up the problems we have and how we got into this mess in the first place, ppl living above their means and expecting rising property prices to sustain it. If we think about this for a min ... if the economy is in such a bad state that it cannot sustain an 0.25% increase in interest rates. How in the heck can house prices outside normal long term affordability be sustained??The truth is that they can't ... and wont. Northern Ireland is in a worse position than the mainland. Some comparisons can be made between NI and the North of England ... an article in the Independent earlier in the week made reference to the North/South divide on the mainland ... considering NI is in pretty much the worst economic position in the Uk you can draw your own conclusions. (not forgetting about the mess down south here!!)

A north-south divide is developing among struggling homeowners, according to the ratings agency Standard & Poor's. Research involving 1.5 million mortgages held in the first quarter of the year shows that borrowers in the North of the country are 35 per cent more likely to be in arrears than those in the South. The agency warned that the Government's planned public spending cuts could exacerbate the divide. Credit analyst Mark Boyce said: "Given the North's public-sector jobs bias, unemployment in those regions, and consequently arrears, could escalate."

Inflation continues to rise and makes life more expensive for everybody ... this equals less disposable income, less affordability for houses and less chance of anyone saving for a deposit for a house. Wage inflation on the other hand has lagged behind the cost of living making us all poorer - this is a fact. Not exactly a breeding ground for higher house prices. The other issue with inflation is that it has wiped out the value of savings accounts, making it almost pointless to save at all. The Consumer Price Index shows the cost of living rose to 4.4 per cent last month, up from 4.2 per cent in June. So in order to beat inflation, a basic-rate taxpayer now needs a savings account paying interest of at least 5.5 per cent, while those on the 40 per cent tax band need interest to be getting at least 7.33 per cent to see any gains. The average rate on a standard account is now 0.3 per cent while the best easy-access saver offering a rate of just 3.1 per cent. Therefore those who have hard earned savings have to watch the buying power of this disappear every single day. Where is the good news story in all of this???

Ironically the government hopes that with low interest rates that ppl will start to spend their savings but this is not happening and as a result more and more businesses fail every day. Small businesses have no chance, unemployment continues to rise ... where is the hope?? Ask an EA ... they seem to have all the answers.

Thousands of youngsters are getting their A level results today, yet how many will have their day soured with the prospect of having to pay £9000 in student fee's every year in the next yr or so? How many parents are wondering where this money is going to come from?

The ignorance of EA's and those with VI's is that the housing market is in some sort of bubble wrap protection from all of this ... where is the logic??? House prices may well have fallen to around 2005 levels (in theory - not reflected in asking prices) but where do we go from here? 2005 prices may be more affordable than 2007 prices but they IMO are still too high, and sentiment would suggest this is the case for most potential buyers. I'm assuming that those with a VI believe that the government will wave a magic wand and it will all kickstart again. It wont.

The longer this game of charades keeps going on the more evidence I see that bad habits are forming again. I have heard of IFA's encouraging ppl to go and borrow money for the deposit for a MTG elsewhere and then to come back to them for the remainder. Hardly evidence of prudent lending, nor the ability of many to save deposits if this is a recommended course of action. Will lessons be learnt ... I doubt it. Will those who don't learn from them be left behind .. I think so.

Enough typing from me ... others can do a better summary than me. If you can afford to wait longer then I suggest you do. House prices are not going to rise anytime soon I could safely predict that much

Edited by tinbin

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I love that bolded part of your post. It just sums the situation up so well - bubble wrap protection.

I hate to burst your bubble. House prices have almost halved in value. If there was bubble wrap, it didn't work.

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I hate to burst your bubble. House prices have almost halved in value. If there was bubble wrap, it didn't work.

The bubbles (extend and pretend, QE, Low interest rates, forbearance, NAMA, Rates freezes, no water charges, moving debtors onto IO mortgages and longer terms, taxpayers bailing out banks) have been popping and have resulted in a slowish 50% drop.

Now there are no more bubbles to pop.

And the world is going mad. Riots, inflation, pay freezes.........

What the housing market needs now is a fire blanket.

And there isn't one big enough. :)

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Been reading the other thread on when people will decide to buy and found it very interesting. Personally, I've just got to the point in life where I want my own place and am in a position to do it.

One of the main problems I have is a lack of knowledge of Belfast areas. I've moved to the city about quitea few years ago now and rented mostly in Stranmillis area and just off Malone rd (Malone Av/Eglantine Av). However, now as I start thinking of buying I'm realising that my knowledge of the areas is not probably quite what they should be when you are going to pump £130k+ into a property.

I could ask workmates, but they are only promoting their own area and of course these areas never have any downsides.

So at the minute, my number one objective is to somehow find a method of working out which are the best (and most suitable) areas for me to concentrate on.

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  • 335 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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