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UNSHURE

E. Lancs Activity Pointing To More Boom Before Bust

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I live in Bacup. A small town on the E.Lancs-W.Yorks border. I regularly travel to both Burnley and Halifax. The general impression that I get from the hpc forums is that house prices have flattened off and within the next year will be in decline. There are a lot of statistics and convincing arguments to support this. Since I don't own my own property, and some day would like to, I would like to see some sort of correction happen.

However, the impression that I get traveling around my own little patch of the UK, is that the House Price Boom is in Full Swing. It does not feel like they are ready to crash, or even slow down. As I drive around the Burnley area I see numerous 'SOLD' signs up. Probably as many 'SOLD SIGNS' as 'FOR SALE' signs. Many houses seem to be sold after only a couple of weeks. THEY ARE SELLING LIKE HOT CAKES!

Prices in my own town are rocketing. Ex-council houses, in rough areas, are heading towards 100K. Prices in Burnley and the Calder Valley are also very high. However, houses along the Calder Valley don't seem to be selling quite as fast as the Burnley area. Although New builds are quickly snapped up.

The main impression that I get is that there is some way to go, in this part of the UK, before prices go into reverse. It could be some years before the crash happens and prices could be much higher than todays prices when it does happen. Perhaps it always feels like this at the latter stages of a bubble?

I have also noticed that there are a lot more houses on the market than this time last year. Also there are a lot of houses with signs saying 'To Let'. Not something I noticed much of until recently.

The main reason that I am posting this message is to ask whether anyone has any idea about what is going on. It is extremely confusing living in the middle of a housing boom when the National indicators are showing a sharp slow down.

:unsure:

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I would be very wary personally.

I've noticed a lot of SOLD signs myself recently - one house in particular has been SOLD for 3 months. When I looked closer at this and every other SOLD sign they are all SUBJECT TO CONTRACT - now others on the site will be able to inform you better but I don't believe that a sale in this situatuion is either legally binding or carries any sort of redemption penalties.

In other words it may reflect the seller unable to agree a price on a house to move too or it could be marketing spin from agencies to create a 'fear' of houses going like hot cakes.

In other words if a house is SSTC there is no guarantee that that house has received a viewing let alone an offer.

Paranoid ?....perhaps ?

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It's rather generalistic to describe all these areas as shitholes - let's be more specific. The ribbon between Rochdale and Burnley (including Bacup) is truly 'grim up north' country, as is the road to Todmorden. But above and around there are one or two decent rural areas.

With that in mind, here's my take. The property bubble, as in previously cycles, finished rippling out at the cheapest (and by definition most undesirable) areas about a year after it turned down south. Looking at LR figures, they topped out in London in Mid/late 2004, so what you are seeing is the very top from the summer of this year onwards in the shitholes.

Have a look at selling prices in Bacup say four years ago, October 2001. Terraces between £7000 and £25000, semis £20,000 to £70,000, detached clustered around £100,000. It is fair to say average prices since then have risen by 300/400%.

Throughout history, and in every market in the world, house prices have been most correlated to earnings, and thus meander around a ratio between the two which reflects real interest rates and sentiment. You can argue what you like as to current real rates, because there are differing views on inflation, but real rates have been (artificially) low since about 2001. They are now returning to long term averages. Wages are about 20% higher than four years ago. Average wage for Bacup? £18000? Therefore the correct trend average house price working on 3.5 times earnings should be around £64,000, say for a three bed semi in the area.

Anyone who paid significantly more than this for a terrace will need to wait for the next boom whenever that is to recover their investment in real terms, because that is all that matters at pension time.

Take a look at the weekly Rossendale Free Press housing section. The number of price reductions, which appear to have gathered momentum in the last three weeks, are clear for all to see. It wasn't the case this summer, but I feel there is now a creeping realisation that it could be a very difficult winter if you've got a property to sell.

Bottom line: Top of the market dead (Penny Lodge Dell in Loveclough £50,000 reductions and no interest). Very few moving upmarket nor likely to in the short term.

Middle of the market - one or two sales appear to be going through at reduced prices but still horrendously overvalued.

The rest appears patchy and the better areas seem OK, but terraces/ex-council in Bacup etc at £100,000? You're havin' a larf mate. £30,000 to £40,000 in five years time.

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The puddleducks I've got to agree with your take on this market topping out,

Its the "less desirable" areas that see the biggest percentage increases compare to the rest of England as the overall market tops out. This is because newbie late in the day BTL'ers are hunting down the cheapest properties, and these will be the first to off load those properties when the correction is beyond doubt. Same goes for area's such as Middlebrough.

Be very wary, I was born near Burnley and now the area, I know of BTL'ers in the game recently in that area, off loading lets as the tenancies expire. Of course novice FTB'ers having only experienced a raising market, will see this increased activity [bTL'ers prepared to negotiate to get a sale] as a market awakening. When in fact it will most likely transpire to be a "Suckers Rally"

Edited by Catch22

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The puddleducks I've got to agree with your take on this market topping out,

Its the "less desirable" areas that see the biggest percentage increases compare to the rest of England as the overall market tops out. This is because newbie late in the day BTL'ers are hunting down the cheapest properties, and these will be the first to off load those properties when the correction is beyond doubt. Same goes for area's such as Middlebrough.

Be very wary, I was born near Burnley and now the area, I know of BTL'ers in the game recently in that area, off loading lets as the tenancies expire. Of course novice FTB'ers having only experienced a raising market, will see this increased activity [bTL'ers prepared to negotiate to get a sale] as a market awakening. When in fact it will most likely transpire to be a "Suckers Rally"

Good call - Maybe we should compile a list of the less desirable areas countrywide that appear ludicrously overpriced thru BTL investment or otherwise (some were hilariously pointed out as 'hotspots' for future growth recently by the desperados). These are the opinion of the author only!

North West: Bacup

North East: Middlesbrough - totally agree

Other contenders: Stoke/Hanley/Burslem, Bradford, parts of Wrexham, Hackney, Blackley (north Manchester).

Any offerings from other delightful spots around the country - we could all do with a laugh!

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The ‘market topping out theory’ is very helpful towards trying to explain this crazy situation. I’m sure that it’s true that the less desirable areas are the last to experience the effects of a price bubble. Probably due to BTL’s moving in to find the cheaper properties when other areas become too expensive. There are a lot of ‘To Let’ signs in all the places that I travel around. To say that house prices are ludicrously overpriced in places like Bacup is spot on. How prices have got to this stage beggars belief.

The ideas posted by ‘assetpriceinflation’ could also explain a few things. I have seen numerous properties that have had ‘sold signs’ posted outside them for several weeks.

However, I think that the people who have replied to this post, so far, have not appreciated just how far this boom has gone. Puddleducks says “but terraces/ex-council in Bacup etc at £100,000? You're havin' a larf mate”.

I have last Fridays Rossendale Free Press in front of me. There are eight pages of properties. There are about five properties that have been advertised as being ‘reduced in price’. I cannot see any properties below 50K. The cheapest that I can see is a back to back one bed roomed terraced house in, what I consider, a poor area.

Terraced houses are advertised at mainly 80K plus although there are a small number in the 50K-80K range. Ex Council houses are mainly advertised around 80K. There are also quite a lot of terraced houses in the 90K-110K range and I’m not “havin' a larf mate”! These are the prices from last Friday’s Free Press! Whether they will manage to sell at these prices is another matter.

Here's a random selection:

End Terrace 2 bed 90K

Back to Back 1 bed Terrace 50K

Semi detached ex-council house 79.9 K

2 bed Terrace on main road 96.5K

4 bed mid terrace 148.95K

3 bed mid terrace 104.95K

Semi-detached ex council 89.95K

Semi-detached 3 bed gardens and garage 125K

There are people, that I know who are expecting even more growth in prices over the next few years. However, when I look at the properties, and see the prices, something just doesn’t add up. ‘Common sense’ should dictate that this cannot go on much longer. However, with ‘Common Sense’ long departed, this fiasco could continue for quite a while yet.

I will keep you posted on any future developments. I have a hunch that late Jan to March will be a telling time in many areas.

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The ‘market topping out theory’ is very helpful towards trying to explain this crazy situation. I’m sure that it’s true that the less desirable areas are the last to experience the effects of a price bubble. Probably due to BTL’s moving in to find the cheaper properties when other areas become too expensive. There are a lot of ‘To Let’ signs in all the places that I travel around. To say that house prices are ludicrously overpriced in places like Bacup is spot on. How prices have got to this stage beggars belief.

The ideas posted by ‘assetpriceinflation’ could also explain a few things. I have seen numerous properties that have had ‘sold signs’ posted outside them for several weeks.

However, I think that the people who have replied to this post, so far, have not appreciated just how far this boom has gone. Puddleducks says “but terraces/ex-council in Bacup etc at £100,000? You're havin' a larf mate”.

I have last Fridays Rossendale Free Press in front of me. There are eight pages of properties. There are about five properties that have been advertised as being ‘reduced in price’. I cannot see any properties below 50K. The cheapest that I can see is a back to back one bed roomed terraced house in, what I consider, a poor area.

Terraced houses are advertised at mainly 80K plus although there are a small number in the 50K-80K range. Ex Council houses are mainly advertised around 80K. There are also quite a lot of terraced houses in the 90K-110K range and I’m not “havin' a larf mate”! These are the prices from last Friday’s Free Press! Whether they will manage to sell at these prices is another matter.

Here's a random selection:

End Terrace 2 bed 90K

Back to Back 1 bed Terrace 50K

Semi detached ex-council house 79.9 K

2 bed Terrace on main road 96.5K

4 bed mid terrace 148.95K

3 bed mid terrace 104.95K

Semi-detached ex council 89.95K

Semi-detached 3 bed gardens and garage 125K

There are people, that I know who are expecting even more growth in prices over the next few years. However, when I look at the properties, and see the prices, something just doesn’t add up. ‘Common sense’ should dictate that this cannot go on much longer. However, with ‘Common Sense’ long departed, this fiasco could continue for quite a while yet.

I will keep you posted on any future developments. I have a hunch that late Jan to March will be a telling time in many areas.

Good research unshure - I should have clarified 'havin a larf' to be an exclamation of amusement at the prices, not disbelief that they could have reached that - apologies if it's ambiguous. Also, I've not seen last Friday's paper but the previous editions caught my eye with lots of reductions, and the Penny Lodge details etc. were taken from the local property weekly that I picked up at an EAs in Rosssendale.

We're on the same wavelength I reckon - it's just that not everyone in the area is receiving signals from the outside world - I know that in my local EA where I pay my rent they are giving out the same spiel, and only shifting props at the very bottom of the market. Further up, there appear to be lots of chains around, and yes the dark days of January might be a bit iffy. Thanks for the info.

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George...

All those areas u mentioned are shit holes. If I had power to exude, I'd level them in a flash kill 90% of the inhabitants and start over.
Grow up!

Unshure... take a peek at the table below.

All these houses within a couple of miles of where you live are for sale at under £75,000.

They are all perfectly habitable, although personally I'd draw the line at Inkerman street.

At the end of each line I've added the number of weeks since the listing appeared. These houses are not "SELLING LIKE HOT CAKES". A similar situation exists in Burnley, Nelson and Accrington.

Street..........Town...........Type.............Status......Price..Weeks

Gordon St.......Bacup..........3BR Mid Terr.....For Sale....69,950.42

Britannia Av....Bacup..........3BR Mid Terr.....For Sale....67,950.29

Comet St........Bacup..........2BR Mid Terr B2B.For Sale....58,000.25

Edward St.......Bacup..........2BR Mid Terr.....Under Offer.69,000.24

Hannah St.......Bacup..........2BR Mid Terr.....For Sale....69,950.24

Rossendale Cl...Bacup..........3BR Semi.........For Sale....74,995.24

Russell St......Bacup..........3BR End Terr.....For Sale....45,000.24

Earnshaw Rd.....Bacup..........2BR Mid Terr.....For Sale....72,000.17

Rosehill St.....Bacup..........2BR Mid Terr.....Under Offer.59,950.17

Inkerman St.....Bacup..........2BR Mid Terr B2B.For Sale....35,000.16

Clough Rd.......Bacup..........3BR Semi.........For Sale....75,000.15

Daisy Bk........Bacup..........2BR Mid Terr.....For Sale....67,000.15

Inkerman St.....Bacup..........2BR Mid Terr B2B.For Sale....60,000.13

Pendle Cl.......Bacup..........2BR Semi.........Under Offer.75,000.13

Dale St.........Bacup..........2BR Mid Terr.....For Sale....60,000.12

Gladstone St....Bacup..........3BR End Terr.....For Sale....69,950.12

Daisy Bk........Bacup..........2BR Mid Terr.....For Sale....64,950.11

Alma St.........Bacup..........1BR Mid Terr B2B.Under Offer.47,950.10

Crimea St.......Bacup..........2BR End Terr.....For Sale....60,000.10

Edward St.......Bacup..........2BR Mid Terr.....For Sale....69,995.10

Rose St.........Bacup..........2BR Mid Terr.....For Sale....67,950.10

Brown St........Bacup..........2BR Mid Terr.....Under Offer.59,950.09

Daisy Bk........Bacup..........2BR Mid Terr.....For Sale....69,950.09

Hannah St.......Bacup..........2BR Mid Terr.....For Sale....72,950.08

Beech St........Bacup..........2BR Mid Terr.....For Sale....60,000.07

Abbey St........Bacup..........2BR End Terr.....For Sale....71,950.06

Pembroke St.....Bacup..........3BR End Terr.....For Sale....74,950.06

Gordon St.......Bacup..........2BR Mid Terr.....For Sale....72,950.03

Brunswick Terr..Bacup..........2BR Mid Terr.....For Sale....57,995.01

Dale St.........Bacup..........2BR Mid Terr.....For Sale....67,950.01

Major St........Crawshawbooth..2BR End Terr.....For Sale....75,000.17

Cross Bldgs.....Crawshawbooth..2BR End Terr.....Under Offer.75,000.12

Bankmill St.....Haslingden.....2BR Mid Terr.....For Sale....65,950.22

Parkinson St....Haslingden.....2BR Mid Terr.....For Sale....59,950.22

Townsend St.....Haslingden.....2BR Mid Terr.....For Sale....73,500.17

Manchester Rd...Haslingden.....2BR Mid Terr.....For Sale....70,000.15

Rifle St........Haslingden.....1BR End Terr B2B.For Sale....49,950.14

Peel St.........Haslingden.....2BR Mid Terr.....For Sale....75,000.12

Manchester Rd...Haslingden.....2BR End Terr.....For Sale....64,950.11

Salisbury St....Haslingden.....2BR Mid Terr.....For Sale....69,950.11

Wells St........Haslingden.....2BR Mid Terr.....For Sale....75,000.09

Greenfield St...Haslingden.....2BR Mid Terr.....For Sale....71,500.08

Manchester Rd...Haslingden.....3BR Mid Terr.....For Sale....75,000.08

Bury Rd.........Haslingden.....2BR Mid Terr.....For Sale....72,000.07

Salisbury St....Haslingden.....2BR Mid Terr.....For Sale....59,950.05

Bury Rd.........Haslingden.....2BR Mid Terr.....For Sale....69,950.03

Manchester Rd...Haslingden.....2BR Mid Terr.....For Sale....74,950.03

Holcombe Rd.....Helmshore......1BR Mid Terr.....For Sale....69,950.06

Larkhill........Rawtenstall....1BR Mid Terr.....For Sale....60,000.33

South St........Rawtenstall....1BR Mid Terr.....For Sale....74,950.13

Larkhill........Rawtenstall....1BR Mid Terr.....For Sale....60,000.33

South St........Rawtenstall....1BR Mid Terr.....For Sale....74,950.13

Captain St......Weir...........1BR Mid Terr.....For Sale....70,000.13

Wright St.......Weir...........2BR Mid Terr.....Under Offer.74,950.03

Edgeside Lane...Waterfoot......1BR Mid Terr.....For Sale....64,950.09

Brougham Hall...Waterfoot......1BR Flat.........For Sale....74,950.08

Rostrons Bldgs..Waterfoot......2BR Mid Terr.....For Sale....69,950.06

Holt Mill Rd....Waterfoot......2BR Mid Terr.....For Sale....72,950.01

Ashworth St.....Waterfoot......2BR Mid Terr.....For Sale....64,950.00

Bridge St.......Water..........2BR Mid Terr.....For Sale....67,000.15

Phillipstown....Whitewell Btm..2BR Mid Terr.....For Sale....72,950.20

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George...

Grow up!

OK I wouldn't kill all the inhabitants, but I'd for sure as hell level it. :lol: I drove through Burnely a while back, and had to consume a tub of St Johns Wort :lol:

Edited by George

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Guys

I live in waterfoot and as I am over 40 I remember the last property bubble.

It will end at some stage with property prices tumbling across the country.

I dont know what the catalyst will be,Inflation,interest rates or whatever but in my humble opinion it will come.

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After the list produced by madenph , I decided to do a bit of analysis of my own so that we could get a clearer picture of the situation in Bacup.

I listed 80 houses in a spreadsheet. All these are houses that are currently for sale in Bacup (Note:Bacup Only). I then sorted and grouped them by ‘Residence Type’. I then calculated the average price for each residence type.

All houses were for sale on 7th October.

They are houses in Bacup only.

A sample of 80 houses was taken.

Houses were posted by Estate Agents and listed in the local press.

These are listed prices and do not indicate the prices at which houses are really selling.

RESULTS

15% of all houses listed were advertised as being ‘reduced in price’.

End Terrace 2 Bed Average Price was £75,649

End Terrace 3 Bed Average Price was £76,650

Mid Terrace 2 Bed Average Price was £72,735

Mid Terrace 3 Bed Average Price was £92,765

Semi Detached 2/3 bed Average Price was £118,509

Large 4/5 bed semi Average Price was £194,925

Detached 3 and 4 bed Average Price was £225,588

Detached 5 and 6 bed Average Price was £277,238

Detached Bungalows Average Price was £187,780

Steve

I too can remember the last 'housing price crash'. The same houses were 'For Sale' for months on end. You could travel for miles and miles without spotting one 'sold sign'. There was a real feeling of 'desperate grim reality'. Many families had their homes re-possessed. Many went into negative equity.

A large part of the last housing recession might be attributed to the government of the time. They entered the ERM at an exchange rate that was 'too high' to maintain. This resulted in the need to keep interest rates at an artificially high rate. In turn, this had disasterous effects on busisinesses causing high unemployment.

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The boom only reached that area about 12 months ago. Although it does seem to be a sharper and faster increase, hopefully it'll be just as fast on the way down too.

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  • 336 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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