Glasgow Prices

[damoj]

Register of Scotland (= Land Registry) shows for Q2, Glasgow City price reductions (YoY for mean / median prices) are:

Detached: - 11.5% / -5.8%

Semi-Detached: -18.4% / -7.4 %

Flats: -1.7% / -2 %

Looks like semi-detached properties have taken a big hit!

I'm currently looking at semi-detached or flats in the West End area and these reductions seem to be reflected on propertybee's history of rightmove. It also seems like nothing is moving.

Anyone got any anecdotal stories of the Glasgow west end market - particularly a feel for the amount over/under the 'offers over' agents are advising people to expect?

Thanks

[kenzdawg]

I have to admit, though I don`t especially like Glasgow, that I`ve been wondering if prices there would cr@p out before Edinburgh.

[Jie Bie]

Can't speak for the west end, but here in the south side most stuff seems to be fixed price nowadays, with the places on at OO only going for very small amounts above the OO price (maybe 1-2%). Offering 2004/2005 prices seems about right here. Certain areas are more sticky than others though (e.g. nice family homes in areas with good schooling and no neds).

[g k]

Anyone got any anecdotal stories of the Glasgow west end market - particularly a feel for the amount over/under the 'offers over' agents are advising people to expect?

Yes. I was flathunting intensively in the West End about 18-24 months back, then got sidetracked and ended up carrying on renting.

But I kept all the data, so when I started flathunting again within the last month, I was in a pretty good position to compare a number of properties' asking prices with the prices they actually went for. Bearing in mind we're talking about a specific market segment here (properties in the 200K-300K range) my findings were:

Properties offered as Fixed Price seemed quite often to finally sell for around 20K less than the fixed price.

Properties listed as Offers Over seemed to sell for around 20K more than the fixed price - so around an 8% premium, as compared to the 20%-25% I'm told was the norm a few years back.

Bear in mind I don't have data on whether the fixed asking price was subsequently lowered, or whether the sales went to speculative offers. I'd imagine a mixture of both.

I've also noticed a difference in the pattern of asking-price changes on Property Bee.

Back then, folk seemed to shuttle about between (say) offers over 230K and 259K fixed price - there were relatively few real price cuts.

Now it's fairly common for me to see properties whose fixed price has been slashed by 10-25K - sometimes in a couple of stages, sometimes in one fell swoop. I feel the Fixed Price offers may be coming more from the folk who are really committed to selling, rather than faffing about hoping for an illusory return to late 2007 prices.

Overall impression is that reality is finally biting: folk are realising that house prices have fallen to a new lower level, rather than dipped. And with a number of economic sources predicting another 6% or so drop in 2011, and further slow fall over the next 2-3 years, people are finally twigging that if they wait to sell, the chances are they will actually get less.

As a result of this, I think volumes are up. A number of places I looked at during a very brief flurry about 4 months ago have now sold, and in the last month or so four or five places I was looking at are now sold or under offer - some buyers obviously jumping at the chance of that 10 or 15K reduction.

Personally I'm in no hurry. If there is a 6% fall over the next year, that'll represent about 3 or 4 times my annual rent.

[g k]

[ ^^^ Should have read another 6% or so drop in 2012 ]

[ccc]

Yes. I was flathunting intensively in the West End about 18-24 months back, then got sidetracked and ended up carrying on renting.

But I kept all the data, so when I started flathunting again within the last month, I was in a pretty good position to compare a number of properties' asking prices with the prices they actually went for. Bearing in mind we're talking about a specific market segment here (properties in the 200K-300K range) my findings were:

Properties offered as Fixed Price seemed quite often to finally sell for around 20K less than the fixed price.

Properties listed as Offers Over seemed to sell for around 20K more than the fixed price - so around an 8% premium, as compared to the 20%-25% I'm told was the norm a few years back.

Bear in mind I don't have data on whether the fixed asking price was subsequently lowered, or whether the sales went to speculative offers. I'd imagine a mixture of both.

I've also noticed a difference in the pattern of asking-price changes on Property Bee.

Back then, folk seemed to shuttle about between (say) offers over 230K and 259K fixed price - there were relatively few real price cuts.

Now it's fairly common for me to see properties whose fixed price has been slashed by 10-25K - sometimes in a couple of stages, sometimes in one fell swoop. I feel the Fixed Price offers may be coming more from the folk who are really committed to selling, rather than faffing about hoping for an illusory return to late 2007 prices.

Overall impression is that reality is finally biting: folk are realising that house prices have fallen to a new lower level, rather than dipped. And with a number of economic sources predicting another 6% or so drop in 2011, and further slow fall over the next 2-3 years, people are finally twigging that if they wait to sell, the chances are they will actually get less.

As a result of this, I think volumes are up. A number of places I looked at during a very brief flurry about 4 months ago have now sold, and in the last month or so four or five places I was looking at are now sold or under offer - some buyers obviously jumping at the chance of that 10 or 15K reduction.

Personally I'm in no hurry. If there is a 6% fall over the next year, that'll represent about 3 or 4 times my annual rent.

Yep this is key. Take a one bed flat for example. A simple 10 k drop represents ~4 years rent for a similar flat (You would pay back 20k inc interest). And also less any maintenence costs that may arise.

In Gorgie in Edinburgh - a classis one bed FT area - prices for a nice ready to move in place have dropped from about 125k at peak - to about 95k - if you are lucky - right now.

That is 30k which translates to 60k extra payable if taken on at 125k with a mortgage. This is 12 years rent for the same flat. Yet this has happened over 3 years. So basically if you decided to buy today rather than in 2008 you would have 'saved' or 'earned' 9 years of rental payments/mortgage payments - whichever way you choose to look at it. MASSIVE difference. And if the youngsters of today were shown simple exampls lke this - I think prices would drop to 50-60k for these places within a year ro two.

(based on a normal 25 year mortgage at an average rate of 6% over the period)

[g k]

Yep this is key. Take a one bed flat for example. A simple 10 k drop represents ~4 years rent for a similar flat (You would pay back 20k inc interest). And also less any maintenence costs that may arise.

In Gorgie in Edinburgh - a classis one bed FT area - prices for a nice ready to move in place have dropped from about 125k at peak - to about 95k - if you are lucky - right now.

That is 30k which translates to 60k extra payable if taken on at 125k with a mortgage. This is 12 years rent for the same flat. Yet this has happened over 3 years. So basically if you decided to buy today rather than in 2008 you would have 'saved' or 'earned' 9 years of rental payments/mortgage payments - whichever way you choose to look at it. MASSIVE difference. And if the youngsters of today were shown simple exampls lke this - I think prices would drop to 50-60k for these places within a year ro two.

(based on a normal 25 year mortgage at an average rate of 6% over the period)

Yes, I think buyers are already grasping this, and sellers (despite an understandable psychological inertia) are beginning to admit it.

Problem is, if there was a 40% drop in house prices within a 24-month period, millions of people would be financially ruined. Our eccentric UK economy would collapse in a way that would make Greece look like Liechtenstein. That's why the Government will do whatever it takes to shore them up. I'm pretty sure they realise they are unsustainable - but they need the fall to be a 10-year gradual decline, rather than a catastrophic collapse.

In practical terms, I think it all comes down to how important the financial side of things is to us as individuals. For me, I'm perfectly willing to wait a year or even two to get my dream place, cos I know that my buying power is increasing with every passing month; but bottom line is I'd rather be living my life than saving money. IMO pretty much no-one in the UK who buys a house in the next decade can reasonably expect it to hold its value. But short of indefinite renting or moving abroad, there's nowt for us but to bite the bullet at some point...

[ccc]

I think you can live your life whether you own a place or not !! But yes I can sort of see where people are coming from when they say this. The thought of being kicked out with 2 months notice is not good.

Then again the thought of having to pay off a mortgage for X number of decades is not good.

I agree it will be a long slow slog. Although I reckon even Edinburgh is close to half way there - after 3 years. Well the bottom half definitely is - and everything will have to follow.

[the-wife's-knickers]

The Mrs and I are still saving away but I think that we might end up biting soon-ish. I would happily wait it out but I reckon that we will buy within the next 12 months.

[damoj]

Yes. I was flathunting intensively in the West End about 18-24 months back, then got sidetracked and ended up carrying on renting.

But I kept all the data, so when I started flathunting again within the last month, I was in a pretty good position to compare a number of properties' asking prices with the prices they actually went for. Bearing in mind we're talking about a specific market segment here (properties in the 200K-300K range) my findings were:

Properties offered as Fixed Price seemed quite often to finally sell for around 20K less than the fixed price.

Properties listed as Offers Over seemed to sell for around 20K more than the fixed price - so around an 8% premium, as compared to the 20%-25% I'm told was the norm a few years back.

Bear in mind I don't have data on whether the fixed asking price was subsequently lowered, or whether the sales went to speculative offers. I'd imagine a mixture of both.

I've also noticed a difference in the pattern of asking-price changes on Property Bee.

Back then, folk seemed to shuttle about between (say) offers over 230K and 259K fixed price - there were relatively few real price cuts.

Now it's fairly common for me to see properties whose fixed price has been slashed by 10-25K - sometimes in a couple of stages, sometimes in one fell swoop. I feel the Fixed Price offers may be coming more from the folk who are really committed to selling, rather than faffing about hoping for an illusory return to late 2007 prices.

Overall impression is that reality is finally biting: folk are realising that house prices have fallen to a new lower level, rather than dipped. And with a number of economic sources predicting another 6% or so drop in 2011, and further slow fall over the next 2-3 years, people are finally twigging that if they wait to sell, the chances are they will actually get less.

As a result of this, I think volumes are up. A number of places I looked at during a very brief flurry about 4 months ago have now sold, and in the last month or so four or five places I was looking at are now sold or under offer - some buyers obviously jumping at the chance of that 10 or 15K reduction.

Personally I'm in no hurry. If there is a 6% fall over the next year, that'll represent about 3 or 4 times my annual rent.

GK,

Thanks for the update - it seems to match what i've been seeing although i've only been tracking the market for the past month so i've not confirmed the prices at which the houses sold. Do you know how long it takes before sales data is available (e.g. through Zoopla)?

Good places do seem to be still selling quickly. Given the likely price falls i'm looking for somewhere that i can add value to (e.g. redecorate / extend) to protect myself against the falls. I went to the future property auctions recently - interesting to see many houses not even hitting their reserves - e.g. flats in Ibrox going for £25k!

[g k]

Thanks for the update - it seems to match what i've been seeing although i've only been tracking the market for the past month so i've not confirmed the prices at which the houses sold. Do you know how long it takes before sales data is available (e.g. through Zoopla)?

Zoopla doesn't seem to get them up until about 7 weeks after the sale date.

But the Registers of Scotland site can have them up as soon as a week after.

Good places do seem to be still selling quickly.

Yes they do. There has been another flurry of sales and Under Offers since my last post a couple of weeks ago.

Intially I was hoping (like ccc above) that the upper section of the market would see the falls that the budget section has already seen. But I'm now more of the opinion that we are seeing a greater stratification of the market - i.e. the difference in price between cheaper properties and premium properties is simply growing. I guess this makes sense, in that it mirrors the increasing wealth disparity in our society. And the fact that the current economic climate, and the reining-in of crazy 95%-type mortgages, means folk at the lower end of the market can't afford to buy at all unless prices are slashed.

I think I am quite close to buying. Found a nice place, planning to offer around 35K under the home report price. Fingers crossed.