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First Time Buyers Watch Prices Rise By 33k As They Wait On The Sidelines

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First time buyers watch prices rise by 33K as they wait on the sidelines

Research by Alliance & Leicester Mortgages reveals that one in five people are delaying buying a property due to current high prices.

However, three quarters of respondents say that they have seen house prices rise in the time that they are waiting, with the average amount that a property rose totalling £33,689.

Alliance & Leicester Mortgages has revealed that currently almost 80 per cent of people think that property is overpriced. A further 15 per cent saying that they are waiting for prices to fall.

Stephen Leonard, director of mortgages at Alliance & Leicester, said: "The research highlights that some homebuyers are playing the waiting game to see if house prices will fall.

"In recent years the majority of those who waited to see if house prices would fall before, found that they had waited in vain since prices rose on average by £33,000 whilst they waited."

Nevertheless, Alliance & Leicester Mortgages has also found that people are still purchasing property, despite believing it is overpriced, because they have no other option.

Edited by shakerbaby

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"In recent years the majority of those who waited to see if house prices would fall before, found that they had waited in vain since prices rose on average by £33,000 whilst they waited."

A way of saying "I told you so" in the article and sort of implying "no point in waiting any further FTBs, get on the ladder now! Because prices may go up by £33,000 again by the time FTBs get off their backsides and buy into a life of slavery to keep me in my cushy little bank job".

Tosser.

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They give the game away with the "in recent years" bit. When something economic has happened in recent years that's a good indication it's not going to continue.

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Can anyone explain why the nation perceives high prices to be beneficial? And also the equation that determines how much a house price increases over a period of time based on certain dynamics? In simple terms it all seems false to me. Guess work. Lies. Speculation.

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First time buyers watch prices rise by 33K as they wait on the sidelines

Research by Alliance & Leicester Mortgages reveals that one in five people are delaying buying a property due to current high prices.

However, three quarters of respondents say that they have seen house prices rise in the time that they are waiting, with the average amount that a property rose totalling £33,689.

Alliance & Leicester Mortgages has revealed that currently almost 80 per cent of people think that property is overpriced. A further 15 per cent saying that they are waiting for prices to fall.

Stephen Leonard, director of mortgages at Alliance & Leicester, said: "The research highlights that some homebuyers are playing the waiting game to see if house prices will fall.

"In recent years the majority of those who waited to see if house prices would fall before, found that they had waited in vain since prices rose on average by £33,000 whilst they waited."

Nevertheless, Alliance & Leicester Mortgages has also found that people are still purchasing property, despite believing it is overpriced, because they have no other option.

This looks like scaremongering to me (and an advert for Alliance and Leicester).

"Quickly now, come and get one of our Mortgages before you loose money".

Roughly translates to...

"Quickly now, come and get one of our Mortgages before we loose money".

There doesn't seem to be a mention of how property prices are not grow at this rate anymore.

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What a crock of shit!

For a start, FTB properties are NOT rising by 33k - The average property is - mainly the 200K+ stock. The fact they mention that 80% think its overpriced and a further 15% saying they are waiting for prices to fall point to one thing. THE BUYERS IN THE MARKET HAVE STOPPED BEING TAKEN FOR A RIDE.

The populus has WOKEN UP and its a buyers market for a LONG, LONG TIME.

Expect sub 200K properties to fall 20-30% over the next few years. 10% in the next 6 months!

FIRST RULE: Dont believe anything from a VI - although I do find this article quite bearish

TB

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Whats the matter A&L running out of people to lend to?

I wonder what the lending quality is like to people outside the regulations?

http://www.thisismoney.co.uk/mortgages/mor...4&in_page_id=58

Is buy-to-let back in fashion?

Michael Clarke, This is Money

6 September 2005

LENDERS are piling into the buy-to-let market ahead of renewed interest in the sector from investors.

Alliance & Leicester is planning to re-enter the market for the first time in two years next year,

.....

http://www.quotesearch.co.uk/news/874/alli...-to-let-market/

Mehrdad Yousefi, head of intermediary mortgages at Alliance & Leicester said: "Our plan is to offer buy-to-let through our intermediary channel and concentrating on lending to good quality applicants."

Furthermore, experts agree that the buy-to-let market continues to grow strongly, with landlords becoming savvier all the time.

.....

http://www.manchesteronline.co.uk/homesear...new_rules_.html

Paul Cooper, head of mortgages at Alliance & Leicester said consumers needed to be aware that not all products were not covered by the changes which come into force on Mortgage Day later this month

.....

The FSA remit will include all aspects of mortgage advertising, advice and sales in a bid to make the industry more transparent and consumer-friendly.

Mr Cooper said: "We think that there is a gap in the rules since buy-to-let and equity release products will not be regulated along with the rest of the market - these are arguably two of the most complicated products on the market.

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What a crock of shit!

For a start, FTB properties are NOT rising by 33k - The average property is - mainly the 200K+ stock. The fact they mention that 80% think its overpriced and a further 15% saying they are waiting for prices to fall point to one thing. THE BUYERS IN THE MARKET HAVE STOPPED BEING TAKEN FOR A RIDE.

The populus has WOKEN UP and its a buyers market for a LONG, LONG TIME.

Expect sub 200K properties to fall 20-30% over the next few years. 10% in the next 6 months!

FIRST RULE: Dont believe anything from a VI - although I do find this article quite bearish

TB

Maybe the FTB's are avoiding the traditional FTB properties, such as studios & 1 bed places and are waiting to buy a 2 bed place?

The 1 beds & studios will (possibly) be purchased by BTL people who will rent them out to the waiting FTB's

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Maybe the FTB's are avoiding the traditional FTB properties, such as studios & 1 bed places and are waiting to buy a 2 bed place?

The 1 beds & studios will (possibly) be purchased by BTL people who will rent them out to the waiting FTB's

How do you know what a traditional FTB place is?

From days gone by, it has been shown they are likely to be a 2 bed, more often than a studio.

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A question - apologies if it's been asked before. Long term, are the banks shooting themselves in the foot with BTL? If we become a "rentier" society, doesn't that mean less mortgages? Obviously someone still has to own the property somewhere...now that I think about it, I can't decide whether or not there would be less mortgages in terms of value, or whether there would be less people (ie the landlords) with much bigger mortgages because they own tens of properties.

My brain hurts! :blink::blink:

Edited by Leodhasach

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A question - apologies if it's been asked before. Long term, are the banks shooting themselves in the foot with BTL? If we become a "rentier" society, doesn't that mean less mortgages? Obviously someone still has to own the property somewhere...now that I think about it, I can't decide whether or not there would be less mortgages in terms of value, or whether there would be less people (ie the landlords) with much bigger mortgages because they own tens of properties.

My brain hurts! :blink::blink:

I don't think the banks mind whether they have 100 customers with 100 mortgages each, or 10,000 people with 1 mortgage. Itis probably cheaper for them to administer a smaller number of clients.

you are right - someone has to own the places.

How do you know what a traditional FTB place is?

From days gone by, it has been shown they are likely to be a 2 bed, more often than a studio.

simply going on what friends here (London) have been able to buy.

I could be wrong. It was only a suggestion.

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First time buyers watch prices rise by 33K as they wait on the sidelines

Research by Alliance & Leicester Mortgages reveals that one in five people are delaying buying a property due to current high prices.

However, three quarters of respondents say that they have seen house prices rise in the time that they are waiting, with the average amount that a property rose totalling £33,689.

Alliance & Leicester Mortgages has revealed that currently almost 80 per cent of people think that property is overpriced. A further 15 per cent saying that they are waiting for prices to fall.

Stephen Leonard, director of mortgages at Alliance & Leicester, said: "The research highlights that some homebuyers are playing the waiting game to see if house prices will fall.

"In recent years the majority of those who waited to see if house prices would fall before, found that they had waited in vain since prices rose on average by £33,000 whilst they waited."

Nevertheless, Alliance & Leicester Mortgages has also found that people are still purchasing property, despite believing it is overpriced, because they have no other option.

Questions

Are they talking about asking price or sale price?

What do they mean 'last few years'?

How do they define FTB and what do they consider a typical FTB property to be?

If they think a FTB is a young couple looking at the asking prices of new build 2 bed 'apartments' then of course prices of risen. Builders see no reason why a young couple shoudn't be preapared to spend 1/4 million pound on a cr@ppy two bed flat.

On the other hand I have been watching two houses near me (three bed semi). One was put up for £162,950 a few months ago. Looks like the owner died and family are selling it. It was under priced then by about £10k in comparison to others in the area. It hasn't sold and has now been reduced to £159,950. It has now been put up with another EA.

As a FTB why would I spend £250K on a cr@ppy flat when I can get a three bed semi for £100k less and the price is coming down!

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I don't think the banks mind whether they have 100 customers with 100 mortgages each, or 10,000 people with 1 mortgage. Itis probably cheaper for them to administer a smaller number of clients.

you are right - someone has to own the places.

They'll worry about it when they realise that there is no equity to collect when the defaults roll in. A single mortagee can be screwed down to paying some money back to fill the gap either by seizure of assets (on top of housing) for sale or through part of future income. Multiple property owners who go bung pro-rata will have far less to fill the gap.

The old adage owe the bank a $1 and you have a problem, owe them $1m and they have a problem.

Besides any significant shift to a rentier society will create havoc for a consumer driven economy reliant on home owners continually upgrading everything round the house for no particular reason at all - renters and LL's simply don't have the same mindset.

Moreover recent graduates are loadedwith debt already that is sticking for anything up to 10 years, this year the picture gets worse. Far from conditioning youngsters to live off more debt they may well see it as a millstone.

Edited by OnlyMe

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I don't think the banks mind whether they have 100 customers with 100 mortgages each, or 10,000 people with 1 mortgage. Itis probably cheaper for them to administer a smaller number of clients.

you are right - someone has to own the places.

Yes...but does a rental property change hands (in ownership terms) as often as an owner occupied one? When a couple who owned a 1 bed flat had their first kid, they sold the flat and moved somewhere larger (back in the golden days when people could afford to buy such things). If they were renting, they'd have moved to a bigger rental property, and the landlord would have re-let their 1 bed flat to someone else. Two moves, no mortgages.

...another point. Don't the banks make a profit on their administration transactions? I thought arrangement fees etc were all profit generating rather than simply covering the actual costs? Perhaps they actually benefit from many small mortgages rather than a few large ones? I don't know...

Edited by Leodhasach

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Yes...but does a rental property change hands (in ownership terms) as often as an owner occupied one? When a couple who owned a 1 bed flat have their first kid, they sold the flat and moved somewhere larger (back in the golden days when people could afford to buy such things). If they were renting, they'd have moved to a bigger rental property, and the landlord would have re-let their 1 bed flat to someone else. Two moves, no mortgages.

Good point, prime opportunity to cross-sell products at the same time as well, anything from will writing, to changes in insurance, other loans, pensions, etc when you are in the branch or in communication by other means.

I wonder if banks become detached form their potenital client base when they are renting, I suspect so.

Yes, the banks really haven't thought this move through, the grabbed at BTL because they couldn't thin how to market to FTB's/second movers etc or that group could not afford to buy, so what did the lenders do push it a little further.

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Yes...but does a rental property change hands (in ownership terms) as often as an owner occupied one? When a couple who owned a 1 bed flat have their first kid, they sold the flat and moved somewhere larger (back in the golden days when people could afford to buy such things). If they were renting, they'd have moved to a bigger rental property, and the landlord would have re-let their 1 bed flat to someone else. Two moves, no mortgages.

if they move into a larger place, then if it was occupied - those peopl have moved out somewhere else. They may have bought or rented - but generally, the population is increasing (I think) with people living longer and immigration. There are apparently (I was told it was in the paper) only 97 Polish plumbers 9or builders)in London - well they are all concentrated in our area if that is true!

Also, household sizes are (I think) getting smaller.

I don't think (& I am not saying this categorically as I do not know) that the number of additional houses is increasing as fast.

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if they move into a larger place, then if it was occupied - those peopl have moved out somewhere else. They may have bought or rented - but generally, the population is increasing (I think) with people living longer and immigration. There are apparently (I was told it was in the paper) only 97 Polish plumbers 9or builders)in London - well they are all concentrated in our area if that is true!

Also, household sizes are (I think) getting smaller.

I don't think (& I am not saying this categorically as I do not know) that the number of additional houses is increasing as fast.

LL, I don't think that there is any doubt that at the moment the housing stock increase is anywhere near keeping up with the change in population. Howver you have to be careful not extrapolating previous housing usage to any newcomers, especialy economic migration. Many if not most economic migrants are here for the money and jobs whilst they are here, their housing needs are related to their ability to perform their daily work and little else and many/most will be off back home with the money when the jobs dry up or they have enough to set themselves up.

As for the renters moviong between different housing types this means very little for the banks and lenders, they are earning little to nothing as the moves are taking place, same goes for a large part of the housing industry , oh and the treasury, no stamp duty. Whereas it might cost say £1000 to move beween rentals an equivalent move between the same types of property under owner occupied status can cost £10k's.

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  • 302 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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