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Anecdotal - Buy A House, Don't Sell A House

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Went to see a house for sale at the weekend

Prices round here don't seem to be moving and I am having trouble stopping Mrs Zen wanting to buy. The house we saw has been on the market ages, it's very poor and expensive even for this area (SE). Vendor was very nervous - tell us he has bought another house to move into, can't sell this one and has borrowed from friends and family to purchase the new one.

This is a very big gamble is it not? How many more people are there like this?

Z.

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Went to see a house for sale at the weekend

Prices round here don't seem to be moving and I am having trouble stopping Mrs Zen wanting to buy. The house we saw has been on the market ages, it's very poor and expensive even for this area (SE). Vendor was very nervous - tell us he has bought another house to move into, can't sell this one and has borrowed from friends and family to purchase the new one.

This is a very big gamble is it not? How many more people are there like this?

Z.

And what an idiot to tell you. Did you gently ask why he hadn't reduced the price?

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Do some research on "rent to buy".

This happened in the last crash, people couldn't sell their houses, so got a BTL mortgage on their home, bought a new place and rented out the old.

Probably the most stupid strategy anyone could imagine, but then you'd have a weight of EA's and mortgage advisors telling you that you could own 2 properties and be a property tycoon. Wow.

The same has started to happen again...

Edited by BandWagon

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I think this kind of story is fairly common now. I know of one house on the market where I'm looking that has been on for over a year now. When it first came on I talked to the agent and he said they'd committed to buying a newbuild flat (retiring and downsizing). So I'd guess they must be in that by now, or lost a lot of deposit.

The house opposite where I'm living right now has been for sale for months. We know the family indirectly and they have moved to the other side of London for schooling. We know they have bought but they have not sold their old house yet. It's just sitting there empty probably costing a small fortune.

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And what an idiot to tell you. Did you gently ask why he hadn't reduced the price?

Agreed. He is in a weak postion, so he makes his bargaining position even weaker by showing his hand?

Perhaps Zen had shown no signs of buying anyway, but even so, it isn't helping your case to let info like this out.

It's all downward pressure, so it's all good!

NDL

Edited by New Darker Law

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And what an idiot to tell you. Did you gently ask why he hadn't reduced the price?

I didn't bother. If he hasn't sold and hasn't reduced the price to try to it probably means he can't afford to :o:o:o:o

Telling me was not a good idea - I can't believe it either!

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Do some research on "rent to buy".

This happened in the last crash, people couldn't sell their houses, so got a BTL mortgage on their home, bought a new place and rented out the old.

Probably the most stupid strategy anyone could imagine, but then you'd have a weight of EA's and mortgage advisors telling you that you could own 2 properties and be a property tycoon. Wow.

The same has started to happen again...

Did not know that BW but certainly makes sense. Thanks.

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Do some research on "rent to buy".

This happened in the last crash, people couldn't sell their houses, so got a BTL mortgage on their home, bought a new place and rented out the old.

Probably the most stupid strategy anyone could imagine, but then you'd have a weight of EA's and mortgage advisors telling you that you could own 2 properties and be a property tycoon. Wow.

The same has started to happen again...

Been seeing this a lot in Australia for a few months now. In my local area well over half of the properties for sale are visibly empty from the outside.

I know of 3 people who have bought or moved in with partners over the past month. One left a rental property whilst the other two now own a house they don't occupy. One of them plans on BTL, the other plans to renovate and then sell. The point is that 3 people (and in 2 cases their families) moved and not one house was sold as a result. This is very typical of the situation.

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Some people we know are trying to buy a house (also in SE) the owners of which have done this. The wannabe purchasers haven't had anyone round their house in months, but 'can't reduce because the vendors won't reduce too'. I assume the wannabe vendors can't afford to sell at any less (ignoring their bridging costs of course).

There's just so much stalemate in the housing market at the moment, so many incredibly long-lasting 'SSTC' and houses popping back onto the market - just a house of cards waiting to tumble...

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Do some research on "rent to buy".

This happened in the last crash, people couldn't sell their houses, so got a BTL mortgage on their home, bought a new place and rented out the old.

Probably the most stupid strategy anyone could imagine, but then you'd have a weight of EA's and mortgage advisors telling you that you could own 2 properties and be a property tycoon. Wow.

The same has started to happen again...

This is exactly what my sister has done. Refused to drop the price to sell so rented it out and bought another one instead.!

I have also seen quite a few houses for sale, not sold, then let out easily..

Interesting stuff..

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Yes. I'm seeing an increasing amount of empty property on the market and I'm fairly certain most of it isn't ex-rental.

I suppose something had to explain why the number of sales has picked up recently with no apparent increase in FTBers or BTLers.

This would probably also explain why some indices have shown a small increase in average price.

All of this points to further real falls next year.

Oddly enough I'm not seeing a glut of really cheap rents - which is what I would expect as these landlords will be out to cover (most of) their costs and not out to make a profit. I suppose that this may be happening in other parts of the country.

Is anyone seeing cheaper rents?

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Do some research on "rent to buy".

This happened in the last crash, people couldn't sell their houses, so got a BTL mortgage on their home, bought a new place and rented out the old.

Done at the right time (i.e. at the bottom of the market when nothing is selling) its a reasonable way of moving. Done at the wrong time (i.e. at the top of a very large downhill slope) it is suicide.

Oddly enough I'm not seeing a glut of really cheap rents - which is what I would expect as these landlords will be out to cover (most of) their costs and not out to make a profit. I suppose that this may be happening in other parts of the country.

Is anyone seeing cheaper rents?

no because the costs they have to cover is not the small loan on the original property but the stupidly massive one on the new property. As I said above when I had no choice but to rent to buy in 1997 I was at least sure that any possible rent would pay the additional mortgage I had this is not the case nowadays.

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People who let their houses out and buy (at the top) are in for a world of pain.

If they have to sell for 25% less in future, their 'peak price' new house in effect has

cost them a lot more (assuming they haven't leveled it off with Let costs).

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This happened in the last crash, people couldn't sell their houses, so got a BTL mortgage on their home, bought a new place and rented out the old.

Probably the most stupid strategy anyone could imagine, but then you'd have a weight of EA's and mortgage advisors telling you that you could own 2 properties and be a property tycoon. Wow.

The same has started to happen again...

Certainly is. I've been keeping an eye on the situation a friend of mine has got himself into. He moved in with his partner when they bought a house together earlier this year. Now he can't sell the old one and is seriously considering letting it out. On the other hand, the way the relationship is heading, it will all end in tears - and a forced sale of the new house and him moving back into the old one. Bet they'll have fun selling up if that happens...

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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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