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TheCountOfNowhere

Longest Ever Sstc Back On The Market

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This one is 5 months....the boom that never was:

http://www.rightmove.co.uk/property-for-sale/property-29453550.html

02/03/2014
Initial entry found.
6/05/2014
Price changed: from '£320,000' to '£314,995'
15/09/2014
Status changed: from 'null' to 'Sold STC'
24/02/2015
Status changed: from 'null' to 'Available'
Swiftly followed by:
28/02/2015
Price changed: from '£314,995' to '£299,995'
These places, IMHO, are worth £150K tops
If chains have been sat that long and are starting to collapse now, panic will ensue.

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It's just take us 4 months to complete on buying.

Firstly the solicitor forgot about us for a month, then dragged everything out.

Even between exchange and completion has taken two weeks.

Oh, yes then the mortgage company forgot about us for a month too. Fell off their diary system apparently, they soon rectified the situation.

EA's recommended solicitors - fecking joke. Would have been quicker undertaking the conveyancing myself and I haven't a clue.

House has been on sale for quite a time because the previous sale fell through when the buyer couldn't get the funds. Solicitors in this country are a joke. No problems with searches or anything, all done very quickly. In the end I called the solicitors and shouted at the solicitor dealing with us, which was a result as she worked on it over the weekend so we could exchange the next week.

The problems with fallen through sales is the vendor won;t take much/ any discount on the last price it was sale agreed. But then again most of us are in the ponzi together and can;t afford to sell for less as they wouldn't be able to pay off the mortgage or buy another house.

House price inflation helps nobody except the banks.

If you were to buy a house int he 90's for £60k and wanted to sell it today, but the same house was £160k, youd'e have to sell yours for around £160k to be able fto afford to move.

Who exactly (except for landlords/'speculators) has house price inflation ever helped?

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It's just take us 4 months to complete on buying.

Firstly the solicitor forgot about us for a month, then dragged everything out.

Even between exchange and completion has taken two weeks.

Oh, yes then the mortgage company forgot about us for a month too. Fell off their diary system apparently, they soon rectified the situation.

EA's recommended solicitors - fecking joke. Would have been quicker undertaking the conveyancing myself and I haven't a clue.

House has been on sale for quite a time because the previous sale fell through when the buyer couldn't get the funds. Solicitors in this country are a joke. No problems with searches or anything, all done very quickly. In the end I called the solicitors and shouted at the solicitor dealing with us, which was a result as she worked on it over the weekend so we could exchange the next week.

The problems with fallen through sales is the vendor won;t take much/ any discount on the last price it was sale agreed. But then again most of us are in the ponzi together and can;t afford to sell for less as they wouldn't be able to pay off the mortgage or buy another house.

House price inflation helps nobody except the banks.

If you were to buy a house int he 90's for £60k and wanted to sell it today, but the same house was £160k, youd'e have to sell yours for around £160k to be able fto afford to move.

Who exactly (except for landlords/'speculators) has house price inflation ever helped?

This plus MMR rules are responsible for whole sections of the market being frozen up around my way IMO,

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Here's another random example......

http://www.rightmove.co.uk/property-for-sale/property-47757485.html

Been for sale since at least last summer if I recall correctly. Has been SSTC for quite a while. Now just back (as a new listing) with the price UP from the original, already nutty, 160K now to 175K.

if you can't sell at 160K then of course it makes perfect sense, as the seller, to listen to the same EA tell you to this time put it on the market for an even higher price. :wacko:

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Here's another random example......

http://www.rightmove.co.uk/property-for-sale/property-47757485.html

Been for sale since at least last summer if I recall correctly. Has been SSTC for quite a while. Now just back (as a new listing) with the price UP from the original, already nutty, 160K now to 175K.

if you can't sell at 160K then of course it makes perfect sense, as the seller, to listen to the same EA tell you to this time put it on the market for an even higher price. :wacko:

Nope, nobody's going to buy it for £160k or even £175k, but I suspect that if the vendor can;t get that price then they simply won;t move home.

99% of people selling have no money to pay EA fees, solicitors, stamp duty etc. They're skint. Wqually buyers are also skint, so the market freezes up.

Now what you need is a 5% interest rate hike and some repo's to get the market moving again. I note that repo's have hit record low's. :rolleyes:

You won't get repo's increasing before the election, but you might well do after especially if they were to 'cut back' and remove SMI, in work and housing benefits.

I can't see rates rising significantly (especially since china has just cut theirs), so you really need these costly tax payer subsidies removed. Which party is going to do that?

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Completely agree. The transaction costs for moving house are enormous. People just don't have a spare £10,000 plus to cover it all. Forced sales due to unaffordable mortgage payments are the only way to get the market moving, as you say.

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I note that repo's have hit record low's. :rolleyes:

Not really, the 2014 repossession rate was 0.19% of all properties, the lowest since 2006, but still well above where it's been in the past. In 1973 for example repossessions were just 0.03% of all properties and as recently as 2003 and 2004 repossessions were running at 0.07%.

But I agree with your point that repossessions are a critical component of any property crash, in fact I'd argue that it's repossessed properties, with their fire sale prices, that actually are the property crash. In the 1989/95 crash interest rates spiked, which meant many owner occupiers could no longer afford to pay their new, higher mortgages, and repossessions rocketed, peaking at 0.77% in 1991. Without a flood of repossessed properties overwhelming buyers and setting much lower prices at the margin, there wouldn't have been a crash.

So how likely is it to happen again in the foreseeable future? Not likely at all in my opinion.

Interest rates will probably stay ultra low for years to come, and consequently repossessions will remain subdued. The one ray of sunshine is potentially buy to let, where forbearance isn't an issue and repossessions could happen faster. But I STR'd in 2005 precisely on the assumption that BTL landlords would rush for the exit at the first sign of even moderating house price inflation. That didn't work out very well for me, and the lesson I learnt is that BTL landlords are more tenacious than I'd reckoned. Going forward when landlords say they're in it for the long haul, I'm going to take their words at face value!

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Not really, the 2014 repossession rate was 0.19% of all properties, the lowest since 2006, but still well above where it's been in the past. In 1973 for example repossessions were just 0.03% of all properties and as recently as 2003 and 2004 repossessions were running at 0.07%.

But I agree with your point that repossessions are a critical component of any property crash, in fact I'd argue that it's repossessed properties, with their fire sale prices, that actually are the property crash. In the 1989/95 crash interest rates spiked, which meant many owner occupiers could no longer afford to pay their new, higher mortgages, and repossessions rocketed, peaking at 0.77% in 1991. Without a flood of repossessed properties overwhelming buyers and setting much lower prices at the margin, there wouldn't have been a crash.

So how likely is it to happen again in the foreseeable future? Not likely at all in my opinion.

Interest rates will probably stay ultra low for years to come, and consequently repossessions will remain subdued. The one ray of sunshine is potentially buy to let, where forbearance isn't an issue and repossessions could happen faster. But I STR'd in 2005 precisely on the assumption that BTL landlords would rush for the exit at the first sign of even moderating house price inflation. That didn't work out very well for me, and the lesson I learnt is that BTL landlords are more tenacious than I'd reckoned. Going forward when landlords say they're in it for the long haul, I'm going to take their words at face value!

My anecdotal experience of BTL landlords is that they often don't have a real view of their profit/loss position. I've helped a couple of friends with their tax returns and pointed out to them how they are ploughing money into their BTL every year to deal with voids, repairs etc and warned them that if interest rates rise their costs and hence the loss will increase. This seems to be news to them, I generally get a blank look and the observation that "you always make money in property" or "I'm in it for capital gain and taking a long term view".

I suspect that these people are pretty representative of a fair proportion of BTL landlords. As a result it is going to take something that radically increases their cost base (eg. significant interest rate rise, loss to tax relief on interest payments) creating real financial distress, or even forced repossession before they will seek to exit the market.

Edited by Exiled Canadian

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Nope, nobody's going to buy it for £160k or even £175k, but I suspect that if the vendor can;t get that price then they simply won;t move home.

99% of people selling have no money to pay EA fees, solicitors, stamp duty etc. They're skint. Wqually buyers are also skint, so the market freezes up.

Now what you need is a 5% interest rate hike and some repo's to get the market moving again. I note that repo's have hit record low's. :rolleyes:

You won't get repo's increasing before the election, but you might well do after especially if they were to 'cut back' and remove SMI, in work and housing benefits.

I can't see rates rising significantly (especially since china has just cut theirs), so you really need these costly tax payer subsidies removed. Which party is going to do that?

Whichever one wins a decent 'secure' majority at the coming election - assuring them 5 years to do as they please?

Edited by anonguest

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Not really, the 2014 repossession rate was 0.19% of all properties, the lowest since 2006, but still well above where it's been in the past. In 1973 for example repossessions were just 0.03% of all properties and as recently as 2003 and 2004 repossessions were running at 0.07%.

But I agree with your point that repossessions are a critical component of any property crash, in fact I'd argue that it's repossessed properties, with their fire sale prices, that actually are the property crash. In the 1989/95 crash interest rates spiked, which meant many owner occupiers could no longer afford to pay their new, higher mortgages, and repossessions rocketed, peaking at 0.77% in 1991. Without a flood of repossessed properties overwhelming buyers and setting much lower prices at the margin, there wouldn't have been a crash.

So how likely is it to happen again in the foreseeable future? Not likely at all in my opinion.

Interest rates will probably stay ultra low for years to come, and consequently repossessions will remain subdued. The one ray of sunshine is potentially buy to let, where forbearance isn't an issue and repossessions could happen faster. But I STR'd in 2005 precisely on the assumption that BTL landlords would rush for the exit at the first sign of even moderating house price inflation. That didn't work out very well for me, and the lesson I learnt is that BTL landlords are more tenacious than I'd reckoned. Going forward when landlords say they're in it for the long haul, I'm going to take their words at face value!

Agreed re: rates staying low. BUT.....there are, this time around, different factors at work conspiring to have the same effect as rising rates (albeit slower perhaps). Such as wage stagnation (or declines) and rising cost of living. More than a fair few will be forced to cut back in their lifestyle expectations (e.g. "do we really need this 4 bed house anymore?", "what if we moved to xxxxxx, we could buy the same size house for less....", etc).

So I am sure there will be 'forced' sales. Just that they may take longer to materialise and never quite each dramatic surge levels - rather just an elevated constant stream level.

Edited by anonguest

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Not really, the 2014 repossession rate was 0.19% of all properties, the lowest since 2006, but still well above where it's been in the past. In 1973 for example repossessions were just 0.03% of all properties and as recently as 2003 and 2004 repossessions were running at 0.07%.

But I agree with your point that repossessions are a critical component of any property crash, in fact I'd argue that it's repossessed properties, with their fire sale prices, that actually are the property crash. In the 1989/95 crash interest rates spiked, which meant many owner occupiers could no longer afford to pay their new, higher mortgages, and repossessions rocketed, peaking at 0.77% in 1991. Without a flood of repossessed properties overwhelming buyers and setting much lower prices at the margin, there wouldn't have been a crash.

So how likely is it to happen again in the foreseeable future? Not likely at all in my opinion.

Interest rates will probably stay ultra low for years to come, and consequently repossessions will remain subdued. The one ray of sunshine is potentially buy to let, where forbearance isn't an issue and repossessions could happen faster. But I STR'd in 2005 precisely on the assumption that BTL landlords would rush for the exit at the first sign of even moderating house price inflation. That didn't work out very well for me, and the lesson I learnt is that BTL landlords are more tenacious than I'd reckoned. Going forward when landlords say they're in it for the long haul, I'm going to take their words at face value!

Interest rates really are the key and not just because of their impact on the affordability of mortgages. I Even a small percentage rise in savings rates should make a rational investor consider taking their money out of BTL property and putting it into a relatively safe and hassle free account.

Of course property investment often lacks rationality and that is why bubbles occur.

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