'trouble In Paradise': Haart Boss Warns Of Big Slump In Buyers, Says House Prices Have Hit A Ceiling

[Tempus]

Surprised this article hasn't been picked up on here. It's quite something.

Paul Smith, chief executive of Haart – which has 100 branches nationwide – says: "There is trouble in paradise as we start to see a big slump in buyer demand. This has been compounded by buy-to-let investors pulling out of the market following the new stamp duty surcharge."

"We believe the nation has now neared the limit in terms of price rises. Our data is already showing a slowdown in both house price growth and transaction levels.

"In order to maintain healthy sales levels sellers need to be much more realistic with their asking prices – properties are in danger of being over-valued and these homes will struggle to sell. They could also be at risk of lenders refusing to grant high loan-to-value mortgage applications based on these too high valuations."

Read it in full at http://www.thisismoney.co.uk/money/mortgageshome/article-3606555/Trouble-paradise-Estate-agent-boss-warns-slump-buy-let-rush.html

So that is the boss of a major estate agent chain sounding the alarm.

[canbuywontbuy]

They could also be at risk of lenders refusing to grant high loan-to-value mortgage applications based on these too high valuations

Activate 40% HTB UK-wide - problem solved. Next!

Edited May 24, 2016 by canbuywontbuy

[Maynardgravy]

properties are in danger of being over-valued

Welcome.

Still can't quite bring themselves to say it though can they.

It's like saying the sea's in danger of becoming wet.

[Growlers2]

Wow! That cheered me up

[suntory]

Surprised this article hasn't been picked up on here. It's quite something.

Paul Smith, chief executive of Haart which has 100 branches nationwide says: "There is trouble in paradise as we start to see a big slump in buyer demand. This has been compounded by buy-to-let investors pulling out of the market following the new stamp duty surcharge."

"We believe the nation has now neared the limit in terms of price rises. Our data is already showing a slowdown in both house price growth and transaction levels.

"In order to maintain healthy sales levels sellers need to be much more realistic with their asking prices properties are in danger of being over-valued and these homes will struggle to sell. They could also be at risk of lenders refusing to grant high loan-to-value mortgage applications based on these too high valuations."

Read it in full at http://www.thisismoney.co.uk/money/mortgageshome/article-3606555/Trouble-paradise-Estate-agent-boss-warns-slump-buy-let-rush.html

So that is the boss of a major estate agent chain sounding the alarm.

The Guardian just picked this up.

[canbuywontbuy]

I think it's going to be a summer of discontent for EAs....but you know what, usually when something like this is about to happen, something cocks up the possibility - I can see a Remain vote kickstarting the housing market. Any old excuse.

[Fully Detached]

Paul Smith, chief executive of Haart – which has 100 branches nationwide – says: "There is trouble in paradise as we start to see a big slump in buyer demand. This

Or as the sane world calls it, reality in delusionworld.

Cracking first post btw, welcome

[Bland Unsight]

So that is the boss of a major estate agent chain sounding the alarm.

Estate agents need to sell houses, when the best way to do that is to talk sellers down, they'll do it.

(And respect for starting a thread with your first post!)

[200p]

In paradise HPI world "I'm not giving it away"

[jiltedjen]

sales volumes must be dead. Things in the south west seem to be priced at March BTL panic buying levels plus 10%.

the real buying level is now probably much lower than in 2013.

Estate agents are loving more on their books (seems 25% more on sale this spring than last) but that's no good if no one is viewing or buying.

this time next year bargains ahead. I'm sure the average BTL moron will start to get the idea towards the end of this year.

The news outlets will start spelling it out clear enough end of this year.

When the news is screaming 'sell now sell everything' then they will suddenly all wake up.

[billybong]

"There is trouble in paradise as we start to see a big slump in buyer demand.

UK - "Paradise". That's the UK with the tiniest most expensive homes in the world? Doubt it.

Edited May 24, 2016 by billybong

[thewig]

"It simply wouldn't sell so I just rented it out. Innit."

This is monumental IMO. #crashycrashy

[Venger]

Yay. Would be nice if so.

Have the EAs now finished dragging everyone that could be reached to viewings of super-expensive houses, and bankers finished dragging in people off the street to sign jumbo mortgage contracts for dream homes? hehe.

Wait for the deals to begin coming to you. That's what someone once told me. Still nowhere near that point, but I hope it could change quite rapidly.

I'm waiting until the deals come to me.

I've said there's no way I'm going to go out looking for the deals - but will wait until the deals begin coming to me. And then wait till EAs and owners are squealing, begging and crying.

[canbuywontbuy]

UK - "Paradise". That's the UK with the tiniest most expensive homes in the world? Doubt it.

We COULD be living in a paradise. We really could. Affordable housing, controlled immigration helping our infrastructure cope well. Not rocket science. But then governments aren't here to look after us, are they?

[Venger]

Surprised this article hasn't been picked up on here. It's quite something.

Paul Smith, chief executive of Haart – which has 100 branches nationwide – says: "There is trouble in paradise as we start to see a big slump in buyer demand. This has been compounded by buy-to-let investors pulling out of the market following the new stamp duty surcharge."

.. "In order to maintain healthy sales levels sellers need to be much more realistic with their asking prices – properties are in danger of being over-valued and these homes will struggle to sell. They could also be at risk of lenders refusing to grant high loan-to-value mortgage applications based on these too high valuations."

Read it in full at http://www.thisismoney.co.uk/money/mortgageshome/article-3606555/Trouble-paradise-Estate-agent-boss-warns-slump-buy-let-rush.html

So that is the boss of a major estate agent chain sounding the alarm.

To be in a market with far few BTLers competing against us... that prospect is so dreamy.

(Van Helsing)

Aleera: [to Anna] Don't play coy with me Princess. I know what lurks in your lusting heart...

...haart.

Paul - ( not a Realtor )

October 4, 2014 at 4:18 pm

….EXACTLY CORRECT ….

This spike in escalating home prices was due to temporary lack of inventory,

but the prices and sales are declining slowly.

Once the reductions TAKE HOLD .. the price reductions will escalate …. WHY?????

Because the REAL ESTATE SALES PEOPLE (Agents/Brokers)

MUST MAKE A LIVING .. THEY WILL TELL THE SELLERS ANYTHING …

” Sorry — I can’t get you Top Dollar for your house… Sales are DECLINING”

What the R.E. Agent/Broker is really saying is :

” I really need to SELL SOMETHING, I have bills to pay and I need to make

a quick sale on your p.o.s. House — I need my money FIRST … You can take

your FANTASY PROFIT that we promised you when you signed the Listing Agreement

and just “eat your heart out” ….. TOUGH LUCK FOR YOU…. I NEED MY COMMISSION,

IT’S TIME TO DISCOUNT YOUR damn PROPERTY”.

*** AND THAT IS EXACTLY HOW THIS WILL PLAY OUT.****

Just go back and take a look at 1991 to 1996 California R.E. Statistics,

I lived through it and bought a house at 75% discount. I saw how

desperate and hungry the Agents and Brokers were — THEY ONLY CARED

ABOUT THEIR COMMISSION….. REALITY RETURNS TO US AGAIN.

[renting til I die]

Activate 40% HTB UK-wide - problem solved. Next!

I'm sure they will try this! Not so sure that there are that many FTB'ers on the sidelines who would buy even with a 40% discount (which they still would have to start paying interest on 5 years later).

[Venger]

HTB and latest scheme for 40% HTB.....it was just to play both sides of the market.

You can't drag people into it (40% HTB) - and the few who might just get what they want against London newbuld prices.

Since HTB announced in 2013, speculators/BTLers have been the ones to borrow/buy in belief that Gov stands behind the market whatever the crazier values. HTB debt/numbers just doesn't compared to the BTLing debt over same time period.

A hunter with a visible snare catches few rabbits.

Do I have to link to that old couple who bought a 1 bed flat to rent out in London, days before Budget 2015 where Osborne announced reduction in BTLer tax relief?

Seen their own home go up in value from £85K to £650K. Not enough for them so they just bought 1 bed flat for £500,000 as an investment. HPC on both their homes, and banks made whole regardless, for can sell their main home and repay the debt.

EA did an abrupt change intone a while ago, but then turned other way sharpish again, as market continued to power up .

Seemed to me to be clear evidence that EAs just want churn, and not so bothered about price. Will turn just like that.

This time though, so much weighing down on BTLers, and just seen them surge into trying to beat the BTLer stamp duty hike. Lets hope long-wave HPI mad gainz owners find fewer viewers in market, and some begin accepting lower offers in order to transact (sell).

Rightmove Index June 2014 Shipside notes: “Many serious buyers who were waiting in the wings have now bought and moved in, taking a slug out of the pent-up demand for a few years to come, and the consequent chatter on the street is that quality buyers are now thinner on the ground. The next wave of buyers may have less motivation or ability to buy and sellers are going to have to be sensitive to their local market and not pitch their asking prices too high as choosy buyers will not arrange to come and visit.”

Source for the above

June 2014 http://www.rightmove.co.uk/news/articles/property-news/prices-go-off-the-boil-as-supply-and-demand-find-a-better-balance

[pig]

House-builders are nervous also apparently. Just an anecdote but one that may be worth taking seriously...

[Tapori]

Get in! Yeshhh!

[Patient London FTB]

You can't drag people into it (40% HTB)

Exactly. Soon as it dawns that market momentum is downwards there'll be zero demand for HTB.

[Patient London FTB]

House-builders are nervous also apparently. Just an anecdote but one that may be worth taking seriously...

I had a phone call yesterday from someone tasked with doing "market research" on people who'd expressed interest in a development near me [ie finding an excuse to recontact cold prospects]. One question was "Do you think now is a good time to buy?" and I said No absolutely not. Met with part-nervous, part-appreciative laughter from the guy who sounded young and probably keen on an HPC himself.

[Bland Unsight]

Exactly. Soon as it dawns that market momentum is downwards there'll be zero demand for HTB.

And the immediate introduction of FFTBTB (Force First Time Buyers To Buy), guys from G4S with lead pipes beating your till you sign up for a slavebox. Or we could have a house price crash. I'm keeping an open mind as to which is more likely.

[Venger]

Exactly. Soon as it dawns that market momentum is downwards there'll be zero demand for HTB.

Yes, sentiment would change.

When it begins, hopefully it will become unstoppable. We've already got MMR (tigher lending criteria) reinforced by EMCD the other month, giving lenders much less leeway on letting people pass for mortgages outside of stress tests. S.24 / stamp duty hikes. Older BTLers who bought BTL after BTL, having less tax relief and so higher tax obligations which tests their financial position, but in a pincer for some, with big CGT to pay if sell. And hopefully fewer BTLers looking to get into the market, with more of them picking up on the difficulties. SDLT BTLer hike easiest one for many a would-be BTLer/BTLer expander to understand, and put them off buying that bit more.

So maybe a real unwinding of malinvested positions, and the policy measures which went into supporting it all (although my view is banks took opportunity to shrink balance sheets and recapitialise during the reflation - allowing speculators who had it all, to double down again in search of core-voter more mad-gainz and yield).

The major economic drama will be the struggle between the market and government over the liquidation of debt. Political authorities will prefer to wipe away debt surreptitiously through inflation. But to inflate away bad debts also means inflating away good credits. Market participants will seek to preserve the value of their assets denominated in money. To the extent they succeed, they will make it harder to repay excessive debt in cheap money, and thus make the system more vulnerable to overt default and deflation. As monetary policy is loosened, in increasingly desperate efforts to reliquify the economy, the market may force a deflationary response.

------

With the value of real estate collateral falling, the true market value of construction and other real estate loans will fall. Bankers and other lenders, like their predecessors of 1929, will not wish to magically turn one dollar of cash into a loan worth just eighty cents, much less sixty cents.

------

For older owners, housing has been a substitute for financial savings. Before these paper windfalls generated from the seventies can be converted to cash, however, new buyers must be found. Most of these buyers will not have sufficient cash reserves to pay 50 percent down.

Therefore mortgage lenders will have to absorb a growing share of the housing market risk for prices to remain stable. They are unlikely to do this. Losses on real estate loans will be the main cause of increasing losses in the banking system.

Creditors normally react to rising losses by curtailing lending, imposing higher qualifications on borrowers, and raising loan rates higher than they would be otherwise.

As this trend becomes apparent, ageing home-owners, who are depending on their homes to provide retirement security, will try to sell. This will push prices down further. Paul Hewitt estimates that "the predicted trade-up market" may not materialise if a growing number of buyers elect to remain in housing they consider adequate, rather than risk their equity in large luxury homes.

------

Debts are retired by paying them off, "restructuring" or default. In the first case, no value is lost; in the second, some value; in the third, all value. In desperately trying to raise cash to pay off loans, borrowers bring all kinds of assets to market, including stocks, bonds, commodities and real estate, causing their prices to plummet.

The process ends after the supply of credit falls to a level at which it is collateralised acceptably to the surviving creditors. Financial assets, and all other asset-classes of value, will be selectively repudiated by default, not obliterated by inflation.

[AvoidDebt]

Sounds too good to be true dosent it? No doubt remain will be along soon to pi55 on everyone's fire.

The most disturbing thing for me was Osborne saying that we should be worried about a possible 18% hit (side note it's a carefully worded 'hit' including predicted gains over next few years and not a haircut), yet he has never mentioned once that we should be worried about the disgusting increases over the last few years. This tells me that we have a Chancellor that is perfectly happy with annual double digit growth.

The other VI spin that is being pushed, started by Osborne, and picked up by others on Twitter is that a collapse in prices won't make houses cheaper. Kid you not! The argument goes cheaper houses, higher rates = houses still unaffordable so don't wish for cheaper prices you plebs! That does not explain why every house in London was actually bought at some point by people in normal jobs, average salaries who could not dream of buying the same house today but somehow managed to buy it in the low prices, higher rates era.

[winkie]

Once upon a time agents valued the home..now vendors are valuing their own homes....they think everyone wants it and can pay for it.....no sale no fee,no business...or diversify into rental, same problems....more stuff out there than people are ready, willing or able to pay.