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Honestly, Who Will Buy A House Now?


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Was feeling a bit depressed after seeing Foxton's shoot up so called up a friend (EA in NW London).

These were his observations.

- Anything above 1m, not a chance, forget it, no interest at all.

- 600-1m, dwindling interest but can still get sales. Sales falling through thou, people negotiation discounts, sellers being unrealistic.

- Below 600, still active. Lot's of FTB professional types getting help from parents.

- BTL. Completely dead. He's helping some big players sell up.

He personally wants to see a crash, believes in more transactions at lower prices.

Good to hear.

Re Foxtons, whilst I agree that it functions as a useful indicator, using something as liquid as a share price to try to predict something as illiquid as the housing market means you're going to see a lot of noise and volatility that needs to be smoothed out to give any meaningful insight. Look at the longer term trend for Foxtons and the recent bounce doesn't look quite so pretty.

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...

- Below 600, still active. Lot's of FTB professional types getting help from parents.

And they'll be buying overpriced crap, way beneath what people of their professional status used to be able to aspire to.

These people need to wake up. Until they do...

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I was having a pants day, this has just improved it although the lower <600K news is a bit of a downer.

Yes, 600K is still very high. Don't know if 50% crash will be enough to bring prices to affordable levels.

Does anyone know how many transactions upto 600K are done using 40% HTB? This could distort real affordability/price ratio.

If majority are HTB then the 600k, in reality, drops down to 440k.

Edited by Fairyland
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I'm still seeing yuppies buy flats in this part of nw London (they often have a coffee in our shop to celebrate -go figure). No doubt they're getting help from the bank of mum+dad. But still amazed they are paying the ridiculous prices. I can only assume they've seen the recent popularity of airbnb accommodation in this area, so figure they can earn from that.

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...Those are just some examples, you get an idea of the figures involved. The bigger the home of course the higher the price but the equivalent size home up for rent in the same area in the same sort of condition will cost upwards of £950 and I could negotiate down to maybe 900? Possibly 875?

So financially let me weigh it up. £550 as a mortgage rising up to £650 if IRs all of a sudden jump up 1/2%. The equivalent of 25% of my net income. The alternative being rent, £900 which would be 37/38% of the average net income for me monthly.

Simply put, given those numbers above, real numbers for me and important ones. Can you really say I would be winning if I chose to rent?

You don't have to find a house where rent-same-as-mortgage (say £550pm mortgage). You could pay more in rent for something better.

If you glance into the future, seems to me paying an extra £3,000 a year for a nicer rental place... well that's what so many friends and family do.

To buy you're putting your £80K down, for that mortgage. When market turns house could be worth lot less. Other house, comparable, may come to market at 40% below current prices (eg inheritor trying to sell into a cooler market), but you can't buy it for you already paid more for a house.

If there is HPC some of your capital deposit is worth less for house worth less. So you could rent a nice place rather than put your deposit all in to buying, is all I am suggesting. It's the balance you have to work out for yourself, for you can't have it both ways in the market. £80K of equity in HPC market.... isn't £80K of cash any more. Although there is less to weigh up for houses around the £200K mark, may have a different hpc profile, depending on lots of different circumstances, vs houses currently in the £400K mark in this area.

House ownership is great - unless you ruin your life paying for it. If you can save even just 10% on the price of a house, you can retire several years earlier than you would otherwise.

If you can save 50%, then you can easily take a ten year holiday and still come out ahead.

"People want to buy a house, they want to have someone tell them it is the smartest decision they are making in their lives, and they don't want to hear about any downside risk."

Housing is the biggest expense in nearly everyone's life, far more expensive than food, petrol, energy, even more expensive than education or medicine. To reduce the time you spend working to pay for housing is to increase the time you have for everything else.

Cheap housing is good for us all! High housing costs take away from families' ability to save for retirement, fund their children's education, travel and lead a quality life.

This forum has more and more people who aren't willing to put their minds to work about the 3% BTL stamp duty hike, and S.24 (from 2017) but coming to attention of more investors in the here-and-now and influencing their decisions/planning, is going to affect market, imo. 'It's all hopeless'. / 'I only see more HPI'. So buy then imo. Market.

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Young couple I know both early to mid twenties. Not yuppies she's a child minder he's semi skilled.living with parents are completing next Monday on a place 20 miles away as that's all they could afford. They don't care about Brexit. All their lives they've only seen it go up and be propped up.

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Young couple I know both early to mid twenties. Not yuppies she's a child minder he's semi skilled.living with parents are completing next Monday on a place 20 miles away as that's all they could afford. They don't care about Brexit. All their lives they've only seen it go up and be propped up.

I don't care.

They've chosen to buy.

It's a market.

'Young couple'... all their lives only known HPI.

They are making their own choices. Must have some position in terms of passing MMR, having deposit, to buy at these prices... even if it's 20 miles away from somewhere they'd prefer.

It's called a market.

Edited by Venger
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Young couple I know both early to mid twenties. Not yuppies she's a child minder he's semi skilled.living with parents are completing next Monday on a place 20 miles away as that's all they could afford. They don't care about Brexit. All their lives they've only seen it go up and be propped up.

In the 1989-95 crash these were the people that got hit the hardest.

They'd bought in a huge rush in the late 1980's as they were fearful of being left behind. But all they could afford was something really cr@p in a terrible location. When the market's booming you can convince yourself even the worst place "has potential" or "is good enough for now".

When the crash came it didn't hit all properties equally, if you had the dream Edwardian rectory on a lovely street there were still buyers, just at a lower price.

But the couple in their ghastly flat on an awful street didn't have that option. Their property didn't just suffer a fall in price, it was quickly rendered absolutely worthless. For them there were no buyers at any price, not a single one. When the market falls all that "potential" and "good enough" stuff goes straight out of the window, everyone suddenly becomes very discriminating about property, the slightest flaw and a property is blighted and not worth viewing.

So they were stuck for the best part of a decade. If they had kids and wanted to upsize, if he got a great job offer in another town, if she wanted to continue her education and move closer to a college...all not possible. They had zero alternative but to hunker down with their negative equity and watch the world passing them by.

At least this time there'll be someone even lower than them on the food chain, the highly leveraged BTL landlord won't even have the "hunker down" option, many of them will be driven straight into bankruptcy. But your young couple will be only one small step above that, and once again they'll be looking at a grim decade of being totally stuck without any possibility of relief.

Their choice.

Edited by silver surfer
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In the 1989-95 crash these were the people that got hit the hardest.

They'd bought in a huge rush in the late 1980's as they were fearful of being left behind. But all they could afford was something really cr@p in a terrible location. When the market's booming you can convince yourself even the worst place "has potential" or "is good enough for now".

When the crash came it didn't hit all properties equally, if you had the dream Edwardian rectory on a lovely street there were still buyers, just at a lower price.

But the couple in their ghastly flat on an awful street didn't have that option. Their property didn't just suffer a fall in price, it was quickly rendered absolutely worthless. For them there were no buyers at any price, not a single one. When the market falls all that "potential" and "good enough" stuff goes straight out of the window, everyone suddenly becomes very discriminating about property, the slightest flaw and a property is blighted and not worth viewing.

So they were stuck for the best part of a decade. If they had kids and wanted to upsize, if he got a great job offer in another town, if she wanted to continue her education and move closer to a college...all not possible. They had zero alternative but to hunker down with their negative equity and watch the world passing them by.

At least this time there'll be someone even lower than them on the food chain, the highly leveraged BTL landlord won't even have the "hunker down" option, many of them will be driven straight into bankruptcy. But your young couple will be only one small step above that, and once again they'll be looking at a grim decade of being totally stuck without any possibility of relief.

Their choice.

great post thank you - as someone who often sees property and think 'i guess i could cope with that' its very good to have this insight.

when prices drop no-one will be thinking 'i guess i could cope with that' they will see the place as the crap hole it is

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In the 1989-95 crash these were the people that got hit the hardest.

They'd bought in a huge rush in the late 1980's as they were fearful of being left behind. But all they could afford was something really cr@p in a terrible location. When the market's booming you can convince yourself even the worst place "has potential" or "is good enough for now".

When the crash came it didn't hit all properties equally, if you had the dream Edwardian rectory on a lovely street there were still buyers, just at a lower price.

But the couple in their ghastly flat on an awful street didn't have that option. Their property didn't just suffer a fall in price, it was quickly rendered absolutely worthless. For them there were no buyers at any price, not a single one. When the market falls all that "potential" and "good enough" stuff goes straight out of the window, everyone suddenly becomes very discriminating about property, the slightest flaw and a property is blighted and not worth viewing.

So they were stuck for the best part of a decade. If they had kids and wanted to upsize, if he got a great job offer in another town, if she wanted to continue her education and move closer to a college...all not possible. They had zero alternative but to hunker down with their negative equity and watch the world passing them by.

At least this time there'll be someone even lower than them on the food chain, the highly leveraged BTL landlord won't even have the "hunker down" option, many of them will be driven straight into bankruptcy. But your young couple will be only one small step above that, and once again they'll be looking at a grim decade of being totally stuck without any possibility of relief.

Their choice.

Their choice, and if it's only half-similar (to early 90s) - although squeeze on BTLers coming with S24 and 3% stamp duty hike giving other BTLers reason to cool on BTL - then I'm thinking of opportunity for the renter-savers who are paying way more than 'mortgage payment' in rent, because they want their £40K-£80K deposits to go further into a HPC they believe will come, even if they're slow grinding it with the savings. And younger generations behind them.

Opportunity for such renter-savers in uncertain market where they've made their decision not to settle for rubbish house on at painfully high price, in back-of-beyond For some such renter-savers their thinking goes.... rather a few more years paying £3K a more year in rent (say 4 years = £12K), than the guy who has put down £80K to get a £550pm mortgage, with belief prices of better properties will slip 20%-40%.

However it's a market. We all make our choices. For many it's been many years of rent vs years of HPI, followed by massive fiscal stimulus which only seen house prices go much higher in many areas. Certainly were it to ever to finally occur (HPC), I want the renter-savers (patient upsizers) to have opportunity for their choices, rather than be drowned out by load of excuses for those who choice to buy at ever higher toppy prices (prime and non-prime), as some sort of victims vs the renter-savers who they outbid. Buyers made their own decisions in a market, and one where many see no HPC but continual HPI+++. Market. And one where there are ever fewer numbers of younger buyers, but many more renting and saving.

I know people that have in the past bought in London and later bought outside London...I asked them what was their best buy, most said outside London....go figure. ;)

Depends on their individual circumstances. Older London owners perhaps, with their mad-gainz from London sale in hpi long wave, and QE, global QE, 0.5%, BTLers double-down mad-gainz???

Of course they could be very happy in such circumstances, selling at mad-gainz prices inside London (to date), to buying a lot more for less outside of London + putting a load of ££££££ into savings. "Alma Chizzit? I'll pay full asking."

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Carney warns housing market: "Brexit conditions will be difficult"

06 July 2016

The Bank of England’s governor is warning future mortgage borrowers who buy homes that “conditions will be difficult” as a result of economic volatility following the Brexit vote.

“If you are taking out a mortgage, at some stage, during the life of that mortgage, conditions will be difficult. So you want to be sure, as a household or an individual, that you can repay that mortgage - you don’t want to lose your house or flat” he says.

Carney also says future interest rate changes may be downwards - which in theory would be good news for would-be buyers - but he also warns buyers to avoid high levels of debt.

https://www.estateagenttoday.co.uk/breaking-news/2016/7/carney-warns-housing-market-conditions-will-be-difficult

You make your market choices.

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In the 1989-95 crash these were the people that got hit the hardest.

They'd bought in a huge rush in the late 1980's as they were fearful of being left behind. But all they could afford was something really cr@p in a terrible location. When the market's booming you can convince yourself even the worst place "has potential" or "is good enough for now".

When the crash came it didn't hit all properties equally, if you had the dream Edwardian rectory on a lovely street there were still buyers, just at a lower price.

But the couple in their ghastly flat on an awful street didn't have that option. Their property didn't just suffer a fall in price, it was quickly rendered absolutely worthless. For them there were no buyers at any price, not a single one. When the market falls all that "potential" and "good enough" stuff goes straight out of the window, everyone suddenly becomes very discriminating about property, the slightest flaw and a property is blighted and not worth viewing.

So they were stuck for the best part of a decade. If they had kids and wanted to upsize, if he got a great job offer in another town, if she wanted to continue her education and move closer to a college...all not possible. They had zero alternative but to hunker down with their negative equity and watch the world passing them by.

At least this time there'll be someone even lower than them on the food chain, the highly leveraged BTL landlord won't even have the "hunker down" option, many of them will be driven straight into bankruptcy. But your young couple will be only one small step above that, and once again they'll be looking at a grim decade of being totally stuck without any possibility of relief.

Their choice.

People will not believe you - but this is absolutely spot on. Those crap houses really do not sell in a poor market. Interestingly a box on an estate does sell either. When prices are dropping people do not buy. The rectory is a different matter.

I have seen this....both the market where people but any old cr4p and the market where people just will not buy.

Until you see it people won't believe it.

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RICS sounding gloomy.

This is the most negative reading for near-term expectations since 1998, Rics said.

https://www.theguardian.com/money/2016/jul/14/housing-sales-forecast-to-fall-sharply-this-summer-after-brexit-vote

Few more months of this please and perhaps they might mention the bleedin obvious that the asking prices are offensive.

Looks like ftb + HTB + BOMAD is the only serious contender left.

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I caught the end of a piece on BBC News, quoting RICS as the source, saying that houses have fallen 10% across the board and will continue to fall for three months before recovering. One man in the street, said that falling house prices were a good thing and a positive result of Brexit.

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As much as I wanted to put an offer for a house in North Birmingham down, got a lecture from Dad.

Basically in my culture if your dad says no, provided it's with your best interests at heart (which parent is that?) then you do as your told.

I liked the house, so did the Mrs, but back to the drawing board.

Not ideal because we really a place of our time, but I guess this buys us a bit more time. Just hope I see something happens in terms of a potential crash and soon.

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This agent is actually pretty fair. They comeback with a price they have discussed with the vendor and stick to it.

Unlike one scumbag agent who doesn't relay offers and sells it at 10,000 less than your offer... Not entertained that agent since, if he has a house on, I'm not buying it.

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This agent is actually pretty fair. They comeback with a price they have discussed with the vendor and stick to it.

Unlike one scumbag agent who doesn't relay offers and sells it at 10,000 less than your offer... Not entertained that agent since, if he has a house on, I'm not buying it.

I Have seen that sort of thing happen and it's often due to commission, they will put offers forward to sell to someone who has said they will use the estate agents' own mortgage advice and solicitors as they get a nice little wedge for that. If they start to push their services at offer stage say yes yes I'll be using your people then once offer accepted say oh actually I've found my own solicitor and mortgage now thanks. Edited by streamingfreedom
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This agent is actually pretty fair. They comeback with a price they have discussed with the vendor and stick to it.

Unlike one scumbag agent who doesn't relay offers and sells it at 10,000 less than your offer... Not entertained that agent since, if he has a house on, I'm not buying it.

I hope you went to the police !!!

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Have a look at this crazyness. These are the fruits of Osborne's boom.

Sold for 380k in Apr, 2014.

http://www.rightmove.co.uk/house-prices/detailMatching.html/svr/3110?prop=27208979&sale=1126432&country=england

It's had a bit of work since. A loft extension to create an extra bedroom (I've heard you can get these done for around 30k with no PP required). It's also had some internal refurb and a lick of paint.

New price: 800k

http://www.rightmove.co.uk/property-for-sale/property-42048681.html

It's by no means the only one. This is in same area.

Sold Dec, 2012 for 665.

http://www.rightmove.co.uk/house-prices/detailMatching.html?prop=31260415&sale=48577400&country=england

Back on at 950.

http://www.rightmove.co.uk/property-for-sale/property-40739472.html

On the plus side it does look like this price range is at a complete standstill. Hopefully a raft of bankrupt EA's towards the end of this year.

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  • 415 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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