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Fear Phase Beginning?

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My RM search area has 140 non STC listings... 10 more appeared this morning... Lots of new reductions... Something is afoot.

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What I would like to know is who is selling?.....people with one or people with more than one, where are they going and what are they buying?;)

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Only seen 2 houses in my search area of about 100 go sstc or under offer since brexit. Strange that some people on here say things are carrying on as normal for them. How can it be so different where I am!?

When do agents start to panic?

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There have been so many false dawns over the last few years - I remember late last year feeling the local market was starting to turn and being proved completely wrong - but... I am starting to see quite a number of reductions. There's still a lack of supply and those properties and still massively overpriced compared to 3 years ago, but there does seem to be an air of urgency to sell since the Brexit vote.

My concern is that this is largely a knee-jerk reaction to the doom-laden headlines after the exit vote - but once that starts to stabilise and people realise any affects of leaving the EU are likely to be more long-term and drawn out - confidence will seep back in and the boom will kick off again.

However if the nervousness last long enough for the monthly indicies to start showing annual price falls then I think it will start to gather its own momentum regardless of the wider economy - the BTLers will panic and flood the market.

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There have been so many false dawns over the last few years - I remember late last year feeling the local market was starting to turn and being proved completely wrong - but... I am starting to see quite a number of reductions. There's still a lack of supply and those properties and still massively overpriced compared to 3 years ago, but there does seem to be an air of urgency to sell since the Brexit vote.

My concern is that this is largely a knee-jerk reaction to the doom-laden headlines after the exit vote - but once that starts to stabilise and people realise any affects of leaving the EU are likely to be more long-term and drawn out - confidence will seep back in and the boom will kick off again.

However if the nervousness last long enough for the monthly indicies to start showing annual price falls then I think it will start to gather its own momentum regardless of the wider economy - the BTLers will panic and flood the market.

I think London is the key here. The bubble reflation has been very London-centric and things have become very overheated there. Plus, Londoners 'lost' the EU vote by a county mile so the psychological shock / panic of Brexit is much greater there. If London pops, it will bring the SE down with it.

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If London pops, it will bring the SE down with it.

And hopefully the north will follow.

One new listing struck me in the balls this week, mainly because its a 3bed semi, with naff gardens for £240k and it makes a 5 bed detached with gardens all round and a double garage, private drive, surrounded by trees, that hasn't sold since being listed in 2014 look like outstanding value at £280k (last sold price £205 in 2011)! Really I don't think they stand a hope in hell of selling the semi when there is a MUCH better house round the corner for 15% more.

Bonkers!

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Hard to know at the moment, early days, everything in MSM saying everything is awesome "keep calm and carry on", Brexit doesn't mean you'll lose your job after all, and mortgage rates will drop so bonus!

Personally got my eyes on Greater Manchester and Cheshire, not so great areas seeing some reductions of around 10% but prime areas seeing stubborn kite flying prices still, little movement so far, why would there be already when nothing has changed fundamentally yet?

Think it'll take news of entering a recession in 2017 to really start things, unemployment predicted to rise from 4.9% to 7.1% by 2019, took a couple years last time round for unemployment to rise from 5.1% to steady around 7.8% before then climbing further to 8.4% towards the end of 2011.

I'm not saying it's a direct indicator of HPI sentiment but at the time HTB was introduced in April/Oct 2013 (which i know is being cited as the cause of HPI madness since then), it also coincided with the resumption of a steady rise in employment, along with BTL being seen as the only way to get decent returns as the economy improved whilst interest rates stayed on the floor.

Now that the BTL changes are coming (hopefully not to be reversed), foreign buyer sentiment being dented despite weak GBP, mortgage rates with little space to fall noticeably, and the probability of unemployment to rise starting next year, I think we're seeing the start of the perfect storm, or at least as good as it's going to get if you want to buy in the coming couple of years. Never mind the great risk of wider EU falling into a severe recession and possibly States et al towards 2020, cyclical innit...

Edited by Barnsey

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At what point do the Mortgage co. surveyors start to bring down valuations post Brexit. Probably a stupid question, but do they base things purely on today's comparable sold prices or build in some negative risk?

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Not seen very much good news in my small area of the North East that I'm looking at (constrained due to kids at school) lately.

Just spotted these two grossly overpriced properties in the last few days....

http://www.rightmove.co.uk/property-for-sale/property-55242454.html

http://www.rightmove.co.uk/property-for-sale/property-55220005.html

650k for 4 bed detached........

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At what point do the Mortgage co. surveyors start to bring down valuations post Brexit. Probably a stupid question, but do they base things purely on today's comparable sold prices or build in some negative risk?

I believe they already are. I asked this on here recently but apparently RICS don't instruct members to downgrade prices by X amount. They leave it up to 'local knowledge'

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Hard to know at the moment, early days, everything in MSM saying everything is awesome "keep calm and carry on", Brexit doesn't mean you'll lose your job after all, and mortgage rates will drop so bonus!

Personally got my eyes on Greater Manchester and Cheshire, not so great areas seeing some reductions of around 10% but prime areas seeing stubborn kite flying prices still, little movement so far, why would there be already when nothing has changed fundamentally yet?

Think it'll take news of entering a recession in 2017 to really start things, unemployment predicted to rise from 4.9% to 7.1% by 2019, took a couple years last time round for unemployment to rise from 5.1% to steady around 7.8% before then climbing further to 8.4% towards the end of 2011.

I'm not saying it's a direct indicator of HPI sentiment but at the time HTB was introduced in April/Oct 2013 (which i know is being cited as the cause of HPI madness since then), it also coincided with the resumption of a steady rise in employment, along with BTL being seen as the only way to get decent returns as the economy improved whilst interest rates stayed on the floor.

Now that the BTL changes are coming (hopefully not to be reversed), foreign buyer sentiment being dented despite weak GBP, mortgage rates with little space to fall noticeably, and the probability of unemployment to rise starting next year, I think we're seeing the start of the perfect storm, or at least as good as it's going to get if you want to buy in the coming couple of years. Never mind the great risk of wider EU falling into a severe recession and possibly States et al towards 2020, cyclical innit...

Not claiming to be an expert - I just spent 2 mins googled these pointers for first time, so take with pinch of salt -but it looks to me like the (pre brexit, important to note) trends are going in the wrong direction.

BTL changes in early days, but look more like slowing growth than popping the bubble

Foreign buyer sentiment appear look down, but no concrete stats on this yet.

Mortgages rates forecasted to drop.

Unemployment has been falling steadily and as of yesterday at record lows (if you believe the stats)

EU GDP growth is trending upwards slightly.

I'm not trying to ruin the party, just saying that current stat trends don't strike me as 'the perfect storm'.

My gut feeling is hopeful, still waiting for something statistical to give some footing to the speculation.

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I agree with all of that, mubes.

I wonder if, ironically, EAs will be driving down prices when they start to panic about their lack of commission.

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Not seen very much good news in my small area of the North East that I'm looking at (constrained due to kids at school) lately.

Just spotted these two grossly overpriced properties in the last few days....

http://www.rightmove.co.uk/property-for-sale/property-55242454.html

http://www.rightmove.co.uk/property-for-sale/property-55220005.html

650k for 4 bed detached........

That is pure comedy.

I was expecting those houses to be on the high side of £200k

Who can raise that sort of debt in Whitley Bay?

wow.

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Contact has told me of 2 houses in one of the areas I track for younger-brother, set to come to market.

I should imagine they'll be asking £400K each (South Manchester).

One house the owner has died. Family home 3-beds. Inheritors decided to sell.

The other house the single-occupant owner gone into a care-home. Family home 3-beds.

Although to be fair the market is still hot. All we need is for buyer confidence to fall, despite mubes low rates. Initial repayments on £100K mortgage at 15% is same as £300K mortgage at 2%.

Real estate runs on money; not population growth, not mube's gut feelings. Values are found at the margin. My memory of 2008-early 2009 where the steep falls happened in fairly low transaction rate market. Sellers and buyers agreed to transact at lower prices, and surrounding houses fell in value. Although then QE, and many owners of surrounding houses felt their own homes had never fallen at all.


I just read the FS reports in full, and yes I must concede you right on all these points and there is more 'gut feel' to my arguments than facts.

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Real estate runs on money; not population growth, not mube's gut feelings. Values are found at the margin. My memory of 2008-early 2009 where the steep falls happened in fairly low transaction rate market. Sellers and buyers agreed to transact at lower prices, and surrounding houses fell in value. Although then QE, and many owners of surrounding houses felt their own homes had never fallen at all.

Sorry again Venger. I'm just speculating really. I'm not claiming to be an expert. Life just threw me the dice to be in a position this year to buy..... and just trying to form a layman's opinion on the short term movements, just like everyone else!

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Although to be fair the market is still hot. All we need is for buyer confidence to fall, despite mubes low rates. Initial repayments on £100K mortgage at 15% is same as £300K mortgage at 2%.

Are you saying that buyer confidence is not related at all to these stats, rate changes etc? Is confidence not very tightly intertwined with these trends?

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Are you saying that buyer confidence is not related at all to these stats, rate changes etc? Is confidence not very tightly intertwined with these trends?

Mubes - I would advise you to look at the Royal Institute of Chartered Surveyors data, which is a good measure of confidence in the housing market because it tracks new buyer interest and new seller interest as well as surveyors expectations of what direction prices will go next. It's a monthly report, the last one was out a couple of weeks ago and it was grim.

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That is pure comedy.

I was expecting those houses to be on the high side of £200k

Who can raise that sort of debt in Whitley Bay?

wow.

Just the tip of the iceberg.....

http://www.rightmove.co.uk/property-for-sale/property-52768240.html 830k

http://www.rightmove.co.uk/property-for-sale/property-42556170.html 700k

Definately a micro bubble and plenty of houses over 300k. I didn't think there were the jobs here to support these types of prices, but people are still buying them.

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Thanks that is super useful. I've just had a look at the report, and the key chart for my own purpose (i have an investment horizon of 5 years in current situation, it's not a forever home) is the 5 year forecast.

6_WEB_June_2016_RICS_UK_Residential_Mark

This shows that RICS consensus is 4% growth. Which is a downgrade, but not negative, and certainly not bubble popping forecasts.

More encouragingly the 12 month forecast is slightly negative, but that would be necessary of course to bring the 5 year growth significantly down below the long term average of 7% compound growth YoY.

I just want to stress again, that this is the first time I've looked at this report, I'm not claiming to be right, just trying to understand the whole spectrum of debate....

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Just the tip of the iceberg.....

http://www.rightmove.co.uk/property-for-sale/property-52768240.html 830k

http://www.rightmove.co.uk/property-for-sale/property-42556170.html 700k

Definately a micro bubble and plenty of houses over 300k. I didn't think there were the jobs here to support these types of prices, but people are still buying them.

I can only conclude it's mostly SE money being cashed in to buy these houses. With wages forming only a small part, if any, in the affordabilty sums.

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This is just anecdotal and I have been saying it for weeks now, but this is the first time in years I am really starting to see a build up of For Sale signs. I am old enough to remember times when they were seen as a type of polllution, there were so many of them, oh to see days like that again. I cover a wide area around North Herts and Cambs.

I can remember that. I met a guy in about 1992-3 who was ecstatic about it and never, ever wanted the housing market to pick up again. Turned out his company made the plastic "For Sale" signs used by local EAs. Since they were stood for so much longer in front gardens they weren't recycling for re-use, so the EAs were having to order loads more from his company. Every cloud...

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