Average Property in England & Wales passes £300k

[BelfastVI]

Link

Looks strange when London prices are, according to reports falling. Are people shunning London prices and buying in cheaper areas outside the city and thereby pushing those prices up?

I'm sure this will be discussed on other boards but time to reflect on our own prices which are now almost 60% lower than those in England and Wales.

[The_Equalizer]

3 hours ago, BelfastVI said:

Link

Looks strange when London prices are, according to reports falling. Are people shunning London prices and buying in cheaper areas outside the city and thereby pushing those prices up?

I'm sure this will be discussed on other boards but time to reflect on our own prices which are now almost 60% lower than those in England and Wales.

Massively skewed by prices in London and the 'surrounding' areas:

UK House Prices - Zoopla

The average in Wales - according to the link above - is £169K.

Northern Ireland had such a boom and bust I'd suggest that our market still isn't back to anywhere near normal. There's got to still be a good percentage of home owners who are in negative equity. Moreover, these would have been the type of buyer who would have looked to move on and have been out of the market for a decade. Also, NI is a relatively low wage economy.

That said, things seem to be selling and prices firming since the beginning of the year (purely my observations).

[BelfastVI]

Sometimes we forget NI house prices have increased by 27%, steady over 14 quarters. That increase has been at a, too fast average of 7%pa, which is thankfully slowing now.

More supply of new houses urgently needed.

[2buyornot2buy]

5 hours ago, BelfastVI said:

Sometimes we forget NI house prices have increased by 27%, steady over 14 quarters. That increase has been at a, too fast average of 7%pa, which is thankfully slowing now.

More supply of new houses urgently needed.

I think a lot of that is to do with the various props put in place to stop the wider UK market crashing. FFL the various HTBs and the historically low interest rates. 

[darkmarket]

3 hours ago, 2buyornot2buy said:

I think a lot of that is to do with the various props put in place to stop the wider UK market crashing.

Exactly, and despite all those props there's we still have almost zero growth the last few quarters and transactions down YoY. The much-touted bull market the media were talking up is going nowhere. There's a trickle of supply, a huge amount held back chasing equity fantasies and still no evidence of unmet demand at these prices.

[BelfastVI]

16 hours ago, darkmarket said:

Exactly, and despite all those props there's we still have almost zero growth the last few quarters and transactions down YoY. The much-touted bull market the media were talking up is going nowhere. There's a trickle of supply, a huge amount held back chasing equity fantasies and still no evidence of unmet demand at these prices.

I think when people cant buy in England because of affordability this counts as unmet demand.

Edited February 15, 2017 by BelfastVI

[darkmarket]

48 minutes ago, BelfastVI said:

I think when people cant buy in England because of affordability this counts as unmet demand.

With reference to NI, I said "still no evidence of unmet demand at these prices." That's increasingly true across the UK as well. That's not a reason to build more houses as you suggest, it's a reason for prices to be allowed to correct themselves instead of more props.

This narrative that 2007 prices are some sort of reasonable benchmark, NI prices are comparable with England's and there's huge pent-up demand waiting for a flood of new housing at 5x joint income on 30-year terms is just a myth.

The market is a series of props intended to avoid banks having to write down losses accrued around 2007, some people being spared negative equity in the meantime hoping the greater fools will return, endless media bias to encourage consumption and an underlying economy based on handouts and debt with years of austerity ahead.

[The_Equalizer]

Meanwhile, a number of houses in and around Belfast that I have been watching (on for at least several months) seem to have gone sale agreed. These include a couple that have been listed for over a year plus. In fact one in Ashley Avenue - on at £350K - and discussed in our thread here:

Advice Needed For Where to Buy in South Belfast - HPC

Has just gone too. I have a feeling that the market is fairly bouyant.

 

 

[BelfastVI]

3 hours ago, darkmarket said:

With reference to NI, I said "still no evidence of unmet demand at these prices." That's increasingly true across the UK as well. That's not a reason to build more houses as you suggest, it's a reason for prices to be allowed to correct themselves instead of more props.

This narrative that 2007 prices are some sort of reasonable benchmark, NI prices are comparable with England's and there's huge pent-up demand waiting for a flood of new housing at 5x joint income on 30-year terms is just a myth.

The market is a series of props intended to avoid banks having to write down losses accrued around 2007, some people being spared negative equity in the meantime hoping the greater fools will return, endless media bias to encourage consumption and an underlying economy based on handouts and debt with years of austerity ahead.

There is of course pent up demand for housing in NI. The Housing waiting list is but one manifestation of this. The doubling of the amount of people living in the private rented sector, paying off Landlords mortgages instead of their own is but another.

NI has now some of the most affordable houses in the UK and whilst building more £650k houses in London will not help FTBers building more in NI will. The failure to build more houses will result in higher land and higher house prices.

The props you refer to, what ever they were or if they ever existed, didn't work. House prices halved and land fell in value by 90%. and many, many people experienced and many still experience negative equity.

Nobody is saying that 2007 prices are a reasonable benchmark and I hope never to see anything close to them (in real terms or other) again.

I simply can't understand how building fewer houses in any way helps.

[2buyornot2buy]

3 hours ago, BelfastVI said:

There is of course pent up demand for housing in NI. The Housing waiting list is but one manifestation of this. The doubling of the amount of people living in the private rented sector, paying off Landlords mortgages instead of their own is but another.

NI has now some of the most affordable houses in the UK and whilst building more £650k houses in London will not help FTBers building more in NI will. The failure to build more houses will result in higher land and higher house prices.

The props you refer to, what ever they were or if they ever existed, didn't work. House prices halved and land fell in value by 90%. and many, many people experienced and many still experience negative equity.

Nobody is saying that 2007 prices are a reasonable benchmark and I hope never to see anything close to them (in real terms or other) again.

I simply can't understand how building fewer houses in any way helps.

The waiting list isn't a good measure of housing demand. Anyone can join the list. Unsecured tenancies and the increase in a amateur BTLism is a significant factor in its growth IMO. People join the list in the hopes of bagging that secured HA or NIHE lottery jackpot of a house for life. If you're not in you can't win. 

 

The props were implemented to save the GB banks. Carney admits without props to shore up the system it might have fallen. The purpose of the various props, were to stop prices dropping and thus save the banks. Without the props, who knows how low NI prices could have gone. 

 

Using other over priced UK areas as an example of how the NI market is affordable is a fallacy of relative privation. Not as bad as doesn't work. 

 

 

Edited February 15, 2017 by 2buyornot2buy

[BelfastVI]

12 hours ago, 2buyornot2buy said:

The waiting list isn't a good measure of housing demand. Anyone can join the list. Unsecured tenancies and the increase in a amateur BTLism is a significant factor in its growth IMO. People join the list in the hopes of bagging that secured HA or NIHE lottery jackpot of a house for life. If you're not in you can't win. 

 

The props were implemented to save the GB banks. Carney admits without props to shore up the system it might have fallen. The purpose of the various props, were to stop prices dropping and thus save the banks. Without the props, who knows how low NI prices could have gone. 

 

Using other over priced UK areas as an example of how the NI market is affordable is a fallacy of relative privation. Not as bad as doesn't work. 

 

 

I can't think of any 'props' that were applied in NI and how they may have 'propped up' the prices which went on to fall 50%.The central bank will act to save banks and the system. that's one of the reasons they are there.

NI was traditionally about mid table in the affordability scale in the Uk Regions. It once just tailed London at the wrong end of this league. However it is amonst the most affordable now and that is something we have to welcome. We also want to keep it there and as you say not just follow the other regions if they keep growing. To remain affordable we need more supply. Increasing competition to developers like me and increasing the supply of land. 

[2buyornot2buy]

Also just wanted to put it out there. You used the old landlord cliche - paying someone else's mortgage. As you know, 70% of private NI tenancies receive housing benefit. It's the tax payer paying the LL mortgage in most cases. Not an individual. 

Luckily the tax payer looks set to get something back with the removal of higher rate tax allowance and Wear and tear allowance. 

[2buyornot2buy]

6 hours ago, BelfastVI said:

I can't think of any 'props' that were applied in NI and how they may have 'propped up' the prices which went on to fall 50%.The central bank will act to save banks and the system. that's one of the reasons they are there.

First Buy. Help to buy mortgage guarantee. Funding for lending. 0.5% interest rates. 350 billion QE. 

 

PROPS

[BelfastVI]

22 hours ago, 2buyornot2buy said:

First Buy. Help to buy mortgage guarantee. Funding for lending. 0.5% interest rates. 350 billion QE. 

 

PROPS

I think most of the QE went to the stock market and will shortly be sucked out. Most of the price pressure in London came from overseas. The majority of overseas buyers bringing cash in.

H2B didn't really take off here as the bit (H2B1) that really helped first time buyers didn't cover NI. Funding for lending replaced other avenues that were previously available to banks and the BoI rate is not the rate mortgages are available for.

whether the private renters are receiving benefits or not doesn't take away from the fact they are paying off LL's mortgages rather than their own. The introduction of the increased tax will reduce the amount of additional BTL properties and may result in an overall reduction which applies further upward pressure in rents. 

[darkmarket]

On 17/02/2017 at 3:52 PM, BelfastVI said:

I think most of the QE went to the stock market and will shortly be sucked out. Most of the price pressure in London came from overseas. The majority of overseas buyers bringing cash in.

QE is the primary factor in all the current asset bubbles, from stocks to housing. The BoE is also responsible for ensuring that credit is cheap, which is the biggest prop of all. A small proportion of London property is bought by non-resident investors, the bubble is driven by excessive credit in the domestic market.

On 17/02/2017 at 3:52 PM, BelfastVI said:

The introduction of the increased tax will reduce the amount of additional BTL properties and may result in an overall reduction which applies further upward pressure in rents. 

The new owner-occupiers reduce demand for rental accommodation by an equivalent amount resulting in a neutral outcome. The increased tax is currently serving one function of masking price drops by impeding transaction volume.

On 15/02/2017 at 5:07 PM, BelfastVI said:

NI has now some of the most affordable houses in the UK and whilst building more £650k houses in London will not help FTBers building more in NI will. The failure to build more houses will result in higher land and higher house prices.

More overpriced houses in Belfast without any jobs nearby won't stop London being overpriced. What will help everyone, except short-term speculators and those who borrowed too much, is the market correction that's beginning to unfold and eventually reaching NI with the usual delay.

[BelfastVI]

10 hours ago, darkmarket said:

QE is the primary factor in all the current asset bubbles, from stocks to housing. The BoE is also responsible for ensuring that credit is cheap, which is the biggest prop of all. A small proportion of London property is bought by non-resident investors, the bubble is driven by excessive credit in the domestic market.

The new owner-occupiers reduce demand for rental accommodation by an equivalent amount resulting in a neutral outcome. The increased tax is currently serving one function of masking price drops by impeding transaction volume.

More overpriced houses in Belfast without any jobs nearby won't stop London being overpriced. What will help everyone, except short-term speculators and those who borrowed too much, is the market correction that's beginning to unfold and eventually reaching NI with the usual delay.

A high proportion of the £1m+ properties was, up until Brexit purchased by overseas investors, many with no intention of ever living here.

I agree that the movement of ownership from BTL to Owner-Occupier is welcome but we have to agree it will reduce the amount of houses available on the rental market. There is over demand for rental properties.

I don't agree houses in NI are overpriced. Reducing the number of house built/supplied places an upward pressure on prices. Increasing the supply places a negative pressure on prices. Nothing we do here will have any effect on what is happening in London and that market operates on its own. it is more influenced by external investor attenuates and that attitude has turned negative.  London and most of England didn't have a significant price correction 2007/2008. NI had the mother of all corrections to match the boom.

[darkmarket]

24 minutes ago, BelfastVI said:

A high proportion of the £1m+ properties was, up until Brexit purchased by overseas investors, many with no intention of ever living here.

For Prime London, the figure is around 10% for international buyers of second homes and residential investors in 2013/14: http://researchbriefings.files.parliament.uk/documents/CBP-7723/CBP-7723.pdf

The 68% which is UK buyers is a reflection of the excessive credit. There's no need to blame it on the foreigners, plenty of guilt to go round.

The need for more housing is secondary to the need for a market correction. Although the extra supply pressure sounds like a good thing, enjoying a false floor set by Treasury / BoE props to the financial sector means developers are still renting out non-sold units waiting for a return to 2007 levels. That's not participating in a market.

38 minutes ago, BelfastVI said:

NI had the mother of all corrections to match the boom.

NI had the biggest bubble in western Europe, one of the biggest in the world, based on no underlying economy. It was protected by the same props that limited the crash in London, and continues to be. It's still failing, despite endless media hype, cheap credit and widespread financial illiteracy, because it's still overpriced.

Defending gross market manipulation and reckless lending might help paint a picture of a functional market, it doesn't make it reality.

[yadayada]

A rise of under 1% in the quarter just gone is not a rise at all. Congratulations to those of you "paying someone else's mortgage" - you're winning.

[2buyornot2buy]

9 hours ago, BelfastVI said:

There is over demand for rental properties.

Based on what? Rents not moving for the past 10 years?

[BelfastVI]

whilst the article is from 2013 it states " 85% of homes in the capital's centre sold to overseas buyers as weak pound sees foreign interest soar"

Read more: http://www.thisismoney.co.uk/money/mortgageshome/article-2340858/85-homes-Central-London-sold-overseas-buyers.html#ixzz4ZW4e0rqJ 
 

I doubt if the interest is soaring now but, if correct it shows that in recent years the top end of the London Market was driven by overseas demand.

[darkmarket]

7 hours ago, BelfastVI said:

I doubt if the interest is soaring now but, if correct it shows that in recent years the top end of the London Market was driven by overseas demand.

You're still arguing that QE hasn't contributed to house price inflation when just this week even the Bank of England witnesses at the Treasury Committee acknowledged that it has, significantly. To your original point:

On 13/02/2017 at 10:21 AM, BelfastVI said:

Looks strange when London prices are, according to reports falling. Are people shunning London prices and buying in cheaper areas outside the city and thereby pushing those prices up?

No. London always leads the market, the other areas are catching up.

Price trends have reversed in prime central, spread to include cuts in a third of all offers, and signs from Cambridge and others suggest that reverse is extending beyond London. If history is any guide, NI will be affected in turn.

On 13/02/2017 at 10:21 AM, BelfastVI said:

time to reflect on our own prices which are now almost 60% lower than those in England and Wales.

No, a UK bubble doesn't justify a bigger bubble in NI. NI is getting poorer and the UK is just about growing. Prices need to fall more in GB than NI, but they need to fall a long way in both.

[yadayada]

Indeed. I believe taking time to reflect on how our prices are so much lower than England's will allow us to conclude that this is irrelevant.