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Telegraph: First-time buyers - four ways to capitalise on falling house prices

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First-time buyers: four ways to capitalise on falling house prices

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While investors and buy-to-let landlords are bemoaning the decline of house prices, there is one group which will be rubbing their hands – first-time buyers.

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While this may be good news for people trying to get on the housing ladder for the first time, new research has suggested first-time buyers’ lack of negotiating skills could be forcing them to pay over the odds for their dream home.

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Lenders and brokers agree that the most important thing to remember when searching for your ideal first property is you can take your time. Rushing into an agreement and panic-buying is among the worst thing you can do.

http://www.telegraph.co.uk/personal-banking/mortgages/first-time-buyers-four-ways-capitalise-falling-house-prices/

Yes, you read that right, the Telegraph giving advice to FTBers on how to negotiate LOWER prices and NOT rush in. Sure sign the crash in underway! Top story in Money section.

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55 minutes ago, Barnsey said:

Lenders and brokers agree that the most important thing to remember when searching for your ideal first property is you can take your time. Rushing into an agreement and panic-buying is among the worst thing you can do.

isn't the entire market based on folk panic buying...?  fear of 'missing the boat' etc is what encourages over bids.  Without this sense of panic the market will crash...no doubt about that in my mind.

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23 minutes ago, rantnrave said:

Another way to capitalise right now.

Wait.

Wait....and wait a few years.......

I watched it go down in '89 by 92' you still couldn't really tell if if was over. 

House prices are very slow to adjust, once prices fall people naturally step back and watch the train wreck.

I have seen it once and I will see it again.

 

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The data, from Barclays Mortgages, suggests 51pc of first-time buyers who bought for the first time in the past five years regret not negotiating prior to purchase. It also revealed that one in five paid over the asking price by an average of £8,000 – with that figure soaring to £13,000 in London.

Not negotiating - really? Over half of these idiots just subscribed to potentially the largest amount of debt they'll ever be exposed to without even trying to haggle the price down, even just a bit?

Sadly it seems indicative of the unquestioning consumerist idiot mentality that seems so pervasive. Let's face it you've got to be utterly mad to have ftb'd in the last 12-18 months, however I bet plenty have been duped into taking on eye-wateringly high LTV debt on horrible over-priced brick boxes "because it's new", "prices only ever go up" and "the monthly payments are low".. I suppose happily handing over whatever exorbitant sum they're demanding goes with the territory :rolleyes:

 

22 minutes ago, rantnrave said:

Another way to capitalise right now.

Wait.

Indeed.. I dislike the over-enthusiastic, saccharine-sweet tone of the article and considering it's citing a 0.4% fall in the RM asking price index as a legit and significant reason to get scrambling for the mortgage forms, I can't help but think that this is nothing other than a cynical ploy to prop up a falling market by exploiting those who don't know any better and allow the more savvy sellers to reach the exits relatively unscathed.

I find the use of the term "dream home" hugely patronising too... historically I suspect very few ftb'ers would ever have scored their "dream home", let alone now when prices are so ball-crushingly high compared to what they once were. 

The smart money's definitely on sitting on one's hands while the panic unfolds and the fools rush in, IMO.

 

 

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Keep waiting, all you FTBs. I've no plans to buy till at least 2020. Let's watch this thing go down together, from a safe distance. They'll really struggle without us.

 

 

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40 minutes ago, Parkwell said:

Keep waiting, all you FTBs. I've no plans to buy till at least 2020. Let's watch this thing go down together, from a safe distance. They'll really struggle without us.

 

 

I am certainly in no rush to jump in at these prices. It would take a minimum 30% correction from here before I even started to consider buying and would still feel like I was getting robbed. 

 

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1 hour ago, Parkwell said:

Keep waiting, all you FTBs. I've no plans to buy till at least 2020. Let's watch this thing go down together, from a safe distance. They'll really struggle without us.

 

 

+1

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1 hour ago, ftb_fml said:

Not negotiating - really? Over half of these idiots just subscribed to potentially the largest amount of debt they'll ever be exposed to without even trying to haggle the price down, even just a bit?

Sadly it seems indicative of the unquestioning consumerist idiot mentality that seems so pervasive. Let's face it you've got to be utterly mad to have ftb'd in the last 12-18 months, however I bet plenty have been duped into taking on eye-wateringly high LTV debt on horrible over-priced brick boxes "because it's new", "prices only ever go up" and "the monthly payments are low".. I suppose happily handing over whatever exorbitant sum they're demanding goes with the territory :rolleyes:

 

Indeed.. I dislike the over-enthusiastic, saccharine-sweet tone of the article and considering it's citing a 0.4% fall in the RM asking price index as a legit and significant reason to get scrambling for the mortgage forms, I can't help but think that this is nothing other than a cynical ploy to prop up a falling market by exploiting those who don't know any better and allow the more savvy sellers to reach the exits relatively unscathed.

I find the use of the term "dream home" hugely patronising too... historically I suspect very few ftb'ers would ever have scored their "dream home", let alone now when prices are so ball-crushingly high compared to what they once were. 

The smart money's definitely on sitting on one's hands while the panic unfolds and the fools rush in, IMO.

Colleague of mine, FTB, managed to get a bit of a discount (like 2%), but the chain took forever (not their fault, they were at the bottom). After several months the vendors said they were putting the price back up as the offer was conditional on a quick sale. The sane response would have been to tell them to go ****** themselves, original price or bye bye chain... not a chance. He paid up :(

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The naive FTBers will always be the last to be sucked in, thank Krusty and Phillis for that with their pathetic "Your low offer was rejected, lets offer asking? Yay you've got it, congratulations!!!" on tv.

I'm another FTB waiting for 2019/20, just saving best I can whilst not putting life on hold too much. Friends at work have bought within last year or 2 at peak prices in Berkshire, I'm hoping for at least a 30% reduction in next 3 years allowing me to also move thereabouts, still overpriced but perhaps best I can hope for.

Ok with paying rent for next 3 years at this point as I believe the falls will far outweigh what i'm "wasting" by not jumping in at this point and continuing to fund my landlord's retirement.

Edited by Barnsey

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34 minutes ago, Northern Welsh Midlander said:

Colleague of mine, FTB, managed to get a bit of a discount (like 2%), but the chain took forever (not their fault, they were at the bottom). After several months the vendors said they were putting the price back up as the offer was conditional on a quick sale. The sane response would have been to tell them to go ****** themselves, original price or bye bye chain... not a chance. He paid up :(

The sad thing is that as cynical and defiant as I consider myself, until maybe three months ago I could completely have identified with the feeling of complete hopelessness that would probably behind just rolling over and dropping your trousers in such a situation.. "might as well get it over now as it'll probably be 5% more expensive in six months time" :(

 

27 minutes ago, Barnsey said:

The naive FTBers will always be the last to be sucked in, thank Krusty and Phillis for that with their pathetic "Your low offer was rejected, lets offer asking? Yay you've got it, congratulations!!!" on tv.

I'm another FTB waiting for 2019/20, just saving best I can whilst not putting life on hold too much. Friends at work have bought within last year or 2 at peak prices in Berkshire, I'm hoping for at least a 30% reduction in next 3 years allowing me to also move thereabouts, still overpriced but perhaps best I can hope for.

Ok with paying rent for next 3 years at this point as I believe the falls will far outweigh what i'm "wasting" by not jumping in at this point and continuing to fund my landlord's retirement.

That certainly looks to be the way it's going.

I certainly agree about holding off, although hopefully not for as long as 3yrs. It seems that generally the low point was reached after the last crash after 12-18 months at around 15% lower than peak - of course things could well be different this time in terms of timescale and magnitude.. a 30%+ drop would be wonderful but tbh 20% would certainly be enough to motivate me to buy the "right" property.

 

 

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20% in the SE is half of sod all really, still looking at grotty ex-council 3 bed semi's at £320k+, once they get down to £270k or so things start to get interesting. A reversal to 2011-12 prices would be Christmas for all, still nuts but half what they are now.

Really not prepared to commit myself to 25 years paying off a £320k ex-council house on "boy racer crescent" at £1400 a month with historically low IRs for now, this becomes £1900 a month if rates head back to 6%!

20% on stagnant areas of NW and NE on the other hand, probably as good as it will get (this excludes prime areas of large cities).

Edited by Barnsey

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2 hours ago, doomed said:

I am certainly in no rush to jump in at these prices. It would take a minimum 30% correction from here before I even started to consider buying and would still feel like I was getting robbed. 

 

30%? I have always said a 50% drop, more so here in the outer boroughs of London that have seen the steepest rises.

This will only take it down to 2012-2013 levels, which is in no way in any realms of fantasy.

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Unless we get some serious wage inflation (which I doubt we will), London/SE prices need to fall by 70%+ to return to sanity.

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1 hour ago, Darby Ram said:
  1. Don't buy a house.
  2. Buy things that are not houses.
  3. Wait.
  4. Stop reading articles written by people who ultimately want to sell you their house.

5. Don't be a fool!

The greater fool theory states that the price of an object is determined not by its intrinsic value, but rather by irrational beliefs and expectations of market participants. A price can be justified by a rational buyer under the belief that another party is willing to pay an even higher price.

 

IMG_3513.JPG

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5 hours ago, ftb_fml said:

Not negotiating - really? Over half of these idiots just subscribed to potentially the largest amount of debt they'll ever be exposed to without even trying to haggle the price down, even just a bit?

Sadly it seems indicative of the unquestioning consumerist idiot mentality that seems so pervasive. Let's face it you've got to be utterly mad to have ftb'd in the last 12-18 months, however I bet plenty have been duped into taking on eye-wateringly high LTV debt on horrible over-priced brick boxes "because it's new", "prices only ever go up" and "the monthly payments are low".. I suppose happily handing over whatever exorbitant sum they're demanding goes with the territory

......The smart money's definitely on sitting on one's hands while the panic unfolds and the fools rush in, IMO.

 

3 hours ago, ftb_fml said:

The sad thing is that as cynical and defiant as I consider myself, until maybe three months ago I could completely have identified with the feeling of complete hopelessness that would probably behind just rolling over and dropping your trousers in such a situation.. "might as well get it over now as it'll probably be 5% more expensive in six months time" :(

 

Cmon the forum has had so many members sing how buyers have been 'duped into it' for 9+ years.

It's almost rubbing hands for a bailout of innocence buyers.

And you admit you had hoplessness.  I won't buy at these prices, and hopelessness to pay extreme prices, outbidding all others, is no excuses.

The truth is they made their own choices in a competitive market, and if they are even in the market at these prices, they must have something about them for incomes.  If they do it through a scheme, it's not a stretch to know £250,000 or £350,000 is a lot of money/debt.

And in many areas it's been 9 years more renting £-big-money paid out, and house prices up 40% on 2007 peaks.

It's incredible conceit to widely cast FTBs as being duped.   What about the couple on Prime London thread touching 30 who have put down a deposit on offplan £1m+ property, whilst hoping the flat they bought for £400,000 goes up in value in the meantime, and admitting themselves they are 'gambling' ?   Own choice.  What about other couples with massive Bomad help.   Not all FTBs paying these prices are buying from lack of hope.  And on a drive out today all the recent houses that have gone up for sale are Sold STC tagged on boards at £400,000 - £800K.   It's a market out there, not the beginning of innocence for the owners/buyers.

Mention you or someone has a modern German car and the control squad comes out about how they must be 'uninformed' - 'victims of advertising' - 'didn't do their research' vs their own perfumed greatness choice of an 10+ year old Kia.  Arrogance.  If anyone is brainwashed it's many HPCers with their superior view of themselves vs owners/buyers.

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I haggled a £25 reduction for a handbag for my wife's birthday a couple if years back. It was already on sale. The assistant was young. Said no-one had ever asked for a reduction.  First time for everything I replied. She talked with her boss and deal was done.  This was in a posh London chain. 

Honing my skills for the oncoming HPC........

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What I am seeing in London as a keyworker all the developments are offering shared ownership flats without the rent element.  So you get a mortgage for £200k for a studio and just have to pay the service charge and not the rent element.  The price is shown as a £400k sale.  They are finding so many ways to stretch afforability and keep bubble going however my deposit powder is dry despite Carney stealing all my interest.

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5 hours ago, Barnsey said:

The naive FTBers will always be the last to be sucked in, thank Krusty and Phillis for that with their pathetic "Your low offer was rejected, lets offer asking? Yay you've got it, congratulations!!!" on tv.

I'm another FTB waiting for 2019/20, just saving best I can whilst not putting life on hold too much. Friends at work have bought within last year or 2 at peak prices in Berkshire, I'm hoping for at least a 30% reduction in next 3 years allowing me to also move thereabouts, still overpriced but perhaps best I can hope for.

Ok with paying rent for next 3 years at this point as I believe the falls will far outweigh what i'm "wasting" by not jumping in at this point and continuing to fund my landlord's retirement.

Nobody can time the housing market perfectly. In 2008 the expectation was the same, the prices will keep falling for years but they were reflating within 18 months. 

In Berkshire (Wokingham) we're close to exchanging on a place that we've got for 11% under original asking which was conditional on a quick sale. We're FTB and there's no onward to happy days. Our choice of course, and I wish you well in yours. One thing we did notice while comparing the sqft of our rented place to our new place is that the rent we're paying here for a two bed flat now seems to be slightly higher than similar places. I would say it would go for a 5% to 10% reduction. The recent ban on tenant's fees is great news and might help you to negotiate a reduced rent to assist with your savings until you decide to buy (or not). 

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56 minutes ago, Venger said:

And in many areas it's been 9 years more renting £-big-money paid out, and house prices up 40% on 2007 peaks.

It's incredible conceit to widely cast FTBs as being duped.  

Nailed it again. If I'd bought 9 years ago it is likely I'd be well over half way to clearing the mortgage by now. I wouldn't care/don't care what the value of teh house is provided I don't get repo'd. All I care about really is buying a house that ticks as many of my requirement boxes as possible and clearing off the mortgage so I can focus less on work and more on my passions.

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On 06/23/2017 at 10:42 PM, Venger said:

Cmon the forum has had so many members sing how buyers have been 'duped into it' for 9+ years.

 

I'm coming round to this worldview seeing friends in similar situations buy when others can't or won't. I agree with you, people do make their own choices.

Yet, you see things like this from the debrief, edited by the lady who led the middle class charge to get letting fees banned, telling of buyers in London whose developer took 90 square feet off their offplan flat and (amazingly) they agreed to bend over and take it.

Desperation and stupidity. Could and should have walked away, but outrageous behaviour from the developer.

At some point though, it's gotta be fraud or outright extortion. What if they'd turned up on moving day and they'd had one less bedroom, no kitchen or bathroom, or the plan had one metre high ceilings and no-one noticed? Friendly developer's lawyer, clipboard in hand, invites them to sign their rights away or walk away homeless.

There has to be a point in the shades of grey somewhere where the buyer really has been a victim, surely? Let a court decide, whatever.

As you say, a market, but no modern market will let you label horsemeat as beef. Yet some estate agents and developers will try their best to lie and deceive and there has to be accountability there too.

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On 06/23/2017 at 11:42 PM, adarmo said:

Nailed it again. If I'd bought 9 years ago it is likely I'd be well over half way to clearing the mortgage by now. I wouldn't care/don't care what the value of teh house is provided I don't get repo'd. All I care about really is buying a house that ticks as many of my requirement boxes as possible and clearing off the mortgage so I can focus less on work and more on my passions.

If it's any consolation, Im sure you could have overpaid or whatever, but a 25 year mortgage after 10 years has only paid off 30%ish of the capital.

Much of mortgage is paying rent (or interest) on the capital at the beginning.

Play around with an amortisation calculator, I was surprised.

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4 hours ago, mat109 said:

If it's any consolation, Im sure you could have overpaid or whatever, but a 25 year mortgage after 10 years has only paid off 30%ish of the capital.

Much of mortgage is paying rent (or interest) on the capital at the beginning.

Play around with an amortisation calculator, I was surprised.

Please, do tell the chartered accountant with an Economics degree more. :)

Over the last 9 years I have had significant pay rises and, assuming I remained in the same property, I would have simply reduced the mortgage term. Over payments not necessary.

The amortization schedule I've produced shows circa £1,270/month repayments and of that circa £400 is interest which is fine. The interest rate on our mortgage is actually half the inflation rate (unbelievably for our first property) so in real terms the debt is falling even if we made zero payments and rolled up the interest. Wont be rushing to pay that one off. :D 

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On 23/06/2017 at 4:44 PM, Parkwell said:

Keep waiting, all you FTBs. I've no plans to buy till at least 2020. Let's watch this thing go down together, from a safe distance. They'll really struggle without us.

 

 

I am right there with you my friend.

 

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