cock-eyed octopus Posted June 24, 2018 Share Posted June 24, 2018 I've been convinced that house prices are stagnant round our way (south of Cambridge). Not much for sale, & what there is generally sticking. Small new estate in the village not selling at all (at ridiculous prices of course). Expecting to see the builders in receivership any day now! However a builder bought the house next door to a nearby friend a couple of years ago; it wasn't in bad nick - didn't look an obvious candidate for flipping to me - but he's spent £40k (not including his labour) doing it up while still working. I thought the'd be lucky to get his money back but he's just sold to the first couple viewing (who are completing their sale soon) & made 39% gross (above his £40k). I'm amazed. But he's done a fantastic, well thought out job with beautiful finish & detail. But still ... that's an excellent return I reckon. It just proves you can't generalize about house prices, there's just so much individual variation. It also proves quality of finish is paramount. Quote Link to comment Share on other sites More sharing options...
dougless Posted June 25, 2018 Share Posted June 25, 2018 Its depressing isn't it. We should be in the middle of a historic crash by now but all the props the Government have put in place seem to be holding..... Quote Link to comment Share on other sites More sharing options...
Si1 Posted June 25, 2018 Share Posted June 25, 2018 housing development involves taking on risk - you could make or lose money on individual jobs. That's my amateur take on it anyway. By the same token we can all find individual shares we should have bought to get fantastic returns way above the market average. It's just about overlooking risk after the event. Quote Link to comment Share on other sites More sharing options...
“Nasty Piece of work” Posted June 26, 2018 Share Posted June 26, 2018 20 years of mad gains - you will always find a plonker. With Joe Public so very thick, it is not surprising. Quote Link to comment Share on other sites More sharing options...
Si1 Posted June 28, 2018 Share Posted June 28, 2018 No no no. It's just the division of labour, in this case. Quote Link to comment Share on other sites More sharing options...
“Nasty Piece of work” Posted June 28, 2018 Share Posted June 28, 2018 What exactly do you by division of labour then? Quote Link to comment Share on other sites More sharing options...
“Nasty Piece of work” Posted June 28, 2018 Share Posted June 28, 2018 6 hours ago, Si1 said: No no no. It's just the division of labour, in this case. I can imagine DoL playing a part in an actual market environment, but what we currently have is nowhere remotely near it. Quote Link to comment Share on other sites More sharing options...
Si1 Posted June 28, 2018 Share Posted June 28, 2018 10 minutes ago, Freezer? Best place for it said: I can imagine DoL playing a part in an actual market environment, but what we currently have is nowhere remotely near it. My point is he didn't make money from a rising market, rather by adding value. Unless I've missed a detail. Quote Link to comment Share on other sites More sharing options...
“Nasty Piece of work” Posted June 28, 2018 Share Posted June 28, 2018 50 minutes ago, Si1 said: My point is he didn't make money from a rising market, rather by adding value. Unless I've missed a detail. I think we will have to disagree. My point is that DoL has little to do with adding “”value”', and the purchase will have been made because of two decades of the likes of The Fat One, and HutH Quote Link to comment Share on other sites More sharing options...
cock-eyed octopus Posted June 28, 2018 Author Share Posted June 28, 2018 He certainly hasn't made money on a rising market, it's stagnant at best. I think the main factor involved is the sophistication of the market; people who are prepared to part with large sums for a premium product have been round the property block a few times (i.e. they're old) & realise just how difficult & expensive it is to get a proper job done. The guy is not your average builder. He is highly academically qualified & obsessive about detail. He works on jobs where people want a meticulous job done, they tend to be wealthy, so he knows what such people want. My overall point is that the property market is now much more mature than it used to be & very diverse, people can spot the rubbish from the desirable, this means some houses sell in days & some never. General statements about prices going up or down fail in individual cases, so the sort of statements some posters are fond of such as " offer him 20% less, he'll snatch your hand off" have less validity than ever. Quote Link to comment Share on other sites More sharing options...
Si1 Posted June 30, 2018 Share Posted June 30, 2018 On 28/06/2018 at 23:30, ****-eyed octopus said: He certainly hasn't made money on a rising market, it's stagnant at best. I think the main factor involved is the sophistication of the market; people who are prepared to part with large sums for a premium product have been round the property block a few times (i.e. they're old) & realise just how difficult & expensive it is to get a proper job done. I've noticed that decent houses now have a premium over doer uppers. This is a sensible market. I'd have no problem paying higher price for this as I suspect a good professional developer can do a better cheaper doing up job than me. Quote Link to comment Share on other sites More sharing options...
“Nasty Piece of work” Posted June 30, 2018 Share Posted June 30, 2018 3 hours ago, Si1 said: This is a sensible market. It isn’t even a market, and offers no value, only Fool’s Gold. Only buy if you crave negative equity. Quote Link to comment Share on other sites More sharing options...
Si1 Posted June 30, 2018 Share Posted June 30, 2018 (edited) 2 minutes ago, Freezer? Best place for it said: It isn’t even a market, and offers no value, only Fool’s Gold. Only buy if you crave negative equity. Ok my bad. I meant that doer uppers, certainly where I am, seem to have a sensible price distinction below non doer uppers. I wasn't clear to the point of being downright confusing. I agree, if this is what you mean, that the market is skewed by weird govt incentives overall. Edited June 30, 2018 by Si1 Quote Link to comment Share on other sites More sharing options...
cock-eyed octopus Posted June 30, 2018 Author Share Posted June 30, 2018 Exactly right, Si1. Not long ago people were paying as much for wrecks as decently renovated places, didn't make sense really. Perhaps there was the idea prevalent that you had to 'put your own stamp on it', but without reaising the difficulties when you're starting from scratch. I wonder if it's related to authenticity in antiques? I used to deal in furniture but the market died - very few people give a stuff anymore! What does amaze me is the price people will pay for a derelict barn - even a modern one. The conversion costs make them almost worthless I reckon. Quote Link to comment Share on other sites More sharing options...
Toast Posted July 1, 2018 Share Posted July 1, 2018 Thank you ceo: interesting story! The way I read it, is that over the last 10+ years, the market has been irrational in two different ways: the prices are too high (compared to salaries, rental yields or whatever), and prices were rising very quickly. If we consider just those people who don't look at fundamentals, and only look at the rising prices, that second aspect led to a "buy whatever you can, before you miss the boat" mentality. Now, as price rises cease, and before they (hopefully) start to actually go down, we have what looks to those people specifically, like a normal market: there is no rush to buy out of fear; no immediate future equity gains to drool over. The usual dynamics of a properly functioning market start to take hold: people shop around, compare prices, and get picky. This is only true, though, for that small set of people who can still buy, and who aren't looking at fundamentals. In that sense, it's a little false island of real market dynamics: circumscribed in numbers, because not many people can buy, and (hopefully) circumscribed in time, as we are briefly at the top of the arc and so temporarily prices are static. If the trajectory of prices carries on over the top and starts to accelerate downwards, then we'll see this false little market for what it is: the quiet eye of the storm, a little pocket of spring in a sheltered cleft of the mountain. That happy pool of buyers with no awareness of the fundamentals will dry up: they'll be shocked into thinking about underlying values. Even more, they are precisely the people who care about momentum, so they will be aware of the falls, and will want to pull back and wait. Then there will be no sales. Then, gradually, the first of the desperate sellers will have to reach down, a long way, to find the floor of the real market. Maybe. Quote Link to comment Share on other sites More sharing options...
cock-eyed octopus Posted July 1, 2018 Author Share Posted July 1, 2018 Toast, I would basically agree with this interpretation, although the little pocket of spring is perhaps larger than you would think (round here anyway). There is no question but that the present situation is mad, bonkers, totally unsustainable, & that one day the scales will be prised from people's eyes & they will wonder at how such a situation ever came to pass. It's just a question of when. I gave up trying to predict that will happen a long time ago. P.S. I just had a sudden thought; is this symptomatic of the greater inequality throughout society? That your average house-box will depreciate while those seen as more desirable continue on an ever upward trend? Rather like 'quality' & 'classic' cars vs. your Ford Fiesta? A bit depressing ... Quote Link to comment Share on other sites More sharing options...
cock-eyed octopus Posted December 13, 2018 Author Share Posted December 13, 2018 Just a final update: the sale finally went through! Chain collapsed several times - got up to about 12 involved at one point - so an apparently simple sale took 6 months to make it over the line. Pretty symptomatic I think. People at the top of chains being totally out of touch with what FTBs can afford. Quote Link to comment Share on other sites More sharing options...
gp_ Posted December 13, 2018 Share Posted December 13, 2018 It sounds to me the profit he made was not from property trading, but a return on the work put in to improve the property so it tells us more about the possible gain from improvements rather than the level of house prices. Quote Link to comment Share on other sites More sharing options...
peter_2008 Posted December 13, 2018 Share Posted December 13, 2018 I think it is fair to say that UK does have a shortage of good quality housing, so the demand for good quality housing always exceeds supply. And I said this before that I do not believe house price will fall much unless repo goes up as well. I do not even believe that mass unemployment will trigger a house price crash, because whatever the outcome of Brexit, if repo starts to go up, the government will intervene. BoE is ready to print 750 Billion on the top of the £500 Billion already printed. Quote Link to comment Share on other sites More sharing options...
happyguy Posted December 14, 2018 Share Posted December 14, 2018 On 25/06/2018 at 00:40, ****-eyed octopus said: It just proves you can't generalize about house prices, there's just so much individual variation. It also proves quality of finish is paramount. agree 100% On 25/06/2018 at 07:46, dougless said: Its depressing isn't it. no On 28/06/2018 at 23:30, ****-eyed octopus said: I think the main factor involved is the sophistication of the market; people who are prepared to part with large sums for a premium product have been round the property block a few times (i.e. they're old) & realise just how difficult & expensive it is to get a proper job done. The guy is not your average builder. He is highly academically qualified & obsessive about detail. He works on jobs where people want a meticulous job done, they tend to be wealthy, so he knows what such people want. My overall point is that the property market is now much more mature than it used to be & very diverse, people can spot the rubbish from the desirable, this means some houses sell in days & some never. General statements about prices going up or down fail in individual cases, so the sort of statements some posters are fond of such as " offer him 20% less, he'll snatch your hand off" have less validity than ever. could not agree more - also the generation under 40 have generally done nothing for themselves so will have no idea about how to improve a home that needs updating so they buy something in good order and will pay a premium for it On 30/06/2018 at 13:18, Si1 said: I've noticed that decent houses now have a premium over doer uppers. This is a sensible market. I'd have no problem paying higher price for this as I suspect a good professional developer can do a better cheaper doing up job than me. same here Quote Link to comment Share on other sites More sharing options...
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