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Sellers in ‘painful position’ as asking price cuts hit six-year high

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Sellers in ‘painful position’ as asking price cuts hit six-year high
http://www.propertyindustryeye.com/sellers-in-painful-position-as-asking-price-cuts-hit-six-year-high/

 

The level of discounts to asking prices hit a new high in June as agents continued to struggle to offload stock, data suggests.

According to Home.co.uk, there was a 19% increase in properties with price cuts, with agents listing the highest number of reduced properties since October 2012.

New stock on the market was up 10% annually in June – the highest rate of new instructions since 2011 – while total stock is now up 9.7% annually to the highest level since November 2014 at 522,193 properties.

Overall, the average UK asking price was £310,577.

Typical time on the market fell year-on-year by two days to 80.

Doug Shephard, director of Home.co.uk, said: “Slashing the asking price is often regarded as a last resort for frustrated sellers. On the other hand, what else do you do if you need to sell in a sliding market like London is now?

“Vendors are increasingly in a painful position as their properties linger on the market while comparable new instructions arrive with lower price tags.

“We also expect price cutting to increase. Monthly totals of price-cut properties have already risen by 19%, nearing levels last seen in 2012.

“However, it may be some time before we reach the extent of drastic price slashing last experienced in 2008 when a quarter of the entire stock for sale took a haircut each month.”

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12 minutes ago, rantnrave said:

Sellers in ‘painful position’ as asking price cuts hit six-year high
http://www.propertyindustryeye.com/sellers-in-painful-position-as-asking-price-cuts-hit-six-year-high/

 

The level of discounts to asking prices hit a new high in June as agents continued to struggle to offload stock, data suggests.

According to Home.co.uk, there was a 19% increase in properties with price cuts, with agents listing the highest number of reduced properties since October 2012.

New stock on the market was up 10% annually in June – the highest rate of new instructions since 2011 – while total stock is now up 9.7% annually to the highest level since November 2014 at 522,193 properties.

Overall, the average UK asking price was £310,577.

Typical time on the market fell year-on-year by two days to 80.

Doug Shephard, director of Home.co.uk, said: “Slashing the asking price is often regarded as a last resort for frustrated sellers. On the other hand, what else do you do if you need to sell in a sliding market like London is now?

“Vendors are increasingly in a painful position as their properties linger on the market while comparable new instructions arrive with lower price tags.

“We also expect price cutting to increase. Monthly totals of price-cut properties have already risen by 19%, nearing levels last seen in 2012.

“However, it may be some time before we reach the extent of drastic price slashing last experienced in 2008 when a quarter of the entire stock for sale took a haircut each month.”

I am still dreaming, am I reading that estate agents are suggesting a falling knife scenario?

If you don't sell at a reduced price now it could get far worse?

NO, I must be still asleep still , estate agents don't say things like that, they say "slight fall this month because the weather was good, cat died etc", but prices will pick up again in a few months".

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18 minutes ago, rantnrave said:

Sellers in ‘painful position’ as asking price cuts hit six-year high
http://www.propertyindustryeye.com/sellers-in-painful-position-as-asking-price-cuts-hit-six-year-high/

“However, it may be some time before we reach the extent of drastic price slashing last experienced in 2008 when a quarter of the entire stock for sale took a haircut each month.”

That last bit made me smile.

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10 minutes ago, inbruges said:

I am still dreaming, am I reading that estate agents are suggesting a falling knife scenario?

If you don't sell at a reduced price now it could get far worse?

NO, I must be still asleep still , estate agents don't say things like that, they say "slight fall this month because the weather was good, cat died etc", but prices will pick up again in a few months".

They need volume, I have never subscribed to the theory that they are responsible for high prices

estate agents are agnostic they are not responsible for high or low prices 

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25 minutes ago, vincent said:

They need volume, I have never subscribed to the theory that they are responsible for high prices

estate agents are agnostic they are not responsible for high or low prices 

When sellers are thin on the ground, EAs fall over one another to give unrealistically high valuations in order to win the instruction. This is a key driver of sentiment and explains why prices are so sticky on the way down. Have seen this time and time again with family, colleagues etc practically giddy drunk with the sky high valuation they have received from an EA and what that could mean for their life (afford somewhere bigger, closer to better schools, a drive way etc). It's hard to let go of those dreams and realise the place is worth tens of thousands of £ less than they were told.

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6 minutes ago, rantnrave said:

When sellers are thin on the ground, EAs fall over one another to give unrealistically high valuations in order to win the instruction. This is a key driver of sentiment and explains why prices are so sticky on the way down. Have seen this time and time again with family, colleagues etc practically giddy drunk with the sky high valuation they have received from an EA and what that could mean for their life (afford somewhere bigger, closer to better schools, a drive way etc). It's hard to let go of those dreams and realise the place is worth tens of thousands of £ less than they were told.

And then two months later call them to reduce to A more realistic number 

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.......so they get this giddy valuation, the EA must be right they are professional!........get a few stupid offers so think to themselves, am not giving it away, this house has been making me more than the job does.....so they remove it from the market and move anyway......for many now with cheap loose debt they can easily move without selling.....another air b and b, perhaps to cover costs of keeping, or the other home, an empty home of store and growing value?😉

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Well my wife and I are sellers and realistic, but I can tell you for nothing that its a right b@ll ache when almost everyone else is sitting on their hands.  Our 4 bed det. has been cut from £395k (would have been record for street but only by £15k) to £350k and we've been offered £336k which we haven't rejected or accepted, but instead asked them to sell their place then come back to us.

Now some b*gger has put a 100 sq. ft bigger 5 bed link det. in a more expensive area on for £345k.  There may be a catch and we are asking EA to do some digging, but you can imagine how our place and all the similarly located homes for sale now look in comparison.

We are pragmatists and understand that we need to sell at the current market value BUT what if all the properties in our target area (very nice S. Coast leafy suburb 10 mins walk from the sea) are owned by people who refuse to accept that prices have corrected and don't actually have to move?
Suggestions on a postcard please!

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1 hour ago, winkie said:

Only worth as much as what the last similar property on the street sold for next ready, willing and able buyer is ready, willing and able to pay.....forget the new kitchen that ain't worth alot. 😉

Fixed for you.

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5 minutes ago, Diver Dan said:

Fixed for you.

'Only worth as much as the buyer can get a mortgage for you '

Fcxed it for you, fixing it for Winky.

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1 minute ago, spyguy said:

'Only worth as much as the buyer can get a mortgage for you '

Fcxed it for you, fixing it for Winky.

That almost goes without saying, most people need mortgages to purchase because how many people do you know with hundreds of thousands of debt free pounds burning a hole in their pockets?

Obviously after the hpc, you'll be able to snap up a 5 bed overlooking Regent's Park for the price of a Gregg's sausage roll.

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Just now, Diver Dan said:

Obviously after the hpc, you'll be able to snap up a 5 bed overlooking Regent's Park for the price of a Gregg's sausage roll.

Don't be sure of that - the government has already shown its interest to intervene in the takeaway pie and sausage roll market

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13 minutes ago, hotblack42 said:

Well my wife and I are sellers and realistic, but I can tell you for nothing that its a right b@ll ache when almost everyone else is sitting on their hands.  Our 4 bed det. has been cut from £395k (would have been record for street but only by £15k) to £350k and we've been offered £336k which we haven't rejected or accepted, but instead asked them to sell their place then come back to us.

Now some b*gger has put a 100 sq. ft bigger 5 bed link det. in a more expensive area on for £345k.  There may be a catch and we are asking EA to do some digging, but you can imagine how our place and all the similarly located homes for sale now look in comparison.

We are pragmatists and understand that we need to sell at the current market value BUT what if all the properties in our target area (very nice S. Coast leafy suburb 10 mins walk from the sea) are owned by people who refuse to accept that prices have corrected and don't actually have to move?
Suggestions on a postcard please!

NEVER sell. Leave that to the weak hands.. if anything I'd be BUYING up anyone who undercuts you, (overpay if you have to maintain values)

 

Chuck your own home on the rental market instead, stick it on at a nice "teaser" rate to snare some unsuspecting young professionals (preferably with young children) get em in for 3-6 months until they're good and settled then BOOM just bang the rents up on them.  Ker... CHINGA!!

 

No pets, no DSS, no pictures, white goods available for additional fees, mixed race couples at landlords discretion etc. the usual stuff

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4 minutes ago, thewig said:

NEVER sell. Leave that to the weak hands.. if anything I'd be BUYING up anyone who undercuts you, (overpay if you have to maintain values)

I think it's wrong for people to have to buy spare properties to keep the price up. The government, wait no not them - the Bank of England should do it instead. Every time there is a dip in house prices the BOE should buy them up. If you were smart you could front-run it as well knowing that the central bank had your back and you couldn't lose.  It's never been tried but what do you think? 

I like the cut of your jib about banging the rents up. You should try this BTL thing that's going to be hot hot hot.

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45 minutes ago, hotblack42 said:

Well my wife and I are sellers and realistic, but I can tell you for nothing that its a right b@ll ache when almost everyone else is sitting on their hands.  Our 4 bed det. has been cut from £395k (would have been record for street but only by £15k) to £350k and we've been offered £336k which we haven't rejected or accepted, but instead asked them to sell their place then come back to us.

Now some b*gger has put a 100 sq. ft bigger 5 bed link det. in a more expensive area on for £345k.  There may be a catch and we are asking EA to do some digging, but you can imagine how our place and all the similarly located homes for sale now look in comparison.

We are pragmatists and understand that we need to sell at the current market value BUT what if all the properties in our target area (very nice S. Coast leafy suburb 10 mins walk from the sea) are owned by people who refuse to accept that prices have corrected and don't actually have to move?
Suggestions on a postcard please!

errrrrrrr.... Mumsnet?

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50 minutes ago, hotblack42 said:

Well my wife and I are sellers and realistic, but I can tell you for nothing that its a right b@ll ache when almost everyone else is sitting on their hands.  Our 4 bed det. has been cut from £395k (would have been record for street but only by £15k) to £350k and we've been offered £336k which we haven't rejected or accepted, but instead asked them to sell their place then come back to us.

Now some b*gger has put a 100 sq. ft bigger 5 bed link det. in a more expensive area on for £345k.  There may be a catch and we are asking EA to do some digging, but you can imagine how our place and all the similarly located homes for sale now look in comparison.

We are pragmatists and understand that we need to sell at the current market value BUT what if all the properties in our target area (very nice S. Coast leafy suburb 10 mins walk from the sea) are owned by people who refuse to accept that prices have corrected and don't actually have to move?
Suggestions on a postcard please!

How about: convert it to a HMO, install some millennials and sell it with a 5% yield?

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50 minutes ago, Diver Dan said:

That almost goes without saying, most people need mortgages to purchase because how many people do you know with hundreds of thousands of debt free pounds burning a hole in their pockets?

Obviously after the hpc, you'll be able to snap up a 5 bed overlooking Regent's Park for the price of a Gregg's sausage roll.

Thing is, its needs saying.

I go around town and meet people.

All I ere is Oh xx cannot sell their house'

I then ask them - Could you buy it, on the wages you are pulling locally?

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17 minutes ago, Captain Kirk said:

How about: convert it to a HMO, install some millennials and sell it with a 5% yield?

LOL, couldn't do that to the neighbours who are diamonds.
A lot on here won't like this, but if we weren't moving 100 miles away it would be tempting to rent it to a family - in catchment for 2 very good comprehensives.
TBH I don't mind cutting to whatever and selling PROVIDED we can get someone with a nice gaff in the target location to lop off a similar %.  Its dawning on me that not everyone that accumulates property is an evil schemer..

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21 minutes ago, spyguy said:

Thing is, its needs saying.

I go around town and meet people.

All I ere is Oh xx cannot sell their house'

I then ask them - Could you buy it, on the wages you are pulling locally?

And then you wonder why you are not popular 

lol

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28 minutes ago, spyguy said:

Thing is, its needs saying.

I go around town and meet people.

All I ere is Oh xx cannot sell their house'

I then ask them - Could you buy it, on the wages you are pulling locally?

Quite......the pockets of local people with the deposits or income required is getting smaller, fewer potential buyers.....will have to therefore go global to fill the gap......mind the gap.😉

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3 minutes ago, vincent said:

And then you wonder why you are not popular 

lol

In our case its a bit of an above average house so its fair to assume that the joint net income of the couple buying it would also be above average for the area, say £3,500 pcm net.    If they have 20% down and take out a proper long 10yr plus fixed rate repayment mortgage it would take about 40% of their net pay initially, diminishing as their pay gradually rose.

I wouldn't want to be in that position, but many would consider it doable.   I suspect the real problems are:
1. them being unable to sell their current house for 'what its worth' after getting a bit giddy about a 'cheap' upgrade.
2. loss of confidence in the unwritten understanding that paying a hefty mortgage for decades will be inevitably rewarded with a huge tax free real terms capital gain.

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50 minutes ago, hotblack42 said:

LOL, couldn't do that to the neighbours who are diamonds.
A lot on here won't like this, but if we weren't moving 100 miles away it would be tempting to rent it to a family - in catchment for 2 very good comprehensives.
TBH I don't mind cutting to whatever and selling PROVIDED we can get someone with a nice gaff in the target location to lop off a similar %.  Its dawning on me that not everyone that accumulates property is an evil schemer..

1996 prices paid quick sale if you like 

😉😉 pm when you ready

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4 hours ago, rantnrave said:

Typical time on the market fell year-on-year by two days to 80.

Interesting that there is this one slightly contradictory note in the article. My gut says that two days in eighty on half a million properties is likely to be statistically significant.

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5 minutes ago, hotblack42 said:

In our case its a bit of an above average house so its fair to assume that the joint net income of the couple buying it would also be above average for the area, say £3,500 pcm net.    If they have 20% down and take out a proper long 10yr plus fixed rate repayment mortgage it would take about 40% of their net pay initially, diminishing as their pay gradually rose.

I wouldn't want to be in that position, but many would consider it doable.   I suspect the real problems are:
1. them being unable to sell their current house for 'what its worth' after getting a bit giddy about a 'cheap' upgrade.
2. loss of confidence in the unwritten understanding that paying a hefty mortgage for decades will be inevitably rewarded with a huge tax free real terms capital gain.

Way too many wishful assumptions.

MMR puts a limit of ~30% of income net of regular spend.

You'll find that 3500/m drops to around 2000/m month other living costs are counted for.

A 3500 net is about 60k - 40k/20k split. max mortgage they can get is around 200k.

In your case,s theres 150k to be found.

With people taking on mortgages i ntheir mid to late 30s there are very few 'wage increases' to count. Most people earnings peak mid 30s.

 

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  • 301 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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