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MMR should mean sales fall through

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I follow rightmove like a weirdo... But I'm not seeing sales fall through. Have EAs found a way to play the system? Or has MMR not taken full effect yet?

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I have no evidence but I suspect MMR will be contributing to the very low level of transactions we are currently seeing, particularly with properties priced above MMR mortgages that can be sustained by local wages.

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I have to say I'm not seeing them fall through either. Maybe the low level of transactions is because people can't afford to sell, so low demand is being matched by low supply.

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It's a standoff between disinterested sellers, who think any house is immediately worth more then 25% against stretched buyers who either are restricted by MMR or are clever enough to wait it out.

 

An empty house will rot, leading to more work.  I've seen 2 houses where even the EA wont publish internal pictures and is asking for 'proceedable cash buyers'. 

 

There is appetite for a punitive council tax charge as empty houses puts more pressure on social housing.

 

The days of Mad Gainz are over.  The adjustment to the new reality (either stable prices or a drop) will take many by surprise

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" The days of Mad Gainz are over.  The adjustment to the new reality (either stable prices or a drop) will take many by surprise "

 

Agreed...it will be interesting when this sinks into the collective mentality...the inability to borrow plus the unwillingness when they see clearly prices are on a downward trajectory will create a reverse FOMO sentiment...FOMO of having saved on the price or getting more house for your mortgaged buck....

Interesting times ahead......

..It;s happening HPC'ers(Reg) somethings actually happening....

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8 hours ago, This time said:

I know at least one estate agent around here that doesn't take mark as SSTC or take things off until completion. I'd guess that's fairly common now.

That would explain it. A year or two back I was seeing houses flip between sstc and available

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As far as I can see all MMR really means is we won't lend you £xxxxx over 25 years... but we will lend you £xxxxx over 35 years.

 

All in the name of ''affordability'' and supposed stricter more responsible lending... when in reality all it means is the mortgage slave can still borrow just as much but they actually pay more back in additional interest over the longer repayment term.

Edited by nome

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I have seen a few sales fall through but from going Sold subject to contract to back on sale takes upwards of a year. Which could leave you wondering where are the failed sales? They just take a very long time to come around again. 

What’s crazy is some of these houses we made an offer on, and it was only a few grand below what they were asking, but for the sake of say £5,000 the seller will happily put themselves through a year of pain, of failed sales etc. 

i guess people get married to a price and just can’t comprehend that there is actually a ‘market level’, they think they can command a price. 

I suppose their strategy would eventually work just through inflation over 2-3 years closing the gap, but in reality that could be a real-term lower price in the end, but then again often we are not talking about particularly smart people, and I’m sure there is plenty of personal debt at play as well, having already spent the house profits, some houses which I have seen for sale the owners (in early 50’s) were going to sell up and move to rented, and I suppose use the cash windfall to cover debt and go on plenty of holidays to magaluf 

i do enjoy seeing greedy sellers having to re-list after loosing 12 months, the extra stress and disruption does go a little way to punishing them. 

If I could be bothered I would book a viewing now it’s 12 months later, make another offer, but this time £5,000 less than our previous offer. 

i think it also shows that if you do a lot of looking around your local market you can work out a ‘going rate’ for houses, and you can become pretty accurate also. and never be afraid to walk away if they refuse a reasonable offer. the market it will punish greed from failed sales anyway. 

just a shame that ‘going rate’ is soo far removed from ‘fair value’ and has been since the 90’s

If I were to sell my house now I would work out the going rate, and then ask a little less. Help grease the wheels of a sale. and I would be picky about only selling to proceedable buyers, no-one as part of a chain (****** that!). if it didn’t sell in a quick relatively smooth fashion, then would knock a bit off day every 2 months. eventually you will find the market level. 

I have also seen houses on sale for upwards of 4 years now. Same price or even increasing price year in and year out. I can’t belive the estate agent doesn’t tell the sellers where to go? 

must be plenty of very unmotivated sellers out there, perhaps couples going through a divorce where one half secretly wants to keep living there as long as possible (kids in a school?) and will refuse to lower the price. 

Edited by jiltedjen

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2 hours ago, nome said:

As far as I can see all MMR really means is we won't lend you £xxxxx over 25 years... but we will lend you £xxxxx over 35 years.

 

All in the name of ''affordability'' and supposed stricter more responsible lending... when in reality all it means is the mortgage slave can still borrow just as much but they actually pay more back in additional interest over the longer repayment term.

but that only works for selling mortgages to people who are under 35...and they don;t seem to be buying houses

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8 hours ago, bear.getting.old said:

So lenders will also be going by the lenders surveyor reports and so they will not lend on overpriced houses, prior to exchange the price will have to be reduced

first saw this with friend back at end of 2014......since then chum sellig flat.....has happened 3 times all 3 sales still fell through....is now going through...original price 305k....sale price 235k

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I think some are sorting MMR first by getting online mortgage decisions in principal. A buyer may have an issue once....but second time will have things in place. Maybe that’s a factor? 

BTW Definately seen sales fall through for the sake of £5k following a valuation. (Or even less) 

My experience is buyers cry and moan to the valuers, try have it increased, complain etc.....then eventually realise the valuation is actually in their favour. Then they reduce accordingly (unless the are daft and borrow from mum and dad) and that’s when the sellers irrational behaviour kicks in. If a seller isn’t motivated....walk away.

The seller needs (in most cases) take the hit and reflect that back when buying. Not by offering £5k less than things are worth....but by buying something ALSO AT ITS COMPARATIVE VALUE. 

Whilst I remain very bearish and expect a market tumble my concern at the moment is many people are still buying at really daft priced properties because they are painted ‘grey’ and have wooden blinds. And new builds are a disaster waiting to happen for some buyers. 

Anyhoo....starting to pass caring. If someone wants to pay £80k more (literally) for a good decorating job....and work 1.5 days of their week just to pay for their new car, that’s up to them.

I rebelled against consumerism and zombie spending in my late 20’s

My £200 Honda Jazz and previous ability to buy run down house, decorate and clean them and make £50k is something I can reflect on during my early retirement. Bungalows definately the easiest. 

Alothough it would impact me I advocate a price fall in the real world...which seems quite rare (in real world discussions). People tell me if prices fall the economy will collapse and we lose jobs. I say the younger generation don’t have ‘lifetime jobs’ with ‘secure pensions’, so a price fall and some job instability for a couple of years doesn’t have nearly the same impact on them as on the older generation. My son needs to borrow 12 x income to buy a house....he would happily have a proper recession, lose 2 years wages and then get a new job and buy something for 3.5x....even if interest rates were then 4% 

Often greated by some genuine thinking by my older generation friends. They haven’t realised that if you treat a generation badly enough it means the younger generation have less to lose, so care less about a decent recession and shake up.

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Not quite.

MMR ruels are so clear and easy to understand that stuff does not get to Sale Agreed before finding out people cannot get a mortgage.

Id gues what happens is the following -

Mr n Mrs WantAHouse look t a des res. Go the to EA, who tells them - GHo and sort out a mortgage. Go to bank, bank says 'You borrow this, max' MrnNMrs WantAHouse go back and tell th Ea they cannot get the finance.

Sales are not dropping out due to MMR. They are not getting past the first jump.

 

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