Stressed. First time buyer being pushed to complete. Thoughts please.

[Orb]

2 minutes ago, crumblingcon said:

I am spending a little too much time putting pen to paper, trawling the internet and doing as much research as I can in this lockdown, maybe too much. If this virus teaches us anything it teaches us that the world can change very quickly. I am not really going to give a accurate prediction because I really do not know, but I will say this, IMO it is going to be worse than the early 1990's and when we do get to the -20 drop I will then tell you where I think it is going to go, I will sound stupid if I say what I think will happen now

Right now we are getting 24/7 C-19 news coverage, in 12 months we will be topping Brexit and C-19 coverage with the UK and world economy crash that IMO will not be caused by the virus but will be a continuation of the 2007 financial crisis that was never repaired.

That's twice you've said that in the last hour 

Just say it, you know you want to. 

[crumblingcon]

17 minutes ago, Orb said:

That's twice you've said that in the last hour 

Just say it, you know you want to. 

Yes, I have probably said it half a dozen times now ?

And yes again I am dying to say if not just to have the discussion about it. But I mean it, even on a site like this too many of the posters have been hardened to "how it all works" which fine until it doesn't. The world can change so quickly, if when it gets to say -20% I will let rip for you, no that's not a farting euphemism 

[Orb]

3 minutes ago, crumblingcon said:

Yes, I have probably said it half a dozen times now ?

And yes again I am dying to say if not just to have the discussion about it. But I mean it, even on a site like this too many of the posters have been hardened to "how it all works" which fine until it doesn't. The world can change so quickly, if when it gets to say -20% I will let rip for you, no that's not a farting euphemism 

I wish it was. It would have been a good analogy for the impending economic doom - a toxic breaking of wind after a dinner of bloated debt. 

[crumblingcon]

1 minute ago, Orb said:

I wish it was. It would have been a good analogy for the impending economic doom - a toxic breaking of wind after a dinner of bloated debt. 

I am not all that old, but I have already lived in a world where brand new homes were boarded up, whole streets and mothballed and then as good as given away to offload them, I have seen 3 bedroom Victorian terrace homes purchased on credit cards, Ok some maxed out, but do you get my point.

[HovelinHove]

7 hours ago, crumblingcon said:

Yes, I have probably said it half a dozen times now ?

And yes again I am dying to say if not just to have the discussion about it. But I mean it, even on a site like this too many of the posters have been hardened to "how it all works" which fine until it doesn't. The world can change so quickly, if when it gets to say -20% I will let rip for you, no that's not a farting euphemism 

You are right. I know that when I say the market will go down 10-20%, I am just repeating the hopes of the VIs. The truth is they will be very very lucky if they get away with that. In the past 6 weeks 2 properties have been listed in my 10 mile radius search 45 mins by train from London and a 15 min drive to Brighton. Normally there are 15 a week in my price band. No sales...not one. People talk about pent up demand...there is a pent up demand for luxury SUVs and business class seats, but if people don’t have the money, there is no demand. Everyone I know accepts that the market is going to fall. Who would buy now, even if they could? Which bank in their right mind would provide a mortgage without 40% deposit? Who has a 40% deposit? If they do, they will think twice about losing it on a house.

 There is a growing pent up tidal wave of houses that will need to be sold when the market reopens...from bankrupt Airbnb “entrepreneurs” and BTL slumlords, to the usual houses that need to be sold by old folks to go into homes, or who have died, plus those who have been wiped out by the economic collapse. There will be no buyers. none.

Go on say it...30, 40...50%.

[MARTINX9]

9 hours ago, Si1 said:

Sewerage, water, policing, healthcare, shops, public transport, culture

But I'm sure you have some point in there so the same

They do have all these things outside London - less police too though as they don't need as many!

[Warlord]

Where did the OP go? Should we be worried? 

 

[crumblingcon]

1 hour ago, HovelinHove said:

You are right. I know that when I say the market will go down 10-20%, I am just repeating the hopes of the VIs. The truth is they will be very very lucky if they get away with that. In the past 6 weeks 2 properties have been listed in my 10 mile radius search 45 mins by train from London and a 15 min drive to Brighton. Normally there are 15 a week in my price band. No sales...not one. People talk about pent up demand...there is a pent up demand for luxury SUVs and business class seats, but if people don’t have the money, there is no demand. Everyone I know accepts that the market is going to fall. Who would buy now, even if they could? Which bank in their right mind would provide a mortgage without 40% deposit? Who has a 40% deposit? If they do, they will think twice about losing it on a house.

 There is a growing pent up tidal wave of houses that will need to be sold when the market reopens...from bankrupt Airbnb “entrepreneurs” and BTL slumlords, to the usual houses that need to be sold by old folks to go into homes, or who have died, plus those who have been wiped out by the economic collapse. There will be no buyers. none.

Go on say it...30, 40...50%.

I have had 4 glasses of of pinot noir ?

Do not think -70% plus  falls are impossible, there said, won't be saying it again sober, not for a while anyway

[Orb]

15 minutes ago, crumblingcon said:

Do not think -70% plus  falls are impossible, 

 

[Warlord]

The OP said s/he was 'stressed' and felt 'pushed' and has since hasn't posted

Perhaps the admin can try and get in touch with him/her and see if everything's alright ?

 

[HovelinHove]

8 hours ago, crumblingcon said:

I have had 4 glasses of of pinot noir ?

Do not think -70% plus  falls are impossible, there said, won't be saying it again sober, not for a while anyway

And this morning? 70%...mmm, that would be good. I think 40% is well within the realm of reality, especially in the South East with Brexit etc. If deflation really takes hold in a big way, and you catch the market at the right time...the very bottom, and find a desperate seller, then I could see a situation where someone who bought a boring new build box in a commuter town for 800k, might get 340k. I have a friend who did buy exactly that kind of place. I think he overpaid by at least 100-150k at the time just because it was shiny and new, so if its real value on purchase was 650-700k, and if we had a 40% crash overall, but he became a forced seller (which he won’t as he paid the mortgage off after losing his mother), but someone in a similar position, then I could see that place going for 340k on a bad day at the bottom...and that would be 70% off 800k.

Normally someone buying that place would have been in the market for 5 years with a semi or a flat in Brighton. They’d maybe have 50-100k in equity, which would be a 10-15% deposit on a house in 500-700k range. However, if the market drops 30-40%, and semis and flats in Brighton have gone into negative territory compared to five years previously, very few will have a deposit big enough to buy expensive houses, especially when the banks will be demanding big deposits. This is how the whole market will be exposed as the biggest ponzi scheme in history.

Yes, 40-50% is on the cards. There’s will be a few properties, particularly at the higher end, and that were new build, that may lose 70%. Agreed.

[GregBowman]

10 hours ago, HovelinHove said:

18 hours ago, crumblingcon said:

Yes, I have probably said it half a dozen times now ?

And yes again I am dying to say if not just to have the discussion about it. But I mean it, even on a site like this too many of the posters have been hardened to "how it all works" which fine until it doesn't. The world can change so quickly, if when it gets to say -20% I will let rip for you, no that's not a farting euphemism 

There will be no buyers. none.

Go on say it...30, 40...50%.

The how it all works is a phrase is sort of a phrase for a reason - plenty of people on the sidelines looking for quality at a bargain that are liquid or can organise themselves to be - As I have said before if they see a £1 million house for £700k effectively wiping out 13 years of hpi they are going to plunge in therefore creating a quality ‘crash’ floor and the same in the bracket below that 

FTB’s and those at entry level will be seeing houses crash even more but in many cases that’s for a reason - no secret that a three bed semi in a good area is the most popular living unit and will act like the more expensive premium stock

So when all over apart from 3 bed semi person - surely likely to reinforce inequality rather than reduce it ?

[GregBowman]

8 minutes ago, HovelinHove said:

And this morning? 70%...mmm, that would be good. I think 40% is well within the realm of reality, especially in the South East with Brexit etc. If deflation really takes hold in a big way, and you catch the market at the right time...the very bottom, and find a desperate seller, then I could see a situation where someone who bought a boring new build box in a commuter town for 800k, might get 340k. I have a friend who did buy exactly that kind of place. I think he overpaid by at least 100-150k at the time just because it was shiny and new, so if its real value on purchase was 650-700k, and if we had a 40% crash overall, but he became a forced seller (which he won’t as he paid the mortgage off after losing his mother), but someone in a similar position, then I could see that place going for 340k on a bad day at the bottom...and that would be 70% off 800k.

Normally someone buying that place would have been in the market for 5 years with a semi or a flat in Brighton. They’d maybe have 50-100k in equity, which would be a 10-15% deposit on a house in 500-700k range. However, if the market drops 30-40%, and semis and flats in Brighton have gone into negative territory compared to five years previously, very few will have a deposit big enough to buy expensive houses, especially when the banks will be demanding big deposits. This is how the whole market will be exposed as the biggest ponzi scheme in history.

Yes, 40-50% is on the cards. There’s will be a few properties, particularly at the higher end, and that were new build, that may lose 70%. Agreed.

Good summing up - I think you underestimate a little how many people are ‘fluid’ at the £500k - £1 million level in London and the south east - not going up the ladder but open to change - by the coast, more land /less land, modern to older or visa versa 

These buyers will keep prime properties in play still dropping - say 20%+ and their credit histories mean cheap money easy to get hold of 

That is the risk for those flat/semi owners is people in their 50’s thinking I will liquidate this to get what I perceive as a bargain somewhere new ( by that I mean different , kids adult might of looked at a flat in Spain before ) - many of us near or in London looking at the coast 
 

 

Edited April 27, 2020 by GregBowman

[HovelinHove]

1 minute ago, GregBowman said:

The how it all works is a phrase is sort of a phrase for a reason - plenty of people on the sidelines looking for quality at a bargain that are liquid or can organise themselves to be - As I have said before if they see a £1 million house for £700k effectively wiping out 13 years of hpi they are going to plunge in therefore creating a quality ‘crash’ floor and the same in the bracket below that 

FTB’s and those at entry level will be seeing houses crash even more but in many cases that’s for a reason - no secret that a three bed semi in a good area is the most popular living unit and will act like the more expensive premium stock

So when all over apart from 3 bed semi person - surely likely to reinforce inequality rather than reduce it ?

I think you are both right and wrong. Firstly I think you are wrong in over estimating the “hordes” of people sitting around with 1 million cash. Secondly I think you are underestimating the fear that further downward falls would create, and the losses that would ensue. Lastly you miss the significance of the point on which you are correct...the FTB end of the market collapsing because they are the ones most affected by the economic impact of the virus. 

The different segments you describe do not exist in isolation as you seem to suggest. they are not insulated from the rest of the market because they are nicer houses. The market is a ladder, or more accurate, a pyramid.

Let’s look at your first example of a million pound home. In the absence of the millions of cash buyers waiting on the sidelines, this million pound home would require a buyer who has sold a cheaper house and who is able to move up. That person also relies on someone below them selling a cheaper house, until you get all the way down to the humble FTB. No FTB, no one buying the flat which someone bought for 200k in 2017, and is now worth only 150k. That seller is under water, they cannot get the deposit to buy the 3 bed semi they have their heart set on, so the person selling the 3 bed semi can’t buy the detached commuter box they had their heart set on etc etc.

Believe in your mythical millions of cash buyers if you like, reality will expose that myth very quickly.

[Houdini]

12 minutes ago, GregBowman said:

The how it all works is a phrase is sort of a phrase for a reason - plenty of people on the sidelines looking for quality at a bargain that are liquid or can organise themselves to be - As I have said before if they see a £1 million house for £700k effectively wiping out 13 years of hpi they are going to plunge in therefore creating a quality ‘crash’ floor and the same in the bracket below that 

FTB’s and those at entry level will be seeing houses crash even more but in many cases that’s for a reason - no secret that a three bed semi in a good area is the most popular living unit and will act like the more expensive premium stock

So when all over apart from 3 bed semi person - surely likely to reinforce inequality rather than reduce it ?

It doesn't actually work like that. Back in 1990-3 once house prices started dropping like a stone no one wanted to touch them (it's the don't try and catch a falling knife issue). We only bought in 1994 because renting wasn't so much of an option back then and Alliance and Leicester had loosened their lending criteria as they thought the market had little downside left.

This time round renting is likely to remain an option so I can see the market having a hell of a drop

Edited April 27, 2020 by Houdini

[HovelinHove]

5 minutes ago, GregBowman said:

Good summing up - I think you underestimate a little how many people are ‘fluid’ at the £500k - £1 million level in London and the south east - not going up the ladder but open to change - by the coast, more land /less land, modern to older or visa versa 

These buyers will keep prime properties in play still dropping - say 20%+ and their credit histories mean cheap money easy to get hold of 

That is the risk for those flat/semi owners is people in their 50’s thinking I will liquidate this to get what I perceive as a bargain somewhere new ( by that I mean different , kids adult might of looked at a flat in Spain before ) - many of us near or in London looking at the coast 
 

 

If they really are cash now...today, then yes, that will happen, but how many are really that liquid? I think this is where we are both guessing...estimating. Also, even if there are that many, it’s the whole catching a knife thing.

On the other hand, while I am not in the million pound zone, I could be in a position to buy a decent house cash, if they fell 20%...would I risk waiting it out and missing out? maybe not, so I totally get your point.

[Houdini]

2 minutes ago, HovelinHove said:

If they really are cash now...today, then yes, that will happen, but how many are really that liquid? I think this is where we are both guessing...estimating. Also, even if there are that many, it’s the whole catching a knife thing.

On the other hand, while I am not in the million pound zone, I could be in a position to buy a decent house cash, if they fell 20%...would I risk waiting it out and missing out? maybe not, so I totally get your point.

As I said above, it's one thing to say that with prices as they currently are and it makes sense if you purchase it this year.

But once prices start falling a lot of people will keep the money in the pocket a while longer.

[TheCountOfNowhere]

On 22/04/2020 at 21:56, Iamnotsure said:

I want to move forward in life but this is not an easily saleable house. I've told estate agents and solicitor that I want to wait till after lockdown but they keep pushing. 
 

If you want to move forward in life, leave the UK.

The UK is little more than a slave colony now.

[HovelinHove]

18 minutes ago, Houdini said:

As I said above, it's one thing to say that with prices as they currently are and it makes sense if you purchase it this year.

But once prices start falling a lot of people will keep the money in the pocket a while longer.

It takes discipline, and remembering market psychology. It’s when the last bear buys that the crash happens ( I nearly did that in January), and it’s when the last Bull sells up that the crash bottoms. The stock markets will show that in the coming weeks and months, we will see new lows as the reality hits home. The housing market will be no different...when all the press are saying that property is a completely duff investment...that is the time to buy. On teh other hand, if you have cash, are paying rent each month, and can get a decent home with no debt and enough left over to buy a nice car, then why not buy and forget about the market!

[HovelinHove]

2 minutes ago, TheCountOfNowhere said:

If you want to move forward in life, leave the UK.

The UK is little more than a slave colony now.

Where isn’t? I lived in canada for 7 years...not much difference in terms of debt slavery...possibly worse actually.

[Belfast Boy]

Here is a chart for Northern Ireland from the NISRA (I checked - it is not a new paramilitary organisation - it's our ONS)

This shows a 56.6% real fall, taking 5 years.

You can even see a dead cat bounce after 18 months, that lasted 1 year.

I do wonder if we are looking at the housing market crash the wrong way. The question is not how much? The question is how long?

It takes time for the government and bank measures to take effect and put a floor under the market.

I predicted that NI would fall 60-70% and take 3-7 years. You would still be waiting for a 60% fall. (Though by law of averages - some probably achieved this.) 

From the start of the crash - if you bought after 4 to 7 years you were within roughly 10% of the bottom (I haven't done the actual figures yet.)

I was living in England during the 90's. I could not believe that house prices in the UK didn't follow a similar pattern after 2008. If a house price crash does not happen after the lockdown(s) it never will.

Edited April 27, 2020 by Belfast Boy

[crumblingcon]

49 minutes ago, HovelinHove said:

And this morning? 70%...mmm, that would be good. I think 40% is well within the realm of reality, especially in the South East with Brexit etc. If deflation really takes hold in a big way, and you catch the market at the right time...the very bottom, and find a desperate seller, then I could see a situation where someone who bought a boring new build box in a commuter town for 800k, might get 340k. I have a friend who did buy exactly that kind of place. I think he overpaid by at least 100-150k at the time just because it was shiny and new, so if its real value on purchase was 650-700k, and if we had a 40% crash overall, but he became a forced seller (which he won’t as he paid the mortgage off after losing his mother), but someone in a similar position, then I could see that place going for 340k on a bad day at the bottom...and that would be 70% off 800k.

Normally someone buying that place would have been in the market for 5 years with a semi or a flat in Brighton. They’d maybe have 50-100k in equity, which would be a 10-15% deposit on a house in 500-700k range. However, if the market drops 30-40%, and semis and flats in Brighton have gone into negative territory compared to five years previously, very few will have a deposit big enough to buy expensive houses, especially when the banks will be demanding big deposits. This is how the whole market will be exposed as the biggest ponzi scheme in history.

Yes, 40-50% is on the cards. There’s will be a few properties, particularly at the higher end, and that were new build, that may lose 70%. Agreed.

just to make this absolutely clear, I am not saying -70% will happen, just that if far from impossible. people have no problem with property prices rising anything up to six fold in some area over the past 20 years, but will totally ridicule what I said. I can remember new estates being mothballed for years, where potential buyers looking for a bargain treated these places like leper colonies to today being full of BTL properties.

I spread my investments  over a wide spectrum, not out of skill but just to lessen the risk. More so in the stockmarket I have seen what were once sound investments turn to s***. People see their magical stock lose 50% and think there are no bargains to be had to then see it get far worse as they chase their losses in the same stock.

Peoples  perspective can change so quickly.

1. It dawns on them that two wages for a property that is not even the house they dreamed of will take a lifetime of unbroken hard work

2. life can be cut short and even if it's not  you realise there is not much time left of your prime good years as you get older

3. What am I really buying with my £500,000 over 25 years.. I have seen old houses demolished in hours and the bits worth reclaiming stacked in a small area of the garden with a value of £100's, maybe, it just looks like nothing when once you looked at it like a new gold seam you had just discovered.

[crumblingcon]

1 hour ago, GregBowman said:

Good summing up - I think you underestimate a little how many people are ‘fluid’ at the £500k - £1 million level in London and the south east - not going up the ladder but open to change - by the coast, more land /less land, modern to older or visa versa 

These buyers will keep prime properties in play still dropping - say 20%+ and their credit histories mean cheap money easy to get hold of 

That is the risk for those flat/semi owners is people in their 50’s thinking I will liquidate this to get what I perceive as a bargain somewhere new ( by that I mean different , kids adult might of looked at a flat in Spain before ) - many of us near or in London looking at the coast 
 

 

I have seen so many people sell up in London and using the money to move onto paradise. And the stuff they thought they would miss in London can still be had a handful of times per year which becomes a great treat in itself. And even if you move to the most remotest quite place you can imagine there is always something just as good as London had to offer within 20 miles in many cases.

[GregBowman]

48 minutes ago, HovelinHove said:

 

Believe in your mythical millions of cash buyers if you like, reality will expose that myth very quickly.

Didn't say cash said liquid.  - I think perhaps you underestimate the hundreds of thousands of people who run businesses and their finance is single level both in assets and access to borrowing. Real life example - I have a number of vehicles motorcycles and cars all depreciated in my personal balance sheet to realistic values post Covid to perhaps £80k worth of tin, 6 figure sum in cash and access to about £120k+ of credit card debt at peanuts interest rates, I rent two lock ups and some warehouse space for personal use - I can reconfigure all that very quickly to say a £300k deposit and get a loan on top paid for by giving up the warehouse space - numbers give me a less than 60% LTV on a £700k property. I don't want two properties and don't believe in BTL but could move quick bit of a pain but would chance it probably for the right bargain.

14600 properties sold for more than a million in 2018 according to Lloyds - There are tens of thousands if not low end hundreds of thousands of people in this position and thats before 2/3 generation wealth - easily enough to support a floor price - but has to be quality for me detached, mature area - worst house in the best road stuff. So that 14600 is even lower

Was on a bike forum this morning and one guy had cleaned all his machines (cars and bikes)  I reckon easily £150k's worth at fire sale prices but what caught my eye was house his 4 bed detached on a new build housing estate £150k's of tin,  £300/350k house from his location , something doesn't add up unless it was rented or a stop gap 

As Danny Devito says in Tin Men - A man is judged by his house,car,shoes and wife - for business owners ego plays a big part in my experience

 

 

 

[GregBowman]

8 minutes ago, crumblingcon said:

I have seen so many people sell up in London and using the money to move onto paradise. And the stuff they thought they would miss in London can still be had a handful of times per year which becomes a great treat in itself. And even if you move to the most remotest quite place you can imagine there is always something just as good as London had to offer within 20 miles in many cases.

I have come around to that point of view - I use London living on the outskirts anyway - We will move to the coast sooner or later - Have a 'cousin' in Kent - Sandwich - My dads best mate married into the family we are close thats why we call each other cousins. On a zoom call with his crowd every Monday all like minded business owners - Seriously looking at Broadstairs/Deal/Sandwich (think Margate over hyped) holidayed there very year age 3 - 15 so just love the area. Also have a ready made social circle

We are called DNL's - Down from Londons - but can live with that !