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Nearly half of UK properties ‘down valued’ by mortgage lenders


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High house prices are threatening to undermine the buying process as ambitious sellers are clipped by lenders’ valuations, a new survey suggests.

A survey of 1,000 buyers whose transactions spanned the first six months of the Covid crisis, found 46 per cent have had their prospective property down valued by their chosen mortgage lender after a sale and price had been agreed with the homeowner.  

While most were down valued by between £5,000 and £10,000, one in four were hit with an adjustment of up to £20,000. Some buyers reported their potential properties had come back with valuations £240,000 under the agreed price.

 

Homes priced between £400,000 and £500,000 are most likely to have been hit with a devaluation, the survey by mortgage comparison site Bankrate UK revealed.  

https://www.independent.co.uk/money/house-prices-mortgage-latest-stamp-duty-holiday-b1179046.html

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So this happens and always happened, you have a desirable property owned by someone not bovered to sell, dont be surprised if the bank takes a look and decides if YOU need to sell later you might need to take a haircut on the selling price.  Whats mad is the percentage, 46%, holy negative equity batman!!  

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Is there a way of finding / identifying forced sellers?  Coming in hard to someone with HMRC or the Mortgage company breathing down their neck and setting a new low for the road.

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Is there a way of finding / identifying forced sellers?  Coming in hard to someone with HMRC or the Mortgage company breathing down their neck and setting a new low for the road.

Flurry of quick reductions, followed by a big one and "cash buyers only" usually screams desperation.

Or "OIEO" after a decent reduction.. which suggests this is the lowest i could ever go to pay off X.. until someone offers lower.

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Flurry of quick reductions, followed by a big one and "cash buyers only" usually screams desperation.

Or "OIEO" after a decent reduction.. which suggests this is the lowest i could ever go to pay off X.. until someone offers lower.

Good signs, thanks.

Was thinkng if we could ask the Mortgage company or HMRC how much was owed.  Then offer that for the house. 

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Good signs, thanks.

Was thinkng if we could ask the Mortgage company or HMRC how much was owed.  Then offer that for the house. 

No. Thank God.  

You wouldn't like it if HMRC was giving away your tax returns to everyone!

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Jeese, house prices need to be downvalued by £200K just to make them unaffordable.

My feeling is that once the trend is down, it just snowballs into an avalanche.  

As one seller losing hope of capital gains just leads to 2 more doing the same. 

Has there ever been an example of a bubble popping slowly? 

(And we're not passed the us election yet; the us stock market could collapse right before it like it did in 2008.?)

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No. Thank God.  

You wouldn't like it if HMRC was giving away your tax returns to everyone!

Didn't say I want Tax Returns. If you HMRC are chasing you for £x and you own a house, it makes sense to offer £x for the house.  Better still over £x for the house directly to HMRC; they reposess the house and immediately sell to clear the debt. Win - Win.

 

Apart from Debt junkie - but I can live with that

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Didn't say I want Tax Returns. If you HMRC are chasing you for £x and you own a house, it makes sense to offer £x for the house.  Better still over £x for the house directly to HMRC; they reposess the house and immediately sell to clear the debt. Win - Win.

 

Apart from Debt junkie - but I can live with that

Aside from anything else HMRC wont have the house as collateral to repossess. You are in auction territory at that point - which is an option.

If you really want to go down that route you can look at the court records for judgements against for people needing to settle and then cross reference to land registry. Yep.. people / firms do that.

They also do the same for companies to buy the assets out of admin. can be very lucrative. 

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Homes priced between £400,000 and £500,000 are most likely to have been hit with a devaluation, the survey by mortgage comparison site Bankrate UK revealed.  

https://www.independent.co.uk/money/house-prices-mortgage-latest-stamp-duty-holiday-b1179046.html

Sounds fair enough to me.

Before the further boosts houses where drifting down from 500 asking to about 450 > 425 around here.

They went SSTC and now the following properties are listed 550-625

problem is the first lot are not on the land registry yet so the poor valuer goes around and the last sales are indeed circa 400 ish.

 

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My feeling is that once the trend is down, it just snowballs into an avalanche.  

As one seller losing hope of capital gains just leads to 2 more doing the same. 

Has there ever been an example of a bubble popping slowly? 

(And we're not passed the us election yet; the us stock market could collapse right before it like it did in 2008.?)

Yeah, the one from 2008, it's be 20 years now and it's still going.

real house price trend graph

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My feeling is that once the trend is down, it just snowballs into an avalanche.  

As one seller losing hope of capital gains just leads to 2 more doing the same. 

Has there ever been an example of a bubble popping slowly? 

(And we're not passed the us election yet; the us stock market could collapse right before it like it did in 2008.?)

Markets are driven by fear and greed. Greed has had the upper hand for a very long time, so long that people have forgotten what fear brings. If we disregard the blip in house prices in 2008 -2010, when there really needed to be a very steep correction, house prices have risen or stayed buoyant enough to keep fear at bay for nearly 30 years. This has mostly been possible due to a persistent policy of reducing base rates to promote borrowing (part of the very cause of the 2008 crash). A sustained period of belief that prices only ever go up, backed up by 24 hour property porn on TV and monetary policy designed to catch house prices every time they stutter, has left people in denial over the prospect of collapse. It is going to take quite a sustained period of price falls and a lot of negative press before fear takes hold in people who have never experienced it or simply forgotten it. These very same people are the least likely to have the confidence to sit tight and most likely to panic if the tide turns. There's nowhere left to go with base rates now. Negative base rates won't be passed on to mortgage borrowers (contrary to what some seem to think), and central banks have ultimately backed themselves into a corner. If a sustained period of falling house prices does take hold (signs are it already has in London), then fear will start to challenge greed for supremacy. If fear gets on top then we could see the biggest bloodbath in living history, big enough to make the Red Wedding look like a skirmish. Central banks and governments have played all their cards and nobody's likely to be able to catch the housing market if it falls this time. The effects could be devastating so we shouldn't wish for it. What we have needed is prolonged stagnation coupled with moderate wage inflation in order to avoid the panic of negative equity and inflate away excessive house prices but successive governments have only wanted growth and greed to promote the illusion of prosperity. Bubbles don't pop slowly but they can sometimes endure a long slow puncture before they're either patched or burst. If real negative sentiment takes hold then I'm not sure that there's a patch big enough this time.

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No. Thank God.  

You wouldn't like it if HMRC was giving away your tax returns to everyone!

For what its worth I think that if Tax Returns were based on a more equitable tax system and weren't works of fiction but truly reflected an individuals or businesses wealth this would be a very fair system. But that's just a pipe dream as too many people and businesses have a vested interest in not being honest and gaming a broken system.

Edited by Switch625
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Markets are driven by fear and greed. Greed has had the upper hand for a very long time, so long that people have forgotten what fear brings. If we disregard the blip in house prices in 2008 -2010, when there really needed to be a very steep correction, house prices have risen or stayed buoyant enough to keep fear at bay for nearly 30 years. This has mostly been possible due to a persistent policy of reducing base rates to promote borrowing (part of the very cause of the 2008 crash). A sustained period of belief that prices only ever go up, backed up by 24 hour property porn on TV and monetary policy designed to catch house prices every time they stutter, has left people in denial over the prospect of collapse. It is going to take quite a sustained period of price falls and a lot of negative press before fear takes hold in people who have never experienced it or simply forgotten it. These very same people are the least likely to have the confidence to sit tight and most likely to panic if the tide turns. There's nowhere left to go with base rates now. Negative base rates won't be passed on to mortgage borrowers (contrary to what some seem to think), and central banks have ultimately backed themselves into a corner. If a sustained period of falling house prices does take hold (signs are it already has in London), then fear will start to challenge greed for supremacy. If fear gets on top then we could see the biggest bloodbath in living history, big enough to make the Red Wedding look like a skirmish. Central banks and governments have played all their cards and nobody's likely to be able to catch the housing market if it falls this time. The effects could be devastating so we shouldn't wish for it. What we have needed is prolonged stagnation coupled with moderate wage inflation in order to avoid the panic of negative equity and inflate away excessive house prices but successive governments have only wanted growth and greed to promote the illusion of prosperity. Bubbles don't pop slowly but they can sometimes endure a long slow puncture before they're either patched or burst. If real negative sentiment takes hold then I'm not sure that there's a patch big enough this time.

Good post and agree about the banks, they can’t reduce mortgage rates any further or soon they’ll be paying us to take mortgages - not sure how you can turn a profit like that....

One problem this time is the vast number of homes being built at inflated land prices and no doubt the builders have overpaid for their current land banks. Prices overall have been kept high by the new build/HTB scheme and pricking this bubble is new territory as its effectively a government secured scheme.

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Good post and agree about the banks, they can’t reduce mortgage rates any further or soon they’ll be paying us to take mortgages - not sure how you can turn a profit like that....

One problem this time is the vast number of homes being built at inflated land prices and no doubt the builders have overpaid for their current land banks. Prices overall have been kept high by the new build/HTB scheme and pricking this bubble is new territory as its effectively a government secured scheme.

In the same way they make money now.

If you can borrow from an institutional investor at 1% and lend out at 2.5% you can turn a profit. 

If you can borrow from an institutional investor at - 2.5% and lend out at - 1% you can turn a profit. 

Logically there's nothing different between them just feels odd. 

As seen in Denmark and Switzerland on a limited basis so far. 

Not sure we will get there here. I can see the end of free banking though for desosits with charges per month and "free" travel insurance becoming the norm 

https://www.google.com/amp/s/amp.theguardian.com/money/2019/aug/13/danish-bank-launches-worlds-first-negative-interest-rate-mortgage

 

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  • 439 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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