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Realistbear

A Nice Dose Of Warm Reality For The Weekend

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www.redditchandbromsgroveproperty.co.uk

The Alcester Standard

Friday April 7, 2006

Property Section

Nigel (funnny name for an EA?) Poole & McGinn are a major EA in the W Midlands and have a huge property section consisting of 11 full pages of ads in this week's paper.

Page 1: 9 houses/ 3 new instructions. 2 Reduced further 15,000 for quick sale. 1 No upward chain.

Page 2: 11 houses/ 4 no upward chain. 1 new instruction.

Page 3: 30 houses/ 4 no upward chain. 2 discounted by 5000 for early completion.

Page 4: 29 houses/ 9 no upward chain

Page 5-6: 46 properties/ 10 new price. 5 no upward chain. 2 "unexpectedly back on market"

Pages 6-7: New Builds: 5% off, stamp paid

Page 8: 21 Properties: 5 no upward chain. 1 new price.

Page 9: 23 properties: 2 price reduced/new price. 1 unexpectedly back on market. 1 no chain.

Page 10: 13 Properties: 5 no upward chain. 3 new price. 1 stamp duty paid.

That is 34 "no upward chain" which suggests they are BTLers getting out or people leaving the country. This is just one agent in a paper crammed with similar EA ads with "new price," "no upward chain," "reduced for quick sale," etc.

Makes you wonder if a snapshot of the market is not, in fact, reality whereas the VI suggestion that houses are going up in price due to a shortage is spin (lies). :lol:

In the same paper:

A T & T say they "have made thousands of redundancies in the UK in recent years, and bosses say restructuring will continue." They are almost Redditch's largest employer with 750 waiting for possible redundancy as jobs are sent overseas where wages are lower due to lower costs of living (and cheaper houses). Bratislava may be the beneficiary of all those IT jobs very soon.

Also in the same paper: "Hospitals could axe 600 jobs" as Worcester NHS balance the books and get rid of staff in line with other NHS trusts.

Its little wonder house prices are going down?

Edited by Realistbear

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Last week, phone call fom EA. House previously valued at 279K. Would I be interested, as now dropped to 269K...and owners will pay stamp duty? All in all then about 18K off since beginning of the year. Not bad - could do better ;)

This is the real story out there. :D

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That is 34"no upward chain" which suggests they are BTLers getting out or people leaving the country.

This is just one agent in a paper crammed with similar EA ads with "new price," "no upward chain," "reduced for quick sale," etc.

Makes you wonder if a snapshot of the market is not, in fact, reality whereas the VI suggestion that houses are going up in price due to a shortage is spin (lies). :lol:

Or maybe a few old people died and their house is being sold. (hence no upward chain)

Edited by Without_a_Paddle

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Or maybe a few old people died and their house is being sold. (hence no upward chain)

We might have to wait until Bird Flu has completed its last two genetic changes before the dead will add much to the stats. :(

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We might have to wait until Bird Flu has completed its last two genetic changes before the dead will add much to the stats. :(

500,000 people die every year in the UK

That's 42,000 per month.

86 counties in the UK.

Therefore 500 die a month in a typical county.

About 100 will be single old people (wild guess)

Therefore expect maybe 33 new properties a month on the market (per county) with no onward chain due to old people dying. (assuming 30% were owner occupiers)

Each one will take at least 3 months to sell.

The West Midlands covers a large densely populated area...

Maybe this accounts for some of your no chain properties. Probably more than for the number of sellers leaving the country.

Edited by Without_a_Paddle

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Don’t forget that “last sales” inject huge amounts of positive MEW into the system, and a severe population contraction, although reducing demand, implies that the remaining population would be significantly more wealthy. ;)

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QUOTE:

500,000 people die every year in the UK
That's 42,000 per month.
86 counties in the UK.
Therefore 500 die a month in a typical county.
About 100 will be single old people (wild guess)
Therefore expect maybe 33 new properties a month on the market (per county) with no onward chain due to old people dying. (assuming 30% were owner occupiers)
Each one will take at least 3 months to sell.
The West Midlands covers a large densely populated area...
Maybe this accounts for some of your no chain properties. Probably more than for the number of sellers leaving the country.
This post has been edited by Without_a_Paddle: Today, 12:56 PM

The 1918 Flu which killed 100s of millions worldwide led to the "Roaring Twenties." A time of great prosperity that was followed by 1929 and a decade of depression.

If, make that "when", Bird Flu mutates we could see a 20-25% drop in the population* leaving a large number of houses empty and thus adding somewhat to the supply side of the equation. Business will be interrupted with a large amount of absenteeism and the FTSE might react by dropping to the downside. However, I agree that we will recover from the temporary slump lasting just a few years to be followed by another boom period.

The economic cycle, magnified by Bird Flu, will present some good investing opportunities for those with the cash. As we are at or very near the top of the market in the UK for HPI, now would appear to be a good time to sell and go to cash.

Remember the old saying: buy low, but always SELL high. Those who hang on too long miss the "sell by" date.

___________________________________________________

The 1918 "Spanish" flu pandemic is estimated to have infected up to one billion people - half the world's population at the time.

The virus killed more people than any other single outbreak of disease, surpassing even the Black Death of the Middle Ages.

Although it probably originated in the Far East, it was dubbed "Spanish" flu because the press in Spain - not being involved in the Great War - were the first to report extensively on its impact.

The virus caused three waves of disease. The second of these, between September and December 1918, resulting in the heaviest loss of life.

It is thought that the virus may have played a role in ending the Great War as soldiers were too sick to fight, and by that stage more men on both sides died of flu than were killed by weapons.

Source: http://news.bbc.co.uk/1/hi/health/3455873.stm

Edited by Realistbear

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500,000 people die every year in the UK

That's 42,000 per month.

86 counties in the UK.

Therefore 500 die a month in a typical county.

About 100 will be single old people (wild guess)

Therefore expect maybe 33 new properties a month on the market (per county) with no onward chain due to old people dying. (assuming 30% were owner occupiers)

Each one will take at least 3 months to sell.

The West Midlands covers a large densely populated area...

Maybe this accounts for some of your no chain properties. Probably more than for the number of sellers leaving the country.

:lol: Good bit of analysis but i think i could probably find atleast 10 no onward chains in my area alone, i do agree that death will account for a small proportion of them but i would suggest that most are alive and kicking :)

EDITED:

By 'Good' i mean unique :) Its completly misguided but good to read :lol:

Edited by theChuz

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:lol: Good bit of analysis but i think i could probably find atleast 10 no onward chains in my area alone, i do agree that death will account for a small proportion of them but i would suggest that most are alive and kicking :)

EDITED:

By 'Good' i mean unique :) Its completly misguided but good to read :lol:

Don't forget, the "No Chain" sales listed are with just one agent in the West Midlands. IMO, it is a sign that whoever is selling wants out of property altogether. Wanna-be STRs could be one cause of the desire to exit the market. Trying to time the market to sell at the top is very hard. We are in the "too late to sell at the top" zone now. The danger is trying to chase the market down as it is hard to get ahead of the drops and stay competitive with others trying to get out.

Edited by Realistbear

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It could be argued that these are owners keen to take advantage of the current resurgence in HPI to get further up the ladder and increase their exposure to property and the (imagined) easy profits; perhaps they think they need to get in quick and move fast – hence the display of flexibility towards their buyers. ;)

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It could be argued that these are owners keen to take advantage of the current resurgence in HPI to get further up the ladder and increase their exposure to property and the (imagined) easy profits; perhaps they think they need to get in quick and move fast – hence the display of flexibility towards their buyers. ;)

Perhaps. They will have to find a rental for a minimum of 6 months and prices will not have dropped that much in such a short period time (unless the B o E hikes the rates in reaction to the VI reports of soaring HPI).

No, I think anyone who is confident in HPI continuing would not want to sit out the market for 6 months after selling. IMO, its a sign of wanting to sell and not buy.

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500,000 people die every year in the UK

That's 42,000 per month.

86 counties in the UK.

Therefore 500 die a month in a typical county.

As much as I admire your dispationate calculations (!) you have to remember that the population distribution is far from equal, for example as a metropolitan county the West Midlands is geographically small yet over 2.5m people live there, neighbouring Shropshire is amongst the largest counties in England yet only 283,000 people live there, and most of those are in Telford which is a chavish enclave of Wolverhampton banished to the countryside. Worcestershire has around 500k people.

As for the general question, I've looked at houses, agents and the local rag in the Birmingham area and then done the same for East Sussex the next day, there's basically a pricing parity, aside from the fact the average wage and earning potential is much lower in Birmingham. I cannot understand what underpins the prices, that's before you even look at the North, they are utterly barmy. Trouble at 'tut mill, yeah, it burnt down 30 years ago! No wonder there is internal migration, the South East is cheap when you look at average pay!

Edited by BuyingBear

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17 of the 50 properties advertised as "no chain" in my local agents.

Don't seem to be any particular price bracket/ property type though.

B)

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Or maybe a few old people died and their house is being sold. (hence no upward chain)

42 out of 182 (listed) is about 20%.

Even assuming that the Nnew Builds page and the 11th page double the amount of houses to 360.

Thats still 10% of houses with no chain.

I doubt 10% of the population are dying on a monthly basis.

If 10% of the general population were dying (not just 10% of the elderly) we wouldnt have a pensions crisis.

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Just checked Hemmings EAs (Alcester, Warcks)--who are an upscale RICs outfit--they have 15 properties advertised as follows:

No chain: 6

Unexpectedly back on market: 2

Larger EA, Lamberts (Studley, Redditch, Droiotwich) have 31 houses listed:

No upward chain: 6

New Price: 4

The kinds of percentages we are seeing for "no chain"do suggest a movement out of the market--for whatever reason.

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Perhaps. They will have to find a rental for a minimum of 6 months and prices will not have dropped that much in such a short period time (unless the B o E hikes the rates in reaction to the VI reports of soaring HPI).

No, I think anyone who is confident in HPI continuing would not want to sit out the market for 6 months after selling. IMO, its a sign of wanting to sell and not buy.

Agree about the 6 months restriction, although some may be willing to “crash” with family or friends, but they could easilty offer and lock in the price of their next house early and certainly don’t have to wait the full assured period. Their own flexibility towards their next seller would net them a significant discount that could easily offset the extra rental costs, and we all know that house sales and purchases can easily take several months anyway.

Edited by spline

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Agree about the 6 months restriction, although some may be willing to “crash” with family or friends, but they could easilty offer and lock in the price of their next house early and certainly don’t have to wait the full assured period. Their own flexibility towards their next seller would net them a significant discount that could easily offset the extra rental costs, and we all know that house sales and purchases can easily take several months anyway.

Its possible. But with 20% + "no chain" there is unlikely to be that many willing to move in with relatives. Or, to risk 6 months out of the "hot" market.

As for locking on the next property--what point would there be if the seller thinks they can get a better price as the market soars (according to the VIs)? Many sellers want a ready and willing buyer not someone who is going to tie them up for 6 months in case the price drops.

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And let’s not forget that quite a few “no chain” sellers have actually gone and purchased their next house before selling their current one. So have a motivation different from an STR type dash for the exit. :)

Edited by spline

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And let’s not forget that quite a few “no chain” sellers have actually gone and purchased their next house before selling their current one. So have a motivation different from an STR type dash for the exit. :)

Very few will risk this. Solicitors are bound to advise their clients not to exchange contracts on a purchase before a contract is secured on a sale. I doubt 20% of sellers who are "no chain" have the kind of financial back up to do this. Most of the properties with the "no chain" are moderate to low priced. Not the kind of sophisticated or wealthy sellers who have already bought before selling an existing property.

We have to face the fact that the large number of sellers with a "no upward chain" situation indicates an exit trend. Or, at least, a wanna-be exit trend--IMO, too many have left it too late to try to sell now. They failed to follow the old saying: buy low but sell high ("sell" being the operative word--not hang on too long).

Edited by Realistbear

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42 out of 182 (listed) is about 20%.

Even assuming that the Nnew Builds page and the 11th page double the amount of houses to 360.

Thats still 10% of houses with no chain.

I doubt 10% of the population are dying on a monthly basis.

If 10% of the general population were dying (not just 10% of the elderly) we wouldnt have a pensions crisis.

DO OLD PEOPLE ONLY DIE IN MARCH?

TB

Oh please...

I did say death may account for SOME of the no chain properties. Not all of them.

RB implied that the sales were due to BTL bail outs or emigration.

I would guess that death and emigration would account for some of the no chain sales.

Others are due to staggered sales where the seller sells in advance and rents for a few months whilst they look for the right house. My parents did this and I remember us living in a grotty rental as a teenager for 6 months whilst we were 'between houses'

This also often happens when people relocate. Some keep the old house and rent it out and buy a second house.

Depending on circumstances, they may eventually choose to sell the original house as a 'no chain'.

Other sales will be due to couples splitting up due to divorce or separation.

As much as I admire your dispationate calculations (!) you have to remember that the population distribution is far from equal, for example as a metropolitan county the West Midlands is geographically small yet over 2.5m people live there, neighbouring Shropshire is amongst the largest counties in England yet only 283,000 people live there, and most of those are in Telford which is a chavish enclave of Wolverhampton banished to the countryside. Worcestershire has around 500k people.

So lets focus in on Worcestershire.

500,000 people.

Assuming the death rate is the same then the number of Worcestershire deaths will be

500,000 deaths x (500,000/58,000,000) = 4300 deaths a year. = 358 a month.

Not far off from my original 'broad brush' figure of 500 a month.

Edited by Without_a_Paddle

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We have to face the fact that the large number of sellers with a "no upward chain" situation indicates an exit trend. Or, at least, a wanna-be exit trend--IMO, too many have left it too late to try to sell now. They failed to follow the old saying: buy low but sell high ("sell" being the operative word--not hang on too long).

If you look at other forums it appears that people do this sort of thing quite often (buying house #2 before selling house #1), and I know people who’ve done it themselves, mainly from having seen their dream house and desperately wanting to secure it, although obviously I wouldn’t recommend it.

I think we have to accept the fact that there’s a whole multitude of perfectly sensible reasons for sellers being “no upward chain”, and trying to ascribe a particular blanket motivation is probably not very “realistic”. :)

Edited by spline

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Bottom line remains that 20% + is a high proportion of the total number of sales. IMO, most of them are sellers who see a crash coming and want to sit on the sidelines for awhile. I was one of those "no chain" sellers but my motivation was more about a job move than a "sit out the market move." The reason I have invested my STM funds in equities rather than another house is that I believe house prices are dropping in the West Midlands. An assumption, it seems, shared by quite a few.

Most people are insecure about house prices and the numbers of properties on the market with "no chain" or new price suggests lack of confidence. I doubt many will be taking on bridging loans where the market is dropping or is flooded with properties as is the case around here. Again, solicitors will be advising their seller clients of the risks involved in a buyers market.

1 in 5 house sales offering a "no chain" sale is, by all accounts, very high and a clear sign that market has turned.

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Surely takes someone like Mystic Meg and a very expensive and powerful crystal ball to divine the motivations of all these “no upward chain” sellers. :lol:

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  • 337 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% +
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      • Even
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      • up 5%



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