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munimula

On The Frontline It Is Getting Worse

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Figures for 27th not yet in but on 26th, discounting properties sold prior or withdrawn, 16 out of 29 properties failed to sell at auction.

This is a major westcountry estate agent that holds auctions that cover the whole of the westcountry inc Devon/Somerset and Cornwall.

I've been tracking this for the last couple of auctions and the figures have risen from 20% to around 33% going unsold at the last auctions to 55% at the latest auction.

Now these auction prices don't show up in the stats as buyers usually don't need a mortgage but it looks like things are bad when properties aren't even selling at auction prices....I'd say that what is happening at auctions is a good leading indicator of where prices are going as it represents a serious disappearance of demand for property.

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Figures for 27th not yet in but on 26th, discounting properties sold prior or withdrawn, 16 out of 29 properties failed to sell at auction.

This is a major westcountry estate agent that holds auctions that cover the whole of the westcountry inc Devon/Somerset and Cornwall.

I've been tracking this for the last couple of auctions and the figures have risen from 20% to around 33% going unsold at the last auctions to 55% at the latest auction.

Now these auction prices don't show up in the stats as buyers usually don't need a mortgage but it looks like things are bad when properties aren't even selling at auction prices....I'd say that what is happening at auctions is a good leading indicator of where prices are going as it represents a serious disappearance of demand for property.

Does this information have a source?

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Figures for 27th not yet in but on 26th, discounting properties sold prior or withdrawn, 16 out of 29 properties failed to sell at auction.

This is a major westcountry estate agent that holds auctions that cover the whole of the westcountry inc Devon/Somerset and Cornwall.

I've been tracking this for the last couple of auctions and the figures have risen from 20% to around 33% going unsold at the last auctions to 55% at the latest auction.

Now these auction prices don't show up in the stats as buyers usually don't need a mortgage but it looks like things are bad when properties aren't even selling at auction prices....I'd say that what is happening at auctions is a good leading indicator of where prices are going as it represents a serious disappearance of demand for property.

A staggering statistic.

Who is it and is there a link? I am having a long-running argument with my development department that they should be contracting when they think they should be expanding. Any ammunition is welcome.

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Figures for 27th not yet in but on 26th, discounting properties sold prior or withdrawn, 16 out of 29 properties failed to sell at auction.

This is a major westcountry estate agent that holds auctions that cover the whole of the westcountry inc Devon/Somerset and Cornwall.

I've been tracking this for the last couple of auctions and the figures have risen from 20% to around 33% going unsold at the last auctions to 55% at the latest auction.

Now these auction prices don't show up in the stats as buyers usually don't need a mortgage but it looks like things are bad when properties aren't even selling at auction prices....I'd say that what is happening at auctions is a good leading indicator of where prices are going as it represents a serious disappearance of demand for property.

Good Post, I have been following them so keep them coming.

We want to move to the West Country (Devon) and will only be able to afford it after a significant crash. It is not just that houses are ridiculously priced but also the fact that the earning potential is far reduced down their which makes most houses completely unaffordable to other than second home owners or retirees. My parent In-law are both Teachers and have always lived in the same house. It is a bungalow and now worth £450,000. They have lived in it from a similar age as we are now so in a fair world it should be worth £200-£250,000 on 2 incomes 3.5 multiple which I now am starting to accept is the norm. It was bought on a single teachers income! In a truly fair world it should be nearer £100 -£150,000 but I am realistic and only expect a 50% fall. ;)

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Good Post, I have been following them so keep them coming.

We want to move to the West Country (Devon) and will only be able to afford it after a significant crash. It is not just that houses are ridiculously priced but also the fact that the earning potential is far reduced down their which makes most houses completely unaffordable to other than second home owners or retirees. My parent In-law are both Teachers and have always lived in the same house. It is a bungalow and now worth £450,000. They have lived in it from a similar age as we are now so in a fair world it should be worth £200-£250,000 on 2 incomes 3.5 multiple which I now am starting to accept is the norm. It was bought on a single teachers income! In a truly fair world it should be nearer £100 -£150,000 but I am realistic and only expect a 50% fall. ;)

The basic argument against the "affordability" preached by building society economists is that most people could not now afford to buy the house they are living in (or if retired, could not have afforded it at their final salary level).

Everything above this affordability level is driven by speculation which has a limited lifespan.

The good thing is that there is so much momentum with the property market that as well as overshooting property prices undershoot. You may get that £150k yet; unless inflation is allowed to spiral when the real cost will be £150k but the nominal will be higher.

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The basic argument against the "affordability" preached by building society economists is that most people could not now afford to buy the house they are living in (or if retired, could not have afforded it at their final salary level).

Everything above this affordability level is driven by speculation which has a limited lifespan.

The good thing is that there is so much momentum with the property market that as well as overshooting property prices undershoot. You may get that £150k yet; unless inflation is allowed to spiral when the real cost will be £150k but the nominal will be higher.

There is absolutely no way they could afford their own house, in fact with no mortgage they were saying to me the other day that they were thinking of down sizing because the running cost were quite high and council taxes keep going up!

I did suggest if they are seriously thinking of doing it to do it now and rent while they get there next house bought and done up. Renting is not in there ethos though so it went no further than that (they could sell then rent back their house and put £800/month into savings!). I am looking forward to conversation in a few years time where hopefully I won’t be the STR loony son in Law (to be fair they are very down to earth and supportive of our decisions)

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I live in Torquay, and my partner and I are thinking of moving to Scotland for better paid work and cheaper houses and a better quality way of life. The problem with Devon is that H.P's are set to cash rich incomers from London and the midlands. Tale a look at bungalow prices to see what I mean. An old dilapidated beach hut in Teignmouth this week went for £91K at auction (sorry no link), this is what we are up against crazy stupid prices when the typical wage around here is £11 - 15K P.A and half the local population is on some kind of benefits to make ends meet. I think allot of the failed sales at auction are due to stubborn sellers waiting for the spring 2008 bounce, which happened last spring, so hay it must come again, right?

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I live in Torquay, and my partner and I are thinking of moving to Scotland for better paid work and cheaper houses and a better quality way of life. The problem with Devon is that H.P's are set to cash rich incomers from London and the midlands. Tale a look at bungalow prices to see what I mean. An old dilapidated beach hut in Teignmouth this week went for £91K at auction (sorry no link), this is what we are up against crazy stupid prices when the typical wage around here is £11 - 15K P.A and half the local population is on some kind of benefits to make ends meet. I think allot of the failed sales at auction are due to stubborn sellers waiting for the spring 2008 bounce, which happened last spring, so hay it must come again, right?

No bounce, time to pounce. ;)

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I live in Torquay, and my partner and I are thinking of moving to Scotland for better paid work and cheaper houses and a better quality way of life. The problem with Devon is that H.P's are set to cash rich incomers from London and the midlands. Tale a look at bungalow prices to see what I mean. An old dilapidated beach hut in Teignmouth this week went for £91K at auction (sorry no link), this is what we are up against crazy stupid prices when the typical wage around here is £11 - 15K P.A and half the local population is on some kind of benefits to make ends meet. I think allot of the failed sales at auction are due to stubborn sellers waiting for the spring 2008 bounce, which happened last spring, so hay it must come again, right?

Cash rich Londoners - yes, I believe that... Cash rich people from the Midlands? Really? Are you sure? From which industry?

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Cash rich Londoners - yes, I believe that... Cash rich people from the Midlands? Really? Are you sure? From which industry?

Don't know the industry as they tend to be retired and sold up form areas such as sutton coalfield and the like.

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Guest grumpy-old-man
Figures for 27th not yet in but on 26th, discounting properties sold prior or withdrawn, 16 out of 29 properties failed to sell at auction.

This is a major westcountry estate agent that holds auctions that cover the whole of the westcountry inc Devon/Somerset and Cornwall.

I've been tracking this for the last couple of auctions and the figures have risen from 20% to around 33% going unsold at the last auctions to 55% at the latest auction.

Now these auction prices don't show up in the stats as buyers usually don't need a mortgage but it looks like things are bad when properties aren't even selling at auction prices....I'd say that what is happening at auctions is a good leading indicator of where prices are going as it represents a serious disappearance of demand for property.

good trustworthy anecdotal imo, you can't beat it.

cheers.

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Now these auction prices don't show up in the stats as buyers usually don't need a mortgage but it looks like things are bad when properties aren't even selling at auction prices....I'd say that what is happening at auctions is a good leading indicator of where prices are going as it represents a serious disappearance of demand for property.

The first stage is non sale at reserve price - but after a few months of realising that they aren't going to sell any other way, the building societies are going to start knocking the reserve prices down pretty sharply.

The prices won't show up in most of the indeces, but the properties sold at auction will most certainly show up in the Land Registry index which records all sales.

As such the LR registry is soon going to become the most up to date index - as the asking price / mortgage based indeces will still be showing 'suspension of disbelief' based prices; and will plateau a long time before they accurately represent the falling market pushed by the repos.

The short term divergence of the LR and Haliwide indeces is also going to make a big mess of the algorithms that Acadametrics use to produce the FT index.

The indeces are going to be all over the place for the next year or so, until sellers realise they have to drop prices to follow the repo prices downwards.

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Cash rich Londoners - yes, I believe that... Cash rich people from the Midlands? Really? Are you sure? From which industry?

I read that and thought the same. I am from the midlands and have friend in London. Cash rich in London are the ones on the way to monaco. Cash rich people in the midlands are the ones on the way to bingo.

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this has been one the major drivers of the excessive hpi in the south of england. Basically the city boom times + the perception that property is a fabulous investment has lead to city money ending up in second homes/btl in nice areas along the south coast. Even if this level of city demand were to stay constant in the future (and it's a big if because perceptions are starting to turn IMO) then we would still have a problem because this demand is only at the margin. Everyone else finds themselves living in houses that, if they were to start out again, simply could never afford. So what happens as these people retire/die? There will be steady stream of houses coming on to the market that city money simply doesnt have the capacity to mop up. You might say oh but as the oldies move on they can pass their valuable houses to the next generation. But does it really work like that? Of course not, the next generation doesn't hang around waiting to move into the house their parents leave behind, it gets sold! And with a crazily low inheritance tax threshold a very large chunk of that wealth gets lost forever, for Gordon Brown to piss it around the public sector in all manner of wasteful ways. This will take many many years to play out, if perceptions do a U turn then yes we may well see a "crash" over a year or two but perhaps equally likely is a protracted and slow decline/stagnation over a longer period. Come back in 10 or even 20 years, I honestly think that house prices in real terms in many of these areas will be unchanged or down.....

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A staggering statistic.

Who is it and is there a link? I am having a long-running argument with my development department that they should be contracting when they think they should be expanding. Any ammunition is welcome.

This is the auction results page.

Results for 27th Sept not yet posted - due tomorrow I guess

http://www.fulfords.co.uk/dynamic.php?id=auctionresults

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Good Post, I have been following them so keep them coming.

We want to move to the West Country (Devon) and will only be able to afford it after a significant crash. It is not just that houses are ridiculously priced but also the fact that the earning potential is far reduced down their which makes most houses completely unaffordable to other than second home owners or retirees. My parent In-law are both Teachers and have always lived in the same house. It is a bungalow and now worth £450,000. They have lived in it from a similar age as we are now so in a fair world it should be worth £200-£250,000 on 2 incomes 3.5 multiple which I now am starting to accept is the norm. It was bought on a single teachers income! In a truly fair world it should be nearer £100 -£150,000 but I am realistic and only expect a 50% fall. ;)

This is where I was brought up in Devon where new 2-bed flats are now being priced at £135K;

http://www.rightmove.co.uk/viewdetails-900...=5&tr_t=buy

I grew up in a large 5-bed house with my parents and 3 sisters. My mum never worked and my dad always earned below UK average wages.

Today on those wages he wouldn't be able to afford the 2-bed flat above.

That's how much things have changed in a generation.

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There is absolutely no way they could afford their own house, in fact with no mortgage they were saying to me the other day that they were thinking of down sizing because the running cost were quite high and council taxes keep going up!

I did suggest if they are seriously thinking of doing it to do it now and rent while they get there next house bought and done up. Renting is not in there ethos though so it went no further than that (they could sell then rent back their house and put £800/month into savings!). I am looking forward to conversation in a few years time where hopefully I won’t be the STR loony son in Law (to be fair they are very down to earth and supportive of our decisions)

My parents are in a similar situation, they are sitting on £435K in the bank after selling up. Dad bought a Morgan sports car and they are still bringing in over £2000 interest per month. Their rent, in Devon for a 3-bed house is just £550. Through my persuasion they are in this position and happily waiting out the storm.

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Is it ex Local Authority? as purchaser needs connection with local area.

Part of my family comes from South Hams in Devon. Incredibly expensive but wages so low this is a completely unsustainable situation that cannot last otherwise the area will begin to fall apart as no workers to maintain it.

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The first stage is non sale at reserve price - but after a few months of realising that they aren't going to sell any other way, the building societies are going to start knocking the reserve prices down pretty sharply.

It appears that this is happening all around the UK now, this from a London auction of Woolwich flat;

Being shockingly realistic, the mortgagee didn’t expect to get all its money back. Instead it put a reserve price on the flat of £175,000 – a drop of £75,000 or 30% from the original sale price over two years in which the London property market has been soaring ahead – until recently anyway.

And guess what? It didn’t even get that. The first bid lobbed at £150k, the last at £160k. Lot unsold.

As indeed were two other flats on the same floor, while three others in the same building were withdrawn before the auction.

http://www.citywire.co.uk/Blogs/Entry.aspx...rsionID%3d96658

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Is it ex Local Authority? as purchaser needs connection with local area.

Part of my family comes from South Hams in Devon. Incredibly expensive but wages so low this is a completely unsustainable situation that cannot last otherwise the area will begin to fall apart as no workers to maintain it.

It's a brand new flat. There are clauses on some of them so they are only sold to 'local' people

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This is where I was brought up in Devon where new 2-bed flats are now being priced at £135K;

http://www.rightmove.co.uk/viewdetails-900...=5&tr_t=buy

I grew up in a large 5-bed house with my parents and 3 sisters. My mum never worked and my dad always earned below UK average wages.

Today on those wages he wouldn't be able to afford the 2-bed flat above.

That's how much things have changed in a generation.

Attached below is an interesting map of the UK I posted a while ago. It is one of the areas like Norfolk that has gone from very cheap to the most expensive.

My parents are in a similar situation, they are sitting on £435K in the bank after selling up. Dad bought a Morgan sports car and they are still bringing in over £2000 interest per month. Their rent, in Devon for a 3-bed house is just £550. Through my persuasion they are in this position and happily waiting out the storm.

Good work, I can not see how you can fail with sums like these. My wife’s parents could do the same but I was told they could not rent at their age because it is against there principles. My grandparents have always rented on a housing scheme, their rent is now very low and the reassurance of the house maintenance being someone else’s problem make it stress free for them. I worked out once that since they bought their house from the very first year they have made approx £15,000 per year every year for 30 years, that is a comparable local wage now let alone one from 30 years ago.

Is it ex Local Authority? as purchaser needs connection with local area.

Part of my family comes from South Hams in Devon. Incredibly expensive but wages so low this is a completely unsustainable situation that cannot last otherwise the area will begin to fall apart as no workers to maintain it.

My In-laws are in the South Hams and we love it down there which is why we want to relocate and my wife has always wanted to move back home. It is a victim of it's own success. A good recession should shake out the second home owners which is what I am waiting for. Hopefully patience will be a virtue.

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Attached below is an interesting map of the UK I posted a while ago. It is one of the areas like Norfolk that has gone from very cheap to the most expensive.

Good work, I can not see how you can fail with sums like these. My wife’s parents could do the same but I was told they could not rent at their age because it is against there principles. My grandparents have always rented on a housing scheme, their rent is now very low and the reassurance of the house maintenance being someone else’s problem make it stress free for them. I worked out once that since they bought their house from the very first year they have made approx £15,000 per year every year for 30 years, that is a comparable local wage now let alone one from 30 years ago.

My In-laws are in the South Hams and we love it down there which is why we want to relocate and my wife has always wanted to move back home. It is a victim of it's own success. A good recession should shake out the second home owners which is what I am waiting for. Hopefully patience will be a virtue.

That map doesn't tell the true picture.

My nan is buying a 3-bed terraced house (fairly average!) where I grew up in Devon for £245K

That would make it about 15X average local wages

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