Are Things Turning Bullish?

[zzg113]

Hometrack shows Bromley down 1.4% in January.

http://www.hometrack.co.uk/index.cfm?fusea...report.viewhtml

[FernandoMorientes]

I went for a nose around a new development in Bromley on Saturday to find out what was on offer, and more importantly to find out what has sold and for how much, just to get a feel for how bad things really were.  I had absolutely no intention of buying anything.

It seems out the 21 brand new, 2-bed 2-bath flats, duplexes and loft style flats built, 16 have already been sold since June last year and the remainder are expected to sold by end of April. Most would have sold off plan as they are still fitting out some of them at the moment.

I viewed one of the unsold duplexes, asking price £285,000 for about 900 sq feet and came face to face with the madness that is HPI in the UK. Tiny, poky bedrooms below ground level ( ), average sized living space on the upper floor, and to be honest not much else.

The 'loft style' flats were going for £345K (1,000 sq feet) !!!

The marketing brochure was very glossy and was basically selling a lifestyle, rather than a place to live. At the same time I was viewing, a girl of about 30 turned up to look at the flat she had already reserved, one of the cheaper ones.

I asked the salesman about part exchange and was told that there was no incentive on the developer's part to offer this as the flats were selling so well by themselves. He also mentioned that they would not accept offers from people who were in an incomplete chain and still trying to find a buyer, and also menioned that all the other sold properties were taken by first time buyers.

How much of his sales talk was fact and how much was fiction, I couldn't be sure. He seemed rather indifferent to me to be honest, wasn't really making much effort to convince me to buy. He did perk up when I mentioned that I had no mortgage on my existing place though.

But I was genuinely shocked when he said now many has already sold. If he was lying, why go so OTT, why not just say half sold or something. Maybe the general public just aren't as aware of the potential for future HP falls as we'd like to think.

<{POST_SNAPBACK}>

As awful as this sounds I actually find this sort of thing quite encouraging and simply rub my hands at the thought of all those cheap repos once the almighty crash finally kicks into gear.

Pity the poor fools getting fobbed of by all this nonsense but if they are stupid enough to buy into it then they will have to live the consequences when it all goes t*ts up....and it will its only a matter of time.

[dogbox]

And don't forget ----- Dogbox is selling his flat at the moment!

And............?

I think I might get better capital growth from commercial property, so what?

Doesnt mean buying a home is to be avoided.

Also for those B2L resi investors, Im sure they will do just fine especially in the longer term.

Im a lazy profit chaser is all.

[Casual Observer]

And............?

I think I might get better capital growth from commercial property, so what?

<{POST_SNAPBACK}>

I agree with you that residential housing is not the best thing to buy at the moment.

[dogbox]

It is difficult to get a balanced view - especially when you do see property still selling. Property will always sell - or at least appear to. I can only tell you what is happening in my end of East Berkshire (between Slough and Maidenhead).

Anything in the plus 300k usually takes a long time to sell. I watch the market continuously and I could show you properties here that have been on the market for over a year.

I could also show you properties in the 400k plus range that have reduced in asking price by up to 75k over the last year - and still not sold.

There are thousands of properties on the market - especially since Christmas. Lots of new For Sale signs.

Up to half the properties in any one week in my local property paper say 'No onward chain'. Once this used to mean an executor's sale - now it means a BTL landlord getting out.

Some of the blocks of flats near me have dozens (quite literally) of For Sale and To Let boards outside them.

In the last 3 months of 2004, half as many properties were sold (Land Registry figures) in Norwich as in the last 3 months of 2003. No EA bull here - just simple Land Registry facts.

One of the new blocks of flats near me has now been finished just over a year - it is still half empty and prices have reduced from 250k to 195k.

Another new block of flats near me (finished 3 months ago) still only has 2 cars in the car park each day and they belong to the EAs selling the flats.

Mortgage approvals are at a 10 year low.

Estate Agents near me are always empty, even on Saturdays, and admit, when pressed, that the market is dead.

Sellers are now accepting offers from Buyers who are not in a position to proceed in desperation i.e. to kid themselves they have sold.

There are, round here, (I have this from several EAs in the area) 'no first time buyers in the market'.

There are masses of properties to rent on the rental market - with the result that actual rents have dropped a couple of hundred pounds a month. The BTL figures do not add up round here and many (presumably) recent BTLs are trying to sell.

FTBs pay no attention to Marina. She wears sh!t tinted specks 24/7.

[Dee Monic]

As awful as this sounds I actually find this sort of thing quite encouraging and simply rub my hands at the thought of all those cheap repos once the almighty crash finally kicks into gear.

Pity the poor fools getting fobbed of by all this nonsense but if they are stupid enough to buy into it then they will have to live the consequences when it all goes t*ts up....and it will its only a matter of time.

<{POST_SNAPBACK}>

There's a small block of flats near me just finished being converted (was an old peoples home) up for sale at high prices. A couple of weeks ago I was gutted to see one of them had actually sold, but then I saw it up for rent in the window of a local agency. So there are still some mugs buying to let on the south coast They want 1,000 pcm for a two bed flat I'd pay nearer 700.

[Casual Observer]

There's a small block of flats near me just finished being converted (was an old peoples home) up for sale at high prices. A couple of weeks ago I was gutted to see one of them had actually sold, but then I saw it up for rent in the window of a local agency. So there are still some mugs buying to let on the south coast They want 1,000 pcm for a two bed flat I'd pay nearer 700.

<{POST_SNAPBACK}>

What did it sell for?

[right_freds_dead]

FTBs pay no attention to Marina. She wears sh!t tinted specks 24/7.

<{POST_SNAPBACK}>

dogbox.

i think you need to replace the words: Marina-Dogbox & She-He before posting this again.

[nickd]

I have to point out the irrationality of taking ONE house going UNDER OFFER (not SOLD) and immediately using this as evidence to extrapolate out to the WHOLE (UK) property market.

If you thought I was doing that, no, I was extrapolating a whole load of houses selling at once. Look on Rightmove at Beeston, Nottingham, under £130k. If you include sold houses the number shown increases by 50%. Believe me I've been watching it

> Uh, nick, a low inflation environment will HASTEN the crash, as people begin to > realise that inflation will no longer pay the huge mortgages they have taken out and > the true burden of the debt they have taken on becomes apparent.

If people use their brains, yes. unfortunately people don't realise till years down the line. I think this will "become apparent" at the same speed as endownments being a rip-off or pensions failing to deliver became "apparent"

So what? There will always be forced sales (the 4 D's-death, divorce, debt, disease) and it is the marginal seller who sets the new market price.

Or move somewhere where property is cheaper?

You know yourself, cheaper means

1) where there are no jobs or:

2) abroad  or:

3)  where there are chavs and crime

there will be forced sales yes. I am suggesting a tickle of mega-stretched FTBs (or those supported by parents) will mop up these.

Overall sales volume will be small. Overall change in price will be small.

Until some much later date perhaps it will all come crashing down, probably once we've all given up on a bust and mortgaged ourselves to the hilt

<{POST_SNAPBACK}>

[zzg113]

If you thought I was doing that,

No, my comment about the dangers of extrapolating from a small sample were referring to Volvos60's original post on the thread.

cheaper means

1) where there are no jobs or:

2) abroad  or:

3)  where there are chavs and crime

What's wrong with abroad?

[Harry Sacks]

1. Dead cat bounce.

2. nothing, nothing, nothing can stop the crash, nothing.

[Sledgehead]

Im selling as I wish to diversify into commercial property as I have a 'gut feel' (sorry nothing scientific) that commercial will easily out - strip residential capital gains in the next 3 years.

<{POST_SNAPBACK}>

And of course you are the only one in the world who this has occured to. All the professional investors out there would pay you good money for that advice.

PS: my commercial porperty units were up 35.9% last year. Hurry!

PPS: you do realise that money chases the best returns, don't you. ALL money, not just yours. See what I'm driving at wrt residential?

[Big_Bad_Bear]

I have the front page of the Sunday Times Business section somewhere from a few years back. The time it was put out marked an absolute high for the FTSE, DOW and Nasdaq. Within weeks the indexes had plummeted and were to continue to fall for a couple years until techs were bombed out of sight and the FTSE had lost nearly half it's value. Thousands of people lost fortunes and thousands more their jobs. Brokers and advisors were jailed for 'ramping' of share prices and the Nasdaq still looks like it'll take many years to recover.

What was on the cover? A full page picture of a prancing bull.

The key is that when idiots can make money in a market just by betting one way, it's time to bail out. Read about any of the worlds best traders, dealers or financiers. As soon as they feel they are earning 'dumb' money, they head for the door.

This market is going straight to hell.

[Marina]

FTBs pay no attention to Marina. She wears sh!t tinted specks 24/7.

<{POST_SNAPBACK}>

Dogbreath, I just post the facts as I see them. You post them as you see them. I don't give a monkeys whether FTBs take any notice of me or not. In the last few weeks I have made a decision I have been toying with for a while - as soon as my present contract is up - I'm off. This country is on a one-way trip to chaos and there is no future here for my kids - or me for that matter.

[Guest consa]

FTBs pay no attention to Marina. She wears sh!t tinted specks 24/7.

<{POST_SNAPBACK}>

Asinus asinorum in saecula saeculorum.

[Guest pioneer31]

People who buy now are stupid beyond belief.

The interest rate is going to rise after the election.

Happy bankruptcy.

[zzg113]

I have the front page of the Sunday Times Business section somewhere from a few years back. The time it was put out marked an absolute high for the FTSE, DOW and Nasdaq. Within weeks the indexes had plummeted and were to continue to fall for a couple years until techs were bombed out of sight and the FTSE had lost nearly half it's value. Thousands of people lost fortunes and thousands more their jobs. Brokers and advisors were jailed for 'ramping' of share prices and the Nasdaq still looks like it'll take many years to recover.

What was on the cover? A full page picture of a prancing bull.

The key is that when idiots can make money in a market just by betting one way, it's time to bail out.

There is no such thing as a one-way bet, and when large numbers of people start to believe there is, that is the time to get out as fast as your legs will carry you.

I think the Sunday Times story you cite above is the equivalent of the "shoeshine boy" moment experienced by Joe Kennedy in 1929 just before the Wall Street Crash:

the story told about Joe Kennedy who was a big investor before the 1929 crash. It is said that Mr. K went to Wall Street to visit his broker (JP Morgan of course) about a week before the crash. Now Mr. K always used to get his shoes shined by a particular shoeshine boy called Billy. So he went to Billy and while getting his shoes shined asked for the news on the street. Billy said "Mr. K, you must buy US Steels and RCA, I heard they are hot". Mr. K got his shoes shined, went to JP Morgan, sold his holdings and went home. His wife asked what did you buy, and he said, "I sold everything. When the shoeshine boy starts giving you tips, it is time to be out of the market".

Here, both the Sunday Times business section and the shoeshine boy are proxies for what the herd/masses are thinking.

[Bullish Bear]

I am getting this horrible feeling that the media are turning more bullish following the bearish articles towards the end of last year. Just look at the media postings pasted on this site - not many bearish stories of late.

Is the general public / media sentiment turning again, so soon after things were looking like they were lining up for a HPC?

Also, I only know personally 2 people trying to sell in my area (Barnet/Finchley/Southgate). One has a 4 bed detached modern house who is trying to sell for £450K - only 1 viewing in 2 months. However, my neighbour put his 3 bed semi on 2 weeks ago for £309K. He had 11 viewings in the first week & accepted an offer of £305K. Obviously he has not exchanged contracts & a lot can happen in between, including Guzundering, but it seems to me the market may have life in it yet.

I do happen to feel my neighbour put his house on at maybe £10K below 'market price', but maybe he felt it better to price low, get a close enough offer & accept, rather that aim high & not have any interest.

Is my gut feel that things are not so bearish & sentiment is turning bullish shared by anyone else here?

<{POST_SNAPBACK}>

LOL - Check today's blog!!

[Ursa Minor]

I went for a nose around a new development in Bromley on Saturday to find out what was on offer, and more importantly to find out what has sold and for how much, just to get a feel for how bad things really were.  I had absolutely no intention of buying anything.

It seems out the 21 brand new, 2-bed 2-bath flats, duplexes and loft style flats built, 16 have already been sold since June last year and the remainder are expected to sold by end of April. Most would have sold off plan as they are still fitting out some of them at the moment.

I viewed one of the unsold duplexes, asking price £285,000 for about 900 sq feet and came face to face with the madness that is HPI in the UK. Tiny, poky bedrooms below ground level ( ), average sized living space on the upper floor, and to be honest not much else.

The 'loft style' flats were going for £345K (1,000 sq feet) !!!

The marketing brochure was very glossy and was basically selling a lifestyle, rather than a place to live. At the same time I was viewing, a girl of about 30 turned up to look at the flat she had already reserved, one of the cheaper ones.

I asked the salesman about part exchange and was told that there was no incentive on the developer's part to offer this as the flats were selling so well by themselves. He also mentioned that they would not accept offers from people who were in an incomplete chain and still trying to find a buyer, and also menioned that all the other sold properties were taken by first time buyers.

How much of his sales talk was fact and how much was fiction, I couldn't be sure. He seemed rather indifferent to me to be honest, wasn't really making much effort to convince me to buy. He did perk up when I mentioned that I had no mortgage on my existing place though.

But I was genuinely shocked when he said now many has already sold. If he was lying, why go so OTT, why not just say half sold or something. Maybe the general public just aren't as aware of the potential for future HP falls as we'd like to think.

<{POST_SNAPBACK}>

Was this the Clock House development by any chance?

Ursa Minor

[centrallondon]

Was this the Clock House development by any chance?

Ursa Minor

<{POST_SNAPBACK}>

Bromley is miles away ! Why buy there when you could get a 2 bed in se1 for about the same price.

We need a 0.5 % rise to put the s**ts up people. Not going to get that before the election. Saying that when the crash happens Tony Blair will say sorry and everything will be ok again

[Sledgehead]

I am getting this horrible feeling that the media are turning more bullish following the bearish articles towards the end of last year. Just look at the media postings pasted on this site - not many bearish stories of late.

<{POST_SNAPBACK}>

Let me share this one with you: "Mum's the work"

( http://news.telegraph.co.uk/property/main....2/ixptop28.html )

"For women who want to pursue both child care and career, investing in property is a very attractive option. Deany Judd on why mothers are becoming a force among landlords."

At first glance this article sounds like a "too good to be true" invitation to join the BTL crowd for people who don't want their wrok to interfere with their homelife, yet earn money. Read it. See what impression you are left with.

"I was an air stewardess ... I have definitely found my niche in life. Property has given me a good standard of living and financial independence. "

Now read it again and this time forget the feel-good factor and look at the figures:

"... I bought for £150,000. It had some land, too ... the land ... I sold that for £70,000 and, six months later, sold the house for £122,000. I'd spent £25,000 on the work, so after expenses I made about £20,000. "

So Sold assets gross return = 70 + 122 = 192k

capital outlay + dev costs = 150 + 25 = £175k

she reckons after expenses she made £20k. That doesn't work even BEFORE expenses.

expenses = Stamp duty + EA fees + Conveyancing costs

Stamp duty will be 1% over £60k = ((70 - 60) + (122 - 60)) * 0.01

_________________________=£0.72k

EAs charge around 1 -> 3%, call it 1.5 :

EA fees = (70 + 122) * 0.015 = £2.88k

Conveyancing will cost around £600 depending on search depth

Tot expenses = 0.72 + 2.88 + 0.6 = £4.2k

So her total profit = return_pre_expenses - expenses

_______________= (192 - 175) - 4.2

So her total profit = £12.8k

She CLAIMED £20K !!!!!!

I don't know about you, but seeing as this is her example, I'd say it was one of her better profits. Like she says:

"I try to make about £20,000 on each one. Sometimes it works out at only £15,000 "

Which in "12.8 = 20" world means :

"Sometimes it works out at only 12.8/20 * £15,000 = 9.6k"

Bear in mind also that she is being held up as an example of "how to do it". Sometimes to sift the bear from the bull, you have to read between the lines.

Suddenly :

"I was an air stewardess ... I have definitely found my niche in life. Property has given me a good standard of living and financial independence. "

... sounds like more shoeshine speak....

[Big_Bad_Bear]

Speculating in any market is a fine art and the work of pro's. That's why I continue to live off the stock market, even if i call it wrong. Because I have a strategy for every eventuality that may occur. I called the FTSE short before Xmas. How wrong I was, yet my account is higher now than it was then. Why? Because I knew what I would do in EVERY situation. Piling into RIO instead of shorting it was a good move because the market told me my short stance was wrong.

Property bulls are now ignoring what the market is telling them. A glance at the long term price chart says 'run to the hills' but they won't. Resistance has been met and the market has failed to breach.

Next up is a 90% chance of extremely significant falls. Any trader knows this and would bail out. But they'll sit there like rabbits in the headlights. I've seen it before during the dot com bust. They talked of fundamentals and long term profitability while the market went to hell and took them with it. They argued and gloated on every upturn, only to go strangely quiet on the next fall. How similar is this? Finally, when they turned bear, we knew it was time to buy. I remember BARC at £15 (pre split) and making 30% in a couple days.

When any Joe thinks they can call the market and are smart because thay are right so far, trouble is bound to follow. You bulls who don't see a crash, what are you thinking? You were lucky, as I was, to own property during a huge boom. Now there must be a huge bust. Do you still want to be in property? Your funeral. Some of us know when we have been lucky. We also know that luck, like credit, eventually runs out.

[Sledgehead]

This from another of the three hapless BTLers / devers:

" I persevered and was able to buy four ex-local authority houses near us for £30,000 and let them for £500 a month each, a brilliant return. "

Now, I have the choice of assuming she bought 4 houses for a total of £30k. Perhaps somebody will tell me whether this was even possible in Toxteth in 1996 ... otherwise the yields look like shit. We'll give her the benefit?....

But this is a classic, from the third and final contributor, about which there can be no doubt:

"The best thing about it is that, when any of the flats are empty, we get to use them. So it really is a fun investment."

Lady: if we must talk "fun" and owning, this is fun :

It has a 450-horsepower 6.0-litre V12 engine, will do 0-60mph in 4.7 seconds, and has a top speed is around 180 mph. THAT is about as much "fun" as mere ownership can bring.

Now imagine you bought one for £107k with borrowed dosh, hoping to hire it out at £750 a day ( http://www.prestigecarhire.co.uk/ fo rthose interested ) .

How much "fun" is driving it for a day (ie NOT hiring it) now? You got it: not a lot.

Basically using her own holiday let is a miserable way to fool herself that her voids are not real and her "investment" is paying its way.

Is this what volvos60 of this thread meant by" the media are turning more bullish" ?

[Guest Charlie The Tramp]

When any Joe thinks they can call the market and are smart because they are right so far, trouble is bound to follow.

And here`s the story of the young bullocks who got well and truly castrated.

Charlie The Tramp Posted on: Feb 3 2005, 04:26 PM

In the early eighties the great Margaret Thatcher created the Yuppie, armed them with a filofax and instructed them to visit the newly opened wine bars in the cities to spread the good news to invest in the stock market. They had a language of their own with their Yah, and you know where I`m coming from. Had names like Dominic, Justin, Nigel, Tristan, Penelope, Amelia, and Sophie. They boasted among each other about their portfolios talking loudly so everyone could hear them. In ten years they claimed they would be millionaires.

On October 19th 1987 there was an explosion and in a puff of smoke they were gone.

The yuppie faded into history and today has been reborn as the amateur BTL investor who I would say is now the majority.

[VacantPossession]

"I was an air stewardess ... I have definitely found my niche in life. Property has given me a good standard of living and financial independence. "

<{POST_SNAPBACK}>

This woman's two short sentences absolutely sum up all that is wrong with the economy in the Britain of the new millenium:

In sentence one she presents a chosen career .....then in the second betrays her career by financially rubbishing it in favour of a speculative gamble in property.

How stark is that?!!!

It's almost like a vicar saying: I was a servant of god. But now I have found the devil, and the devil has given me the life I really sought all along.

Yes, all noble professions: air hostess, pilot, teacher, baker, sailor, inventor, architect or farmer, indeed ANYTHING that requires WORKING for a living is but nothing to gambling on property. And for her it may even be true, until the pyramid world to which she has subscribed implodes.

Napoleon was wrong; England is not a nation of shopkeepers, it is a nation of amateur speculators.

VP