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Wolverine

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The current market at present is not very positive in relation to the sales of properties.

I bought land with outline planning permisson in the boom era to build my home and realised that i could get 2 houses on it. I applied for another house got the outline permission and put both the house I was building up for sale and the site up for sale.

I did this in May 2007 and since then have finished the house and moved into it but it is still for sale as i have not got one viewing either on the site or the house.

My house was at the £450,000 region and I have recently dropped £60,000 of it with some outside hope that I might get a viewing but no luck.

What my problem is, does people not realise the money it cost to buy land in the market boom and the money it costs to build a 2700 sq ft house? The value which my house is on the market for now is the amount it have took me to purchase the land build the house so I am no better of if I sell the house, but if I sell the site I will not have to go through the process of building but finacially I would be worse off.

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You speculated, obviously assuming you would make alot of £££, but you timed this investment very badly. No one's fault but your own.

As the saying goes: "The value of your investment may fall as well as rise" ....

Oh .... and I would imagine that you will need to drop alot more than £60k off the original £450k price if you want to get the house sold.

Edited by Ulidia

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The current market at present is not very positive in relation to the sales of properties.

I bought land with outline planning permisson in the boom era to build my home and realised that i could get 2 houses on it. I applied for another house got the outline permission and put both the house I was building up for sale and the site up for sale.

I did this in May 2007 and since then have finished the house and moved into it but it is still for sale as i have not got one viewing either on the site or the house.

My house was at the £450,000 region and I have recently dropped £60,000 of it with some outside hope that I might get a viewing but no luck.

What my problem is, does people not realise the money it cost to buy land in the market boom and the money it costs to build a 2700 sq ft house? The value which my house is on the market for now is the amount it have took me to purchase the land build the house so I am no better of if I sell the house, but if I sell the site I will not have to go through the process of building but finacially I would be worse off.

firstly welcome to the site, I'd agree with Ul though....you bought at a bad time, just at the tipping point on the way down :(

rent it out? or drop the price by 100k from your starting price.....it's your call

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The current market at present is not very positive in relation to the sales of properties.

I bought land with outline planning permisson in the boom era to build my home and realised that i could get 2 houses on it. I applied for another house got the outline permission and put both the house I was building up for sale and the site up for sale.

I did this in May 2007 and since then have finished the house and moved into it but it is still for sale as i have not got one viewing either on the site or the house.

My house was at the £450,000 region and I have recently dropped £60,000 of it with some outside hope that I might get a viewing but no luck.

What my problem is, does people not realise the money it cost to buy land in the market boom and the money it costs to build a 2700 sq ft house? The value which my house is on the market for now is the amount it have took me to purchase the land build the house so I am no better of if I sell the house, but if I sell the site I will not have to go through the process of building but finacially I would be worse off.

Welcome Wolverine! :)

By the sound of it, you bought the land at boom prices and, as a result, you need a boom price sale to make the numbers work. However, the market has now moved into the bust phase and now the land is worth less, resulting in the house being worth less.

Unfortunately, this doesn't help your situation; by today's market rates, you over paid for the land. You could now buy similar land for less and build a house on it, much like you could buy land much more cheaply a few years ago, for less.

To further make the point, those who bought land more cheaply can afford to sell their house for less, without making a loss. This means you have some stiff competition for similar houses built more than a couple of years ago, as they cost less to build (including land and materials).

As a result, it sounds like you're stuck between a rock and a hard place. You bought the land at a bad time and put the house on the market at about the worst time. I would recommend you use the land and the house as a home, not bother with the second house and be happy that you have built a lovely home to live in.

If you really must sell something though, I would try to sell the land ASAP. Building a house on it and trying to sell it will likely just result in even bigger losses for you, as houses look set to continue falling in value.

I'm not a financial advisor or such though, so do your own research etc (finding this site was good research already imo), but with the market like it is, you have to be careful not to compound your losses.

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Thanks for the replies and i do agree to a certian extend but as you will agree we are want to make money in life so we and are famlies can live comfortable lives but, you still miss the point which I was trying to get across.

To buy land and build a house anywhere takes money and yes in the boom era people were cashing in on this especially the developers which in the current climate are suffering and I am glad to see this as they were making loads of £££.

The price which my house is at now just covers the land and building of the house and I am not willing to drop the price anymmore. I will just have to hold out and "ride the wave"!

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Thanks for the replies and i do agree to a certian extend but as you will agree we are want to make money in life so we and are famlies can live comfortable lives but, you still miss the point which I was trying to get across.

To buy land and build a house anywhere takes money and yes in the boom era people were cashing in on this especially the developers which in the current climate are suffering and I am glad to see this as they were making loads of £££.

The price which my house is at now just covers the land and building of the house and I am not willing to drop the price anymmore. I will just have to hold out and "ride the wave"!

Everyone tries to do well for themselves and I don't think many would argue against that. However, you probably decided to go for this idea at the wrong time, even if we sugar coat it.

As for riding out the wave, yes you have that option. If you are a cash buyer, the land isn't costing you a maintenance fee as such, even if it falls in value in the short term. There are questions you need to ask yourself though:

- Would the money spent on the land be better off liquidated and invested somewhere else where it may 1) retain value or 2) increase in value, rather than 3) lose value for potentially a decade or more.

- If you're not a cash buyer, consider that you will be paying interest on that land, so losing money there as well as the loss in value. This is also an overhead which needs to be paid regularly too.

- How long will it take for the market to recover to current values? Some argue it will be a decade or so, as part of the traditional cycle. Others argue this housing bubble is bigger than any previously observed in the UK, let alone NI (where it is a bubble, on a bubble!). Some have coined the phrase 'peak credit', which is something which may not happen for a long time again. We could be looking at 2 decades or more before prices return to last summer's peak prices. Riding the wave could be very costly in the short, medium and even long term. Note, these figures would be inflation adjusted (ie. real prices).

Look around though and do some research. I have seen more land coming up for sale recently, often with planning permission, and many of them have cut prices a lot already. The problem is, the land for building is practically worthless for the next 5-10 years - unless the land is well under the market rate, any building risks not being able to break even on the property, if prices continue to fall. It's like building to a stop watch, ticking ever faster.

The smart developers would have bought land cheaply years ago and would have profited handsomely on selling at the inflated prices of the current years. Buying land now makes zero sense to them, hence the market value becomes little more than agricultural land; only people buying land to build a home on (ie. not trying to profit) would likely be looking at buying land over the next 5-10 years imo.

Edited by Traktion

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Thanks for the replies and i do agree to a certian extend but as you will agree we are want to make money in life so we and are famlies can live comfortable lives but, you still miss the point which I was trying to get across.

To buy land and build a house anywhere takes money and yes in the boom era people were cashing in on this especially the developers which in the current climate are suffering and I am glad to see this as they were making loads of £££.

The price which my house is at now just covers the land and building of the house and I am not willing to drop the price anymmore. I will just have to hold out and "ride the wave"!

Mate, land valuations have substantially reduced think about as much as 30% now, people are still living in denial of the current situation.

It’s highly unlikely that you will get anywhere near 450k particularity with the impact of this credit crunch at the minute. I reckon house prices have fallen 15-20% since the start of the crunch The UK is in the infancy of another recession to and it’s not going to be pretty this time either.

The Uk is a consumer generated boom and bust economy and ya cannae change the laws of Economics. Bust will always follow the boom.

We have had a credit expansion asset bubble created in UK housing over a 15-20 year cycle. We now have the credit crunch therefore resulting in an asset contraction!

This situation at the minute was all talked about on the internet months and months ago all I can say is its not a bad thing to educate yourself on UK economics, credit, and housing cycles.

Edited by sdoey

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i would say that the land, at the price you bought it at, will be worth that price again in 5 - 7 years time!

If you can hold out, alls well and good. If you can't and have the bank nipping at your heels, cut your loses and run asap!

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Thanks for the replies and i do agree to a certian extend but as you will agree we are want to make money in life so we and are famlies can live comfortable lives but, you still miss the point which I was trying to get across.

To buy land and build a house anywhere takes money and yes in the boom era people were cashing in on this especially the developers which in the current climate are suffering and I am glad to see this as they were making loads of £££.

The price which my house is at now just covers the land and building of the house and I am not willing to drop the price anymmore. I will just have to hold out and "ride the wave"!

I think everyone in this thread understands the point you are making (If you reduce your price you are making a loss)

This is exactly the situation that many builders are in now, they bought land when it was at it's most expensive (the peak) and they can only lower prices so much before they start losing money.

The market has now changed, prices are on the decline and will continue so for the next few years.

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Everyone tries to do well for themselves and I don't think many would argue against that. However, you probably decided to go for this idea at the wrong time, even if we sugar coat it.

As for riding out the wave, yes you have that option. If you are a cash buyer, the land isn't costing you a maintenance fee as such, even if it falls in value in the short term. There are questions you need to ask yourself though:

- Would the money spent on the land be better off liquidated and invested somewhere else where it may 1) retain value or 2) increase in value, rather than 3) lose value for potentially a decade or more.

- If you're not a cash buyer, consider that you will be paying interest on that land, so losing money there as well as the loss in value. This is also an overhead which needs to be paid regularly too.

- How long will it take for the market to recover to current values? Some argue it will be a decade or so, as part of the traditional cycle. Others argue this housing bubble is bigger than any previously observed in the UK, let alone NI (where it is a bubble, on a bubble!). Some have coined the phrase 'peak credit', which is something which may not happen for a long time again. We could be looking at 2 decades or more before prices return to last summer's peak prices. Riding the wave could be very costly in the short, medium and even long term. Note, these figures would be inflation adjusted (ie. real prices).

Look around though and do some research. I have seen more land coming up for sale recently, often with planning permission, and many of them have cut prices a lot already. The problem is, the land for building is practically worthless for the next 5-10 years - unless the land is well under the market rate, any building risks not being able to break even on the property, if prices continue to fall. It's like building to a stop watch, ticking ever faster.

The smart developers would have bought land cheaply years ago and would have profited handsomely on selling at the inflated prices of the current years. Buying land now makes zero sense to them, hence the market value becomes little more than agricultural land; only people buying land to build a home on (ie. not trying to profit) would likely be looking at buying land over the next 5-10 years imo.

Wolverine this is excellent info from Traktion, you need to spend some time seriously researching the pros and cons of the situation and base your decision on all the info available.

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this is an unfortunate situation you have,

i can offer no advice, but sympathy, it seems you realise what has happened, and are not in "full" denial, like some people. it seems the only winners in this story are the people who you bought the land from and the builders of the home you had built.

a value of a house is ambigious at the best of time, as sentiment to you can ofter out wiegh the actual price, especially if it was built to your orders.

i will one day build my own (dream) home and the cost of it when finished will be meaningless to me, yes the hosue may have a value but it will be my house to my design and specification, and that to me is priceless, and i will pay a price for it.

i may buy more land than i need and build a second home, or at least (like you) get outline permission and sell the remainder to "help" fund my build (as you know land with permission is a hell of alot more expensive than the same plot with out)

good luck

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i would say that the land, at the price you bought it at, will be worth that price again in 5 - 7 years time!

I heard that development land is now only worth 1/3 of what it was last year!

In 5-7 years, we will likely see the bottom of the cycle. In 5-7 years, houses and land will be at their lowest value before the next boom gradually builds. Remember this is all just part of the economic cycle.

As Traktion said, the concern this time is the size of the bubble. Please read the last line of my signature. I hope you understand it.

IMO what we may be witnessing is the end of a grand supercycle. This is a once in a lifetime occurance. What we may be witnessings is a transfer of wealth from western countries living on credit, to eastern countries with strong growing economies, large supplies of natural resourses and very large populations.

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Sorry, have you just come to moan "It's not fair that people won't pay what I'm asking for my house?"

MSE = ---->>

:huh: eh?

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Sorry, have you just come to moan "It's not fair that people won't pay what I'm asking for my house?"

MSE = ---->>

So it seems , but it's interesting to see he's happy to watch others suffer, since they apparently have been making too much and deserve it. Nice touch.

It's called a loss, and you might have to face it, man, not forgetting your objective was to make the next guy pay you a fine profit. You're a property developer, too, just an unsuccessful one.

Lots of us know how it feels. I bought nine calves one time and two of them died, which spoilt my day (and theirs) no end. I picked the wrong horse at the point to point near Banbridge a few years ago.

Sell it, rue it and put it down to a bad urge.

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My house was at the £450,000 region and I have recently dropped £60,000 of it with some outside hope that I might get a viewing but no luck.

What my problem is, does people not realise the money it cost to buy land in the market boom and the money it costs to build a 2700 sq ft house? The value which my house is on the market for now is the amount it have took me to purchase the land build the house so I am no better of if I sell the house, but if I sell the site I will not have to go through the process of building but finacially I would be worse off.

Welcome, and I hope you heed the advice given by others here.

The main problem is that people don't know or care what the house cost to build. A house is only worth what someone is willing to pay. Unfortunately for you! You are not 'entitled' to cover your costs or make a profit, you were simply unlucky in your timing.

Only you can decide whether to cut your losses and sell now, chase the market down for the next few years and perhaps make a bigger loss, or hold on for 15+ years and eventually sell at a profit in the next upturn (except you have interest and maintenance costs etc to consider, so you may still end up losing money - plus there is the opportunity cost of your capital). The credit binge of the last few years is over so you will probably not sell without a substantial reduction in price. You should definitely sell the land for whatever you can get in my opinion.

Read the rest of this forum and do your own research. I wish you luck. Keep us posted.

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[quote name='Wolverine' date='Jul 10 2008, 02:12 PM' post='1205775'

The price which my house is at now just covers the land and building of the house and I am not willing to drop the price anymmore. I will just have to hold out and "ride the wave"!

All previos posts offer good objective information and all the currently available data suggests we are only in the early stages of the crash. I hope you've got some scuba gear.

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Thanks for everyone’s reply to this topic even if their reply was unconstructive!!

I feel that the housing market will decrease further as more & more people are protecting their finances for the longer term!!

You will still get the people who want to move to a bigger detached house in the country and this will never change!!

Prices for these unique properties will not fall as much as the properties built for the FTB Market.

I also feel that the people who are striking for more pay rises and not accepting the 2.45% offered are ludicrously mad as more than the offered pay rises will keep people spending which will in turn increase inflation more and the BOE will have to then look at interest rates which they have said they did not want to touch until the inflation comes down, any comments on this?

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Thanks for everyone’s reply to this topic even if their reply was unconstructive!!

I feel that the housing market will decrease further as more & more people are protecting their finances for the longer term!!

You will still get the people who want to move to a bigger detached house in the country and this will never change!!

Prices for these unique properties will not fall as much as the properties built for the FTB Market.

I also feel that the people who are striking for more pay rises and not accepting the 2.45% offered are ludicrously mad as more than the offered pay rises will keep people spending which will in turn increase inflation more and the BOE will have to then look at interest rates which they have said they did not want to touch until the inflation comes down, any comments on this?

I think most of the replies were pretty constructive actually.

Good point on inflation though.

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I also feel that the people who are striking for more pay rises and not accepting the 2.45% offered are ludicrously mad as more than the offered pay rises will keep people spending which will in turn increase inflation more and the BOE will have to then look at interest rates which they have said they did not want to touch until the inflation comes down, any comments on this?

A 2.45% pay rise is a real terms pay cut. It would be mad to accept it without negotiation.

More spending does not necessarily mean an increase in inflation either.

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Wage inflation is a secondary level of inflation, caused by inflation already in the system pushing costs up. In essence, wage inflation is the response to general inflation. Without wage inflation, people are effectively taking a pay cut.

However, in a global economy, the above scenario is far from clear cut. You could say that externals such as oil price is driving inflation in the UK, but what is causing oil prices to go up? As it's pricing is tied to the dollar, the inflation and subsequent devaluing of the dollar has caused the oil prices to go up. Why then hasn't the dollar tanked against the pound? It must be because we have high inflation too. So, it can't be a "global problem" as such (unless you believe demand, current or near future, has quadrupled over the last few months), but more related to monetary policy in the UK.

Speculation on oil looks like it has also been a driving force, but it may be people fleeing currency (USD, GBP or otherwise) because of high inflation which has caused this too.

Rampant lending, followed by bank bail outs must surely have caused this inflation?

If we allow deflation to happen by not continuing to bail out the banks, then many people will likely lose their homes, as costs other than mortgage costs, increase and squeeze the owners ability to repay their mortgage. Ultimately, this should bring down inflation (as credit will be removed from the system, increasing the value of the remainder), but it will be a painful process for all.

If we give wage increases, then we're essentially rewarding the banks for irresponsible lending and those who took on so much credit. It would likely cost the economy in the medium/long term too as it would make our labour force more expensive, pushing our already over priced manufacturing costs higher still. This would ultimately cost us all perhaps much more. We may lose our jobs (yet more, to cheaper overseas countries) and it would cause more inflation, pushing up prices further anyway (as the pound becomes worth less again, as there would be more of them).

It seems to me, that lax lending policy has started this cycle and now it's reached critical mass (and the banks are now creaking under the strain), the BoE isn't helping by pumping yet more money into the system. To then tell us that we shouldn't ask for wage increases is like gifting the rich (the bankers) with money and then taking it off the poor (the workers, being told not to ask for pay rises).

I say let the banks collapse, helping to speed up the deflation cycle and start afresh afterwards. It would be a good opportunity to wrestle the power back from the banks and, if it causes complete financial melt down like some fear (why?), then we can set up a system which isn't inherently flawed like the current one. Whether that would be full-reserve (or at least not "no holds barred" fractional-reserve) banking, with BoE in a stronger position or something else, could be explored. Why do we insist on saving these institutions which are essentially parasites anyway?

Sorry for the slightly OT rant... I'll post it in the inflation thread too.

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Thanks for everyone’s reply to this topic even if their reply was unconstructive!!

I feel that the housing market will decrease further as more & more people are protecting their finances for the longer term!!

You will still get the people who want to move to a bigger detached house in the country and this will never change!!

Prices for these unique properties will not fall as much as the properties built for the FTB Market.

I also feel that the people who are striking for more pay rises and not accepting the 2.45% offered are ludicrously mad as more than the offered pay rises will keep people spending which will in turn increase inflation more and the BOE will have to then look at interest rates which they have said they did not want to touch until the inflation comes down, any comments on this?

So if people cant sell their house in the populate areas to move out to the country, then how can they buy the country house?

They will have to reduce their price to sell, means they have less to pay for the big house in the country, meaning country prices will have to fall by the same ratio! If anything country houses could fall quite rapidly as getting a big house close to the main citys becomes more affordable as price decreases and petrol prices rise!

Dont confuse us with Scotland were the Mega rich from London are buying country retreats and taking their helicopter up for the weekend!

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You will still get the people who want to move to a bigger detached house in the country and this will never change!!

Prices for these unique properties will not fall as much as the properties built for the FTB Market.

Actually, I am not sure that is the case .... since the "value" of a bigger detached house in the country was (and still is) inextricably linked to the value of its site - and site values have been decreasing faster than prices of residential homes and, in the current climate, will continue to do so.

I'm sitting on some land with development potential myself (an inheritance, not an investment decision) so I'd prefer if that wasn't the case but it is.

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So if people cant sell their house in the populate areas to move out to the country, then how can they buy the country house?

They will have to reduce their price to sell, means they have less to pay for the big house in the country, meaning country prices will have to fall by the same ratio! If anything country houses could fall quite rapidly as getting a big house close to the main citys becomes more affordable as price decreases and petrol prices rise!

Dont confuse us with Scotland were the Mega rich from London are buying country retreats and taking their helicopter up for the weekend!

All house prices will adjusts down or up. I don't think country houses would reduce at a greater rate than any other. Personally I prefer to live in the country although there may be some advantages to living in a city.

From experience a home in the country is better value than on in the suburb.

My own home (which is in the countryside) has no access to landline broadband but has a very high speed, unlimited satellite broadband connection. If I worked in the city/IT and could work from home I know where I would rather be.

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  • 395 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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