Jump to content
House Price Crash Forum
Sign in to follow this  
buytoilet

Houses Not Selling At Auction

Recommended Posts

I have been thinking the reason houses are not selling at auction is people can not raise the finance. Before you would bid on the property win and pay your deposit, have the bridging finance in place, then take a " Day One Remortgage" with Mortgage Express. Now that MX have pulled out of the market you can only buy at auction with cash or bridging finance. This would stop a lot of people buying as bridging finance is around 1.25- 1.75% a month and most dont have cash aas they have been remortgaing the deposit from one property to the next.

What do peeps think

Share this post


Link to post
Share on other sites
I have been thinking the reason houses are not selling at auction is people can not raise the finance. Before you would bid on the property win and pay your deposit, have the bridging finance in place, then take a " Day One Remortgage" with Mortgage Express. Now that MX have pulled out of the market you can only buy at auction with cash or bridging finance. This would stop a lot of people buying as bridging finance is around 1.25- 1.75% a month and most dont have cash aas they have been remortgaing the deposit from one property to the next.

What do peeps think

Did not meet reserve

Share this post


Link to post
Share on other sites

It used to be the case that many auctioned properties needed a bit of work doing to them to realise their potential.

Small builders / developers would know how much this building work would cost and how much they thought an "in improved" property should go for and bid up to a level that saw them move on with a profit.

The builders still know how much it will take to improve what they dont know is what they will get for it when its finished. Its a risk thing.

Share this post


Link to post
Share on other sites

Reserve price unrealistically high considering the current economic climate, the lack of cheap easy credit and the fact that todays bargain bmv is tomorrows market price. People are loathe to try and catch the falling knife.

Share this post


Link to post
Share on other sites
Did not meet reserve

I have been to a few local auctions for lincs and notts, property in Lincs is still selling providing the price is right, the auctioneers i have spoken too are turning away people with unrealistic views on price. JH Walter's latest auction last week sold 15 out of 17, they carefully selected the stock at realistic guide prices.

From a commercial standpoint finance is still available for development projects, I did speak to a couple of FTB'ers who got the property they were after, they had managed to arrange a mortgage pre-auction including an independent valuation and they had a 10% deposit. Still possible to get mortgages for auction property it seems provided people negotiate with lenders.

City terraced houses / flats have taken a real bashing at auction with very little selling unless the location is right, specialist country homes auctions have held up well with prices only slightly down on last year.

The fact that auctioneers are turning away many properties tells a story in itself, still too many people out there with unrealistic expectations!

Share this post


Link to post
Share on other sites
Reserve price unrealistically high considering the current economic climate, the lack of cheap easy credit and the fact that todays bargain bmv is tomorrows market price. People are loathe to try and catch the falling knife.

This is it for me.

Why buy today when it'll be cheaper tomorrow? The sentiment amongst buyers is firmly entrenched, now - yes, we'll see the odd fool buying when they think it's bottomed out but considering the rate of falls right now, you really would have to be offered a spectacular discount to want to buy.

Edited by red

Share this post


Link to post
Share on other sites
This is it for me.

Why buy today when it'll be cheaper tomorrow? The sentiment amongst buyers is firmly entrenched, now - yes, we'll see the odd fool buying when they think it's bottomed out but considering the rate of falls right now, you really would have to be offered a spectacular discount to want to buy.

Well it might surprise you but some people actually want a home and are not so concerned about its value! Some of the auction properties have been 30% below the highs of last year, so for many it makes sense to buy at these levels especially if they get the house they want at a price they can afford!

I think many HPC'ers have been equally swayed into this idea that all people view a house as an investment, i have just sold another property within two weeks (the fourth this year and all within 4 weeks) to a chain free buyer, this is because i am realisitic about the price and this is the real problem with many sellers. The guy who is buying this 3 bed semi in Newark said to me that even with a mortgage rate of 6.5% on a 90% LTV (value confirmed by valuer by the way) it is cheaper for him to buy than rent a similar property. He is also buying at 15% below the highs seen last year and his view is that he intends to live there for 10 years as it has all the space he needs so he doesn't care if prices drop a little further, it is the home he wants for a price he can afford!

There are also many professional BTL investors buying at present, those looking at the long term view who can buy in cash are having a field day, 20-30% of market value is achievable with cash in the bank so it makes sense to buy at these levels, especially with rents on the up.

So it's not all doom and gloom HPC crew!

Share this post


Link to post
Share on other sites
Guest DissipatedYouthIsValuable
I have been thinking the reason houses are not selling at auction is people can not raise the finance. Before you would bid on the property win and pay your deposit, have the bridging finance in place, then take a " Day One Remortgage" with Mortgage Express. Now that MX have pulled out of the market you can only buy at auction with cash or bridging finance. This would stop a lot of people buying as bridging finance is around 1.25- 1.75% a month and most dont have cash aas they have been remortgaing the deposit from one property to the next.

What do peeps think

I reckon it's a lack of money fing.

Share this post


Link to post
Share on other sites
I have been thinking the reason houses are not selling at auction is people can not raise the finance. Before you would bid on the property win and pay your deposit, have the bridging finance in place, then take a " Day One Remortgage" with Mortgage Express. Now that MX have pulled out of the market you can only buy at auction with cash or bridging finance. This would stop a lot of people buying as bridging finance is around 1.25- 1.75% a month and most dont have cash aas they have been remortgaing the deposit from one property to the next.

What do peeps think

We are in the classic "Why buy now when it will be cheaper later" phase.

Would anyone who has been around this website for the last 6 months or more buy now?

Share this post


Link to post
Share on other sites
Reserve price unrealistically high considering the current economic climate, the lack of cheap easy credit and the fact that todays bargain bmv is tomorrows market price. People are loathe to try and catch the falling knife.

Spot on.

Share this post


Link to post
Share on other sites
Well it might surprise you but some people actually want a home and are not so concerned about its value! Some of the auction properties have been 30% below the highs of last year

And some have come down a lot more than 30% IMHO.

Flat in London for 55k

New detached in mansfield for 90k.

Even i was suprised and i'm one of them people that said 40% reductions were on the way 3 years ago but the speed once it got going is faster then my wildst dreams.

There are also many professional BTL investors buying at present

Are they the same professional landlords that have used the ten times rental income rules for the past 60 years ?

Not sure about you !!!

Edited by Justice

Share this post


Link to post
Share on other sites
The guy who is buying this 3 bed semi in Newark said to me that even with a mortgage rate of 6.5% on a 90% LTV (value confirmed by valuer by the way) it is cheaper for him to buy than rent a similar property. He is also buying at 15% below the highs seen last year and his view is that he intends to live there for 10 years as it has all the space he needs so he doesn't care if prices drop a little further, it is the home he wants for a price he can afford!

I could understand his logic if he'd had a 50% LTV but not 90%. Say prices fall another 15% at best(i think it'll be closer to 50% but thats my opinion) he'd still effectively be in negative equity with a mortgage more than the house cost. Personally, I hate overpaying for anything let alone for a mortgage! I wonder if he'll think like that when his mortgage is more than his house value...

I'm renting until this whole saga unfolds more... I have no maintenance costs, can up and leave with short notice if need be and do not have to worry about being involved in property. I may be overpaying on what a mortgage would be costing me by about £50-100 but that's fine with me as I get flexibility and will also recoup this money when i eventually by in at a lower price.

KG

Edited by KingGorilla

Share this post


Link to post
Share on other sites
We are in the classic "Why buy now when it will be cheaper later" phase.

Would anyone who has been around this website for the last 6 months or more buy now?

No I wouldn't.

Perhaps RB you'd care to enlighten us as to the different phases of the crash, their likely duration, and psychology behind them? What comes next after the "Why buy now when it will be cheaper later" phase?

Share this post


Link to post
Share on other sites
Guest happy?
No I wouldn't.

Perhaps RB you'd care to enlighten us as to the different phases of the crash, their likely duration, and psychology behind them? What comes next after the "Why buy now when it will be cheaper later" phase?

The next phase will be 'How much longer "Can the why buy now phase" last?'

Followed by the "Surely it got to turn now that Cameron's in charge phase?"

And then the "I thought things would be better under the Tories, but that wee Georgie Osborne's crap phase."

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 396 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%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.