Price Falls Edinburgh

[shergar75]

Why do Edinburgh house prices seem to be slower in falling than in other parts of the U.K, I have just looked at a one bedroom in Newington at offers around 155grand. Its hilarious and at the sametime really annoying, I dont know if the Estate agents are having a massive laugh or still think we are all so stupid as to pay that amount of money for a one bedroom flat that you couldnt swing a cat in..In my head i value the flat at 80grand tops..God i wouldnt even pay that..whats going on stop the greed and reduce the prices its getting so annoying..I seriously value the flats iam looking at at around half the value they are asking for...ITS F>>KING CRAZY

[roblpm]

Not enough forced sellers yet to bring prices down generally. People are waiting for the bounce!

[SelfDoIt]

I agree it is very annoying. There are a few that have had price reductions. There are more that have been on the market for months without shifting, that would probably be open to negotiation if someone wanted them.

I think that everyone has now battened down the hatches until January, expecting a bounce. There have been no new properties and no price changes since the beginning of December. However, I expect to hear about financial sector layoffs in January / February which will bring more houses onto the market. It will be a very interesting spring.

I agree about the frustration of waiting. So many people believe that Edinburgh is different and nobody wants to be the first person to take the hit.

Watch out for ex HMO properties and estate sales; people who have to sell and who have nothing to lose will be the most open to negotiation. 'Flipper' properties will just end up staying on the market until the end of time.

I plan to buy in June / July when my tenancy agreement runs out. Which I realise will be well before the Edinburgh market 'bottoms out'. I will just negotiate really hard. I'll start at the most expensive property on my ESPC list and offer them what I can afford and so on down until someone says yes. Some one will. There are loads of good properties on the market.

[TTD]

Why do Edinburgh house prices seem to be slower in falling than in other parts of the U.K, I have just looked at a one bedroom in Newington at offers around 155grand.....

Take a looksee at Applecross' flatted development at Milton Road East - 1 bed or 2 bed on offer, with the 1 bed at £175,000 and the 2-bed at £250,000 .....

[Radge]

At the moment sellers (EAs) are setting prices. I imagine folk are just not putting in offers assuming they'll be turned down. However, HPC and t'interweb give us a weapon to influence prices. I wonder how many sellers will hold their prices for how long if they are faced with a small legion of 'buyers' all putting in offers well below asking.

I wonder if www.buyersmarket.co.uk has been taken?

[TTD]

"At the moment sellers (EAs) are setting prices"

How do you support or prove this? Without having access to the dialogue between every EA and their seller, there's no way of knowing who's leading who.

[ccc]

"At the moment sellers (EAs) are setting prices"

How do you support or prove this? Without having access to the dialogue between every EA and their seller, there's no way of knowing who's leading who.

Indeed. I reckon there are many EA's desparate for people to lower their prices. Even the ESPC is constantly telling people now that 2007 prices will not be attained. The ******ing ESPC no less !! What a turnaround.

I think once we have no Spring bounce, once it looks even worse this time next autumn, then we will see fear in the majority. I think the chances of an 'improvement' in the Edinburgh housing market in 2010 is slim to none. Of course we also have to think what will happen to the Financial system as a whole. Looking shaky to say the least.

[Radge]

"At the moment sellers (EAs) are setting prices"

How do you support or prove this? Without having access to the dialogue between every EA and their seller, there's no way of knowing who's leading who.

From our point of view, who cares whether it's the seller or the EA? My point was that there is probably an element of 'once mortgage lending eases, it'll sell.'

To disabuse sellers and EAs from this notion, rather than bumping our gums on a web board why not put in offers well below asking to demonstrate that there are buyers out here but not at Looby-Loo prices. For example, I wonder how long this comic would keep his £137K price tag up if he had 5 offers ranging from £45K to £85K?

[TTD]

I don't much care whether seller or EA; merely the way I read your first sentence, it reads as though you're suggesting it's all the EAs... which is why I asked. Sorry if I misunderstood.

"why not put in offers well below asking to demonstrate that there are buyers out here but not at Looby-Loo prices"

..because I/we aren't ready to buy, and don't want to be tarred with a 'timewaster' brush by the EAs...?

[roblpm]

Radge, just to reassure you, we put in an offer 35% under a fixed price last monday, we are cash buyers, but vendor not interested at all!

Someone I know in a property dealing company in edinburgh told me they are doing this every day on 10s of properties, between 1 in 10 and 1 in 20 was biting at the moment according to him.

[Radge]

Cheers, Rob. That's perked me up!

Not being a sensitive soul and not giving two hoots what label Embra's EAs may or may not wish to attach to me, a 5 to 10% success rate would get me putting in well below asking offers.

[ccc]

Radge, just to reassure you, we put in an offer 35% under a fixed price last monday, we are cash buyers, but vendor not interested at all!

Someone I know in a property dealing company in edinburgh told me they are doing this every day on 10s of properties, between 1 in 10 and 1 in 20 was biting at the moment according to him.

What do they do ? Deal between who ?

[itsdave]

For example, I wonder how long this comic would keep his £137K price tag up if he had 5 offers ranging from £45K to £85K?

Wow! That's a real shocker Radge! Looks like it was bought for £106,786, new kitchen, bathroom, flooring and a lick of paint and back on the market since at least July. The idiot 'developer' hasn't reduced the price once. It's not even in a particularly well to do area, so I have no idea where he gets that asking price for a tiny 1 bedder. I'd say it's true value is nearer £60k.

My point was that there is probably an element of 'once mortgage lending eases, it'll sell.'

I think you're right. Still a lot of denial in the Edinburgh market.

I have a flat in Yorkshire which I currently let, and was looking on rightmove out of curiosity to see to see how far mine has plummeted in value , and I was staggered at the number of flats which have been on sale since the start of the year which hadn't been reduced, or have been on for months with something ridiculous like 3 grand knocked off! The only ones selling seem to be round about 15% off peak.

It seems that there is slightly more acceptance there than here in Edinburgh, but I really think it's going to be Q3 2009 before most people get the message that things simply won't shift unless priced realistically.

I sense that buyers are still willing to borrow excessively (though expect this to lessen next year as unemployment soars), so I do hope that the lenders stick to sensible lending policies, requiring 25% deposits and reasonable income multiples. People need to be saved from themselves sometimes.

[roblpm]

ccc, works something like this:

Company A finds "BMV" property, say vendor agrees to sell for 50k.

Company A finds investor who will pay 52.5k for it.

Surveyor values at 70k.

Company buys at 50k sells to investor for 70k

Investor gets 75% BTL mortgage of 52.5k.

Company A gives investor 17.5k back, retains 2.5k as fee.

Investor has property with no upfront money!

[ccc]

ccc, works something like this:

Company A finds "BMV" property, say vendor agrees to sell for 50k.

Company A finds investor who will pay 52.5k for it.

Surveyor values at 70k.

Company buys at 50k sells to investor for 70k

Investor gets 75% BTL mortgage of 52.5k.

Company A gives investor 17.5k back, retains 2.5k as fee.

Investor has property with no upfront money!

Cheers - Interesting. Very dangerous game by the sound of it. Especially right now when prices still have a long way to drop from these 'BMV' valuations.

Seems the company gets a fee and is happy. Of course they are taking the risk of the cash up front though.

Investor is left with what they think is a bargain, however what turns out in 6 months to be far from a bargain.

Also I imagine a few brown envelopes are moving between certain parties in this whole deal.....

Of course I am not relating this to surveyors at all. Not at all. Because of course thay would never overvalue a property for one of their mates for £500 cash in hand. No idea if this does happen. I would be surprised if it does not though. These 'companies' must be pretty certain of a valuation for a deal like this to work.

[geed]

Wow! That's a real shocker Radge! Looks like it was bought for £106,786, new kitchen, bathroom, flooring and a lick of paint and back on the market since at least July. The idiot 'developer' hasn't reduced the price once. It's not even in a particularly well to do area, so I have no idea where he gets that asking price for a tiny 1 bedder. I'd say it's true value is nearer £60k.

I think you're right. Still a lot of denial in the Edinburgh market.

I have a flat in Yorkshire which I currently let, and was looking on rightmove out of curiosity to see to see how far mine has plummeted in value , and I was staggered at the number of flats which have been on sale since the start of the year which hadn't been reduced, or have been on for months with something ridiculous like 3 grand knocked off! The only ones selling seem to be round about 15% off peak.

It seems that there is slightly more acceptance there than here in Edinburgh, but I really think it's going to be Q3 2009 before most people get the message that things simply won't shift unless priced realistically.

I sense that buyers are still willing to borrow excessively (though expect this to lessen next year as unemployment soars), so I do hope that the lenders stick to sensible lending policies, requiring 25% deposits and reasonable income multiples. People need to be saved from themselves sometimes.

"People need to be saved from themselves sometimes"

Scary isn't it. I see some of the most rational thinking people's brains go to mush when the conversation turns to property.

[Radge]

Dave

Sadly he was a mere Alan Carr. How about the Les Dawson of Embra's property comedians? A storage cellar hardly worth more than £30K with ne'er a room wider than 7 1/2 feet. £164K reduced by a whopping £3.5K since July.

[roblpm]

Cheers - Interesting. Very dangerous game by the sound of it. Especially right now when prices still have a long way to drop from these 'BMV' valuations.

Seems the company gets a fee and is happy. Of course they are taking the risk of the cash up front though.

Investor is left with what they think is a bargain, however what turns out in 6 months to be far from a bargain.

Also I imagine a few brown envelopes are moving between certain parties in this whole deal.....

Of course I am not relating this to surveyors at all. Not at all. Because of course thay would never overvalue a property for one of their mates for £500 cash in hand. No idea if this does happen. I would be surprised if it does not though. These 'companies' must be pretty certain of a valuation for a deal like this to work.

ccc, actually the guy told me that this system was starting not to work any more due to the fact that the surveyors are getting nervous I think! I think this has been going on for ages but now the valuation price is coming down to meet the BMV price. Funnily enough it also seems in this game that it is the surveyor taking the risk really not any of the others. I wonder if the banks are going to ever bother getting the valuations investigated. You can imagine a BTL landlord getting reposessed and the bank getting back much less than 50% of the original bogus valuation.

[ccc]

ccc, actually the guy told me that this system was starting not to work any more due to the fact that the surveyors are getting nervous I think! I think this has been going on for ages but now the valuation price is coming down to meet the BMV price. Funnily enough it also seems in this game that it is the surveyor taking the risk really not any of the others. I wonder if the banks are going to ever bother getting the valuations investigated. You can imagine a BTL landlord getting reposessed and the bank getting back much less than 50% of the original bogus valuation.

Cheers.

Interesting point about the surveyors. IIRC in the last crash down South there was lost of Legal action due to valuations ? I can imagine those up here getting a little more cautious due to that.

As for the plan - Still fairly cunning but leaves the investor with no deposit or leeway in case of further falls. People forget that deposits are required for a reason. They are benefiical to have for both parties !!

[shergar75]

Not enough forced sellers yet to bring prices down generally. People are waiting for the bounce!

was that a pun on alans book? , Another strange thing ive noticed on espc is a one bedroom in abbeyhill area top floor kitted out 98,500 , then another one bedroom in abbeyhill 112,000 dont even think its a top floor, whats that all about is the one at 98,500 needing a quick sale or are the 112 sellers taking the piss hoping i dont look at the same flat up the road for 98,500...........not that i would touch either with a barge pole.....my old heads telling me once again and ime no trained surveyor 80grand tops.........if even..

[meltsheep]

ccc, actually the guy told me that this system was starting not to work any more due to the fact that the surveyors are getting nervous I think! I think this has been going on for ages but now the valuation price is coming down to meet the BMV price. Funnily enough it also seems in this game that it is the surveyor taking the risk really not any of the others. I wonder if the banks are going to ever bother getting the valuations investigated. You can imagine a BTL landlord getting reposessed and the bank getting back much less than 50% of the original bogus valuation.

Then banks appear to have been encouraging this sort of swindle for the last few years. How can a place have a 'below market' value ? the BMV is what people will pay for it. Most of the blocks of flats sold to property 'investors' where sold at 85% BMV automagically producing a 15% 'equity; stake. Call me naive but I simple didn't believe it until i watched a TV programme explaining how the whole BTL / flipping thing worked.

I worked with a guy who had 60 BTL places and didn't pay a penny of his own money towards them.

Can surveyors be sued if they get a valuation way off ?

[darksquid]

was that a pun on alans book? , Another strange thing ive noticed on espc is a one bedroom in abbeyhill area top floor kitted out 98,500 , then another one bedroom in abbeyhill 112,000 dont even think its a top floor, whats that all about is the one at 98,500 needing a quick sale or are the 112 sellers taking the piss hoping i dont look at the same flat up the road for 98,500...........not that i would touch either with a barge pole.....my old heads telling me once again and ime no trained surveyor 80grand tops.........if even..

Hi there,

I'm the owner of the £98,500 flat in the Abbeyhill. You will be glad to know that today we accepted a full asking price offer after only 3 weeks on the market. We had 14 viewers, and four offers above £93,000. We listed our flat at what we thought was a reasonable asking price to obtain a fast sale, and happily, there still seem to be plenty of people wanting to move!

Now, I wish the chap down the road good luck.

Edited December 22, 2008 by darksquid

[TTD]

Good result. I'm sure we'll be back in 3 months or so when the £112k-er drops their price ....

[darksquid]

Good result. I'm sure we'll be back in 3 months or so when the £112k-er drops their price ....

He's going to have to. £112,000 is madness. The chap next door to me has been on the market for 6+ months at offers over £105,000, and he hasn't lowered his asking price since going on the market. What are these people thinking?

[shergar75]

Hi there,

I'm the owner of the £98,500 flat in the Abbeyhill. You will be glad to know that today we accepted a full asking price offer after only 3 weeks on the market. We had 14 viewers, and four offers above £93,000. We listed our flat at what we thought was a reasonable asking price to obtain a fast sale, and happily, there still seem to be plenty of people wanting to move!

Now, I wish the chap down the road good luck.

Iam glad you sold it, my brothers selling his flat and i hope he sells it also, just i wouldnt touch it with a bargepole, thats my opinion, on top of that 98,500 is still ten grand less than it would have gone for in summer 2007.....and another ten grand needs to come off these flats, where these prices came from in the first place is not for me to answer..........i sold my flat in 2007 because i knew it was crazy you just have to sit down and look at your flat and ask is this worth what iam asking for it and like me you would have to say NO a big NO.....I bought my flat for 41grand in 2001 and i would say that when i sold it in 2007 its real true value would have been about 65grand....Not in this inflated mad mindset of valuations....