Tuesday, August 14, 2007

‘Market weakens further’

First-time buyer demand 'drops'

The number of people looking to buy a house for the first time has fallen at its fastest rate in more than three years, a report says.

Posted by sold 2 rent 1 @ 06:44 AM (681 views)
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18 thoughts on “‘Market weakens further’

  • “while the number of unsold properties rose” Noticed this in my area (rural wiltshire). It was like this in mid June then several people dropped their price by 5% and a few went under offer, but in the last few days a couple have come back on the market.

    Lets hope it’s the beginning, not just the summer effect.

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  • david20040_0 says:

    FTB are irrelevant now because if they can’t buy they are replaced by BTLers.

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  • buy-to-let is dead in the water….it only worked in the last few years ‘cos prices kept going up.

    big drop down to ftb and as prices drop don’t expect them to pile in.Its the sames as the late 80’s…ftb have survived and thrived without owning a property
    so as prices fall they realise that owning a house won’t change their lives so they hold off.

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  • Notice they didn’t actually publish the percentage of first time buyers.

    That’s because it’s less than 10%, and if your sales register had less than 10% new customers, your market would be doomed too.

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  • Converted Lurker says:

    Paul it is less than 10%, according to NAEA 8.5%. What I’ve noticed (fwiw) is that the discrepancy between those that can climb onto the first rung is huge, never bigger. Most are so far away from affordability it’s not worth discussing, however, those that can qualify fly through the process in record time. Application to completion has never been quicker bizarrely.

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  • Our landlord’s house (4 bedroom, 7 year old town house, lovely riverside location) went on the market in a very pretty village near Bath for £365,000 six weeks ago.
    So far it’s had one viewer and they didn’t bite. They now reduced it to £299,000 and still no viewers. This despite similar houses in the same street going for £350,000 earlier in the year. And since rates went up we’ve seen a pile of houses come onto the market – looks like a lot of people have over-stretch themselves and are trying to bail out before the inevitable happens.

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  • Justwatching says:

    After two years of watching my first comment…..

    “FTB are irrelevant”
    Indeed.

    Has anyone else noticed the large proportion of properties coming to the market with “No onword chain” or “Vacant possession”?

    Now this is surely due to;
    a) people str
    b) death
    OR
    c) wise investors jumping ship

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  • 0thtimebuyer says:

    BBC reporting is really beginning to irritate me with its lack of professionalism – as Paul stated they do not even bother mentioning the percentage of first time buyers: they key point of the whole article.
    There have been other examples over the past couple of weeks where the BBC makes broad sweeping statements but omits to mention any numbers to back it up. Are they hiding something or just negligent?

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  • @paul

    I agree. I can’t believe the BBC didn’t mention the percentage of current FTBs. Instead they are happy to quote percentages and amounts for rises in house prices many times in an article title ‘First-time buyer demand ‘drops”

    BBC – There was a time when I respected their news site, but many things I’ve seen there recently have been very biased and in many cases they are omitting information where they feel like it.

    as http://www.medialens.org/ wrote to the bbc online editor recently –

    “Are we to understand that BBC Online is committed to objective, impartial reporting, except when you decide otherwise?”

    too true.

    A.

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  • David,

    If you don’t live in a property and buy it as an investment then you ned to make a return on it to mkae it worthwhile as a BTL. And what is the average yield at the moment?

    Oh and it is simply nonsense to suggest that BTL’rs and their mortgage companies are charities that will underpin rents for some possible future capital gain…

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  • dohousescrashinthewoods says:

    I tend to agree with taffee, I don’t think BTL is an attractive proposition given the risks and return. If BTLs are primarily people with an ounce of nouse they won’t be piling in in enough volume to supplant falling FTB numbers.

    I guess it’s a matter of relative volumes – are there enough ounceless BTLs left to counterbalance lost FTBs?

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  • planning4acrash says:

    FTB who can buy are relevant. FTB in their 20’s are irrelevant, but FTB in their mid to late 30’s are relevant. Less of them means less of a floor to the market, which reinforces the exodus of BTL’ers.

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  • planning4acrash says:

    Sorry, reinforces the effect of the exodus of BTL’ers.

    I reckon the first wave of BTL sales will soak up the last tranch of lemmings ready to buy a pokey flat that’s half the size of what they should be able to afford, then, no floor to the market, and WHOOM, down she goes. That’s the muppet rally.

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  • planning4acrash says:

    Sorry, reinforces the effect of the exodus of BTL’ers.

    I reckon the first wave of BTL sales will soak up the last tranch of lemmings ready to buy a pokey flat that’s half the size of what they should be able to afford, then, no floor to the market, and WHOOM, down she goes. That’s the muppet rally.

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  • what happened to the millions of immigrants, surely the beeb missed these, maybe they are buying in the usa now…lol

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  • David – I think you are slightly oblivious to the fact that having FTBs buy is better than having BTLs. When FTBs buy, they buy a home. Therefore to have it repossessed, or to have to sell it, means losing a home. For BTLs this is not the case. When they stop making big returns, or when the mortgage payments get too big, they can sell with impunity.

    Hence crash.

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  • Hello, as FTBs get older an interesting mathematical effect comes into play. Simply put, the balance between renting and long-term owning starts to skew towards renting, because you would own a purchased house for a shorter time than if you bought it when you were say 25. With IRs over 7% and yields below 5% this effect lasts longer. There is zero argument for buying any asset, let alone a house, with a highly-geared mortgage, in this situation. None.

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  • David20040_0 is often getting criticised on these forums for things he hasn’t said. I agree with him that BTLs are in a better position than FTBs to buy cheap housing (most of them already having somewhere to use as security on any loan) but I don’t think he’s claiming that this situation is ‘better’.

    I hope inbreda is right in that when investors stop making big returns they will get out of the market. If they were true investors they also would not be ‘in it for the long-term’. Investors move their money around to where the profit is. I for one hope that when we have had two consecutive quarters of 0% HPI then that will give them the reason they need to get lost!

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