Monday, July 20, 2009

Missed the boat? – more like missed a sinking ship

Home 'bargain buy' window closing

Property website Rightmove says asking prices rose for the fifth time this year in July. Miles Shipside, commercial director at Rightmove, said: 'There is now clear evidence that there were some fire-sale prices last winter, when a few brave buyers correctly called the bottom of the market. 'In most parts of the country, prices have consistently improved during spring. With growing confidence that we’ve passed the bottom, buyers are more active, although they may discover that many of the best buys have gone,' he goes on.

Posted by jack c @ 02:49 PM (2815 views)
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30 thoughts on “Missed the boat? – more like missed a sinking ship

  • Europeanbear says:

    As the titanic was sinking it broke in two and the back end miraculously bobed up and stayed afloat a little while longer and everyone thought they had been saved……

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  • Rightmove see the market going 1 of 3 ways.

    • The ‘Double-Dip’ scenario would see asking prices falling by 10% in the second half of the year
    to end 3% down overall in 2009, as mortgage lending remains tight, unemployment continues to
    rise, and many more repossessions come to market. This would give a further window of
    opportunity for bargain-hunters who missed out on the best buys last winter.

    • The ‘Steady-State’ scenario would see prices stay flat for the rest of the year, ending at circa 7%
    up, as both mortgage availability and the number of sellers coming to market remain at
    historically subdued levels.

    • The ‘Resurgence’ scenario would see prices go up by a further 5%, ending the year 12% up, as
    buyer interest and mortgage availability pick up significantly while supply remains relatively
    constrained.

    They think the “steady state” seems most likely as do I.

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  • Telling buyers to hurry up because prices are going up when clearly they haven’t been AND unemployment effects have not yet fed through is plain dishonest.

    If he was doing the same thing with investments or shares, he’d be found guilty of securities fraud and locked up.

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  • ‘In most parts of the country, prices have consistently improved during spring. With growing confidence that we’ve passed the bottom, buyers are more active, although they may discover that many of the best buys have gone,’ he goes on.

    Oh no, looks like I’ve just sold at the bottom after exchanging on Friday for a disappointing 10% less than peak. Should I call up my buyers and see if I can buy them out of the contract? I’m so, so worried guys, really… 😉

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  • Bearly Legal says:

    Seriously guys, I’m so tired of this constant Rightmove-bashing. They’re just trying to help buyers not to miss the boat out of the goodness of their hearts! It’s not their fault their hearts were transplanted from executed serial killers and they only pump crude oil through their veins!

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  • Acceleratorhams says:

    The sad fact is that he will sucker some people into the market who have not done their research. The market is headed further down [probably by 10-20%] and no amount of ramping will change that!

    Unemployment is going up to over 3 million, interest rates will also head upwards, no house price correction has ever been less than 5 years…I could go on.

    I WILL NOT BE BUYING YET!!!!!

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  • mrflibble,

    The article suggests the bottom was six months ago – when you might have had to knock 25% off to sell. You’re one of the stubborn sellers we were talking about back then.

    .

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  • @3. luckyjim

    I’m not a stubborn seller, I sold my place four times over the last 12 months, accepted offers at least 5% under the currently Haliwide average each time so I could achieve the sale. Sadly in three of the four cases the buyer dropped out because they lost confidence in the market. Bear in mind I’m at the ‘starter home’ phase of house ownership here with a target market of FTB’s.

    It’s only been over the last few months that I’ve managed to hang on to the buyer. After 9 months and three drop-outs I took the place off the market as I was completely cheesed off with the whole thing. One of the multiple agents I’d been using gave me a call out of the blue about some people who were very keen on my area and who had a pile of money to spend, so on the off chance I let them view. They made an offer I couldn’t refuse believing the bottom was in, I accepted it and kept my fingers crossed. If it wasn’t for the spring bounce I’m sure these FTB’s would have dropped out too, after all, who wants to buy a depreciating asset?

    As for your knock 25% off comment I did. My place peaked at £165k, the offer I was willing to complete on in January 2009 was £120k, a 27% reduction from peak. At that time the Halliwide average put my place at £132k.

    Apologies to all if my original post came across as arrogant, reading it back it did, although I was aiming for sarcasm. I’ve just grown so p*ssed off with the media steering the sheeple into the unknown.

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  • Lots of “Sold” signs going up in my bit of Essex (Billericay/South of Chelmsford). I’ve only seen a few “for sale” boards….the rest must have been snapped up.

    The fish have bitten….Time to reel them in…..

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  • mrflibble

    Don’t take offence. Some of the people on this site would like to believe things have not changed since the start of the year – they clearly have. You’re experience is evidence of that. Whether or not it’s a just a bounce is another story but those who pretend things have not changed are kidding themselves.

    We may not be at the bottom but 20% falls for this year are not going to happen – they never were – and that is not the media’s fault.

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  • Honest Broker says:

    Let’s be frank. Next April the tax bill for every person in the UK is going up. Yes going up. So! you say. Well that means less disposable income. So! you say, mortgages have never been lower. True! But fixed rates are going up and that is indicitive of inflation in the pipeline. So! you say. Well, with unemployment rising, energy costs rising, disposable income being reduced I suggest politely that to buy into an illiquid asset where you need pay solicitors fees, stamp duty, moving costs etc is not the smartest of moves UNLESS YOU NEED SHELTER. Why not rent? If I am incorrect, then your rent will be reduced over time due to deflation.

    There is no urgency to buy, unless your personal circumstances dictate.

    This property ownership game is a long term play. Following the job opportunities when you are tied to a specific home in a set location hardly makes you mobile.

    Think before you leap, and if you must buy I urge you to pay off as much of your loan as possible and as quickly as possible. Being a debt slave isn’t clever and puts a terrible strain on relationships.

    If you struggle now to pay the bills, you simply cannot afford it. Costs will only go up. Housing may or may not. Bon chance.

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  • last_days_of_disco says:

    I am just glad to be shot of the whole thing. The stress of trying to buy is just too much, it is all too expensive.

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  • luckyjim said…
    mrflibble

    Don’t take offence. Some of the people on this site would like to believe things have not changed since the start of the year – they clearly have. You’re experience is evidence of that. Whether or not it’s a just a bounce is another story but those who pretend things have not changed are kidding themselves.

    We may not be at the bottom but 20% falls for this year are not going to happen – they never were – and that is not the media’s fault.

    Yes, things have changed….QE!
    Once we get past this – and with a change of government – more substantial falls in house prices will follow!

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  • housing is a lagging lagging indicator. be in for the long wait, 5 years of stagnant “nominal” prices in a runaway inflation environment

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  • I think that is wishful thinking hpwatcher, sorry. You are now banking on a tory government to restart the crash ?

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  • sorry, where was this market uptake?

    for sale stocks are high and vacant rental properties are FOUR TIMES the levels of summer 2007

    prices hardly moved in May & June (supported by the switching of for sale properties to rentals)

    rents continue the unavoidable decline

    http://www.primelocation.com/house-price-index/

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  • Confused – it has recently been reported that –

    Actual selling prices stopped falling.
    Asking prices are rising.
    Mortgage lending is increasing.
    Transactions are increasing.

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  • Greenshootsandleaves says:

    If there has been such a sustained improvement in the market why doesn’t miles tubthumper quote some real statistics (house sales) for a change? I doubt whether the newspapers which so regularly and unquestioningly devote so many column inches to his highly selective findings would allow a competitor to get away with the claim that their circulation had gone up simply because they were in a mood to charge more per copy or there had been an upsurge in the number of people visiting their local newsagent’s. There is every reason for sales of property to be quantified as reliably as if not more reliably than those of CDs, magazines or second-hand cars, so why settle for what is in effect a needtofeelgoodfactor?

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  • I THINK PRICES WILL DROP ANOITHER %30

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  • flintster1994 says:

    Wow,

    I’ve only been away for a couple of weeks and there’s loads of new posters. Things were becoming a bit stale for a bit there. A wee bit curious though as to the volumes of new posters. Have I missed something significant?

    While I was in France recently I looked in a few estate agents windows in different regions.

    A three bedroom beautiful village country house in the Champagne region was about e140,000 and a mezanine flat about 60 miles from Paris, with a good train connection was about e190,000. In Scotland we don’t have such a gap in property prices. Is it so in the rest of the UK?

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  • Imminent_plunge says:

    Don’t miss the boat! House prices on the up and up, just as they were in 1989’s budget when there was a four month deadline to buy a property and claim double MIRAS…

    Interest rates rose at a stupendous rate due to joining the ERM and there was a seven-year decline in the housing market.

    Things are different now, they’re much worse. Anyone ‘jumping on the ladder’ right now is in for an extremely nasty shock

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  • LJ – did anyone ever tell you that a self righteous ex smoker that vilifies smokers is a real pain in the ar5e? :-). Yes of course things have picked up – i actually think its quite astute of the powers to foster buying at a sensible short term oversold condition. Will it last? Possibly for a while longer. And then…..

    Rayvonyo – thats all a bit blah blah blah – if my grannie had wheels shed be a car stuff.

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  • I spent the last 10 years of the boom in property in London, initially project managing large scale builds, and then the final 5years buying and selling multi-million pound plots of land and buildings on behalf of high-net-worth investors. I spent the last 3 years of the boom becoming increasingly aware that the whole thing was a debt financed ponzi scheme, and the final 18 months incredulous that it was sustained for as long as it was.

    I sold (on behalf of the investors) all the land I could in 2007 when I realised that even though my household income was roughly twice that of the average in my borough, which in turn had the highest average household income of any borough in London, I couldn’t, without taking on unsustainable debt, afford a flat that a family could be raised in, even if I moved to a very secondary location in an average part of town. My decision was supported by the investors, who viewed me, in my circumstances, as being like a canary in the coal mine. They knew that if even I couldn’t move up the ladder, then the cannon fodder had run out.

    Even now, a couple with a 100k equity or deposit, earning 55k and 35k a year – less than my partner and I were when we were hunting in 2007, but representative of the adequately well-off professionals that make up the mainstream of our social scene (I exclude the banksters) – could ‘only’ borrow £315k from HSBC, who are one of the more generous lenders. Out of approximately 600 3-bed or larger properties (flats or houses) on rightmove within a mile of 4 okay, but far-from-special, London locations (Archway, Raynes park, Canonbury station – actually in Highbury/Newington green, not posh Canonbury – and East Finchley) they’d only be able to afford the asking price on two properties. However the mortgage payments of £2,087 a month would meet the asking rent on just over 50% of the 900+ 3-bed or larger rental properties advertised in these same areas. This suggests, one, prices have a long way to go to align with sensible rental yields, and two, the asking prices on Rightmove, at least in London, are almost certainly unrealistic.

    I’m convinced that at current prices the same, mad, VI-stoked, market-dynamics still exist that made 2007 prices unsustainable, with only the debt-ratchet and a shrinking, motley-crew of cash buyers supporting a summer blip. Nobody should lose the faith – if the reasonably well-off circle of early thirties UCL/Imperial/LSE/King’s graduates I know are frozen out as FTBs/movers, something has got to give long term – and it will. I know London isn’t necessarily representative of the UK as a whole, but where house-prices are concerned I think that, outside the prime central areas, it actually is reasonably representative (albeit a slightly caricatured representation). Inflation may well eventually be used to sustain nominal house prices (good luck getting the ball rolling though, GB) but real house prices have to fall and will…

    Jack C’s sinking ship analogy in the initial post is apt: the baby boomers are running out of debt-slaves to man the oars, and when the ship stops moving it will founder.

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  • get over it. time to rename this website to “housepricecrashednowitsbackontheup”
    sorry you won’t have the joy of millions in negative equity and misery any more…

    less bitterness and more empathy would serve many of you well.

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  • I think that is wishful thinking hpwatcher, sorry. You are now banking on a tory government to restart the crash ?

    There will be cuts, whoever gets in. I don’t think it will be Labour though.

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  • for sale stocks are high and vacant rental properties are FOUR TIMES the levels of summer 2007

    Have you noticed that EA have started on the ”few houses for sale” lie again?

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  • @24 Poacher
    You have said it all but how do you pass the message on to the one’s who feel that if they do not buy now, the are going to miss the boat. This appears to be very similar to an E-Bay auction. People have been known to bid on items where you could buy it new at the shops cheaper, this is just to tell their friend’s that they won a bid on the E-Bay auction and how brilliant it was.
    I hope you are right but the signs at present are so different.

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  • @25. Happybuyer

    ‘sorry you won’t have the joy of millions in negative equity and misery any more…’

    I doubt very much doubt anyone on here takes joy in this. The reason we are going to have so much NE is because we had an unsustainable boom that has now bust. The bust isn’t the problem, it’s the cure, the boom was the problem, created by greed and irresponsibility. If we stop unsustainable booms then we won’t have the awful busts that go along with them, taking out innocent people.

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  • Poacher, no intention to ridicule your well thought out post, but I love this phrase: “could ‘only’ borrow £315k from HSBC, who are one of the more generous lenders”.

    Do you write satirical comedy? 😉

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  • @Happybuyer – “sorry you won’t have the joy of millions in negative equity and misery any more…” – you wouldn’t be one of these perchance? My condolences – HA HA HA!

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