Monday, October 8, 2012

Buyers’ Strike gains momentum

Viewers boycott homes they feel are overpriced

tl;dr - Would-be-buyers fed up with kite-flyers and their ridiculous asking prices.

Posted by sibley's b'stard child @ 04:04 PM (2480 views)
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16 thoughts on “Buyers’ Strike gains momentum

  • voiceofreason says:

    I have been wandering around a few BTL flats recently out of interest.
    Unbelievable.

    Today, a 2 bed ground floor flat near the university in Southampton. Repo.
    £160k asking. Lovely view of the electricity substation 3 metres from most of the windows.

    In a sane price world, a 3 bed terraced would be 3.5x dual earnings or ~£90k. This flat would be way below that.
    Rental is £700pm, so at 10% return would be yes, under £90k.

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  • mark wadsworth says:

    Well wrap me in tinfoil and give me a gift voucher!!

    Who’d have thought that buyers would stop bothering viewing wildly overpriced homes?

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  • MW there was a guy who lived near us years ago , he used to wear a tin foil hat

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  • mark wadsworth says:

    Well paint me camouflage and give me a whistle!

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  • From today’s speech at the Conservative Party conference by the ‘right’ honourable George Osborne, Chancellor of the exchequer:

    How can we justify giving flats to young people who have never worked, when working people twice their age are still living with their parents because they can’t afford their first home?

    This received the most generous round of applause from the assembled crowd, much to the surprise, it would seem, of Mr. Osborne himself.

    The Conservative faithful – Doing ‘The Right’ thing.

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  • @ voiceofreason

    The Southampton market is the one I’m interested in too*. Southampton seems to be particularly crazy. Let’s start with the fact that it is not a particularly pleasant or attractive city and has nothing, really, to recommend it (I’m only looking to move there because that’s where my job is). Then let’s move on to the fact that there is a lot of poverty in the city. And then, let’s consider that the average income is probably only about £20K a year (I am guessing here but, all things considered, I can’t imagine I am wildly out) and yet flats start at about £90K and houses at about £140K. And flats/houses in those price brackets are (surprise, surprise) not in areas anyone in their right mind would choose to live. Realistically, to get anywhere half decent, a flat is going to be about 7-8 times the average income and a house 8-10 times. Even if you asssume they’re going to be bought on a joint income of around £40K a year that’s still crippling and does nothing for the wider economy (very little left to spend on anything else, etc.). It’s absolutely nuts!

    * Although, as I stated elsewhere, I have given up entirely on the idea of buying for the foreseeable due to job being ‘at risk’.

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  • voiceofreason says:

    @6
    Agreed, apart from views on Southampton. Its actually quite nice 🙂
    And a lot cheaper than nearby Romsey and Winchester and anywhere in the Hampshire countryside.

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  • @7
    Oh, I agree, there are nice parts of Southampton and there are some good things about the city (the public parks in the city centre are really nice, for example (thanks to the conscientious efforts of the Council workers). Just don’t go in them late at night …

    No, all I mean is it doesn’t have anthing to particularly recommend it. Nothing, really, to justify such exceptionally high house prices.

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  • @7,8
    At last, a couple of Southamptoners… I’ve been living here since 2005 and “priced out” of the market (we could buy but everything seems ridiculously overpriced). Prices seem to have fallen slightly then stagnated since the peak at still absurdly high levels. As you say, it’s completely unclear how an “average” family, let alone a single person, could first time buy. The other salient fact is the low, low build quality of most of the housing stock. There are nonetheless lots of nice big houses in certain areas with large gardens, but often these are divided into umpteen squalid rabbit hutches owned by Mr and Mrs Rackman. As a place to live it indeed doesn’t have that many “nice features” (the Common excepted) but it has a more cosmopolitan, less suck up, atmosphere than the “nicer” surroundings of Hampshire – because people are less rich. *So just why do prices here refuse to budge further?* Is it the far reaching London effect, insulating people from the local economy? I know many people here who commute that far every day.

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  • @9
    I know. Prices in Southampton and district have barely budged downwards in the 4-5 years since the economy imploded and it is very frustrating and hard to work out why. I suppose, for places like Southampton, the fact that it is possible (expensive and exhausting but possible) to commute, daily, to London contributes to house prices being absurdly out of kilter to local incomes. There are other factors too: the simple fact that this is the South East/West, (relatively) low unemployment and, primarily, I would imagine, the fact that interest rate have stayed so low for so long. Those who bought as prices rocketed (and they REALLY did rocket in Southampton in the 2000’s) are stuck because, regardless of what they paid, they can’t or won’t settle for a price far below what they still want to think they can get. So people in Southampton and similar cities/towns are, I imagine, just sitting tight unless they have some unavoidable reason to compel them to sell (redundancy, divorce, job move, etc.)

    So prices in Southampton and similar haven’t fallen by much since the ‘crash’ and have continued to turn over pretty well (largely due to a drought of properties coming to the market). I have noticed that there seem to be a lot more coming to the market in the last couple of months but there’s still no sign that vendors see any need to drop their asking price expectations significantly.

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  • I know. Prices in Southampton and district have barely budged downwards in the 4-5 years since the economy imploded and it is very frustrating and hard to work out why. I suppose, for places like Southampton, the fact that it is possible (expensive and exhausting but possible) to commute, daily, to London contributes to house prices being out of all kilter to local incomes. There are other factors too: the simple fact that this is the South East/West, (relatively) low unemployment and, primarily, I would imagine, the fact that interest rate have stayed so low for so long. Those who bought as prices rocketed (and they REALLY did rocket in Southampton in the 2000’s) are stuck because, regardless of what they paid, they can’t or won’t settle for a price far below what they still want to think they can get. So people in Southampton and similar cities/towns are, I imagine, just sitting tight unless they have some unavoidable reason to compel them to sell (redundancy, divorce, job move, etc.)

    So prices in Southampton and similar haven’t fallen by much since the ‘crash’ and have continued to turn over pretty well (largely due to a drought of properties coming to the market). I have noticed that there seem to be a lot more coming to the market in the last couple of months but there’s still no sign that vendors see any need to drop their asking price expectations significantly.

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  • grumpybob @ nickb
    Our last house is a case in point.
    We sold in Jul ’99 for £88K
    It next sold in Aug ’02 for £155k –WTF ????
    Then sold for £217k in about ’05.
    Currently on the market for £240k then £230k now £180k.
    (Luckily we bought a bigger house then and not 3 years later)

    3 bed terrace in Inner Ave. So should be at the top end of a FTB budget, so around £120k.
    Assuming a combined income of £50k, deposit of 10K.
    But they hang on there, I expect because they are so far underwater and IRs are low.
    The only thing that will unblock it is if people _have_ to sell for some reason.
    Just starting to see a trickle of more repo’s. Not enough to shift the market though.
    Hang on til the depths of winter, see what happens.

    So for now, I’m out !

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  • @grumpy
    I’ve noticed a relative glut of for sale signs recently. Have you tried putting in any comedy (i.e. realistic) offers? e.g. for 50% of asking price? I’m tempted just to gauge the reactions.
    N

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  • voice
    That is a phenomenal story… no wonder there are so many cheap aftershave and fake tan EAs lording it around the place. Many of them look rather depressed at the moment though…
    N

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  • @nickb – No I haven’t tried putting in any low (50/60/70% of asking price) offers. I can’t bring myself to get into that.

    In fact, I’m only taking a cursory interest in what is coming onto the market until/unless my job situation becomes much more secure.

    @11 voiceofreason, yes that sums it up nicely. It was insane during the early 2000’s and it should have been obvious that it was unsustainable.

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  • mark wadsworth says:

    VOR, good anecdotal.

    GrumpyBob, yes, things went completely made from about 1999 onwards, certainly it was insane by 2001 at the latest.

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