House prices 'see first double-digit fall'

WTF?_2

StevieJ wrote: »

So what, if they are moving they will purchase the new house cheaper.

But they have decided not to sell, remember?

If they want to buy a new house, they had better be absolutely loaded if they want to keep the old one.

Or are they going to try to be accidental landlords? In that case, hope they have enough equity to get a good BTL mortgage that the rent covers or they'll be haemorraghing cash for years on an asset worth less than they paid for it... If they have that much equity in the house they'd be as well selling it now rather than clinging to the notion that peak prices are going to be back any day now.

dopester

EdInvestor wrote: »

The long term price trend is represented by the red line.

Sorry but that is so incredibly misleading. The red line goes up even when prices fall significantly.

It is a complete joke to suggest that line will insulate you against devastating falls in house prices over the next few years. Yet you go on trusting the red line if it makes you feel better.

EdInvestor

JWhite wrote: »

There is also another group of people who let their houses sit on the market and won't drop the price. Like us they may be intending to sell up and move abroad. Problem is the property prices may be dropping here but might not be where you are moving to and they may not be able to bridge the gap in price difference.

This can usually be solved at least for a while by renting out the home here and then using that income to pay the rent on a property abroad.

But.....

Also if like us you had budgeted to be able to live off the capital difference between the two properties (one here and one abroad), and you are retiring so no way to work and pay the price difference, you have no choice

A need to downsize to create capital does cause a problem. You might like to check around the equity release (lifetime mortgage) providers to see if they would allow renting at least for a set period. That way you could get some capital out as well.

It still might be worth doing the basic rental sums though. If the property is jointly owned you will have 2 UK personal allowances to offset against it, so the rental income should be tax free if you are non resident.

There are so many people in deep trouble with property in Spain desperate for any income that you might be able to rent pretty cheaply and have some income left over.Be careful of costs over there though, the Euro/pound exchange rate is causing trouble for many as well.It's not as cheap as it was.

spark1

EdInvestor wrote: »

There are so many people in deep trouble with property in Spain desperate for any income that you might be able to rent pretty cheaply and have some income left over.Be careful of costs over there though, the Euro/pound exchange rate is causing trouble for many as well.It's not as cheap as it was.

Getting very pricey and bussiness's that rely on tourists are really starting to struggle, I know someone who lasted 2 years out there with his wife and young children, they are back home renting and are struggling to shift the house they bought out there :mad:

geoffky

The market in spain is on its knees and is falling faster than here and they reckon there are 250 thousand houses that are not needed due to over building so the women looking to buy in spain needs to do a bit more homework..

Leodogger

!!!!!!, you are partly right, it is true the Spanish market is in decline. The only problem is, which is always the same problem in any property market, the building developers will not accept that property prices are dropping and reduce the price of new properties. They are still building thousands and keeping the price up because the length of time from planning stage to completion is about two years. Therefore they are keeping their prices ridiculously high. Same thing here. How many builders (that are still building houses that is!), are reducing the price of new properties built. There is a small development of apartments just down the road from me where the apartments are priced at £150,000. There are 2 traditional semis in my street which have been up for sale at approx. £180,000 (have been done up but similar sizes etc.) for nearly 12 months. One has just come up in a cul-de-sac opposite me, same size just needs decorating etc. (updating) and is priced at £125,000! Now it may be that the owner wants a quick sale but where's the choice - a 2 bed apartment stuck in the middle of a roundabout with no gardens and shops outside the front window and a semi in a cul-de-sac (3 bedrooms with offroad parking) that needs a bit of updating for £25,000 less. The ones priced at £180,000 have little or no chance of selling.

Prices are going crazy but one thing remains obvious, builders will not reduce the price of new properties because they have costed them on prices of 12 months ago.

Also I believe FTBers will not come back into the market even if lending eases. Salaries especially here in the West Midlands have not budged hardly at all in the last 5 years and the deposit required to buy a house is enormous in terms of saving by youngsters. I have 3 sisters with kids at home in their twenties and we all agreed that there is no chance they will ever afford to buy a house. The only saviour these days is parents who will lend £10,000 to £20,000 to youngsters to buy their first apartment.

From what I see of youngsters today, they have it too good at home to saddle themselves with loads of debt. They are more interested in their glossy cars, their holidays abroad and their designer clothing and they like to enjoy life. My sisters are continually bailing their kids out with money. How will they ever have money to buy a property!

By the way we are looking to buy a Park Home in Spain but obviously have to wait for the market to settle to see what money we will have available and as I said the price of Park Homes in Spain are not coming down much in value.

carolt

Your post contains a number of statements that I think point the way to the solutions:

"The ones priced at £180,000 have little or no chance of selling." No they don't. Which is why, sooner or later, whether or not they wish to and whether or not they change their ASKING price, their selling price will come down. There's no point in them holding on to them just to watch the prices fall further; they don't have any emotional attachment to them as homes, they're just businesses. They'd be mad not to try to realise as much as they can as soon as they can.

"I have 3 sisters with kids at home in their twenties and we all agreed that there is no chance they will ever afford to buy a house." Assuming that they work (they appear to have money to spend), there is clearly something very wrong with house prices still if FTB's cannot afford to buy. As FTB's are required to form the bottom of chains (in the absence of landlords, who have largely stopped buying too), then prices are going to have to fall to levels where ordinary young people like these can afford to buy again. Or where investors feel yields stack up. The fact that is not the case yet just shows how much further prices are going to have to fall. Simple as.

WTF?_2

JWhite wrote: »

!!!!!!, you are partly right, it is true the Spanish market is in decline. The only problem is, which is always the same problem in any property market, the building developers will not accept that property prices are dropping and reduce the price of new properties.
..
By the way we are looking to buy a Park Home in Spain but obviously have to wait for the market to settle to see what money we will have available and as I said the price of Park Homes in Spain are not coming down much in value.

From what I hear there are plenty of expats desperate to sell property and move back to the UK. There's no need to fixate on getting a new property straight from a developer. Take a look at auctions or look for some 'expat in Spain' forums and see what the score is.

mr.broderick

!!!!!!? wrote: »

From what I hear there are plenty of expats desperate to sell property and move back to the UK. There's no need to fixate on getting a new property straight from a developer. Take a look at auctions or look for some 'expat in Spain' forums and see what the score is.

Let us hope this doesn't put upward pressure on prices over here then....

WTF?_2

mr.broderick wrote: »

Let us hope this doesn't put upward pressure on prices over here then....

Every little helps, I suppose