I've made an offer - investment rule number one "buy when no one else is2

Conrad

£159k offered on a house that was worth £215 - £240k last summer. I know these properties well, and an investor client of mine already owns one a few doors away door which valued at £240k 1 year ago.

Vendor wants me to come up a little on my offer.

As soon as rates begin to fall in November, it is concievable these 'desperate' sellers will rapidly find renewed confidence and not be open to such offers.
Nice older sytle family house on the edge of London. These types of property are the first to recover as they dont make em any more, whereas newer stock is in great supply.

THE DOWNSIDE RISK:

I could wait another 6 months and pay £10 - £20k less.

In the meantime the rent is £9600 pa.

Always a difficult decision, but I think some of the uber bears here will surely miss the boat as they wait too long for 'definite' signs of recovery by which time its too late.

mystic_trev

Conrad wrote: »

Always a difficult decision, but I think some of the uber bears here will surely miss the boat as they wait too long for 'definite' signs of recovery by which time its too late.

I somehow doubt it as the Country heads into recession. It'll be a long time before House prices start the recovery phase - Look at what HBOS are saying today!

The credit crunch is likely to last well into 2010, the head of the UK's largest mortgage provider has warned.

http://news.bbc.co.uk/1/hi/business/7601461.stm

WTF?_2

Conrad wrote: »

£159k offered on a house that was worth £215 - £240k last summer. I know these properties well, and an investor client of mine already owns one a few doors away door which valued at £240k 1 year ago.

Vendor wants me to come up a little on my offer.

As soon as rates begin to fall in November, it is concievable these 'desperate' sellers will rapidly find renewed confidence and not be open to such offers.
Nice older sytle family house on the edge of London. These types of property are the first to recover as they dont make em any more, whereas newer stock is in great supply.

THE DOWNSIDE RISK:

I could wait another 6 months and pay £10 - £20k less.

In the meantime the rent is £9600 pa.

Always a difficult decision, but I think some of the uber bears here will surely miss the boat as they wait too long for 'definite' signs of recovery by which time its too late.

Good luck - if you can afford it and aren't worried about paying too much then why not?

But I still think you've bought too soon. The only feasible way that prices are going to 'recover' (wrong word IMO as it implies getting back to normal - that's not the case with those crazy peak prices which were anything but normal) is if there is massive government intervention generating inflation.

eg. The frankly bonkers "buy up forty billion pounds worth of iffy mortgages" proposal. That ought to put a bottom on the market and kick off massive sterling devaluation/inflation. I could certainly see nominal values quickly 'recover' in those circumstances. Too bad we'd also be paying 5 quid for a loaf of bread and 6 quid for litre of petrol.

pizzagirl

Conrad wrote: »

Always a difficult decision, but I think some of the uber bears here will surely miss the boat as they wait too long for 'definite' signs of recovery by which time its too late.

Prices will stagnate for some time before rising again.. Therefore it'll be easy to find the 'bottom' of this housing crash.

bluejake

Conrad wrote: »

£159k offered on a house that was worth £215 - £240k last summer. I know these properties well, and an investor client of mine already owns one a few doors away door which valued at £240k 1 year ago.

Vendor wants me to come up a little on my offer.

As soon as rates begin to fall in November, it is concievable these 'desperate' sellers will rapidly find renewed confidence and not be open to such offers.
Nice older sytle family house on the edge of London. These types of property are the first to recover as they dont make em any more, whereas newer stock is in great supply.

THE DOWNSIDE RISK:

I could wait another 6 months and pay £10 - £20k less.

In the meantime the rent is £9600 pa.

Always a difficult decision, but I think some of the uber bears here will surely miss the boat as they wait too long for 'definite' signs of recovery by which time its too late.

It'll be over by November. Not unless the banks go back to the policies that have seen them nearly go out of business and the governments who have to pick up the pieces allow them to do that without new regulation.

When I would look at the graph that shows historical average house prices and see the mount everest that is the recent bubble then I think there is a lot of fallin' to come - to get back to the historical norm. Unless it's different this time of course...

Just keep convincing yourself.

dopester

Conrad wrote: »

£159k offered on a house that was worth £215 - £240k last summer. I know these properties well, and an investor client of mine already owns one a few doors away door which valued at £240k 1 year ago.

You spoken with your investor client recently?

Or are they the one looking to sell to you upwards of £159K? :rotfl:

Everyone and their aunt is a property "investor". Welcome to the mother of all crashes.

Dan:_4

pizzagirl wrote: »

Prices will stagnate for some time before rising again.. Therefore it'll be easy to find the 'bottom' of this housing crash.

Oh no. Another one who can see into the future.

morg_monster

pizzagirl wrote: »

Prices will stagnate for some time before rising again.. Therefore it'll be easy to find the 'bottom' of this housing crash.

thats surely true for the UK as a whole - but will it be so easy to find the bottom on a micro level, say if someone is keen to buy in a fairly small area - maybe within a school catchment area or within half a mile of a station or something? I'm sure not every area of the country will have a clearly defined bottom, a la J-Lo... (sorry)

it is something i worry about, this whole catching the bottom thing...!!

Incisor

Conrad wrote: »

... Vendor wants me to come up a little on my offer. ... As soon as rates begin to fall in November, it is concievable these 'desperate' sellers will rapidly find renewed confidence and not be open to such offers.

Then the floggings will continue until morale improves.

Firstly, rates can go down as much as you like, the problem is that people have got so used to 100% mortgages that the idea of saving for a deposit is quite alien. So the only people with enough equity to buy a house are erm..., people with houses already [who have maxed out on MEW]. So, to get their equity relaesed they need FTB's who currently have no deposits.

Secondly, I think a paradox may emerge over the next few months. The market right now is pretty much in freefall, because so few deals are being done. If sellers get this 'renewed confidence' and refuse what buyers are offering, buyers will just hang off and let the market go further down. And because the sellers are rejecting the offers there will be even fewer deals completed which will reduce the confidence of the buyers, making the market go further down. Remember, at the present time, the biggest problem is finding FTB's and people with nothing to sell. In other words, sellers getting cocky and refusing deals may prevent the market establishing a corpus of deals on which some stable notion of current value can be based.

dopester

investment rule number one "buy when no one else is"

What is investment rule number two then?

It might have escaped your attention but hardly anyone can afford to buy even if they wanted to, because they have no money, and the banks have only just begun tightening the lending screw on them.

A country in debt, and a nation of property investors all trapped in to their illiquid investments.

Gorgeous_George

My simplistic spreadsheet (;)) shows that by waiting a whole year and buying at £15K less, you could save £19,394 over 26 years (that's £65 per month for 26 years!)



GG