Trading up easier as property prices plummet

carolt

http://www.guardian.co.uk/money/2009/jan/12/property-trading-up

The cost of trading up from the bottom rung of the housing ladder has reached its lowest level in five years, research showed today – with two-bedroom homes taking the biggest hit from falling house prices.

silvercar

Someone will be along soon to explain that its not a ladder.;)

Dan:_4

carolt wrote: »

http://www.guardian.co.uk/money/2009/jan/12/property-trading-up

The cost of trading up from the bottom rung of the housing ladder has reached its lowest level in five years, research showed today – with two-bedroom homes taking the biggest hit from falling house prices.

Assuming your not trapped in NE of course.

[Deleted User]

toomany wrote: »

http://uk.youtube.com/watch?v=_7A-I97b6bw&feature=channel_page

ahh Bruno..still in the denial phase :rotfl:

Cannon_Fodder

silvercar wrote: »

Someone will be along soon to explain that its not a ladder.;)

Yup, its a snake at the moment...

rlc22

I have no doubt that this is generally the case, but I traded up from a 2-bed flat to a 3-bed house in Sept 2007 (so pretty much the peak) and bizarrely, looking at sale prices since then we're better off from moving back then than we would be now as the flats have lost more in value than the same houses that we moved to!

I don't know if it will stay that way, but after being really anxious about the timing of our move it's reassuring to know that we actually had to borrow less then than we would have to for the same move now.

Cannon_Fodder

rlc22 wrote: »

I have no doubt that this is generally the case, but I traded up from a 2-bed flat to a 3-bed house in Sept 2007 (so pretty much the peak) and bizarrely, looking at sale prices since then we're better off from moving back then than we would be now as the flats have lost more in value than the same houses that we moved to!

I don't know if it will stay that way, but after being really anxious about the timing of our move it's reassuring to know that we actually had to borrow less then than we would have to for the same move now.

That could be interesting anecdotal confirmation of something I was wondering about today.

There seem to be a few people saying "oh, my house price hasn't dropped" - perhaps a terrace that sounds like an ideal second step on the ladder.

And so I was wondering, if 40% or so drops *really* have been happening to flats/new builds, then soon the affordability of them will be such that FTBs and SecondTBs cannot ignore them. Meanwhile old-style terraces and more "solid" flats might be sticking at the moment...like you say your own 3-bed doesn't seem to have dropped...so, will the FTB/STB ignore those "nicer" flats/terraces/semis and plump for something cheap, to tide them over the crash?

Is this a second stage in the evolution of chain collapses - now beyond FTBs being the problem - to SecondTBs being the non-shifters...??

Once the crash has unwound fully, we might expect the gap between rungs on the ladder to be faily even, but you seem to have picked the year when it worked for you.

Running_Horse

rlc22 wrote: »

I have no doubt that this is generally the case, but I traded up from a 2-bed flat to a 3-bed house in Sept 2007 (so pretty much the peak) and bizarrely, looking at sale prices since then we're better off from moving back then than we would be now as the flats have lost more in value than the same houses that we moved to!

I don't know if it will stay that way, but after being really anxious about the timing of our move it's reassuring to know that we actually had to borrow less then than we would have to for the same move now.

Same with us. Moved from a grotty town to a nice village (2007) where asking prices have risen on modern 3 bed houses. Those in smaller terraces selling to FTBs are clinging to their asking prices because the houses they want to move to are not falling. Although prices have not fallen, nothing is selling as people wait out the storm.

scousethife

no one trades up without adding to their mortgage
if houses go up tan percent then the more expensive house went up by more money you lose out by trading up

Its an absolute myth invented and cultivated by lying estate agents and an idiot thick enough the not question it.

100 k house

200 k house

both go up 10 %

100k is now 110k

200k is now 220k

Science - rocket - not.......................well actually it is for some people.

ukjoel

Think your all SPOT ON and for some very obvious reasons.

Due to the govt increasing the reqs for housing density developers knocked out loads of flats and few houses.

These were all bought by Buy to Let folks and because they dont live there they can sell them at any time. Like you would an old suit on ebay.

This means with prices falling some new build blocks are seeing 50% plus of the properties on the market - result is a big big drop.


Now a mile down the road in the three bed house resides Mr and Mrs Family.
They cant sell without buying a new house and have kids at local school so its a bit of a hassle and besides they quite like there neighbours and have just done the garden up. Hence less houses come on the market and prices remain fairly constant.

The banks have picked up on this by refusing to lend to any new builds less than 2 years old. The fact they are also asking for 25% deposit is killing mr first time buyer who wants the flat but not having much impact on a family trading up who have some equity in their first house they bought 10 years ago.

Think we could well see a market split by property in the same way we see it by geography.

Running_Horse

blakester wrote: »

That is quite a telling statement. Could it be the fact that those houses have dropped in value but the owners cling to their inflated values hence they can't sell them. Some properties are being sold if they are realistically priced IMHO.

Quite possible. But if your buyer cannot get a mortgage, and the house you want to buy has not fallen in price, then there is no point in dropping your price and having nowhere to move to.

We sold in 2007 for £145k, and bought for £190k. A house came on in our old road in 2008 for £175k, before dropping to £125k, and still didn't sell (now removed from sale). Houses in our new area are still asking £190k+.

Even if we could find a buyer, the same move would not be possible for us today.