Many Upsizers gaining nothing from crash....

Harry_Powell

HAMISH_MCTAVISH wrote: »

You miss the point. The figures show that they don't both fall by 20%.

The more expensive houses fall by less than the cheaper ones. Negating the savings in many cases..

I think you have missed the point. You're correct that some properties fall more than others; the new build city centre apartments apartments fall a lot more than 5 bed detached suburban houses, hence why we look at the average. The average is 20%.

HAMISH_MCTAVISH wrote: »

Suit yourself. For many, if not most, it will be a lot closer than you think.

I'm sorry but you can't possibly argue that it's better for many if not most to have bought in the peak of 2007 than the trough of April 2009. The only people who may have gained were people downsizing who paid top whack for their bungalows but at least got top whack for their own property, and as they're downsizing they obviously made more money than they lost.

HAMISH_MCTAVISH

Harry_Powell wrote: »

I think you have missed the point. You're correct that some properties fall more than others; the new build city centre apartments apartments fall a lot more than 5 bed detached suburban houses, hence why we look at the average. The average is 20%.

But you cannot look at the combined average (which is currently more like 14% down from peak, not 20% BTW) when you need to look at the differential between FTB properties and 2TB properties to calculate whether an upsizer has gained or not.

If an upsizer in a newbuild city centre flat loses 30% from peak, and the traditional house they want to move to in a nicer area has only fallen 10%, then they will certainly lose out from the crash. They'd have been better off paying full price at peak, and getting full price for their flat at peak.

Even with the much narrower margins quoted in the OP, it's still much closer than you'd think for most people, particularly when you take into account the higher margins they'll need to pay on a new mortgage versus an old one pre 2007.

I'm sorry but you can't possibly argue that it's better for many if not most to have bought in the peak of 2007 than the trough of April 2009. The only people who may have gained were people downsizing who paid top whack for their bungalows but at least got top whack for their own property, and as they're downsizing they obviously made more money than they lost.

The point I'm making is that the bear myth, that upsizers always benefit form a crash, is simply not true in many if not most cases.

And the differential between prices quoted in the OP proves this point.

Of course some will benefit, but it's not as universal as bears like to portray.

Harry_Powell

HAMISH_MCTAVISH wrote: »

But you cannot look at the combined average (which is currently more like 14% down from peak, not 20% BTW) when you need to look at the differential between FTB properties and 2TB properties to calculate whether an upsizer has gained or not.

If an upsizer in a newbuild city centre flat loses 30% from peak, and the traditional house they want to move to in a nicer area has only fallen 10%, then they will certainly lose out from the crash. They'd have been better off paying full price at peak, and getting full price for their flat at peak.

Even with the much narrower margins quoted in the OP, it's still much closer than you'd think for most people, particularly when you take into account the higher margins they'll need to pay on a new mortgage versus an old one pre 2007.



The point I'm making is that the bear myth, that upsizers always benefit form a crash, is simply not true in many if not most cases.

And the differential between prices quoted in the OP proves this point.

Of course some will benefit, but it's not as universal as bears like to portray.

I doubt that many people will be moving from city centre apartments that have dropped by 30% to suburban houses that have only dropped by 10%, certainly you could not describe this scenario as fitting "the majority of people". I'd argue that it fitted a small minority, just as my downsizing example does.

HAMISH_MCTAVISH

Harry_Powell wrote: »

I doubt that many people will be moving from city centre apartments that have dropped by 30% to suburban houses that have only dropped by 10%, certainly you could not describe this scenario as fitting "the majority of people".

Well, you certainly won't see many of them doing it now. Pre-crash, such a move was common. But the crash has crushed that particular dream, along with so many others.....

I'd argue that it fitted a small minority, just as my downsizing example does.

I'd argue that only a small minority have benefitted from the crash. Those that STR-ed in 2006/7 and bought in Feb 09, for example, are clear winners. (in most, although even with that timing not all, areas)

As are a few FTB's that bought inner city newbuilds at 40% discounts with a big cash deposit last winter.

For most other people, it gets very murky very quickly by the time you factor in bigger bank margins, differentials in price between property types, cost of renting in the meantime, etc etc etc.

chucky

michaels wrote: »

I'm trying to upsize - on Saturday I looked at a property that had come on to the market on Friday. Spoke to the agent yesterday, there are 3 offers and another 7 seriously interested and they are going for sealed bid best and final offers today - no lack of attempting upsizers round here...

and people are saying that this is all a dead cat bounce...

there are 10 people looking at that property plus you which will mean that there will be 10 people looking at another property when the offer is accepted.

there is definitely no shortage of buyers out there!!

Harry_Powell

HAMISH_MCTAVISH wrote: »

Well, you certainly won't see many of them doing it now. Pre-crash, such a move was common. But the crash has crushed that particular dream, along with so many others.....


I'd argue that only a small minority have benefitted from the crash. Those that STR-ed in 2006/7 and bought in Feb 09, for example, are clear winners. (in most, although even with that timing not all, areas)

As are a few FTB's that bought inner city newbuilds at 40% discounts with a big cash deposit last winter.

For most other people, it gets very murky very quickly by the time you factor in bigger bank margins, differentials in price between property types, cost of renting in the meantime, etc etc etc.

Again, I think the numbers of people who STR'd as part of a pre-determined financial strategy are very few and far between. Even on here, the people who claim to be STRers are actually people who downsized or moved to other geographical areas and decided to rent for a while rather than buy straight away.

I'd find it hard to argue against the statements that 100% of FTBers have gained from the HPC. I'd also argue that the majority of FTB to 2TB tend to move within the same geographical region and in reasonable jumps (i.e. 1 bed flat to 2 bed flat or house, 2 bed terrace to 3 bed semi, 3 bed semi to 4 bed semi or detached). The majority of these 'ladder climbers' will have gained from the crash.

I accept what you say and agree that not everyone has gained from the HPC, but I can't agree that these are in the majority. I'd even state that they are very much in the minority.

Incidently, I'm also convinced that we have much further to go with the HPC and with every percentage point drop, we will see an exponential increase in people who are gaining from the HPC. But that is a whole other argument and would require the use of crystal balls, and as neither of us really know what will happen we'll have to let history tell us.

chrishoar

How can house prices be sustainable when they are a product of the resent influx of cheap money that has dried up?
If a bank had £100 pounds to lend to people wanting an average house costing £1 they could provide 100 mortgages
If they have only £10 now then they can provide only 10 mortgages...
However when house prices drop to 10p they can then provide 100 mortgages again....
Will someone please come up with an argument against that

chrishoar

Next month house prices will be negative again, from that point on and until Christmas there will be falls, then we have the cost of Christmas to contend with, the scrapping of 15% VAT. As we progress into next year jobless figures will rise, sentiment will fall and house prices will be back on their way down again full steam. No one will come into provide cheap money because they are all to scared we will try to inflate our way out of the debt we are already in

chrishoar

Finally, as I have said in previous posts, from the amount of transactions actually going through it is pointless and meaningless to take anything from + or - movements atm...I am talking about fundimentals

chucky

you're confusing yourself...

chrishoar wrote: »

Next month house prices will be negative again, from that point on and until Christmas there will be falls, then we have the cost of Christmas to contend with, the scrapping of 15% VAT. As we progress into next year jobless figures will rise, sentiment will fall and house prices will be back on their way down again full steam. No one will come into provide cheap money because they are all to scared we will try to inflate our way out of the debt we are already in

but

chrishoar wrote: »

Finally, as I have said in previous posts, from the amount of transactions actually going through it is pointless and meaningless to take anything from + or - movements atm...I am talking about fundimentals

if they do get negative you'll be liking these figures again regardless of transaction levels - right?