Estate agents behaviour

moneyistooshorttomention

lincroft1710 wrote: »

If you think today's house price rises are exorbitant, may I remind people that in the early 1970s prices literally doubled over a period of 2 years.

Also remember that the 1930s 3 bed semis in London suburbs that now sell for £350K and more cost their first owners around £700 (yes, seven HUNDRED).

And prices do fall, compare the high of 1988/9 with 1994/5.

You cannot legislate against house price rises.

I remember that (where's a rueful smilie when you need it). That was the time I was scheduled to buy my starter house and then those ***** prices shot up like that and I couldn't and it delayed my "start on the ladder" for 10 years in the event. That was SO not a case of "in right place at right time" and I've never recovered from that personally and it's affected my life since/still does.:(

I'm still trying to work out just what hit me then. Was it the fact that I was rejoicing/celebrating in the fact that single women had just become able to buy a house on a mortgage without a guarantor (but others did so and bashed MY chances) or something to do with oil price rises? I'm still trying to work out personally just why my chance was snatched from under my nose at that time and would be glad of clarification as to just why that happened. (I like to not just "live my life", but understand just why things happened as they did...).

Davesnave

lincroft1710 wrote: »

If you think today's house price rises are exorbitant, may I remind people that in the early 1970s prices literally doubled over a period of 2 years.

I remember that.

I was behind the curve, having opted to go to uni a few years later than my contemporaries, so I was in no position to buy.

As soon as I began earning, I started to save for the magic 10% deposit. My LA at that time, a personal friend, assured me, "Don't worry you'll have plenty of time, prices won't rocket upwards like they did a few years ago."

I took no notice and carried on saving. I even auctioned my furniture and sold the car. It took 2 years of breadline living, but eventually I was able to put a deposit on my first small house, all £9251 worth of it!

My Dad had bought a detached country cottage with an acre for not much more than that, six years earlier, in 1971!

lessonlearned

Money I think it was a combination of factors which all came together to create the "perfect storm" - rather like today in London and the South East.

I think part of the problem in the 1970's is that lending criteria was much stricter than it is now despite the relaxing of rules to allow women to borrow in their own right.

Just imagine telling a woman now that she needed a male guarantor to be able to take out a mortgage. :rotfl:

There were several "mortgage famines" where you had to literally join a queue for funds. I can't remember why building societies were not lending and why funds were so tight - partly because the country was in such a mess after the oil crisis, miners and power workers strikes and the three day week etc. There were all sorts of financial restrictions in those days and of course most high street banks did not do residential mortgages to the same extent that they do today. Most mortgage lending came from the building societies.

I seem to recall that you had to demonstrate that you were a regular saver with a building society before they would let you borrow with a track record of at least a year of regular saving under your belt.

There was none of this shopping around for the best deals, you got what you were given and you were expected to feel grateful. Only rich or really savvy people used brokers. In those days I wasn't that savvy.

The flow of money in general was much tighter than it is now for example I remember a time when you were limited to how much money you could take out of the country for holiday spending money. I seem to recall a limit of £50.??

And of course interest rates were much higher than they are now.
Add to that by the end of the 70's general inflation hit around 27% at one point.

What with the mortgage famines and having to meet such strict lending criteria, having to join the queue for funds etc then you had to be careful not to miss a window of opportunity when it presented itself, because of course when money did flow then house prices rose because there was so much pent up demand. Again you can see the same parallels now.

I bought my first property in my own right in 1976 for the princely sum of £6100. It took every last penny I had. It was a wreck and I had nothing left for renovation works. I had to live in it as it was because I couldn't afford to pay rent and a mortgage. I had to live in one room for about 6 months because the downstairs was more or less uninhabitable.

I really struggled for the first couple of years because of galloping interest rates and rampant inflation. On paper my decision to buy was financial suicide but I went ahead anyway, just jumping in with both feet.

A close friend of mine thought I was bonkers. She was much more conservative than I was and a lot more risk averse. She decided to do what she thought was the sensible thing, carried on renting whilst she saved up.

In 1978 she had to pay £8200 for an inferior property in a less salubrious part of the city.

I spent 3 years renovating my little house and sold it in 1979 for £13,400 - partly due to my own efforts and partly due to the rising market.

I think sometimes you do just have to close your eyes and take a leap of faith, borrow to the max and just go for it.

RAS

lincroft1710 wrote: »

If you think today's house price rises are exorbitant, may I remind people that in the early 1970s prices literally doubled over a period of 2 years.

Also remember that the 1930s 3 bed semis in London suburbs that now sell for £350K and more cost their first owners around £700 (yes, seven HUNDRED).

And prices do fall, compare the high of 1988/9 with 1994/5.

You cannot legislate against house price rises.

I recall both periods. Scary.

A colleague bought a house she had not even seen in early 89. I decided that the situation was too crazy and prices would moderate, having already been gazumped twice. Bear in mind everyone was rushing to buy before the new rules which restricted mortgage interest relief to one per house not one per person so there was bound to be a backlash when the rules changed. And I was one person anyway.

SO glad; bought a property three years later at 44 which was on the market at 59 in 89. Family found that a flat near London bought at the higher price before the crash was worth 29 two years later.

It took them the best part of 8 years living with rellies, renting it out and paying the capital down plus a little recovery to be able to offload it.

Davesnave

lessonlearned wrote: »

There were several "mortgage famines" where you had to literally join a queue for funds........ There were all sorts of financial restrictions in those days and of course most high street banks did not do residential mortgages to the same extent that they do today. Most mortgage lending came from the building societies.

I seem to recall that you had to demonstrate that you were a regular saver with a building society before they would let you borrow with a track record of at least a year of regular saving under your belt.

There was none of this shopping around for the best deals, you got what you were given and you were expected to feel grateful.

How true that is!

When I'd saved for 2 years and was, at last, ready to buy, the manager at my branch of the Leeds said, "It doesn't work like that!" or words to that effect.

They'd literally run out of funds to lend.

I think I said something which indicated my level of disappointment concisely, but I couldn't have been very rude, because his next words were, "I haven't told you this, but a new branch of the Alliance & Leicester has just opened in the High St and I've heard they're keen to make an impression here."

About half an hour later, I was withdrawing almost all my funds from the Leeds and taking my business to this new building society I'd never heard of before....:D

Lets_say

I'd forgotten about having to have saved with a building society for a while before they would even consider offering you a mortgage. Then my partner and I discovered that they refused to lend on flat conversions full stop.

Eventually we bought a 2 bed flat for £20k in 1984. We put it up for sale for £62k in 1990. The first viewers said they would have it. Their mortgage company valued it at £60.5k. We took that hit. A few months after selling the crash hit.

lessonlearned

Davesnave wrote: »

How true that is!

When I'd saved for 2 years and was, at last, ready to buy, the manager at my branch of the Leeds said, "It doesn't work like that!" or words to that effect.

They'd literally run out of funds to lend.

I think I said something which indicated my level of disappointment concisely, but I couldn't have been very rude, because his next words were, "I haven't told you this, but a new branch of the Alliance & Leicester has just opened in the High St and I've heard they're keen to make an impression here."

About half an hour later, I was withdrawing almost all my funds from the Leeds and taking my business to this new building society I'd never heard of before....:D

Where there's will, theres a way. :rotfl: You obviously made the right impression……..

Green3

Does it make sense to buy in not so great/bad areas like Feltham, Bedfont, Egham, Staines, Heston, Croydon? Some of these areas have such bad reputations and high crime rates that it is scary to buy there. But if people are getting priced out of so called good family friendly and safe areas, and they start buying in the bad areas, then would these bad areas start improving because decent educated famiies started living there?

Jason74

Green3 wrote: »

Does it make sense to buy in not so great/bad areas like Feltham, Bedfont, Egham, Staines, Heston, Croydon? Some of these areas have such bad reputations and high crime rates that it is scary to buy there. But if people are getting priced out of so called good family friendly and safe areas, and they start buying in the bad areas, then would these bad areas start improving because decent educated famiies started living there?

Is it a good idea to buy in a "less good area",? .Well that depends on how you see things, and what your priorities are. But certainly it's worth thinking about areas outside your first choice if you just can't afford anything where you really want to live.

Will bad areas improve as people priced out of "better areas" move in.? Imho absolutely. An area is determined first and foremost by the people who live in it, so if the make up of the local population "improves" (although when it comes to people, richer doesn't mean better), then so will the area itself. London is full of places that were once considered "bad areas" but are now highly desirable. That process is imho likely to continue in the coming years.

That said, I'm not sure I'd call any of the places you list as truly "bad" areas. dull perhaps, and a bit rough around the edges. But there's far worse out there than any of the places you list. Indeed, I live very close to one of your "bad list" myself, and have never had a problem personally.

lessonlearned

Jason74 wrote: »

London is full of places that were once considered "bad areas" but are now highly desirable. That process is imho likely to continue in the coming years.

It's called the Ripple Effect.

As one area becomes fashionable or desirable and increasingly more expensive then surrounding areas also benefit from an uplift.

Here's an insider secret. It is very simple……..

Follow the skips.

You decide on your preferred area. More than likely you like it because it is already desirable, it has already been "gentrified", properties have largely already been renovated and improved. At this point your preferred area is probably beyond your budget.

So drawing a radius you start visiting the surrounding areas. You will need to get out of your car and start exploring the streets properly.

Take a good look - if there is scaffolding to buildings and skips in the street then the gentrification process has begun and prices will start to rise fast.

Ideally you should try and buy in the next couple of streets that haven't yet got any skips.

Take a look at the shops, what is the make up of the shops. If it's all betting shops and charity shops forget it.

If there is a new Tesco Metro or Sainsbury's mini market or similar then the area is on the up. Check out what the new mini markets are selling. If they have a good bakery section and a bit of a deli section and a section selling good quality ready meals (as opposed to the cheap basics range) then the area is improving.

What are the pubs like, if they are spit and sawdust forget it, if they've started doing decent food then the area is improving. Go into the pubs, have a meal, quiz the bar staff and get chatting to folk.

Have the EA chains moved in, are they any trendy shops, florists etc moving in. What about cafes, bars, is there a deli or at least a decent bakers. These are all signs that an area is on the up.

Closed shops, a plethora of betting shops, charity shops and sleazy fast food joints means that an area could be on the slide.

There's a saying "When the bookies move in, it's time to move out".

Are there any new build developments. They too are a good sign.

Don't forget that the supermarket chains and the big developers spend vast amounts of money and energy researching an area before they move in. Take advantage of their research and ride on on their coat-tails.

Good hunting.