'We've reached a tipping point' Signs of house price weakness

blahblahblah85

We've had our eye on our local market since April and more recently in last 3-4 weeks I've noticed more and more houses put back on the market and/or reduced, maybe 1 out of 10 (rough figure).
I'm assuming it's due to the season? And because of the new measures put in place since April that have caused a slight shift which has been welcomed by us as it's nice not to feel panicked !
We're looking to buy still, obviously we're not wanting to buy and have the property decrease but it's also not something we're fearful of as it's primarily going to be home for next 10 years. As long as we can afford the mortgage (which will be 30% lower than renting) it's all good.

blahblahblah85

I keep seeing STR... What does this stand for?

chucknorris

blahblahblah85 wrote: »

I keep seeing STR... What does this stand for?

Sell (Sold) to rent, people who decided that there was going to be a price fall and sold, with the intention (hope) to later buy back into the market at a lower price.


It is a high risk strategy though:


1. You have to get your timing right, the market may continue to rise.
2. You have to cover, legal fees, other misc. fees (i.e valuation, mortgage arrangement) possibly stamp duty, estate agents fees, the probable increased rental payment and also you may have lost a great mortgage deal (i.e. low margin tracker which are no longer available).
3. You have to probably suffer less freedom in your rental property that you enjoyed in your own home.

Blooloo

chucknorris wrote: »

There is a difference between estimating (which is a profession in itself in the construction industry) and guessing, I didn't get paid £70k a year in industry just to 'guess'.


I won't be going bust like the person that you mention above because I am currently diversifying to spread and also reduce the risk of this occuring. In the last few years we have ensured that our joint (mine will be about £22k) pension income will be about £35k. I have also invested in tracker funds (not individual shares which carry much more risk), these will provide about £35k of dividend income in retirement. I haven't yet invested in bonds (lower risk than shares) but that will be my next venture (this will reduce the dividend income, but also reduce the risk). Our rental income is about £115k although that will reduce to about £85k if the base rate returns to 5.5%. In addition to that because we don't have children we will be drawing down about £100k a year from our assets (this will of course be tax free as I have already estimated and deducted the CGT when valuing our assets).


So even if there is a huge correction which affects the above income (but not most of the pension income which is DB) we will still be comfortable.

One of my clients is an estimator...he reads his "estimates" from tables, price lists and labour time tables, and uses his experience to adjust.

this is far from the estimating what the market is going to do. indeed, for you to have a success, someone else had to be in a position for you to take advantage of, for example, needs to sell a flat for whatever reason from thinking its all about to crash and its time to crystalise paper gains, or he's lost his money, got a tax bill, cant pay the mortgage and needs cash...who knows.

I guess it is in the bounds of possibility the Queen calculated which body to inhabit to become Britains Richest.

However, having accumulated a small level of wealth, it is hard to keep on to it as the way it was made becomes more risky, so it is indeed good advice to spread it around a bit.

As I said, I am not interested in a single luck story, i am interested in the market as a whole, both for the successes and the failures.

If you really want a good luck story, I can report on a rags to riches story involving not one property purchase, not one plan, just a fortunate circumstance. But I wont bother, the papers are full of them.

wotsthat

Philuk wrote: »

You are talking through your own prism. Your generation have had a real choice whether they wanted to buy or rent. Most of my entourage is in their late 20s early 30s and we all started working in 2007-8, the world then divides between those with a family deposit usually in the bracket 100k-250k (thanks to generous old boomers like you) and the others who have to build their own (and repay student loan of 15-30k). Since 2011, the average flat price increases by 40k requiring an additional salary of 10-15k a year, for most it means buying is a vanishing target. Result is that most of my friends are still living with mum & dad, or renting, few lucky ones bought 40% equity thanks to their family deposit and stretch their finances to breaking point to borrow the rest as they still don't earn much. There is nothing argumentative or opinionated about not buying, for most it is the only option.

It's tough out there - no denying it. I've made it clear that if someone can't buy there's no point calculating how much better they'd be by not renting - that would be like the 'here's what you could've won' moment on Bullseye.

The calculations were for mugs like Dances with Sheeple (who I think is an older gen x like me or maybe a young boomer). He could've bought in '97 but decided to rent instead. The sad thing is he can't see that was a mistake (financially). Despite your view of how great the good old days were you still need to take the opportunities when they present themselves.

Blooloo

blahblahblah85 wrote: »

We've had our eye on our local market since April and more recently in last 3-4 weeks I've noticed more and more houses put back on the market and/or reduced, maybe 1 out of 10 (rough figure).
I'm assuming it's due to the season? And because of the new measures put in place since April that have caused a slight shift which has been welcomed by us as it's nice not to feel panicked !
We're looking to buy still, obviously we're not wanting to buy and have the property decrease but it's also not something we're fearful of as it's primarily going to be home for next 10 years. As long as we can afford the mortgage (which will be 30% lower than renting) it's all good.

Indeed, good luck with your search..as you rightly point out, if you need a mortgage, paying it is the biggest headache for the future...if you are sweating over the value, then maybe now isnt a good time to buy. or maybe it is.

Who knows.

chucknorris

Blooloo wrote: »

One of my clients is an estimator...he reads his "estimates" from tables, price lists and labour time tables, and uses his experience to adjust.

this is far from the estimating what the market is going to do. indeed, for you to have a success, someone else had to be in a position for you to take advantage of, for example, needs to sell a flat for whatever reason from thinking its all about to crash and its time to crystalise paper gains, or he's lost his money, got a tax bill, cant pay the mortgage and needs cash...who knows.

I guess the queen calculated which body to inhabit to become Britains Richest.

and, to be honest, posting your plans on the internet to convince me are a waste of effort...As I said, I am not interested in a single luck story, i am interested in the market as a whole, both for the successes and the failures.

If you really want a good luck story, I can report on a rags to riches story involving not one property purchase, not one plan, just a fortunate circumstance. But I wont bother, the papers are full of them.

You are quite bitter (or perhaps just an argumentative unhappy person) aren't you?


Estimators price tenders which usually involve only very minimal prediction of what the market will do, it is limited to doing this in when a large project that takes a few years to construct. I wasn't an estimator (they work for Contractors) I was a cost planner (working for clients intending to invest in a building in the future), which does involve predicting the market prices for quite a few years, e.g Blackfriars Station I was cost planning that 10 years in advance of the proposed tender date.


I wasn't posting my plans to convince you, I was replying to your post which implied going bust was a possibility.

Blooloo

wotsthat wrote: »

It's tough out there - no denying it. I've made it clear that if someone can't buy there's no point calculating how much better they'd be by not renting - that would be like the 'here's what you could've won' moment on Bullseye.

The calculations were for mugs like Dances with Sheeple (who I think is an older gen x like me or maybe a young boomer). He could've bought in '97 but decided to rent instead. The sad thing is he can't see that was a mistake (financially). Despite your view of how great the good old days were you still need to take the opportunities when they present themselves.

there you go again...with 2020 hindsight you have the wisdom he didnt. and now cant he even see how clever everyone else was.

I think you should have worked for the banks, you could clearly have predicted and avoided the banking collapse that we are all now paying for.

Rota

Blooloo wrote: »

there you go again...with 2020 hindsight you have the wisdom he didnt. and now cant he even see how clever everyone else was.

I think you should have worked for the banks, you could clearly have predicted and avoided the banking collapse that we are all now paying for.

Dances with Sheeple is and forever will be, till his dying day, a mug, you would have to be one not to see it.

Blooloo

chucknorris wrote: »

You are quite bitter (or perhaps just an argumentative unhappy person) aren't you?


Estimators price tenders which usually involve only very minimal prediction of what the market will do, it is limited to doing this in when a large project that takes a few years to construct. I wasn't an estimator (they work for Contractors) I was a cost planner (working for clients intending to invest in a building in the future), which does involve predicting the market prices for quite a few years, e.g Blackfriars Station I was cost planning that 10 years in advance of the proposed tender date.


I wasn't posting my plans to convince you, I was replying to your post which implied going bust was a possibility.

By predicting, you mean guessing...

My client, also an estimator, puts in his estimates for the costs of building, then the client is advised to double it...He accepts this as part and parcel as future costs are entirely guesswork.