London is a joke (moan)

Cornucopia

Digsby wrote: »

I am a member of the house price crash community (and feel no shame about that either) under the same user name...

You believe something different to them though? They believe that the whole on-going market is over-priced and will inevitably crash, whereas you seem to be talking solely about asking prices (which ultimately don't mean very much).

At the moment, most asking prices are way out of touch and there was a spate of articles in the media recently pointing this out after some research was published.

Any examples?

Some sellers achieve those prices...

I supposed some cash buyers may be paying too much, but people buying with mortgages will have to face the Valuation, which should address the issue.

...because the agent told them it could fetch that much when really it was competition among agents forcing them to pitch high to get the business.

I only have experience of selling in the London twice in recent years. One, in 2007, was a high valuation which was spot-on (the property sold in 4 days, and could probably have been pushed a little higher, but I was not greedy). One last year was overvalued by around £30k, but I simply dropped the price gradually to a level where it picked up some interest. As a LL, it's not in my interest to have property empty for months, or to be unrealistic about market value.

Indeed, it's way, way easier to over-value when you are living in the property whilst it's on the market, because you lose nothing financially by doing so.

There is quite a lot on the market at the moment that were bought just months ago, had a splash of paint, and put straight back on at £50k more, where actual sold prices have only increased 5% since on average and in some cases have gone down.

Again, some examples would be useful.

So my advice to the OP is, learn as much as you can about the market, use my tool and others like it, look at a lot of property and not just those with asking prices within your budget but up to 20% above it as well, keep an eye on those you think are overpriced and wait to see if they sell or are reduced.

It is good, basic advice, but I am not convinced that over-pricing is a major factor in the main part of the market. It simply cannot work because you would need to fool not just buyers but Valuers, too.

I suspect that if we looked into some examples, we'd find that either they were niche properties that were difficult to value, or there were factors outside the scope of your process which make the valuation reasonable (at a level permitting a certain amount of haggling).

quidsy

Saturate the market with properties & the prices will go down. Restrict LL to no more than 2 properties.

Cornucopia

quidsy wrote: »

Saturate the market with properties & the prices will go down. Restrict LL to no more than 2 properties.

Have you any idea what that would do to rents?

It might have a short-term effect on sale prices, but I'd be very surprised if the market didn't absorb it and carry on.

The fundamental issue is a shortage of housing, and no amount of tinkering is going to change that.

AdrianC

quidsy wrote: »

Saturate the market with properties & the prices will go down. Restrict LL to no more than 2 properties.

Apart from the points I made above, which you seem to have totally ignored, where do all the tenants live whilst the properties are on the market with vacant possession?

quidsy

There are a lot of people who cant buy due to inflated prices created by the shortage of purchase properties, created by professional LL's hoarding 10's of properties. Once the market dropped these people could afford to buy, freeing up rental properties which would be forced to compete at reasonable rents for the renaming tenants.


I didn't ignore your comments & this isn't a debate, this is an opinion only, as is yours. Neither are fact.


Or can I not express my own view of how this country needs to start dealing with the housing issue.? I am well placed to offer this opinion as I am currently living in the paradox.

AdrianC

quidsy wrote: »

Or can I not express my own view of how this country needs to start dealing with the housing issue.?

Of course you can. But don't you also need to consider and address what appear to be massive fundamental flaws in that view? Perhaps it isn't as simple as you seem to believe?

When you throw some bald statement out which flies in the face of views and questions that are already in the thread, without addressing them, it merely looks like ill-thought out polemic.

I am well placed to offer this opinion as I am currently living in the paradox

So... Your landlord gives you notice and puts your home on the already saturated market, whilst supply of rental properties suddenly disappears completely. What do you do? Where do you live? What if you can't get a mortgage? What if you only plan on living in the area for a year or so more?

quidsy

But don't you also need to consider and address what appear to be massive fundamental flaws in that view?


Not really but if it makes you feel like it then go ahead but it doesn't actually make your view right or make it acceptable for your to patronise.


There are flaws in all arguments & not every decision will benefit all but I believe if there were more properties on the market, prices would drop. The discussion was about buying, not renting. And until there are more properties available to buy the prices will remain high. If all we could ever own was our own & one rental, there would be a massive surge in available properties to buy & prices would drop.

Cornucopia

quidsy wrote: »

There are a lot of people who cant buy due to inflated prices created by the shortage of purchase properties, created by professional LL's hoarding 10's of properties. Once the market dropped these people could afford to buy, freeing up rental properties which would be forced to compete at reasonable rents for the renaming tenants.

I didn't ignore your comments & this isn't a debate, this is an opinion only, as is yours. Neither are fact.

Well, yes, but it helps if one's opinions on a practical, factual matter are grounded in some kind of logic. There is a balance between the Rental market and the general property sale market. In fact, London has some of the lowest rents in proportion to purchase prices in the South-east. In areas where purchase prices are lower, rents are proportionately much higher. (Typically London might yield 4% net, where Medway is more like 7% net). This is due (I think) to the market pricing-in potential capital growth.

Your proposed solution is simply not going to happen, anyway. The danger would be that your objective actually was achieved and property prices did drop. That would risk another financial crisis as the Banks would find that many properties were now in negative equity.

Or can I not express my own view of how this country needs to start dealing with the housing issue.? I am well placed to offer this opinion as I am currently living in the paradox.

I have no objection to anyone giving an opinion, but to be useful, it has to be grounded in the economic realities.

I don't know what the figures are, but I suspect that in property hot-spot areas, LL's are not a major issue. This is because a LL doesn't particularly want to be one of 200 potential buyers chasing after a property, and having the price bumped up by competitive bidding. Certainly not when the less fashionable area down the road is not only cheaper, has better rental yields, and has less competition.

AdrianC

quidsy wrote: »

But don't you also need to consider and address what appear to be massive fundamental flaws in that view?

Not really

There's really not a lot to say to that...

There are flaws in all arguments

Yes, there are. And ignoring them doesn't make them go away.

& not every decision will benefit all

But that doesn't mean all decisions are equally sensible. Some are far less-worse than others.

but I believe if there were more properties on the market, prices would drop.

A basic truism, assuming supply and demand remain in the same proportion.

The discussion was about buying, not renting.

If you're talking about making buying easier by removing rental properties from the market, how can you ignore the result on the rental market?

And until there are more properties available to buy the prices will remain high.

Correct. But your logic doesn't change perhaps the most important issue there - the ratio of people to properties.

If all we could ever own was our own & one rental, there would be a massive surge in available properties to buy & prices would drop.

There would also be a massive drop in available properties to rent. What would happen to prices there?

And what would happen to the economy in general if many of those landlords were suddenly placed in massive negative equity, even bankruptcy, because of the fall in the value of the properties compared to the value of their outstanding mortgages, as well as their inability to pay those mortgages since you've just cut off their income?

quidsy

The negative equity issues isn't my problem. If they weren't so greedy as to buy up all the reasonable priced properties maybe they wouldn't have negative equity. They certainly aren't complaining at the massive increase the lack of available purchase property has added to their value are they?


Like I said, your opinion, my opinion. I look at this purely from a buyers viewpoint. The economy is !!!!!!ed one way or another. At least deflate the over inflated property market & allow people the basic right to own their own home.