House Price Crash Discussion Thread

beingjdc

marcusrapid wrote: »

thanks for the reply - i think!?!? I was under the impression house price falls are regional - eg houses falling more in northern towns etc?

Falling fastest in London and the South-East according to the Land Registry. Still going up in the North-East, though I don't expect that to last, suspect it's a statistical fluke due to falling transaction volumes.

codger

A new era that won't last long:

http://barratthomes.co.uk/offers.aspx

The offer notice landed in my in-box albeit represented as a communication from RightMove -- well, no-one ever said EAs have to be objective.

Barratt's T&Cs make wunnerful reading: part exchange applies if what you have is valued "in the current climate" and what you're buying is to cost at least 30% more (NB: there seems to be no reference to "30% more in the current climate").

As to the 85% house, this seems to have been ushered in before British Gas clambered onto EDF's bandwagon earlier today and announced its own price hikes.

Tomorrow then, the 72.389% house. . . and still not a free car in prospect? Or even an introductory glass of wine????

Tst. Tst, Barratt. Must try harder.

van_persie

hotairmail wrote: »

Hot on the heals of the Nationwide House Price Index for July 2008, I've updated the homeowner wealth index analysis.

If you've borrowed or are planning to borrow to buy a property, you really need to look at this. The impact of house price falls on people's equity or 'homeowner wealth' is startling....

http://diaryofapropertybear.blogspot.com/2008/07/homeowner-wealth-index-july-2008.html

For instance for the typical buy to let portfolio with a loan to value of 57% according to ARLA, around half the equity will be wiped out in real terms over the next 12 months at the current rate of house price declines, according to the Nationwide Index.

Good work - it could, of course, be more severe still...

primerate

Hi,
If the internet was about in the crisis 1920's and late 1980's we would have had then all the scurolous speculation we see today but dont worry because house prices will go up again. This is because everything to do with investment is cyclic, thats how we make our money buy when its cheap and resell when the price goes up. Guess what we control those prices, simple if we want the prices to go up we take our properties of the market then all of a sudden the media will yell property shortage and happy days prices will again rise, but not until we have bought lots of cheap property.

primerate

One other thing please let those estate agents keep persuading you to reduce your asking prices, this wont help you sell as it makes the purchasers think they will get a better deal next month or the month after or the.... By doing so you will keep your local agent in work for perhaps another few weeks as his performance target now set by his area manager( to temporarily keep his job) is to reduce prices - not to sell houses!!!

matbe

rizla01 wrote: »

In a good market people are only too pleased to have their prop put on the market for the value that their house WILL be in 3 mths time hence a prop worth 250k being marketed for 260k is not unreasonable and is common practice.


In a bad market vendors will NOT accept that their prop MUST be marketed at the price the property will be worth in 3 Mths time hence the undervaluing that people are receiving but unwilling to accept.

Human nature really.

What doesn't work here is that while the EA can likely predict the value in a rising market he is unable to predict a change to the drops that people are experiencing.

Also when the market (as now) is bad EA's aren't earning money so they will try to get you to put your prop on the market for well under market value so that they can turn a sale and make their buck.

Unfortunately it is they who are pushing the 'Facts' that tell us all that property is in a continual downward spiral. It is NOT as bad as they make out.

Newspapers have to carry bad news as it is what sells - we ALL know that - hence the scaremongering.

Banks are hanging on to their funds. This is simply an over-reaction to the Northern Rock fiasco. They are just being over cautious.

All of this has caused developers to stop building temporarily.

The drops will cease within the next six months and come the beginning of 2009, properties will start to sell again and not rise anymore for a year or two and then very cautiously.

Remember that Bricks will STILL cost 20p each and sand will STILL cost £30 a ton and all of the materials will cost the same (or more) and you cant build a house and sell it for less that it cost to build including the labour charge and the required profit (30%) to keep the builders afloat.

Greedy tradesmen such as Plasterers (£200 per day) and sparks, plumbers & chippies will HAVE to lower their charges so as to enable houses to be built and sold at realistic prices, enabling the developer to sell competetively priced homes, which will spur the property market on again.

Tradesmen and EA's are the enemy here.

In my view if you would like to get on the property ladder I wouldn't bank on much further decrease. Cash in NOW on peoples fear and offer £20- £30k under the asking in the hope of grabbing a deal. If you don't do it soon, you may well miss the boat.

Now continue the debate.:(

You simpleton

The price of new houses is not governed by the wages of tradesmen.

Not many trademen will be earning £200 per day on a site

This is newspaper rubbish.

The developers Barrats Wimpeys etc are the ones making all the money and the people who sell land.

shelovestobuystuff

posted by rizla01

Remember that Bricks will STILL cost 20p each and sand will STILL cost £30 a ton and all of the materials will cost the same (or more) and you cant build a house and sell it for less that it cost to build including the labour charge and the required profit (30%) to keep the builders afloat.


Materials costs are going up.Most builders use steel in the basic frames and foundations to which the wooden kits are secured.Steel is already the most expensive part of the job with concrete a swift second.The price of steel has gone up at least 50% in the last few months and is expected to double over the next 3.The material costs of concrete have not altered much but the cost of getting it and everything else on site has gone up considerably due to rising fuel prices.The builders are not building because they are not selling off plan,people are too scared to buy now or else they cant get a mortage because the banks are being overly cautious.

shelovestobuystuff

chucky wrote: »

good post but these companies buy their materials forward due to the volume that they use and probably have an X amount of steel coming there way for the next 3, 6 or even 12 months at a fixed price negotiated previously - after this period the prices may have gone up so a new price will then need to be negotiated.

they buy wholesale and probably cut out all middle men and therefore getting it cheaper anyway. the same will go for concrete and other materials they may use that can be bulk bought and bought and priced in advance.

in this case only the new houses beeing built will be more expensive to build not the ones that have already been built - they were built at the old raw material costs.

You would think they would have the common sense to bulk buy their steel in advance when they know the prices are going up so much wouldn,t you but I know for a fact that one of the biggest companies in Scotland have not done that,despite having acres of unused storage units available on their own land.I think they need a new head buyer.
Concrete is usually ordered on the day or a couple of days before it is needed at the earliest.They pay the going rate on the day of delivery minus whatever company discount they have pre-arranged for quantity no matter how early they order.
The houses are not selling and costs for existing build have gone up reducing their profits.They,the one company I know enough about to speak of,are clawing back some cash by banning overtime,freezing payrises and laying off anyone who doesnt do the work of 2 men.Lazy crews are dismissed like a shot as there are now plenty of workers to choose from and only the best are now guaranteed continued work.Middle management and penpushers have been let go too.They probably sacked the guy who would have saved them millions by bulk buying the steel at a low price.

rizla01

Here's another aside.

Has this REALLY happened?

Quote from last year!

Property market experts are noticing a new trend in what is influencing the rise in house prices UK towns, which they are terming the "Potter-effect".

The effect was first seen in Alnwick, which following its starring role as the setting for Harry Potter’s adventures in The Philosopher's Stone, sent the price of homes in the small Northumberland town rising and boosted the local economy.

Alnwick house prices rose 51 per cent in 2001, the year of the film’s release, with a record number of properties changing hands – a total of 226.

However, housing market experts are predicting a similar effect from another Potter – Beatrix – particularly in Ambleside, Cumbria, where the famous author and illustrator lived.

The film of Beatrix Potter's life - Miss Potter - is tipped to give the area an immediate boost of around £5 million, economists predict, with tourists from all over the world visiting the area.

"I would expect to see demand for homes in Ambleside escalate over the next year, as investors in particular look to capitalise on increased tourism in the area," commented David Bexon , managing director of Email4Property.

"In fact, I would expect to see the number of people looking to buy second homes at least treble, with buyers drawn in by the picturesque countryside and the excellent investment opportunities.

"However, the smart investor will have already secured a property here, beating the crowds and placing themselves in an excellent position to profit from the imminent influx of tourists, before demand reaches a peak and inflated prices push properties out of their reach."

Chris2685

Does anyone think that house prices will be lower in 2015 than they are now?