House Price Crash Discussion Thread

Reactor_2

Catapa wrote: »

Landlords like those you are referring to are partly to blame for the high cost of rented accomodation in the UK.

I respectfully disagree. High cost or high prices are determined by demand; if people aren't willing to pay such a high price, prices do come down. As an example, just because I offer my house on the market at £1 million, doesn't mean it will sell for that. The Rightmove House Index is based on offer prices rather than dealt and that is why it's not highly regarded.

tyler80

the price your home is worth is the price someone else is willing to pay for it

I see this phrase come up a lot, but is it really as simple as that? I've been to a few viewings recently, where the property was sold subject to contract but the buyer was unable to gain a mortgage on the house due to the difference between the accepted price and the mortgage valuation.

woodsey2002

tyler80 wrote: »

I see this phrase come up a lot, but is it really as simple as that? I've been to a few viewings recently, where the property was sold subject to contract but the buyer was unable to gain a mortgage on the house due to the difference between the accepted price and the mortgage valuation.

I've been told by a couple of EA's in the last few months that low valuations are the reason why house sales are falling through and coming back on the market so it seems that houses are not worth what someone is willing to pay for them but are actually worth what the banks are willing to lend people to pay for them..

Sadly the deluded EA's are still valuing too high in order to get people to list with them and the cycle continues..a few months ago a friend of ours had his house valued and with one particular agent it was valued at 50K over what any other agent had valued at. The agent told him specifically that their mission was to keep values in my particular search area at peak prices.. My mind boggles at this stupidity.
A new listing came on today with this agent and whilst on first impressions the price didn't seem too ridiculous, a quick look at the floor plan suggests they're now being completely untruthful about exactly what they're selling.. The house is advertised as 4 bedrooms, 2 bathrooms and 3 reception rooms when it fact it's got a kitchen, dining room, lounge and 3 bedrooms.. Seems they're counting the kitchen as a reception room and the dining room is also counted as a reception room and a bedroom. All this can be yours for 599K:eek:

harryhound

As the banks/building societies are probably putting up the majority of the money - certainly for "starter" homes - and that money is other people's savings (geared up?!) their attitude seems perfectly reasonable.

It has always been that the availability of mortgage money has decided house prices. (New production does not get much of a look in!!)

Demand = Need plus capital.

caz1978_2

harryhound wrote: »

As the banks/building societies are probably putting up the majority of the money - certainly for "starter" homes - and that money is other people's savings (geared up?!) their attitude seems perfectly reasonable.

It has always been that the availability of mortgage money has decided house prices. (New production does not get much of a look in!!)

Demand = Need plus capital.

Is that the same money that they are using to give themselves a big fat bonus?? lol

They were saying on the radio this morning that because banks aren't lending much there aren't as many first time buyers and its making the housing market slow. I think most people have realised this has been going on for ages now. I think though that if the banks won't lend on a house that is over valued isn't this a good thing really as it will bring the prices down a bit (but not too much to put some people in negative equity). For some reason the estate agents round my way would have you believe that house prices are rising when they clearly aren't - they are around the same as they were about 5 years ago if you look at the previous sold prices.

Reactor_2

woodsey2002 wrote: »

I've been told by a couple of EA's in the last few months that low valuations are the reason why house sales are falling through and coming back on the market so it seems that houses are not worth what someone is willing to pay for them but are actually worth what the banks are willing to lend people to pay for them..

Sadly the deluded EA's are still valuing too high in order to get people to list with them and the cycle continues..a few months ago a friend of ours had his house valued and with one particular agent it was valued at 50K over what any other agent had valued at. The agent told him specifically that their mission was to keep values in my particular search area at peak prices.. My mind boggles at this stupidity.
A new listing came on today with this agent and whilst on first impressions the price didn't seem too ridiculous, a quick look at the floor plan suggests they're now being completely untruthful about exactly what they're selling.. The house is advertised as 4 bedrooms, 2 bathrooms and 3 reception rooms when it fact it's got a kitchen, dining room, lounge and 3 bedrooms.. Seems they're counting the kitchen as a reception room and the dining room is also counted as a reception room and a bedroom. All this can be yours for 599K:eek:

Apologies, but I made an assumption the buyer is also able to pay for the transaction, otherwise it's just hypothetical, so in this scenario the seller will have to lower their price to get the deal done.

I'm surprised EA's are over-valuing properties as it means they won't get paid, but then again I remembered this phenomenon when I was watching some of these property programmes on TV during the boom, where the main problem was the EA did not want to upset the seller by giving them bad news about their property that was making it difficult to sell.

I guess it is too much hard work for the EA as there will be other easier and more profitable deals.

There needs to be a booming economy and another generation of 'foolish' FTB's to push house prices up as every generation is overly confident they can do it better.

Or banks start doing 100-year 3-generation mortgages like they do in Japan, which will push house prices up as they will be more affordable, but there is a 'dirty' side effect of doing this, which I will leave for the readers to work out.

harryhound

There are a lot of families in the UK that cannot hang to together for one generation let alone three. Mind you it does protect the property from local authority care home fees.

Jimmy_31

tyler80 wrote: »

I see this phrase come up a lot, but is it really as simple as that? I've been to a few viewings recently, where the property was sold subject to contract but the buyer was unable to gain a mortgage on the house due to the difference between the accepted price and the mortgage valuation.

Its as simple as that for me, got most of my deposit in place and now saving for fees and some emergency money even if i had every penny needed all set in place today i still wouldnt be buying a home because im not willing to over pay for it.

It may sound harsh but its of no consequence to me what situation the seller is in ie they want such and such price because thats just what they want or they need such and such a price to be able to move on, its my hard earned wage that i will be spending so when i start making offers its of no interest to me what boom price the seller paid for their home because if they wont or cant sell me their home then ill move onto the next house and make an offer on that one and so on.

shelovestobuystuff

caz1978 wrote: »

Not sure if this has been mentioned before as the thread is so long....

We took 9 months to sell our house due to it being overpriced in the first place and I have been watching the market in our area very closely for the last year. As someone in my position I can tell you exactly what OUR problem is - OVERPRICING. Its really hard to spot them doing this as it takes ages to find out from land registry what houses have actually been going for. Once a property sale has been completed the agent should tell you what it went for but most have been being really cagey about this.

All the agents in our area are overpricing, meaning that desperate people will eventually just drop the price sooner rather than later but others are refusing to budge as they think their house is worth more than it is. Things are taking even longer to sell because the vendors, like ourselves, take a few months to come to the eventual conclusion that their house has been overpriced. In some cases the houses have been fetching near the asking price but this is all due to luck and finding someone who really wants to buy your house. I am just talking about in my particular area as not really been paying much attention to the rest of the country but has any one else been having the same problem as me?? I just think that if the agents priced stuff realisticly I could go and make an offer on a property tomorrow instead of having to wait ages for the vendor to drop the price.

Others may be quick to disagree with me but like I said I am talking about our area and dont claim to be an expert lol

Exactly the same situation in my area,west coast of scotland.
Also,we used to see most properties on at offers over £x but now its offers around £x which of course means folk will offer under that,or fixed price,lots of properties on fixed price but still selling at under that.Selling times I have noticed is around 6-9 months,so pretty slow and some sales obviously falling through and properties going back on the market a few months after selling.

J_i_m

I'm probably in somewhat of a minority here, though I don't know this, (this thread is far too long to read through) yet I am willing house prices to drop significantly over the next few years.

I am not a home owner and have never been. I am currently renting a two bedroom flat at £650 a month (ouch!) and am aware that if I had a mortgage I would be be saving maybe £200+ a month on that.

My plan is to move back in with my parents come the end of my current tenancy contract which expires in August to enable me to start saving for a deposit to put down on a mortgage.

I'd be looking for a house with upto 2 bedrooms (even though I'd likely be a single occupant) and a garage connected to the property and preferably not across the road in a block. It seems that the going rate for what I looking for in the area I would prefer are anything from £130'000 to £180'000.

One of these part buy part rent schemes are a definite possibility, though at this stage I want to keep my options open and not discount 100% ownership though obviously this would increase my length of time back under my parents roof by virtue of needing to build up a greater deposit.

To get a mortgage of £180'000 I imagine I'd need a deposit of around £40'000 maybe more, and on my income that'd take a minimum of four years of saving everything and spending practically nothing, which I'd be unlikely to achieve.

Which is why a part buy, part rent scheme makes some deal of sense, though obviously if prices fall significantly and I'm able to build a deposit of around £20'000 to secure a mortgage for a property of around 130'000 that would open up my options nicely.

Unfortunately... I have no idea how likely prices are to fall, because there seems to be plenty of conflicting advice and opinion in the press, and even more unfortunately for me my super duper saving plan is rather dependant on my income not being hit too savagely in the rather inevitable event of Mr Cameron having his wicked way with the NHS.

Actually, if I had my way I'd get the NHS to employ Martin Lewis as a savings consultant, because if there is one thing thing the NHS is good at, it's wasting money, usually in stupid areas and inevitably the people who suffer are the general staff and of-course the patients.