offer or not to offer?

nelly_2

Ive an axe to grind, its annoying that houses have doubled in price over 5 years for no good reason. I simply cannot bring myself to pay whats being asked, having said that i was in Rome last week and Im too New york on monday holidays are much more fun than saving for a deposit. I reckon I might buy in about 3/5 years when things are back to normal.

lush_walrus

nelly wrote:

Ive an axe to grind, its annoying that houses have doubled in price over 5 years for no good reason. I simply cannot bring myself to pay whats being asked, having said that i was in Rome last week and Im too New york on monday holidays are much more fun than saving for a deposit. I reckon I might buy in about 3/5 years when things are back to normal.

I really do hope you get what you want, I can totally understand how difficult situations are for FTBs, but beleive it or not there are plenty of sales still going on and ultimately now the BofE has control of when and if to change interest rates, we are in a very different climate to that we have ever experienced since owning became vogue in the early 60s.

Fact of the matter is, there is still no reason for prices to reduce back down to a sensible level, people can still afford to buy and still are buying. While the banks make funds available someone somewhere will pay the money. And ultimately there is still room to move, look at Japan price inflations have left Japan in a state where 100 year mortgages are an option. With our 25 year mortgages, one move from the bank to increase the lending to 50 years, and bang a whole lot of people can pay even more.

Im sure this is not what you want to hear, but if I were you I would consider it, the banks sure as hell are!.

odorus

nelly wrote:

Ive an axe to grind, its annoying that houses have doubled in price over 5 years for no good reason. I simply cannot bring myself to pay whats being asked, having said that i was in Rome last week and Im too New york on monday holidays are much more fun than saving for a deposit. I reckon I might buy in about 3/5 years when things are back to normal.

House prices are unlikely to fall to what you consider normal levels as there are still too few houses for the population. The governments plan to build affordable housing at 60k/flat has now been left with a big ? over it. They're now saying the prices can't be fixed at the moment, most people in the industry reckon 60k is too low.

If you are looking for a home to buy look closely at the photos of the property. They will give you a big clue as to how long the place has been on the market. In my case the photo showed the t.v, which had the world cup rugby on it, this was sometime in Sept/Oct. I was viewing in January. When you are viewing properties tell the EA about the properties you have seen with the opposition, they will soon tell you if they had that property on their books and for how long. I did that when I was looking for a BTL and saved 7k over and above the original asking price. Ask how desperate the vendors are to sell. All these things will give you bargaining power. There are still vendors out there who think their place is worth unrealistic amounts and if they won't drop the price walk away. If you really like the place keep an eye on it and ask the EA at regular intervals if there has been any worth while interest in it. A flat I had viewed was over priced at 112k, a couple of months later the vendors woke up and reduced it to 99k. If I were still interested I would've gone in at 90k.

Mean Machine's point about being disspationate is a good one, as you will be more business like about your offer and probably get a better deal as a result. The problem is it's easy to let your emotions lead you when making a big decision like buying a house. It was emotion that led me to buy my current house, the moment I walked in and saw it had a toilet on every level I had to have it!

wibble68_2

lush_walrus wrote:

Fact of the matter is, there is still no reason for prices to reduce back down to a sensible level.

If this is correct then somebody should tell all the universities to scrap the text books on economics as in your opinion the economy is no longer cyclical.

They should also write a book on the birth of the 'soft landing'.

meanmachine_2

Lush, I can only assume you've not been to Japan since about 1992.

In the last ten years or so property prices there have fallen through the floor.

I'm staggered that, as an EA, you don't know this.

And as for this so-called property shortage, how come there are dozens of rentable houses all around me that no one is living in? Doesn't sound like there's a shortage to me.

Besides, there is more than enough housing to go round. It's people who use it to speculate, hoovering up dozens of the things, that have caused this mother of all bubbles.

I agree that affordability is the issue here, which is why the market is so super sensitive to rate changes. If the entire market can seize up at 4.75% every BTL investor and Estate Agent in the land will have to pray to the almighty that there is no inflationary build up in the system, such as, oh I don't know, oil price hikes, Chinese revaluation, US rate hikes.... Oops.

But you're right. Provided rates don't have to rise for any reason, ever again, then there is unlikely to be a crash.

But how likely is that?

Ian_W

Lush Walrus wrote: Fact of the matter is, there is still no reason for prices to reduce back down to a sensible level, people can still afford to buy and still are buying.

I'm certainly no doomster but I'm very surprised at that. Perhaps it shows that the housing market is very localised throughout the country.

Everyone is saying how the London market has been stagnant for a good while. Here in the North West there are certainly far more properties for sale, taking much longer to sell than say 12 months ago, and far more with prices reduced.

I'm also interested in the property market in Cornwall where prices were booming last year due to second home buyers, who, of course, were using released equity & remortgages to buy holiday homes. This year in contrast, even in popular resort areas, more properties are taking far longer to sell and price reductions are starting to take place. My impression was that because there were so many people with so much money wanting to buy a HH that vendors and some EA's were taking the p*ss by thinking up a figure and adding 25%, knowing they'd be fighting them off with a stick!! Whereas now the tap has well and truely stopped and it's a case of more properties chasing fewer buyers bringing keener pricing as the order of the day.

So my overall impression is that the market is moving, slowly - not crashing, back towards more sensible prices because it had run too quickly ahead of affordability. Buyer rather than sellers market. Do take your point about the Banks, but I never understood the "mystique" of 25 yrs when most peoples work-life expectancy is nearly double that.

Anyway we're now so far "off thread" I'll leave it there!!

Save to comment on what Wibble said whilst I was typing this:

If this is correct then somebody should tell all the universities to scrap the text books on economics as in your opinion the economy is no longer cyclical.

Bloody good idea mate! If it is such an exact science why are they always disagreeing? With so many opinions, some are bound to be right but nobody really knows which until somethings happened. Most of the time they tell us what's happened [which we already knew] and why it's happened [which we don't understand].

And MEANMACHINE I don't know the first thing about Japan except they deserved what they got in the War and eat raw fish. But if house prices are so LOW [and it must be true, it's been said so many times on these threads] isn't now the time to BUY? Why no Klondyke like rush of FTB's & BTL's [even UK ones] gobbling up these bargains? Prey do tell?

nelly_2

I dont know that much about japan but I do know there economy has stagnated after their 80's boom, and also the population is ageing massively, like ours but there in front by a few years.

look at the graph right at the bottom of the page http://news.bbc.co.uk/1/hi/world/asia-pacific/3708098.stm

Because older people have bought and settled and never want to move again and far less ftb's then maybe thats what happened in japan

meanmachine_2

I'm really no expert on Japanese economics.

I think the continuing flatline in the property market there is now largely sentiment driven. No one has seen capital gains for so long that no one now expects to make any easy money. Property has lost its aspirational sheen.

It's much like UK property after the early 90s crash. It was a no-go area.

And I suspect we're heading back in that direction now. If any old Joe Bloggs can no longer boast at dinner parties about the quick buck they've made from property, it'll soon lose its glamour. And once property is no longer glamorous, you quickly realise that it's all just a bunch of bricks and a big debt.

Oh, and a place to live.

lush_walrus

wibble68 wrote:

If this is correct then somebody should tell all the universities to scrap the text books on economics as in your opinion the economy is no longer cyclical.

They should also write a book on the birth of the 'soft landing'.

As an economist (or if you arent, then at least someone who understands the teachings of economics), Im sure you will understand that there is NEVER just one economic theory on ANYTHING that we do, but Im sure I dont need to teach you this Im sure your comment was purely to provoke a dialogue!!

lush_walrus

meanmachine wrote:

Lush, I can only assume you've not been to Japan since about 1992.

In the last ten years or so property prices there have fallen through the floor.

I'm staggered that, as an EA, you don't know this.

And as for this so-called property shortage, how come there are dozens of rentable houses all around me that no one is living in? Doesn't sound like there's a shortage to me.

Besides, there is more than enough housing to go round. It's people who use it to speculate, hoovering up dozens of the things, that have caused this mother of all bubbles.

I agree that affordability is the issue here, which is why the market is so super sensitive to rate changes. If the entire market can seize up at 4.75% every BTL investor and Estate Agent in the land will have to pray to the almighty that there is no inflationary build up in the system, such as, oh I don't know, oil price hikes, Chinese revaluation, US rate hikes.... Oops.

But you're right. Provided rates don't have to rise for any reason, ever again, then there is unlikely to be a crash.

But how likely is that?

Meanmachine, please feel free to check Japans economy, but I think you get my point , 100 year mortgages exist in other parts of the world (I hope that this part you can acknowledge) therefore, it could happen here should banks release such opportunities.

And I think you will find that unfortunately the Japanese are STILL paying 100 year mortgages!

As I have mentioned on previous threads, my career is as an arhitect, but I worked PT in an EA to fund my degree, when my year out came after degree, I opened my own agency, which grew to three. All of which are managed by my staff and my career is still as an architect. But what I am able to comment on is the data which my guys provide on a 2 weekly basis, which not to bore you includes price changes and sales figures. Im sure that the guys who work for me are working very hard, but as a rule one agency experiences the same as the next in regard to increases and decreases in price and sales. So Im sure I am typical of my competitors in what I am experiencing as current trends.