House Prices

[LGBirmingham]

House prices still seem to be rising? Does anyone else think this?

nope, going down everywhere. even with high interest rates making it unaffordable, most people are also now waiting for the crash even if it will take a year or two. no one wants to be roped into an over-priced home right now only to suffer later.

yep and they also say:
“While activity is likely to remain subdued in the near term, healthy rates of nominal income growth, together with modestly lower house prices, should help to improve housing affordability over time, especially if mortgage rates moderate once Bank Rate peaks."
note
"modestly lower high prices"
I wouldn't expect them to fake figures - their figures are I believe drawn from mortgages that go through on actual sold prices.

Yep - we bought our London flat in 2001 for £150k. Worth £500k now. I don’t really think it is going to lose 70% of its value, do you? Even in the event of a deep, deep recession.

Definitely not - can’t get anything in London for 150k apart from a garage

The thing is as I older we bought in 2004 and at that time I clearly remember being told a property prices crash was coming others were waiting for and we were foolish to buy. Whilst other factors were at play that was based on affordability. There was a correction in a few years amd although we needed to move cities at that time we rented out once it was clear we couldn't sell for what we bought for, it was worth a few thousand less. When there is a crash mortgage companies close lending completely, at that time I managed to port a mortgage. Throughout property prices have increased worryingly.

Sorry about the typos not good at speed typing

Yes, that will be the best stat they could post, the reality will be a lot better, cheaper housing is a net good for society and ordinary working people.

They said that in Japan in the late 80s before some property lost 90% of its perceived value, and if they reverse the government intervention that has gone on since then in their bond market (if you could really call it a "market") that would have serious implications for higher mortgage rates here.

We've dropped our price by 10% since going on the market. Still can't sell it.

"Forecasters" cant predict the effects from China/Russia/Japan, if they could they wouldnt be forecasters they would be Billionaire investors hanging out with Warren Buffet, no one really knows but a good starting point I think is to accept that we are in basically the opposite position from 2008 in regard to global politics and bond market risk.
As I said the "10 Year Yield" predicts your mortgage rate not some analyst paid by a Wall St. bank that relies on the little punter feeling good about their house price and borrowing lots to spend in the economy so the bank can skim off the top.

according to the nationwide data, flats are seeing the smallest declines in sales. apparently many buyers are opting for smaller properties.

What people constantly miss on these forums is they only take in a situation in consideration of their own circumstances and affordability.

Of course you personally aren't going to be anywhere near negative equity. But in the event of a 40% drop in places like the South and South East (which is reversion of affordability to mean) will cause hundreds thousands/millions of other to be in negative equity.

That has a knock on effect on the economy as a whole, and makes selling property and getting the required finance to buy practically impossible. Recessions, job losses, restriction of credit, creates forced sellers hence a crash.

Yep, I was specifically responding to somebody claiming house prices in London would fall back to 2001 prices over the next year or two. Which they clearly won’t.

I don’t know enough about southern house prices to know if a 40% drop is a realistic prospect or not - it sounds a lot to me!

I totally agree with him. Unfortunately, it looks set to get much worse.

Question.

In a sellers market it was common for multiple potential buyers to have to compete in a final offers process.

In the buyers market, can this be turned on its head? For example, I find 3 homes I'd be happy to buy and openly invite the sellers to compete on price.

Never. You're either interested in buying my home or not. It will never happen.

It’s stagnating here in my NW town. Lots on the market and being stuck for a while not moving etc

And that's ok, but it is the logical version in a buyers market.

The attraction is that I don't need to insult people with my low offers. I leave it to the vendors to tell me their best price. And one answer is the price is the price or FO.

Theoretically someone could try this as there's nothing to stop them.

In reality, it's unlikely many buyers looking for a home would have 3 properties on the go that they like equally well. However, during other "buyers markets" I have experienced, I have heard of investors offering low prices on 2 or 3 properties simultaneously. Not really caring which one they get, just being determined to get a bargain.

Yeah. That would be the normal approach for a bargain-hunter and @mercurial123 wouldn't know I was doing that. Having just bought my last property on a final offers basis, this alternative suddenly struck me.

I think that goodwill is really important in a transaction and that approach would be unnecessarily destructive. You can put in as many low offers as you like at the same time though I agree with that.

I suggested that it would be done overtly as opposed to the traditional covert approach, so why do you feel it would be destructive?

Yes, I agree there is no point being unnecessarily combative. You can put in multiple low offers if your main priority is getting a bargain and don't feel any emotion about the transaction.

But to upset the Sellers too much by asking them to compete with one another on price could have negative consequences.... I'm thinking of the horror stories you hear about people sewing prawns into curtains or hiding them under floorboards for example to slowly rot. Or doing damage to the property on their way out if they have a strong reason to resent their buyers. Like with repossession properties in the 90s where people leaving would rip radiators off the walls etc.

Because it so explicitly pits the owners against each other, having been on both sides of the fence it is more personal as a seller usually - its either your home which people are walking around or maybe your elderly relatives home you have childhood memories of. Could be seen as an attempt to humiliate. There is a reason the covert approach is taken.

I see what you are saying. I'm not very emotional about property. It only becomes a home when my family are there. That's why I could see 4 or 5 properties with no attachment to them other than practical.

It just feels odd that being secretive is seen as better than being open and honest. But I agree that people would find this method unusual. Thanks.