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Estate agent fees

Paying over valuation has in my experience always been the situation in the Edinburgh market well for the last 30 years anyway. In addition, the costs of repairs or indeed refurbishment is almost always ignored by the (successfull) buyer.

When I first moved to Scotland, I had significant negative equity which at the time, was so prevalent, the Mortgage Lenders in England were dealing with it by rolling the loss into the next property and effectively ignoring the deficit in the mortgage calculation.

The same lender was not allowed to do the same in Scotland as officially Scotland had no negitive equity. The solution: have a 10 year low interest home improvement loan for refurbishment all parties knew would never happen!
 
‘Houses have never been less affordable’, according to Halifax. That’s with zero interest rates and more inflation on the way. We need a proper recession to unwind this nonsense or it’s bail out after bail out and print to infinity. Well done successive govts, staggering economic mismanagement.

https://www.bbc.co.uk/news/business-59560878
 
And I have just been reading about the German housing market - which is also going gangbusters. Some other EU markets are also hot.

But - those of us old enough have seen these cycles before. And they will come again.
 
Ponty said:
‘Houses have never been less affordable’, according to Halifax. That’s with zero interest rates and more inflation on the way. We need a proper recession to unwind this nonsense or it’s bail out after bail out and print to infinity. Well done successive govts, staggering economic mismanagement.

https://www.bbc.co.uk/news/business-59560878
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The answer to any problem is misery and suffering for poor people and enhanced wealth for rich people © Neoliberalism since it started.
 
Ponty said:
We need a proper recession to unwind this nonsense or it’s bail out after bail out and print to infinity. Well done successive govts, staggering economic mismanagement.
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Not sure I'd go that far, but I do agree with you that this market needs to correct itself. Hopefully by gentle market decline effected by rising int. rates, unaffordability and a change in the 'property is a one way bet' mentality which has prevailed for decades. It needs to be something stronger than the underpinning aspect of the lack of supply.

There again, if you can't buy, you need to rent. It all involves property availability through the vagaries of supply and demand regardless. This latest wheeze by the BoE to get rid of the eligibility criteria for mortgages beggars belief in the current climate of rising int. rates. Doubt we'll have a Northern Rock scenario again but why tempt fate?

russel said:
The answer to any problem is misery and suffering for poor people and enhanced wealth for rich people © Neoliberalism since it started.
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These pearls of wisdom are lost on me; partly by relevance and partly by comprehension of syntax, I'm afraid. o_O
 
russel said:
The answer to any problem is misery and suffering for poor people and enhanced wealth for rich people © Neoliberalism since it started.
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The issue I have with the current situation is that there is no consequence for people biting off more than they can chew, to the detriment of those without assets. ZIRP and forbearance have removed downside financial risk for many. Unless we have a functioning market, which allows downturns, this won’t change. The best thing the govt can do to ‘help’ people buy a house is to stop meddling. Of course, they’ll do everything but, all because high house prices keep people buying tat they don’t need and win votes and elections.
 
Mike Reed said:
This latest wheeze by the BoE to get rid of the eligibility criteria for mortgages beggars belief in the current climate of rising int. rates. Doubt we'll have a Northern Rock scenario again but why tempt fate?
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It’s crazy. I just don’t think they’ll increase rates sufficiently. They can’t, there’s too much debt, personal, corporate and govt. We’re not allowed a recession, heaven forbid. Inflation is the only course remaining.
 
Ponty said:
The issue I have with the current situation is that there is no consequence for people biting off more than they can chew, to the detriment of those without assets. ZIRP and forbearance have removed downside financial risk for many. Unless we have a functioning market, which allows downturns, this won’t change. The best thing the govt can do to ‘help’ people buy a house is to stop meddling. Of course, they’ll do everything but, all because high house prices keep people buying tat they don’t need and win votes and elections.
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Are people borrowing more than they can afford or are banks lending them more than they can afford?, it takes two to tango.
 
Ponty said:
Inflation is the only course remaining.
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Good for government debt as well as other debts, unless it's inflation linked. Bloody useless for trying to get some kind of return from safe cash investments though. Sod's Law, but when I needed less inflation and correspondingly lower int. rates during my 'formative' years of the 70s to the nineties, this was conspicuous by its absence, with anything from 5 to 15+ % throughout. Now that these retrospectively very sensible (well, around 5%) rates are pie in the sky, it's a losing ticket for cash.

I take your points and theoretically agree with them, but must retain a little optimism that the BoE can't simply let inflation get out of hand without acting, if only to point the way. 0.25% is, after all, historically unprecedented. There must be a transitory aspect to the current inflation surge, but I doubt it's a large part and anyway, it'll need a fair old time to analyse any genuine trends.
 
russel said:
Are people borrowing more than they can afford or are banks lending them more than they can afford?, it takes two to tango.
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‘Afford’ is an arbitrary term. Over a 25 year (or even 35+) contract to repay, anything can happen. Maxing out debt in a zero interest rate environment, without resilience and contingency, is a very dangerous strategy IMHO. The problem is collectively, people, companies and govts are too big to fail. And so it will continue.
 
Ponty said:
‘Afford’ is an arbitrary term. Over a 25 year (or even 35+) contract to repay, anything can happen. Maxing out debt in a zero interest rate environment, without resilience and contingency, is a very dangerous strategy IMHO. The problem is collectively, people, companies and govts are too big to fail. And so it will continue.
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I think Russel's point is that the banks are just as guilty, perhaps more so, than the borrowers, since the banks are in a better position to estimate risk. I agree - I think making it easier for borrowers to walk away from negative equity might focus lenders' minds.

But I agree that the overall situation is a total mess, with no easy way out. Council houses should not have been sold, and more home building was needed, along with spreading economic development around the country, rather than just London and the SE. Foreign laundering, er I mean purchasing should have been severely restricted also.
 
sean99 said:
I think Russel's point is that the banks are just as guilty, perhaps more so, than the borrowers, since the banks are in a better position to estimate risk.
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Not sure if 'guilty' is the correct adjective here. Banks (et al) are in the business of making money and would soon founder if risk is wildly miscalculated, as indeed it has been in the past (2008). It's not just banks but these companies selling goods on a new and truer version of the 'never never'. Mortgages are, after all, secured on equity but these unsecured loans, incl. overdrafts and credit card accumulations, 0% balance transfers to keep the wolf at bay, etc. simply open more doors to profligacy and lack of budgetary (or any?) sense.

I am totally convinced, having been at the chalk face for many decades, that little or no financial instruction is/was given in schools. It's a vast subject, now incorporating the internet and is much more than being able to calculate simple interest and arithmetic. I realise that the teachers themselves are probably inadequately versed in even simple budgetary knowledge but why not create an addendum to maths, e.g., to cover those formative years often leading up to suddenly having large sums 3 times a year to spread out for the college term?

Unsecured debt is, when all's said and done, a personal thing for one to avoid or manage; you really can't blame temptation. What concerns me as I get older, is the relatively recent phenomenon of fraud involving banking. Only some of this is due to gullibility but regardless, there should be industry-wide checks (time checks even). Some of the scam calls I've had shouldn't have convinced anyone with grey matter, but still, they nail a victim.

Re, council houses, I'm not sure whether this continuing scheme is that prevalent or as inviting. The original concept, and one which cannot be disputed, is that an owner-occupier takes a lot more care than a tenant. I've seen large swathes of council areas transformed in appearance and social acceptance; leading to increased value, of course. Besides, one residence, one set of occupants, regardless of ownership.

I think the idea was to plough the funds back into new building, therefore increasing the stock, as it were. but this never quite worked out as planned.
 
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And of course when it all goes pear-shaped, the banks are judged ‘too big to fail’ and are bailed out by the government, so there’s no incentive for them to be less profligate in future.
 
sean99 said:
I think Russel's point is that the banks are just as guilty, perhaps more so, than the borrowers, since the banks are in a better position to estimate risk. I agree - I think making it easier for borrowers to walk away from negative equity might focus lenders' minds.

But I agree that the overall situation is a total mess, with no easy way out. Council houses should not have been sold, and more home building was needed, along with spreading economic development around the country, rather than just London and the SE. Foreign laundering, er I mean purchasing should have been severely restricted also.
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When it comes to secured lending, the bank is only really concerned with exposure and if it goes wrong, will they get their money bank. An area which terrifies me is the likes of klarna etc. who are little more than drug pushers IMHO. So much of our lives is now financialised, with banks sitting behind it all. The number of people who are 2 or 3 missed paycheques from disaster yet have all new stuff, cars etc on tick is probably greater than we think.
 
Joe Hutch said:
And of course when it all goes pear-shaped, the banks are judged ‘too big to fail’ and are bailed out by the government, so there’s no incentive for them to be less profligate in future.
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Well, up to a point, but imagine the consequences for us as individuals and the economy in general if high street banks did go bust and were allowed to fail with account holders losing everything. I've not done the sums :) but it may be cheaper in the long term just to keep them afloat and regulate them more rigidly.
 
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Well quite. I was just countering Mike’s suggestion that banks would ‘soon flounder’ if they miscalculated risks.
 
Joe Hutch said:
And of course when it all goes pear-shaped, the banks are judged ‘too big to fail’ and are bailed out by the government, so there’s no incentive for them to be less profligate in future.
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There was certainly too much deregulation leading to the GFC. I’d have let the Scottish one go. Protect depositors, sell decent assets to other banks and flush the rest of it down the loo.
 
Mike Reed said:
Not sure if 'guilty' is the correct adjective here. Banks (et al) are in the business of making money and would soon flounder if risk is wildly miscalculated, as indeed it has been in the past (2008).
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Except the banks don't flounder / suffer, and the senior management of the banks don't suffer pay & stock option clawbacks. They ride into the sunset with their millions while the taxpayer picks up the mess.
 
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