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Housing market

andyoz said:
Yep, it's what I've been harping on about on this forum for ages...ZIRP basically results in people becoming less afraid of the principal amount they are borrowing. Classic bait and switch by the financial system.

It's the same with PCP...most buyers don't actually know the price of the car they have just signed up for....
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I’m on a few lease company mailing lists. The special deal yesterday was a Ford Kuga. £4,143 initial rental then £460 a month for 4 years, 5K miles a year. Folk on current cheap leases are in for one hell of a shock. The bloody thing is even out of warranty for a year!
 
eternumviti said:
Selling. Inbetween exchange of contracts and completion....
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They can pull out after exchange. I've been there twice, once as buyer and once as seller. When I was buyer and the seller pulled out (in 198?) I was told that the best thing I could do was negotiate with the seller a settlement which covered my fees, deposit and the stamp duty that would have been payed (there was a stamp duty holiday at the time, so the argument was that by the time I had found a new house to buy, the holiday would be over.) When I was a seller and the buyer just didn't complete (around 2015) I was told that I couldn't even get my mitts on the deposit easily, that it was still held by the buyer's solicitors (normal practice apparently) and they wouldn't release it without a big fight. I remember how calm my solicitor was when he said this, as if he wanted to say "Of course, everyone knows that . . ." In the end the seller paid up, some delay getting the funds sorted itself out.
 
Fords (and the like of Vauxhall, Citroen, puegeot etc) have always been stupidly expensive to lease, think it's their depreciation that causes it. Usually cheaper too lease expensive German cars with better residuals.

Finally sold my mum's house (after first buyer pulled out) just a few weeks ago. It still sold very quickly and very strong offers.... Missives concluded two weeks ago so buyers can't pull out now. Anyway they are an older couple have sold theirs already and have cash, no need for mortgage.
 
We're now returning to 'normal' interest rates.

What was abnormal is that we had such low ones for over a decade.

That seems to be getting lost in alot of the narrative I'm seeing on MSM.
 
Average 2 year fix now over 6%, 5 year a smidge under. Although fixed rates are detached from base rates, I sense banks will be increasing the premium over their standard swap rate margin. I have little doubt rates will be slashed again at the earliest opportunity, it might just take a while.
 
With my daughter and her partner looking to buy I’ve been hearing what’s been going on locally in the market. High offers recently accepted are falling though with mortgage valuations coming in 10% lower than offers the estate agent managed to secure. Several properties have returned to the market and chains have broken down.

Lower valuations have been happening for several months but now there’s no headroom with mortgages, people are stretched so sales break down. Estate agents need to wise up asap.
 
They’ll wise up. Without sales, EA’s earn no fee. They’d prefer 75% than no fee.
I think it was Mervyn King who said house prices are a matter of opinion but debt is real.
 
Ponty said:
They’ll wise up. Without sales, EA’s earn no fee. They’d prefer 75% than no fee.
I think it was Mervyn King who said house prices are a matter of opinion but debt is real.
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Yes they will but the EAs are still in arguing mode, there’s now plenty of evidence about excessive pricing such that very few mugs remain who will pay the premium now. It all takes time to filter through, but it needs to happen soon.
 
clivem2 said:
Yes they will but the EAs are still in arguing mode, there’s now plenty of evidence about excessive pricing such that very few mugs remain who will pay the premium now. It all takes time to filter through, but it needs to happen soon.
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It will. Banks will set the prices, they always do. On the way up with cheap and loose lending and on the way down with the opposite.
 
Every estate agent I’ve ever discussed this sort of thing with has said the same thing - the thing that stops houses from selling is sellers refusing to accept offers. They say that one tricky part of the job is persuading sellers to accept a lower valuation of their property - many would rather hold on and wait and wait and wait.

If I were in the market for a property to live in myself, I would keep an eye out for old, pre-war, little one or two bedroom things with low EPCs - they’re the sort of thing which were snapped up by BTL businesses, but I doubt that any landlord now would touch them, because there’s so much uncertainty about forthcoming energy efficiency rules for lets. I bet there’s a real window of opportunity to snap up a bargain. But of course, many people will just not sell them for the market price, so they may be hens’ teeth.
 
mandryka said:
Every estate agent I’ve ever discussed this sort of thing with has said the same thing - the thing that stops houses from selling is sellers refusing to accept offers. They say that one tricky part of the job is persuading sellers to accept a lower valuation of their property - many would rather hold on and wait and wait and wait.

If I were in the market for a property to live in myself, I would keep an eye out for old, pre-war, little one or two bedroom things with low EPCs - they’re the sort of thing which were snapped up by BTL businesses, but I doubt that any landlord now would touch them, because there’s so much uncertainty about forthcoming energy efficiency rules for lets. I bet there’s a real window of opportunity to snap up a bargain.
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The other side of the opportunity you suggest for doer-uppers is that the cost of doing up if you don’t diy it is now cost-prohibititive. I agree about people not wanting to take a drop but there’s a feeding frenzy with some estate agents. They do “best and finals” on a Friday then call you at 6pm Friday telling you there are higher bids (are there really?). The final bids come in on the Monday. It’s all a confidence trick with these sharks. Not all are like this but they push prices up.
 
Bank valuations will bring things back to earth. Unless it’s all cash buyers, people can bid what they like, whether they are then proceedable based on borrowing someone else’s money is another matter entirely.
 
Ponty said:
£4,143 initial rental then £460 a month for 4 years, 5K miles a year.
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That's £26k in total over 4 years for a car that you cannot commute due to the low mileage limit.
I can see end of lease buy off prices soaring as owners cannot afford to swap with the high mortgage
 
Stuff sure does get real when interest rates become an actual factor in people's long term thinking. For ages they really weren't as the longer ZIRP went on, the more people assumed it was the new normal.

Even if rates do drop back people now know that they can actually go up just as all the (generally ignored) warnings had said.

My mate finished building his house earlier this year and thanks to building costs inflation now has a hefty mortgage on a 5 year fix at 1.6%. He was moaning about the cost of the build and I just said... you've been handed a gift with that fixed mortgage....bloody use it!
Earlier this week he rang to setup monthly overpayments and the girl said he's the first customer she'd talked to for a long time that had requested it. He was amazed how much it shortens his mortgage term.
 
Ponty said:
Bank valuations will bring things back to earth. Unless it’s all cash buyers, people can bid what they like, whether they are then proceedable based on borrowing someone else’s money is another matter entirely.
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I remember an old bank manager saying something along the lines of..."Loaning money is the easy part of my job, getting the money back is the hard part!!".

I hate to say it but this whole conversation about interest rates is occuring when employment is (supposedly) high. Throw increasing unemployment into the mix and things then get VERY nasty.
 
mandryka said:
I bet there’s a real window of opportunity to snap up a bargain. But of course, many people will just not sell them for the market price, so they may be hens’ teeth.
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This is the rub. For years people have been paying nearly as much for doer-uppers as for fully done. I put in a couple of low offers on houses that needed work, the offers reflected to work needed. No go. I put a low offer in on one with everything done, beautifully presented. Go on then. I got the better, bigger house with everything done for less than the price of the lesser house plus the work. Every day I'm glad I missed out on the doer-upper, and 8 years on in mine I've done nothing other than paint 3 rooms and replace a dead boiler. Meanwhile a friend of mine who lives half a mile away bought a doer-upper and 6 years on they are still looking at peeling wallpaper and ugly, worn out carpets. No thanks.
 
Yes, in financial terms the advantage of buying an unrenovated but structurally sound house is that you can choose yourself when to do any modernisation, and how. That's to say, it offers the buyer an opportunity to cut his cloth accordingly, and still have a house he can call his own.

I live in a house built in 1910 which I bought unmodernised. It was exactly the same when I bought it as it was in 1910 apart from the wallpaper and the central heating. It even had an original transferware "Crapper" outside loo and bells for the maid and a big cast iron stove in the chimney. I bought it cheap, because of its condition. I've lived in it for 25 years nearly, it has been a great pleasure doing it up slowly over that time period, and it has been affordable because the cost was spread. In the end I enjoyed, and am still enjoying, the process, and I've created something which is my own design, which is a nice feeling. However, if I were to buy a house to live in now, I'm not sure I would do the same -- I'm 25 years older, for one thing. And I'm richer.
 
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