manchaka

Dear All,

I wanted to share this with everyone here since we're on the subject of moving out of UK - feel free to cut & paste onto other country boards, but not for effect - this is serious stuff if it's going to be proved correct:

http://business.timesonline.co.uk/to...cle6346115.ece

The upshot of this is that Schiller may effectively be predicting a further protracted fall of around 20% - that's after the 20% drop that we've just seen.

Schiller is extremely smart - he correctly helped predict the 90's Japanese recession, the Dotcom 'bubble', US sub-prime, the instabilities of Fannie May & Freddie Mac, Lehman Bros - etc.

House prices are generally indicative of localised wealth (or lack of it) and availability of credit (ie there isn't any! - I know quite a few people with good jobs, say £45k pa with 40% deposits who have been turned-down on mortgage apps - that concerns me - a lot).

On this basis I have to agree then that UK house valuations are still overpriced - in our case, now (thankfully) mortgage-free the house was RICS valued at £623k in March 2007 - We've just exchanged after accepting an offer of £490k in anticipation of our move to NZ in August. If this Times article is correct that could suggest that we've just avoided our house becoming worth £380k in perhaps 2 or 3 years' time - but by then we'll be in NZ... and we'll definitely be renting rather than buying when we get there.

(To underscore this we sold a beautiful house in Shropshire with 4.5 acres, great views & fantastic rural location near Whitchurch after redeveloping and getting planning on Dec 12th 07 for £352k gross - it's now under offer for sale again by the owner at £299,995 - and that's after the FIRST round of drop - if there's a second or 'W-shaped' curve on the horizon as I think we might be looking at then the same prop may be worth £230k in a couple or 3 years.... Not good.)

Incidentally, in March 2000 on the cusp of the tech-boom bubble I sold-up all my tech stocks and made a small fortune - I had no compunction when I felt the growing heat in getting out of that particular kitchen completely, to the extent that I took a break from trading for nearly 5 years and rode the property market here, Spain and Rep of Ireland. Glad I did, since that maintained & moreover actually increased our asset (and income) level generally during that period.

My best advice now to those who do have property to sell and have the equity or don't owe much on their property is to discount proactively. If I'm wrong then buy me a beer when you do get to the country of your destination in a couple of years - I personally now have absolutely no reservations about having sold our house for £130k less than the 2007 RICS valuation before we leave UK.

It's my sincere belief that even if this 'W' recession is more linear and more of a slow attrition then we could be looking at protractedly-declining UK property values for up to perhaps 8-10 years before we get back to 2007 levels - and even then, there's no guarantee of that is there - may be sooner, may be later? You have to take a view - this isn't the time to sit on a fence - so be pragmatic.

After all this doom & gloom there are thankfully 2 upsides to this, for what it's worth - the first of course is the knock-on effect to property prices down again globally, so we're intending to rent not just for the first 6 mths after we land - we'll only consider buying once the true market bottom (or as best as we can judge) has been reached or is in sight, which means that we may be in for a pretty long wait before we buy... So, for all those (still imo) way-overpriced $1M+ houses, say for Chch in Fendalton, Merivale and Cashmere... if you're in the market for one of those - watch out - RENT - do not buy. Applying the same logic - that must be true for ALL other property - from your 7-bed detached, right down to your one-room studio apartment (and perhaps even moreso with the market for 1 & 2 bed city apartments, of which as we all know there remains enormous oversupply generally thanks to over-ambitious developers and buy-to-let/property 'investment' schemes...)

The second positive thing to say here is that as I mentioned we've built & renovated property in UK, Spain and Ireland many times - and always ended-up on top. Now's the time to buy land cheaply, negotiating hard for a significant discount, and then putting the job for a new-build out to tender to 5 reputable building companies and again, negotiating hard on the prices for the job - brutally hard, but pleasant with it of course

The building industry is on its knees and hundreds of thousands of jobs in developed countries have already been lost, which we can all read about in the press every day - if you have the nous, fire in your belly, energy and enthusiasm to take this route then do take time to consider it.

We built the UK house that we'll be leaving in August - a 5 bedroom, 3-storey family house, off-road parking, driveway, great gardens, in a particular property hotspot & v desirable Manchester suburb cost us £325k inc plot all-in in 2002/3. That means that even with the current (and prospect of further drop/s) discount of £130k, the property's paid us around £25k per year, less council tax and bills of course, so say £20k net per year - every year - since we moved-in. You do the math - we've effectively insulated ourselves against negative equity and the current dire state of the property market to (now we find) a very useful extent. I'm not trying to be smug or a smart-a55 here, I'm just stating what to me is obvious...

Don't be scared of self-build - it's daunting, hard work, stressful, demanding (esp with kids in tow) but a huge bonding experience, spiritually fulfilling and (if you live it can be) lots of FUN! If you do it right, control the costs, manage the architect, main contractor & subcontractors adequately you should save between 20-30% of the final 'notional' property value, which locks-in downside protection to some extent for the future, as I've hopefully tried to demonstrate here.

You'd also be actively helping keep a flow of employment going wherever your build is too - which if you think about it helps support the local economy - builders, tradesmen, architects, local bacon butty & pie shops, hardware, mini-marts even etc., which in my book can only be a good thing given the current market & employment conditions before us can't it?

Best of luck to everyone, wherever your choices take you.
Sincerely,

AMx

love30stm

Too long to read, and frankly I dont care

manchaka

Thanks so much for such a well-balanced and self-reflecting comment

Best,
AM x

lardyl

Thanks for the heads-up, from a fellow "rat" that "swam" without first off-loading the property, and we now surely regret that

manchaka

The last bit on second page of this one from AT is the relevant but & what I'm trying to get across I think - thanks for your input lardy! Hugs & Fudge, AMx

http://www.atimes.com/atimes/Global_.../KE22Dj02.html

love30stm

sense of humour missing I see , you should fit well in with the kiwis

manchaka

No love30stm ,

You're just not funny.

Please don't post on our thread/s unless you have something useful to say - this information might be useful to many people selling property in UK.

Best Wishes,
AMx

BEVS

Right then.

I am closing this thread until I find out what's the deal here . I'll re-open if I feel it is OK to do so.



By the way.

It is not OK to post personal details you have from PMs on the open forum.

Further,Manchaka, it was me, BEVS, the moderator, that deleted the personal detail from your post. Not Love30stm. Get your facts straight.