odaat

Dugongs,
Interesting comments - unsure as to why you rubbish the mail et all, after all they have been key in pumping up the market in the first place.
Seems logical they will be the agents to pump it down as well.

Estate agents make money on sales, not stagnation, advertising costs, rent and agent salaries have to be met.

By spring they will be asking vendors to reduce prices to achieve sales. They will be fussy as to what they take on for sale. Auction houses are telling a similar story of a stagnant market, vendors are expecting too high a reserve price and punters are just not willing to pay the 6 x income price for a prop.

As for how far a market price correction will go .... the market norm can go back to 4 x income level after a market bubble crash - more than enough stats out there if you care to look.

Renting has become fashionable - " why rush to buy" is a common thought from FTB across the nation - without the FTB , everyone along the chain cannot move.

As people accept lower prices, surveyors will reduce valuations. the corrected price becomes the norm, 2 - 3 years of corrected prices twice a year - lets say 5% corrections twice a year - will knock up to 50,000 pounds on a 250,000 prop.

Banks and lending institutions are starting to be more careful on how much they lend and cover themselves by asking higher deposits. I should know, the last prop I purchased in 2004 required a 20% deposit.

Interest rates are more likely to rise as people continue to "fix" on cheap money - the stats show consumer credit ( also known as debt ) continues to rise.

Employment is stable, but just how many FTB on 20K are out there willing to mortgage themselves to the hilt for a poxy 100K box on a souless estate

odaat

SANDRAPAUL

At last some one else who knows. Agents F'ck with the price to ensure their income. They simply do not care about a few thousand here or there on a £250,000 house. Look at how much diffrence a shift of £20,000 makes to their 2% - little.

Already are with great effect.

But the drop and or rise will be regional. In the south-east (my area only) there has been no change in Detached homes, but semi have reduced by 2% over the last 6 months. Supply and demand. Depends on the house, area, who's looking, how lucky you are, what effort you make to present a better than your neighbours property. The north is less affluent and will be affected the greatest. After all isn't it there that an awful lot of buy to rent property was purchased.

Long term the economy cannot afford rates increase. Not only will we have high debt but we might have increasing unemployment, even poorer trade figures than already. Therfore some parts on the UK will just trundle along at little or no change. Others will not look so good.

odaat

Using the latest available Land Registry data, with details of over two million residential sales from 2003/4, the website at www.nethouseprices.com lets you see exactly how many houses sold for over £5million in London (39), what the cheapest house was in Manchester (£2500) and provides hours of entertainment. Figures are available for house buyers struggling to sell, those keen to buy and those who are simply curious about the value of friends or neighbours properties.

odaat

Now that Estate Agents are starting to go to the wall due to a lack of sale's -a "correction" to house prices will be put to vendors more often, and a lot less property will be taken on to the books in the first place.

Its a pity more vendors do not utilise a free internet home selling site, they can reduce price's without the pain of paying estate agent fees on top.

House price decline claims scalps among estate agents
By Philip Thornton, Economics Correspondent
17 January 2005


" The slowdown in the housing market has sent scores of estate agents to the wall, a property expert said today as it reported another fall in asking prices.

Rightmove, a property website, said agents who had failed to adapt to the sudden change in the market had been left with large stocks of over-priced properties.

Miles Shipside, commercial director at Rightmove, said some estate agents had abandoned their "booming price mindset" six months ago and were now selling again.

"Others who reacted too late have large stocks of over-priced properties and face some desperate months ahead," he said. "We are seeing some agents go out of business and more will follow as the pick-up in activity will come too late."

He said there were signs that agents were persuading vendors to attach a "sensible" price tag to properties to secure a sale. "House prices appear to be correcting to a level where the bargain hunters come in," he said. "That is already happening in some areas where estate agents and sellers recognise it's the only way to achieve a sale."

Last month Harry Hill, the chief executive of Countrywide, the UK's largest estate agent, which has had to issue three profit warnings, warned that a tenth of the UK's 11,000 agents - or more than 1,000 firms - could go out of business.

Mr Shipside said: "Agents only get paid on completion of a sale so even if the market picks up some agents will be looking at seven or eight months without an income. Quite a few people in estate agents were not around in the last tough market and quite genuinely are not experienced to cope with it."

Peter Bolton King, the chief executive of the National Association of Estate Agents (NAEA), said there was anecdotal evidence of agents going to the wall.

"It's not good for anyone losing their jobs but a tough market is a good thing because it allows good agents, like cream, to rise to the top because they have to do a proper selling job."

Rightmove said the average asking price had dropped by 0.1 per cent so far this month, after falls of 0.3 and 1.7 per cent in December and November. Prices have fallen in five out of the past six months and have dropped by 3.4 per cent since they peaked in July last year. Sales remained slow, homes are taking longer to sell and stocks of unsold properties remain high, it said.

Mr Shipside said first-time buyers should consider "stretching" their finances to snap up a cut-price property now, rather than wait for a boom fuelled by a rate cut". - * what a load of rubbish, the pin is out and the crash is on*.

odaat

odaat

worth bumping this thread up as the remainder of 2005 and early 2006 will see some major changes in UK house price corrections.

www.nethouseprice.co.uk/ has had the same effect as garlic to a vampire for EA agents in my area.

Stanton, I suggest you settle down and pin the nappy back on again - latest LR stats should offer you a reply and wake up call ....

HOUSE prices across England and Wales fell 2.7 per cent in the final quarter of last year, according to official figures today that give the first formal confirmation of the property downturn.
The official Land Registry data, seen as the most comprehensive and reliable gauge of market conditions, suggest that the slide in house prices in the closing months of last year was somewhat deeper than survey evidence suggested.

The figures, along with other data this morning hinting that the strength of consumer demand may be waning, will reinforce the City’s belief that interest rates will remain on hold again this week.

The Bank of England’s Monetary Policy Committee begins its two-day rate-setting meeting tomorrow amid widespread predictions from analysts that it will stay its hand.

The Land Registry’s numbers are based on average prices for all housing transactions completed during each quarter. This means that they give a more detailed and in-depth picture of housing market activity but are produced only after considerable delay.

This morning’s figures point to widespread and significant falls in prices across England and Wales, as well as to a slump in transactions as the property market came off the boil in the second half of last year.

The 2.7 per cent average decline in prices between the third and fourth quarters reported today was driven by falls in the value of homes in seven out of ten regions.

The turnaround in the market was emphasised by the change from a 6.7 per cent price gain estimated for the previous three month period.

Only Wales, where prices saw a further quarterly rise of 1 per cent, bucked the negative trend, while prices in East Anglia and the East Midlands stagnated.

The sharpest quarterly falls in average prices came in London, where they fell by 3.7 per cent, in the South East, with a drop of 2.6 per cent, and in the North West, with a decline of 2.8 per cent.

The deterioration in market conditions was also highlighted by a drop of a more than quarter in the number of houses changing hands logged by the Registry.

Across England and Wales the volume of transactions fell from 309,101 in the third quarter to 229,7245 in the following three months. Transactions dropped by more than a fifth in every region and in London they plunged by 29.4 per cent.

The gap between the Registry data and slightly more positive survey evidence is probably explained by differences in the mix of houses included, the timing of transactions and the averaging of the Registry’s numbers.

The averaging process may give more weight to big drops in high-value homes in certain regions, where surveys such as those from the Halifax and Nationwide Building Society contain more sophisticated adjustments to try to give a clearer picture of overall trends.

The Registry figures, since they record completions, reflect house moves that began some months ago, where surveys offer a more timely barometer of activity.

The most recent Nationwide and Halifax surveys reported that prices rose in January. Along with a rise in mortgage approvals, these boosted hopes that the market’s slide may be easing.

Tiaribbon

Interesting reading this thread. Perhaps there will and perhaps there won't; makes no never mind to most of us British Expats who have already sold up and moved overseas.

I am happy to say that we sold our house along with it's farmland in Hampshire in 2003 - made a killing - and are enjoying the fruits now.

Drops (rather than crashes) in property prices can be good as well as bad and it is all relative anyway. The problem comes when people have been too greedy, buying property well above their comfort zone, and the result of drops can put them in a negative equity situation. However we are all at liberty to make our own choices in life, but I have never been a "fur coat, no knickers" kind of a girl!

Being a mother to twin 20 year old boys who are living in a rental cottage in Hampshire and hoping to buy property in the next year or so, a major drop would be good for them as it would allow them to actually get onto the property ladder.

Will be interesting to see what actually happens in the next year or two.

odaat

In my local paper this evening ....

*Marked slump in home sales*
10 February 2005 12:53

The number of people selling their homes in Norwich has plummeted, according to new figures.

In the run up to Christmas the number of homes which changed hands was nearly half that over the same period the year before.

Just 876 properties in the NR1 to NR9 postcodes were sold between October and December.

The Land Registry figures provide further evidence of a dramatic slowdown in the housing market in Norwich.

A total of 1,425 flats and houses were sold during the same three-month period in 2003.

The findings echo the view of city estate agents who reported properties staying on their books for longer and owners having to drop asking prices by as much as 20 per cent. :scared:

Some postcode areas saw a fall of more than 50 per cent in the number of sales.

In NR2 just 95 properties were sold compared with 189 in the same period last year. The number dropped from 105 to 52 in NR4.

David Potter, who runs Norwich family estate agents Potter and Co, was among those to report the market being nearly poor as in the 1988 crash.

He said some unsold houses had now been on the market for more than a year, with sellers having to slash prices to attract interest, particularly in the £250,000 to £400,000 range.

Overall the Land Registry record of all property sales shows the average house price rose by 20 per cent to £176,982 in Oct-Dec from £146,930 during the same period in 2003.

The figures reflect a drop in the number of mortgage approvals to its lowest level in 10 years, a turnaround blamed on five interest rate rises.

Chris Hall, a city estate agent and president elect of the National Association of Estate Agents, said despite the drop off he still expected prices to rise this year.

odaat

Then I open my trade journal - *the Estate Agency News* to read ....

‘10 TO 15 PER CENT OF BRANCHES TO CLOSE’
A leading estate agency boss is predicting that as many as one in eight offices across the industry could be closed by the end of the year.

With turnover around 30 per cent down on 12 months ago and job cuts already starting to bite, Paul Smith, chief executive of Spicerhaart, expects to see 10 to 15 per cent fewer agency branches by the time 2006 dawns.

“I would envisage the reduction being mainly by smaller independents who heavily discount fees,� Mr Smith told EAN’s City correspondent Mike Goodman. Spicerhaart have more than 230 offices, mainly concentrated across the South of England and Wales.

Countrywide, the biggest estate agency in the country with more than 1,000 branches, have already started trimming their staff — by about five to six per cent so far, which equates to some 450 from an overall complement of 12,000.

Moreover, about two per cent further cuts are expected to be carried out and managing director Harry Hill summed up the reasons why when he described the current market as ‘brutally tough�. :scared:

“There are very few homeowners desperate to sell and buyers are waiting to see if house prices will dip further,� he said.

Economic experts were predicting “decimation� of jobs across the industry a few weeks before the end of last year due to the slowing down of the market.

But Peter Bolton King, chief executive of the National Association of Estate Agents said that, although agents have been surprised by the suddenness of the downturn in mortgage transactions, most cutbacks up to now appear to have mostly been limited to the non-replacement of staff who leave.

Mr Bolton King said: “We are not expecting there to be any significant drop in prices. The economic circumstances of the present day are very different to the crash of the early nineties, when unemployment was high, rate rises were vicious and the economy was suffering from recession.�

odaat

First-time buyers 'gazunder' the market.

A third of first-time home buyers cut their offer at the last minute, forcing the seller to take less or find a new buyer.
In total 31% consider "gazundering", reflecting first-time buyers new-found confidence in a slowing market, says Yorkshire Bank.

A third of first-time buyers also felt they could be choosier, it found.

Yorkshire Bank's Gary Lumby said the number prepared to drop their offer was a "worrying proportion".

Confidence returned

"Unfortunately, a downside to this new-found confidence gained from a slowing market has emerged," he said.

"A worrying proportion of first-time buyers would be prepared to drop their offer at the very last minute of the house buying process, leaving the seller in a quandary over whether to take the financial blow or to go through the hassle of putting the house back on the market."

The Housebuyers Survey, which questioned 2,000 people, also predicts that steadying house prices and the prospect of interest rates coming down look set to tempt more and more first-time buyers back to the market in 2005.

Now, 41% believe it is the best time to get on the property ladder in years and 36% feel the market is slow enough to risk offering less than the asking price. "It's good news that the numbers of first-time buyers are beginning to rate more highly their chances of getting on the property ladder," said Mr Lumby.

"This growing return of confidence is partly down to prices slowing down, and in some cases falling, and the expectation that any further rise in interest rates will only be slight."

The following comments reflect the balance of opinion we have received so far:

It's outrageous. When is the government going to put an end to such practices? If you agree a price in good faith, you should be obliged by law to stick to it, and if one party doesn't, the other should be able to seek legal recourse.
Linda Simpson, Katonah, New York, USA


This practice is unfair to everyone involved in the process and could set a disturbing trend in what is anyway a difficult and expensive exercise, not to mention the stress involved in finding the dream home.
John Charles, Birmingham


I'm a potential first-time buyer and, yes, I would consider gazundering. I can't understand why people should thing it's unfair. After all, the housing market is naked capitalism! The market suited existing homeowners very nicely when prices were going up, despite pricing me out. Now the market is favouring me! And, boy, how I'm going to enjoy knocking back the ridiculously inflated asking prices of recent years!
Chris, London


When I have sold houses I have accepted an offer and that is fair. I would never have been so unscrupulous as to accept a higher offer after this point and nor would I expect any buyer to gazunder. If anybody tried that with me then I wouldn't go through with the sale anyway. They could have the inconvenience of looking for another property!
Vivien Cooke, Hants, UK


A friend of mine was the victim of an attempted gazundering a few months ago. He played it very well - he nonchalantly said no - as if it was no problem at all, and there was a queue of other interested buyers, and when the buyer replied that they would pay the agreed price after all, he said: "I'm afraid the price has now increased by £5,000." The buyer paid up in full. A wonderful turn of the tables, and it served the buyer right.
Paul G Roberts, London, UK


Gazundering is a natural response to a hugely overpriced property market which is 50% over-valued. I saw it in the last crash and the coming crash will be no different.
Peter Anton, Beds :scared:


Friends of mine who were second up a chain have just been gazundered. They were forced to accept £5,000 less because they are moving to America, and the buyer of their property had just been forced to drop the selling price on his house. It's a vicious process - you've made plans and bought your next house based on assumptions about the agreed deal on the one you are buying and then it goes awry at the last minute and you are stuck.
Liz, London


Of course it's fair. Sellers have had it far too good for along time - houses are massively overpriced as it is. What's wrong with making an alternative offer just before the paperwork is signed? The seller always has the right to refuse. And in most cases the seller then "passes on" any shortfall when they become the buyer.
Bill, UK


I am an ex-pat living in the USA. I think there is something wrong with a selling process that allows last-minute price reduction without just cause. Over here a buyer is required to make a binding offer before the property is taken off the market. Such offer can only be rescinded or changed without penalty if seller had fault in their description of the property for sale.
Jon F Morris, Hartford, USA


My widowed mother was gazundered. The buyer went through the entire process, waited until she'd told the agents that the sale was done and removed the property from the market, then cut his offer knowing that she'd not want to go through all the rigmarole again. The law concerning property sales in England is an utter shambles, it's slow, expensive, unreliable and the only place where a contract appears not to be a contract. An accepted offer should be binding, not - as it would appear - just another part of the negotiating process.

Tiaribbon

Well as I say, it makes not a lot of difference to the people who have already sold up and taken their money elsewhere......and for those of you who are moving back to the UK, it can only be great news!

jerry brewer

Hi,
Personally don't think the 'crash' will be that big,
Quite a few people I know aren't putting their houses on the market during the downturn, which ,if others think the same will slow the drop in prices, as there will be little choice available.
And no doubt , new house build will slow down to compensate and force the prices back up eventually.
So if your stepping back don't wait to long, as if the UK market is going down and that means less 'spare cash' for the brits to buy holiday homes in spain etc etc, So all the areas 'brits' buy in , will see a slump as well.
All the problems of going global.
Cheers
Jerry

Sunshine Girl

Hi,
We moved to Canada about 2 years ago.
Property in our street in the U.K. has increased about 50%, in that time. I know this for a fact, based on what our property sold for at that time, and what a recent property sold for.
So, it does make a difference to the people who have already sold up and moved elsewhere...because they may wish to move back!

Tiaribbon

As I said "for those of you who are moving back to the UK, it can only be great news!"

PhillyD

Wow! I cannot believe the length of this thread, all very interesting. But mind blowing at the same time. I am but a simple soul, and not a financial wizard at all, but surely it is all relative. If house prices drop do they not all drop from the grand to the most humble abode. So therefore we all either make or lose money according to when we use the market??

Tiaribbon

Yes, so therefore if there does happen to be a crash or a drop in prices then people moving back there will get more for their money.

People who have already emigrated will have reaped the benefits of selling before prices dipped and hopefully exchanged at a reasonable rate.

The only people that it won't help is people who are just about to emigrate.