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Your last login was on: 2011-09-07 13:13:57

Fortescue-Smyth

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Are you an agent? yes
Do I do lettings? yes
Do I do sales? no
Do I do overseas sales or lettings? Sales
Job title: Negotiator
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News stories you have commented on:

92 comments

Posted Date: Wednesday 13th October 2010
If I were Dr Wilcox I would be somewhat upset by this article. Dubious punctuation and formatting seems to have him saying that house prices have never been cheaper - patently not true - when a closer examination reveals the quote is actually from Angel Mas at Glenworth financial. This is worrying enough - that someone employed as a financial adviser could spout such blatant untruth. That it should be published verbatim though in this publication shows very poor standards. Anyway if I were Dr Wilcox I would sue.
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Posted Date: Wednesday 13th October 2010
If I were Dr Wilcox I would be somewhat upset by this article. Dubious punctuation and formatting seems to have him saying that house prices have never been cheaper - patently not true - when a closer examination reveals the quote is actually from Angel Mas at Glenworth financial. This is worrying enough - that someone employed as a financial adviser could spout such blatant untruth. That it should be published verbatim though in this publication shows very poor standards. Anyway if I were Dr Wilcox I would sue.
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Posted Date: Friday 15th October 2010
He is obviously being provocative, but the central point is sensible. Estate agents only have a business if property on their books actually sells at some point. Differentiation is hard so a major way to get vendors signed up is to flannel them that ridiculous prices can be achieved. In the end this does no-one any favours - not buyers obviously, not vendors who especially in this market will struggle to sell at silly prices, not agents who need the turnover. Phony expectation setting is bad business and a recipe for misery; the sooner the profession wakes up to this the better.
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Posted Date: Monday 18th October 2010
How colleagues encouraging fantasist vendors in what's clearly a market on the edge of a big fall - volumes having collapsed already - is beyond me. The only way forward as a profession is to tell it like it is, however hard that may be for some!
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Posted Date: Monday 25th October 2010
Did the survey ask of the optimists what the basis of their optimism was? Precisely what are the factors that will drive prices up from the loose-lending driven highs of the 1997-2007 bubble? Answers on the back of a postage stamp, please. Just goes to show how idiotic the mass of people are. All this shows is how slow some people are to get it when the economic weather changes.
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Posted Date: Wednesday 27th October 2010
I don't think the equations is quite so simple as that. As recovery takes hold, interest rates will rise, hitting those holding on by their fingertips due to the rate cut, boosting repossessions. Falling house prices in a period of growth are not unknown after a bubble pops, think 70s, late 80s-early 90s.
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Posted Date: Monday 1st November 2010
Certainly those agents who got in early in the lettings field have been making a killing. However it is a little irresponsible to convince vendors to delay selling up and rent out in the hope of getting a better price, when that better price might (a la late80s-mid90s) take the best part of a decade to happen, and in the meantime saddle them with 3-4% yield (before insurance, voids and maintenance are considered. Far better to be straight and tell them to cut the price and get what they can for it now, as falls in most areas over the next 2-3 years are 100% inevitable. I know one landlord who tried to sell in 2007, rented out instead, and has just sold at 30% off his (admittedly high) asking price only this month losing him about £150k (the price he achieved was close to his 2002 buy price btw). He was paid around £40k rent in that time which didn't service his mortgage. Bad advice all round in this case.
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Posted Date: Monday 1st November 2010
interesting observation and no reason to doubt it... BUT ... how many of these agreed deals will crack up requiring putting them on the market again because: 1) Finance withdrawn - favourite game with banks at the minute still it gives staff something to do 2) Botched gazundering attempt, vendor takes umbrage and tells buyer to naff off 3) Buyers' cold feet as the downward slide resumes with a vengeance after the false optimism of a year ago. There's a lot of it about.
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Posted Date: Friday 12th November 2010
I don't think it's just finance restrictions, even those buyers in a position to proceed are smelling blood and are prepared to wait a bit longer till vendors capitulate on price. But restrictions are part of the issue for sure, an example one couple £140k joint income, £25k in the bank, shocked to be told to go and save another £25k to buy a £400k property they could afford even if interest rates went sky high (they only want x2.5 joint salary). Where's the sense in that? Having said that, if the finance isn't there anyone who really wants to sell has to get real, fast, about price.
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Posted Date: Monday 15th November 2010
There's an interesting - if rather scary - comment attached to the Telegraphs's take on this story: 1) Prices are some 41% above the 100-year median line. After previous property bubbles, prices have always returned to this line (after overshooting on the downside). 2) Banks are sitting on £20 billion of underwater property loans and are loath to take on more risk (and the housing market is currently the riskiest asset out there) see 1)! 3) The UK consumer is the most indebted he/she has ever been in the history of UK debt. There is no more fuel for the fire. 4) As soon as interest rates begin to rise--and they will, regardless of the massive government intervention to hold them down to zero, prices will begin to fall fast and faster. See major sell-off in bonds now happening--rates are rocketing upwards. The biggest property bust of all time is--albeit in glacial fashion so far--gathering speed. My view - the only way to stay in business is to be honest with people about the coming storm. The few buyers out there will go where they think there's a deal. As far as sellers go, the living in 2007 cloud cuckoo land brigade are a waste of everyone's time and energy.
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Posted Date: Monday 6th December 2010
Seems very sensible. We are all taxpayers and LHA got grossly out of hand under Labour. Landlords benefit from much-reduced default risk, and the whole think keeps rents affordable. The only people who lose in this are landlords who are too highly leveraged, if they get into trouble they only have themselves to blame. Might be some nice fresh stock coming on the market any day too!
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Posted Date: Tuesday 7th December 2010
Sickened by the begging bowl mentality of hb landlords here. We are all taxpayers and the housing benefit bill is WAY WAY WAY out of control. Landlords who based their business plans on shafting the state for ever-increasing rents from benefit claimants deserve all they get in my opinion. Given that a lot of HB-rented stock is at the rubbish end of the market, I seriously doubt there are hundreds of high-paying takers out there. As IDS said in an interview, 'I am 40% of the market'. The market giveth, the market take it away. Tough titty. If they don't like it let them sell up and get a proper job. I'll happily help them shift their portfolios.
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Posted Date: Wednesday 8th December 2010
Hilarious. Wonderful comic timing. Like selling ice lollies in Scotland right now.
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Posted Date: Monday 13th December 2010
The market is still adjusting to tight lending conditions which have been treated as temporary till now. If perception shifts and people come to accept these are permanent, that could be the moment when prices start to fall more drastically. Personally I believe we won't see decent transaction volumes until prices drop back to long-term trend lines so I think we are talking 25% or more in some areas. It's the high prices themselves that are contributing to banks nervousness in lending - let's face it why would they want to lend on assets set for a big fall? Personally I'd rather sell 20 houses at 25% off than 5 houses at full asking wouldn't you?
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Posted Date: Thursday 16th December 2010
Statistics for dummies: The whole point of a survey is that it represents the market as a whole - it's to be expected there will be outliers but that's clearly what this guy's case is. Four sales and 10 offers in a day? Well of course we had that last week ... NOT! In my view the more of these surveys we get the better, we need vendors to get real about their prospects. What a numpty this guy is!
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Posted Date: Wednesday 12th January 2011
Is there no news that isn't a recycled press release? Such puffery gets very tedious. Smacks of 'buy now, don't lose out' the cry of charlatans throughout the ages. What's their definition of prime property? If it's over a mil, it's hardly representative of the London market is it?
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Posted Date: Wednesday 12th January 2011
Samuel J: So the comments box is only for cheerleading is it? Suspend your critical faculties and shout 'hear hear?'. Give us a break. But come on aren't you a bit fed up with reading nothing but tedious press releases, with no attempt to deconstruct the agenda of the company sending them out?
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Posted Date: Monday 17th January 2011
Take existing fantasy pricing. Add a dash of competitive over-valuing, mix it with a cocktail of vendor greed and downright stupidity and what do you get ... a stagnant market. Time to start getting honest with people, folks, even it it means missing some instructions. In the current market they won't sell at these prices anyway.
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Posted Date: Monday 17th January 2011
Always look on the bright side of life ..de dum .. de dum de dum de dum ...
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Posted Date: Wednesday 19th January 2011
Common sense. Whereas house prices are pretty much determined by ability to borrow, which in turn is determined by how tight or loose bank lending policies are, rents are determined by ability to pay. House prices trebled in a decade not on any great new wealth coming into the country, but on loose lending, high income multiples and a lalala fingers in the ear approach to debt/reliance on continued low interest rates forever. With those conditions removed, probably permanently, hard to see where any upward movement is going to come from. Renters are getting a great deal though especially in larger properties where 2-3% yields are commonplace and the rental is half what a new mortgage would be.
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Posted Date: Wednesday 19th January 2011
Sandfords are getting boring now ... prime London, where property magically sells itself and no-one ever needs a mortgage, is an exception within an exception, a tiny bit of the market. Why not quote some of us in the real world for a change?
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Posted Date: Monday 24th January 2011
Sounds like a great idea. The only reason we don't still have Domestic Rates - which in general is a very fair tax on the utility of houses - was Scottish Tories' fear of electoral wipe-out as the very few losers under the system - mainly little old ladies in houses far too big for them - finally stopped voting Tory after a long-delayed rates revaluation put their bills up. Hence the Poll Tax, which due to a quirk of UK law then had to be also introduced in England. Council Tax is a mere amendment of this. A valuation-based tax combined with abolition of stamp duty would be a great way to reduce barriers to purchase while at the same time keep prices from getting too out of kilter. Anything that revives the market is good in my book even if it means prices take a bit of a dip. The sooner we get this crash over with and volumes recover, the better for everyone. Volumes simply aren't coming back at current valuations as the finance has evaporated and won't be back in the crazy form that inflated prices so fast. So alternative solutions have to be found to get things unblocked.
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Posted Date: Friday 28th January 2011
Without wanting to encourage these people, it's clear the have the wrong business model. Who on earth is going to volunteer to be an Aunt Sally? Bear in mind that in general only the motivated (ie the pissed off) are likely to post and that conflict over something (be it price, buyer conditions or moving dates) is almost inevitable at some stage with the agent right in the middle. Only possible model for this is to be universal (a database of all agents) and ad-sponsored.
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Posted Date: Friday 28th January 2011
To Mr O'Donnell at Hometrack: No shit, Sherlock. Do we really need these sort of stats to tell us what we know already? As for "james' and 'confident agent', they sound like they've been to one too many NLP seminars. Give the talking up a rest. If we can't be honest with people when things are patently terrible, why on earth should they ever believe us about anything?
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Posted Date: Wednesday 9th February 2011
So much fantasy pricing around. I'm meeting people regularly who still think it's 2007 and banks are dishing out cash like there's no tomorrow. People need to get real. Once place recently (not with us any more) just completed after being on-off market since late 2007 (with tenants in between). Paid £353k in 2002. Put it on at £550k in 2007 (stupid sod). No interest for a year. Dropped to £495k for best part of a year. Dropped to £475k, £450k, £425k then £395k for another year. Sold in Nov 2010 for £380k (and I think he was lucky at that). Interest only mortgage in the first place - so what was the point of that then? Sellers need to get real and we need to help them sober up. In our area (not London) we have new stock five bed bungalows and old stock three bed bungalows on at the same price. Guess which are getting the interest? I do feel sorry for those people who got in over their heads in the last few years of the boom and will need to tough it out and pay down negative equity for quite a few years before a move is on the cards, but by far, most sellers asking silly prices aren't in this position, they are just greedy sods who can't bring themselves to admit they missed the boat.
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Posted Date: Wednesday 9th February 2011
rant&rave & SBC: Don't always blame the agents in all this. I had dealings recently with a retired teacher who can only afford to run her very large 4-bed detached place in a lovely SE country setting by renting out three rooms to assorted weirdos. We had dealt with her before: top of the market autumn 2007 valued at £575k so she insisted we market at £625k. Result: predictable, hardly a viewing for a year. Takes it off, and continues to live with the weirdos. Calls us again this autumn, looking for a 'quick sale', We look again, we say it's now £495k absolute tops and if she wants to sell quick, try knocking £50koff (slightly smaller place round the corner but with pool and bigger garden has been on for a year at £450k, no takers, but this place is more saleable I think, not everyone wants a pool!). Didn't like our honest advice, went elsewhere. Found an agent without much local knowlege who told her there were two houses in the development went for £605k and £590 in last two years, put yours on at £595k. (These are houses we know, the first has a two-room + loo + kitchen granny flat built on, the second five beds, an extra loo and a hugely extended kitchen. So not comparable). Result she puts it on at £595k, reduced after a month (I assume due to laughter following first viewings) to £565k. Still way too high. This house will sit, I estimate, for a minimum of another year while this stupid woman waits till the good times to roll again. Incidentally she bought it new in the 80s for (I would estimate) around £100-£120k, and hasn't MEW'd to my knowledge. There's no 'necessity' here, it's pure greed and bloody mindedness, just one example of dozens I know of.
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Posted Date: Wednesday 9th February 2011
Mike Wilson : I prefer to be anonymous on here but let's say I'm familiar with at least the edges of the area you mention and without knowing more details, it sounds like you most likely struck a bargain at just x2 1988 price. All depends on location of course and other factors eg other developments around, improvements (a lot of these large houses have been extended or garages built over so we aren't really talking like for like) and so on. You are right of course even if they do often need kitchens and bathrooms doing, the best of the 1980splaces tend to be far larger in terms of footage than newer properties that are shoehorned into tiny plots, and often have space to extend if not done already, one reason why prices have been holding up to some extent. Enjoy it! Houses are for living in.
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Posted Date: Wednesday 9th February 2011
El Burro you've either been at one too many sales courses ('confidence is key' - get some Colgage then!) or you've started too early on the sherry. Confidence can't talk up a market that already in serious trouble. The banks simply aren't lending at these prices. They have to come down. You can't opt out of reality by repeating affirmations to yourself in front of the mirror. I'd be a lot more confident if I had more sensibly priced properties on my books and fewer deluded sellers stuck in 2007. Post like yours just encourage these people to hang on to inflated expectations, in defiance of what's really going on. An air of false confidence - other wise known as head in the sandbucket - does no-one any favours. 300 is a pretty big survey. I appreciate there's the odd exceptional pocket like your millionaire's island persumably where bonus time will no doubt soon be upon you but if you are indeed being honest and not just puffing out hot air, then you are very much the exception.
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Posted Date: Wednesday 9th February 2011
Will Hicks: The contract is between the vendor and the agent (ie the vendor pays the commission fee on sale) so that is where the commercial relationship lies and I can't see any alternative. But a decent agent will do everything he or she can to keep buyers happy (they may be sellers in a few years after all). Of course its unscrupulous (and in a falling market, downright stupid!) to win an instruction by over-inflating the valuation. But there are a lot of sellers who are all too prepared to go with the highest 'bid'. Vendor greed more than anything is what drives this. I try to be straight with people about the chances of achieving a price but it's only an opinion after all (albeit grounded in experience) and you do get more than the occasional seller whose instinct is to shoot the messenger when the valuation isn't what they expected!
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Posted Date: Wednesday 16th February 2011
The elephant in the room is the bubble that hasn't popped yet. We can't keep expecting FTBs to pay ludicrous money (6, 7, 8, 10 times FTBs' salary!) for poxy little boxes, which is still the case in much of the country. Prices were low in 1997 thanks to historic factors (the last crash and its aftermath), around fair (compared to salaries) in 2001 and from 2002 onwards started to go stratospheric - the sentiment was only one way and boy what a party it was. But we are left with prices at the bottom of the ladder that in a lot of places are probably double what they should be on any sensible logic. The government needs to withdraw its support (including its negative interest rates policy), let the inevitable happen as quickly as possible, and let's all get on with life. (And provide a lesson in life to the BTL generation that there's no free money tree). As an allegedly free market Tory, surely Shapps should see this argument? If I was an FTB I would look at the prices and walk on by. If I was a financial institution I wouldn't be lending either without a huge deposit cushion, just to help individuals get themselves into trouble when the inevitable drop happens. And if my kids were older I'd tell them to wait - outside London the bank of mum and dad is the only thing keeping the market afloat. The industry should be helping vendors face reality - it's the only way we can ever get back to decent volumes.
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Posted Date: Monday 21st February 2011
We are nothing but a bunch of lemmings, bidding up prices to get stock on the books while we rush towards the cliff. No wonder we are the butt of so many jokes, it really doesn't get more stupid than this. As a profession we ought to be engineering things downwards toward sustainability and a return to 'normal' volumes - have some people really forgotten it's volume that pays the salary, not the odd sale at a trophy price? Cloud cuckoo land.
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Posted Date: Monday 28th February 2011
2%? That's a rounding error. I suspect it will be rather more than that. Indeed, it needs to be to unblock things. I'm taking bets at 10% upwards. The sooner we as a profession realise that lower prices are our salvation, the better. (And it is, for the vast majority of us, save perhaps those individuals amongst us who, ahem, filled their boots with rental property). As for banks well clearly LBG don't want such a massive write-down of their mortgage book but tough, they (and other banks) caused this mess with irresponsible lending and they should bear their share of the pain.
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Posted Date: Friday 4th March 2011
Steady on chaps. There's no doubt things have picked up a bit since the depths of winter (mainly because, duh, the winter is drawing to a close) but things are still way down on last year and the 2006-7 peak is a mist-shrouded thing shimmering in the far distance. Let's not get carried away. What would be much more interesting than the playground chest beating/name calling is a discussion on what, exactly IS selling up and down the country. What I'm seeing in my SE patch is (as you'd expect) that newly on, sensibly priced stock is getting interest and shifting before the still silly-priced, cobwebbed older stock. This is irrespective of property type. On the whole we are about 15-20% down on peak and a scrape above the 2009 bottom. Given the trend of what sells and what doesn't, I think the market will dip lower again this year, not necessarily by huge amounts though (another 5-10% depending on property type). A lot of people have had enough of putting lives on hold and not everyone is so re-mortgaged to the hilt as to need every last penny from the sale. Lest anyone think this is gloomy I'm actually quite cheerful at the moment. Realistic sellers = more business.
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Posted Date: Monday 7th March 2011
I don't believe this is a permanent shift. I recall similar gloom & doom in the early 90s. Once prices have truly bottomed out, I don't see us returning to crazy lending but 90 and even 95% deals will be commonplace again. Banks, of course, won't do this until prices fall back to something like long term averages of salary multiple, which means they have a fair way to go yet (I'm in favour of a rapid realignment rather than death by a decade of stagnation - just let's get it over with) But when they do fall, there will be FTB demand at the right price. Another good thing about price falls (and indeed, a modest rise in interest rates which is also 100% certain sometime) would be the inevitable shakeout of amateur buy to let - the pro's will still be in the game but many of of those post-2003 amateurs whose yield barely covers the mortgage interest and whose back of the fag packet business plan (if it ever existed) relied on capital appreciation will be forced to give up the ghost. At which point, we re-enter the mass market of FTBs. We may be in for a rough ride short-term but long term this article is just another gloom-monger's delight.
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Posted Date: Wednesday 9th March 2011
Never mind breaching mortgage terms (which I agree is a real issue), the 'nominal' rent idea could also be challenged as tax evasion which is illegal. This agent needs to be careful he doesn't get charged for conspiracy. As for the banking chaos idea, I can't believe there are so many thousands of £1m + deals going through that it would crash the banking system. Might have an interesting impact on price figures though (before and after) if a high proportion of £1m+ deals are going through this month which then disappear out of the numbers in subsequent months. I'm sure it's all academic to most of us though I mean how many £1m+ properties do most people here have on their books? Not a lot, I suspect.
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Posted Date: Friday 11th March 2011
The solution proposed is, of course, nonsensical. But the issue - of overvaluation to gain instructions - is very real and certainly has a distorting effect on the market. As pointed out the big corporates are the worst, often clueless. Concrete example: I valued a house recently at £485k. (Down over £100k on what we failed to sell it at in 2007-8, more than we had advised even the but the seller is greedy, also had refused to drop as things turned nasty). Tenants had moved out and she now wanted to sell 'quickly' - not easy in this market. It's a small estate of larger, mainly extended 4&5 bed 80s detached, well situated for roads and trains and on the edge of fields. This was one of the small 4-bed, non-extended ones. Only three house sales (two by us) in the last 5 years, two around £600k in 2006 and 2010. These were 5-bed to start with, and then extended, so substantially bigger (the 2010 one had a 1-bed granny flat!) Big chain came in, told her the could get £595k for it, based on recent local sales. Guess who she went with? I'm at a loss to know whether this valuation was ignorance, or sheer mendacity, but it's plainly not in the interests of the seller, who has no chance of making that price (prospective buyers on my books looking at that price bracket would just laugh out loud rather than view), and while it no doubt helped make corporate instruction targets, it also makes the rival firm look silly as well. It dropped to £575k after a month, but I doubt that will make a blind bit of difference. I can think of several other silly valuations lately to gain instructions, though one of well over £100k - more than 15% of the valuation - is the most obvious current example. Beyond the damage to the interests of the seller and the reputation of the firm, there is harm caused to the local market. When writ large in a falling market, silly prices add to the overall blocking effect. In a rising market though stupid valuations can have even more pernicious effects, feeding unsustainable bubbles and leading if not always to a crash, then certainly to the current three-way mexican standoff between buyers' common sense, sellers greed, and banks' caution. (With us caught in the middle). I've no idea how we fix this. Hendry's solution is not intended to be real, I'm sure, merely provocative. In that he has certainly succeeded.
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Posted Date: Monday 14th March 2011
This is highly amusing I must say. Gazumping. In this market. Hilarious. Indeed the market is rising so fast that 100% mortgages can only be a few days away. Watch this space.
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Posted Date: Wednesday 16th March 2011
Hmmm .... not to rain on anyone's parade, but the continuing rising trend in asking prices seems like lunacy in a market where: - new instructions are 40% higher than last year (= big increase in supply) - sales are down 7% on last February (continuing fall in demand, from a low base) - 76% of properties have been reduced in price (by not enough to make much difference, but still ...) - annual and three month SOLD prices are down If we are going to manage a spring bounce this year - and god help us if we don't - then it needs to be in VOLUME not PRICE. Can we get that into vendors' thick skulls? Rising supply is one driver of this; greater mortgage availability will be too (how is the true market price to be established if there are no proceedable offers?). But the third leg in the market recovery (in terms of volume) has to be a return to sensible prices.
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Posted Date: Thursday 17th March 2011
We are seeing an increase in mortgage applications too but no more than you'd expect as Winter turns to Spring.I didn't mention it because in the big picture it doesn't really amount to our salvation. On current form it doesn't take a genius to work out how many of those applications will be turned down for all sort of reasons. Not least the sale being thrown out because of survey well below asking price. What I'm saying is, as we go into the peak buying season, without a drop in prices, any improvement we see won't amount to much. Better than last year, certainly but we are still on tiny fractions of the volume we used to shift. I just can't see this changing without a major market realignment in asking prices.
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Posted Date: Thursday 17th March 2011
PeeBee That kind of attitude may help you blow off some steam in your frustration at not selling your house. But it won't help you sell your house. Fantasy prices are in my view now THE major blocker to market recover (ie, return to a functioning market with reasonable transaction volues). (That and cowardly, yes-men agents willing to put houses on at prices that will never sell, just to get them on the books). We can't conjure willing buyers from nowhere, they are increasingly sophisticated (due to internet use as much as anything) and can't be duped as in the past to paying over the odds, not least when sentiment is down, down down as it is at the moment (except for a few blinkered vendors of course). It's vendors like you that need to get with the plot. The market should be a win-win-win situation but all too often delusional vendors living in the past (more even than banks' willingness to lend) are what's causing its malfunction. Get used to the fact that you missed the boat in 2007 and your house just aint worth what, in a fleeting period, it might once have been, should you have had the foresight to sell it in that brief window. Shooting the messenger may be fun on an emotional level but in reality it's a pretty dumb thing to do.
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Posted Date: Friday 25th March 2011
Long overdue but should be accompanied by some measures to ensure properties don't lie idle, ie a minimum make it seriously uneconomic for that to happen. And this should apply not just to property owners but to local authorities as well. Bringing the vast number of empty properties back into circulation - sold at whatever price (market value) to whowever wants them, be it private individuals, would-be landlords for refurbishment and letting, or large professional property companies, would only be a good thing.
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Posted Date: Wednesday 30th March 2011
My sense is that the penny is dropping with some people that the peak from at least 2005 on was artificial and that today's market prices on the whole are the equivalent of some time before then. I've had three sellers this week make major cuts in asking prices, one of £100k (20%), another of £75k (around 18%), another of £45k (15%), these were all people who dropped by little nibbles the last year, a few £k at a time but have finally bitten the bullet and made the grand gesture. I wouldn't call any of them desperate (there's no axeman waiting to take their property away), they are just people who want to get on with their lives. I think they are being quite savvy as I suspect the rest of the market is going this way by the end of the summer. I've taken on a property from a rival vendor as well in the past fortnight, curiously the couple are coming to me because the other agent 'won't allow them to drop their price' at least not to the level they think is necessary. Pretty curious but that property is also on now at an almost 20% drop. I don't understand why an agent should fight to keep prices high, commercial suicide I'd have thought. Realistic prices drive quicker sales - there ARE buyers out there looking for a bargain and these properties will now sell quickly, interest has certainly been very high. The other story on latent reposessions does chime with experience. In this game, only an idiot could have failed to see that lots of people got in over their heads, unwisely, in the boom years, with large salary multiple loans (many of them interest only - over 40% of loans in 2007, I read) based on nothing but optimism: the only plan some people had to pay these loans off was rising prices. Now, with no sign of prices even being maintained let alone rising, earnings being eroded by inflation, and jobs being lost, they have little incentive beyond saving face to stay where they are. It would be suicide though for lenders to start pulling the rug so I see more of a dribble of these people rather than a flood (at the moment anyway - this could change if things take a big turn for the worse).
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Posted Date: Wednesday 30th March 2011
AC's point on mortgage brokers is spot on. Deposit issues aside, available salary multiples are getting smaller. Since it was low/no deposit and high salary multiple deals that allowed prices to get bid up to the 2007 heights anyway, it doesn't take a genius to work out that there's nothing supporting prices at the (artificial - ie bubble) levels they reached then. Guess what the consequence of that is? Yes that's right, lower prices. (Clearly our colleagues within the M25 are exempt from all of the above, as there is no deposit or mortgage shortage there and heaven forbid anyone should suggest there is). Our job is to sell houses, offering our professional advice and skills in whatever market the sellers find themselves in, to help them sell their homes. No-one wins by us not being open and honest with our vendors. Our job is NOT to be fairy godmothers waving our wands and producing free money by magic. For too long, a lot of greedy people have seen our role as exactly that!
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Posted Date: Wednesday 30th March 2011
Ray Evans: The statistics say 40% of houses have no mortgage at all and a great many more have small rather than large mortgages. So I don't agree with what you say about no-one being able to sell. It's true that mortgage-free older people move less often than families, so many we see are not in that position, but while I agree there are a good chunk of people facing negative equity and can't move (just like in the 90s) there are still large numbers - easily the majority I would say - who are not so constrained and will be open to the logic of lower prices. In reality, in addition to those above who are stuck in negative equity, lower prices will directly hurt relatively few people, mainly older people trading down, BTL landlords, or couples divorcing. Some of the latter two, I accept, are in deep doo-doo at the moment as many will have bought relatively recently. But many of the people I deal with are not in these 'big loser' categories. In addition to the downsizers, they are would-be FTBs, people relocating, or families trading up, and for them there is more likely to be a benefit from the coming lowering of prices rather than a loss. What's blocking the market for these categories isn't shortage of cash, it's the unrealistic current level of asking prices, which is what's driving the other big blockers, big deposits and lender parsimony. Jaffa: No I don't think there will be price rises from here any time soon. The engine that lifted prices so high - crazy lending - has gone away and isn't coming back. The boom-time madness (let's be frank) was a 5-year abberation, not a 'new normal'. Medium term, perhaps, I see your point but I think that's years away. The question for us as a profession is: what do we do right now to stay in business and support our customers through this difficult time of adjustment?
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Posted Date: Thursday 31st March 2011
Professional, false outrage from a total busted flush of an organisation. It takes about 5 seconds thought to realise that most of the things they complain about (bar the Ombudsman issue - there's no excuse for that) have a perfectly sensible rationale. Overvaluing will always be with us, sadly for some amongst us it's a common way of winning instructions, but ultimately there will be a commercial impact on those who over-use this tactic, so it's swings and roundabouts. Overall though a waste of the ink it's printed on.
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Posted Date: Wednesday 6th April 2011
I have to say I've never seen shared ownership as anything other than a massive financial risk, a con trick foisted on generally naive/vulnerable people. I have never had anything to do with it, and never WILL have anything to do with it. There's precious little evidence that I can see that anyone was ever 'helped onto the property ladder' via these vile schemes, the only benefit accruing to the developers. If the developers themselves are turning against the idea - well what does that say? If the government really wants to get the property market moving it could do worse than come up with a stiff tax on the vast land banks many developers are sitting on - use it or pay through the nose for it - we'd soon see things moving again at 'affordable' prices! As for the continued bleating that all our housing woes are the lenders' fault, I would concur that yes, reckless lending got us here (prices way above realistic levels); and there may be an element of over-reaction in deposit requirements; but if it was MY money (and arguably, with taxpayer owned banks, it is...) I wouldn't lend it either when prices are so clearly still set for a fall. Get the crash over with, and I suspect we'll see lending opened up, at least back to where we were around year 2000 when it was minimum 5% deposit, 3.5 times single salary, 3 times + 1 times joint, with few/no of the high multiple and interest only deals that boosted, then poisoned the market in the first place. When will politicians like that grinning idiot Grant Shapps wake up and realise that re-setting prices is the only way to get things moving again which is what everyone wants (us, our customers, and the government presumably too)? This zombie market needs some radical policies to re-animate it and clapped out shared ownership schemes are not the answer.
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Posted Date: Wednesday 6th April 2011
Debt free: I've had a good look at HPC and there is a lot of merit in some of their 'collective' economic analysis of the situation with specific regard to housing: to some extent I've been persuaded in many of my views on the market. Ranged against their assembled evidence and - in my view quite plausible - long-term narrative , all I see most of the time are a mixture of assertions of belief things can't get worse (same as you see here often) or outright boosterism from people with lots to lose. When it comes to argument on the direction of house prices, I think they win. Where I part company with them, indeed where the site falls down on credibility generally, is where they take that analysis, generally sensible economics undone by the general tone of the place, over-populated as it is with Euroseptic, let's have a tea party, burn the council worker/stop all benefits right wing nut jobs. And don't forget we estate agents are the devil incarnate from daring to profit from property sales ... we'll be first against the wall when whoever it is they want to run the revolution finally shows up. After Gordon Brown of course.
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Posted Date: Friday 15th April 2011
'Sustained'. 'Recovery'. It's this kind of dishonest tosh that brings our profession into disrepute. Connells should be ashamed of themselves for bringing out this disgraceful piece of highly-selective spin. When we see six months of rising sales VOLUMES (rising prices are a different matter entirely and other than in a few local hotspots, highly unlikely for the foreseeable) then 'sustanied recovery in the market' might be justified. A rise in numbers of valuations means nothing at all at this point in the absence of fresh, PROCEEDABLE buyers.
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Posted Date: Monday 18th April 2011
“While local markets may vary, the marked growth in supply is a clear indicator that fresh sellers should on average be asking less for their properties rather than more.” As my teenage daughter would no doubt say: ''Duh!''
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Posted Date: Monday 18th April 2011
Abolishing HIPS was a very bad thing as we had the mass return of tyre-kicking, living in cloud cuckoo land timewasters who typically react emotionally to a sensible offer as if it was a kick in the teeth. Thanks a bunch. As for Shapps, he patently hadn't a clue and in any case was in the pocket of the housebuilders (having taken a lot of money from them). The fact that he is destined for PROMOTION rather than a firing squad merely highlights the dearth of talent in the Coalition. Having said that the housing brief is a poisoned chalice as the right thing to do at this time - letting the air of the bubble so that the market can re-set and move forward again - would be politically very unpopular.
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Posted Date: Friday 6th May 2011
This report squares 100% with my experience. Roll back a bit, and even in those blissful days of the mid noughties, it was starting to become clear something was up ... As we went through the decade salaries weren't rising much, if at all, but salary multiples were (big time), 'self-cert' was all the rage (and didn't we turn a self-interested blind eye to what our favoured brokers were up to?) while people fell over themselves to make offers on what seemed like a one-way bet .. all the advice was to take things to the max and property shows were compulsory viewing for all females between 20 and 70. Meanwhile with pension returns down as the stock market flatlined, BTL was seen as the path to riches, more often than not on fag packet calculations based on anticipated capital appreciation, rather than solid business plans based on achievable yields and realistic assumptions about voids and maintenance costs. The young crew thought this was business as usual but old codgers like myself had seen at least some of it before ... it had the overipe smell of funny money about it. When people got a grip in late 2007 it was like a roadrunner cartoon, there was no solid ground under anyone's feet. We need to be frank with our sellers that we were in a BUBBLE and ALL BUBBLES BURST eventually. The Bank of England has thrown everything but the kitchen sink into this one but the measures have finally run out of puff. The only way is down, for an extended period. I actually suspect the falls will be faster than predicted here. Yes there are people stuck in negative equity but the vast majority of potential sellers aren't, there is pent up demand, and also pent up supply among sellers waiting for 'better times' (ie a return to a brief and heady 'normal' that was never 'normal' in the first place). But the whole thing is blocked due to unrealistic asking prices and lenders unwilling to lend while awaiting the inevitable falls. We have a role here, not just to make money but to act en masse for the good of the country, and it's pretty obvious what it is: educate sellers to GET REAL in their expectations.
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Posted Date: Friday 6th May 2011
Well I'm no expert in economics but these seem to be two independent expert bodies, with no industry axe to grind/nothing to sell to people (unlike many of the stats/predictions from Nationwide downwards) coming to similar conclusions. Capital Economics have been yelling 'fire' now for a very long time but that doesn't mean there isn't one! That others are coming to the same conclusion as them seems fair enough and (as below) tallies with my experience 'on the ground'. so to speak. As for the 'bubble' graph, I've seen it before and find it interesting. I haven't seen what it's based on though ... you have to assume it's quite stylised and reflects no 'actual' bubble but instead a set of characteristics common to many but not necessarily all bubbles in history. The shape - which I guess can be distributed differently over time - is more useful than the text labels though! I take the mathematics over the spin any day.
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Posted Date: Wednesday 11th May 2011
I suspect for once the numbers are indeed partially influenced by the bank holiday (sorry if that sounds like the standard 'wrong type of snow' cop-it). But that influence is fairly minor I suspect. We have made some sales this year but looking forward the tisution is gloomy ... indeed on current trends it's shaping up to be a pretty dire year. The next month or so will be critical and while stock is increasing, I don't see a corresponding increase in serious, proceedable buyers. (A slight increase in tyre kickers though with their own places to sell and no serious intent - cheap recreation I guess). I've said it before on here: the only way is down - substantially - and it's our job to educate the public. A 1.4% drop in a month is NOT flat-lining whatever Smiley-boy Shipside says, rather, it's evidence of falls gathering pace. You can't suck out more than half the finance and expect prices to be unaffected, and cash buyers simply can't make up the difference. Meanwhile I still have new vendors looking for 2007 prices and going elsewhere after I tell them the truth about what they need to do to make a sale in this market. I get a number of these people back eventually after wasted months with one or other of the big corporates, but by then their house is old on the market and the damage is done. I'm not in the NE or somewhere dire BTW I'm in the SE, barely 25 miles from the M25 and not much more than an hour out of London by train. Survival is the name of the game this year.
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Posted Date: Wednesday 11th May 2011
I have to agree with Hampshire Agent, although independents may lose out on the valuations bidding war, what we do attract, we will sell. I'm frankly not interested in flattering some greedy chancer's with a silly asking price, I'm only taking on instructions I think I have a chance of shifting. I'm hearing through the grapevine quite high staff turnover in some of our larger competitors
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Posted Date: Monday 16th May 2011
I've been rather busy today (about which, I'm not complaining) so have missed the fun and games about this latest statistic, which just reinforces how silly things have got, and in particular the degree of seller delusion out there that I have to say seems to go unchallenged by many colleagues. A couple of things: back when I was studying statistics as part of a business degree we did rather a lot of work on population size and distribution. It seems to me that whatever you think of Right Move, they are working with substantial bodies of highly-representative data, and the huge gulf between asking and selling prices is indeed a real phenomenon, not (at some have suggested) driven only by some sort of weird selection process that counts only Surrey detacheds in the asking prices list, and Northern terraces in the sales column. Sensibly priced stuff is selling; yes there are a few people still prepared to pay high prices over the odds but the number of 'greater fools' out there willing to pay 2007 prices is dwindling. This means the high-priced stuff AT EVERY LEVEL OF THE MARKET isn't shifting. Ergo, the difference between asking and selling prices. It doesn't mean that every house needs £50k or even £100k hacked off the price to sell (though quite a few could do with that, and more, before I would take them on). But that, as some have pointed out, there is a difference between being on the market and marketed to sell. Anyway I no longer play silly buggers over pricing, my stock levels aren't the 'highest ever for May' as I refuse to market at stupid prices. I trust straight talking and honesty will eventually be rewarded - it's stood me in reasonable stead so far. People come on with us who actually want to sell, and that word is getting around. Meanwhile, is anyone else wondering whether the reason some colleagues are so reluctant to see the market properly correct is that they have a secret stash of BTLs collected too late in the day? I can't help think that for some, personal gain is overriding professional judgment. As a profession we - and indeed many buyers as well as the country at large - have far more to gain from a short, sharp correction and a return to normal trading, than in prolonging this, at times, near-zombie marketplace. Thankfully though, it wasn't so zombie today!
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Posted Date: Wednesday 1st June 2011
This is indeed the only answer. It's not about finance availability. Finance is widely available on pre-year-2000 terms (min 10% deposit, sensible salary multiples), which with hindsight was the last time finance was managed sustainably. Bubble finance gave us bubble pricing, and bubbles burst. I've said it before here, our ability to stay in business depends on how we manage expectations of price decline: the HPC brigade want a huge crash right away, I can't see that happening but we do need to start preparing people for what's coming which is a LONG drift to the bottom (took six years from a much less frothy top in 1989, if anyone here remembers, without any of the QE & negative interest rate shenanigans we are having now). Smart sellers - and smart agents - will appreciate this and realise that to sell in the current market, you have to be just enough ahead of that decline, so that increasingly savvy buyers won't feel they need to keep waiting for yet more falls.
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Posted Date: Wednesday 8th June 2011
Anonymous, funnily enough I refused an instruction on Monday because of the obnoxious idiot factor too. (Well, that and ridiculous price expectations). Life's too short to waste signing up for grief from these types.
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Posted Date: Monday 13th June 2011
All seems very plausible. HBOS really messed up big time. Indeed if the fall is less than 10% by this time next year I'll eat one of my boards. With mainstream property outside of London,I just can't see what there is to prop up prices. 10% plus I reckon.
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Posted Date: Monday 27th June 2011
I don't get the 'turnaround' bit. So April is busier than March, and May is busier than April. Looks like business as usual to me. This happens every year. What's the comparitive data to 2009 and 2010, rather than on the previous month? People whose houses are priced sensibly are selling. The fantasists, those who are not serious about selling, and those who know their price is too high but who bought fairly recently and can't afford to take a loss, are not selling. The only turnaround I can see is that the penny is finally dropping that 2007 prices are a mountain peak far behind us now. If this trend continues, than a recovery - in volumes at least - can't be far away.
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Posted Date: Monday 4th July 2011
Not sure about the method used .. this company may not have the reach say of Rightmove or the Land Registry. Are they truly national? Where I am sensibly priced property is moving (or at least getting some footfall) and the la-la-la-la-land brigade are getting no viewers. Same as it's been all year. What's interesting is that the figures (however scientific) suggest sales have held up in the regions where there have been some significant price falls, and have dipped most in areas where sellers are holding out for historic highs. I'm already on record as suggesting where I believe this all leads to.
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Posted Date: Monday 4th July 2011
Ray, I fear you have lost the plot a little. It's not a money lending problem, £125k for many of these flats, once you get used to the fact the world has changed, looks simply wrong. If we are to get back to the classic FTB profile, anything over £80k on current salaries looks optimistic. The fact we all got carried away with the market a few years back doesn't mean these sorts of numbers are a permanent thing. You are right in the sense that finance has been withdrawn but wrong to suggest it is coming back any time soon - I don't believe it will until the risk profile dramatically changes (ie, the rebalancing of the market is a done deal). I think this can only happen with further falls of 20-30% in most areas. It won't all happen at once and it will take every ounce of professionalism we have to keep the wheels on the wagon as it edges downwards. I do recognise all the positive mental attitude stuff but sometimes reality intrudes and a new strategy is required.
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Posted Date: Wednesday 13th July 2011
I doubt these 'drop' figures reflect anything close to real life ... I'm seeing 20% drops or even more before some hard to stuff shift sells, otherwise it just sits unviewed and eventually the boards come down. There are properties in my locale that have been on and off the market for 2-3 years now and often the prices are as fanciful now as they were at the beginning. Having said that a lot of this stuff was well overpriced to begin with (not by us I hasten to add, but by some of our more cynical competitors - though I won't say we haven't made the occasional wrong call). I have to say I don't see where Home get these piddling little drop amounts from, it doesn't reflect my daily reality at all. Add a zero to the percentages.
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Posted Date: Friday 22nd July 2011
Coming a bit late to this but I'm all with Shipside's gallant efforts to get a bit of realism into the thick heads of vendors (who, as pointed out below, strangely and suddenly seem remarkably less thick headed when making a purchase ...). I just wish he'd made this pronouncement earlier in the year rather than 5 minutes before the summer slowdown, might have had some useful impact in volumes earlier in the year. My continuing robust approach in refusing to indulge fantasy asking prices is paying off and I've been pretty busy .. new vendors have been viewing and selling well above the general run rate in my area, while some motivated selllers sold a bag of nonsense first time round are coming on with me now after they sack the idiot that sweet talked them into signing up first time round. The story quoted below about the woman who had to fight to be 'allowed' to reduce their price rings true for me, I've had a several of sellers tell me that now. No wonder the public has quite such a low opinion of our profession. In the meantime, I'm quite happy for the wost of the greedy fantasists to waste my competitors' time and money rather than mine. Only a decent drop in prices will unblock this market and get things moving again. Everybody knows this, but there are still quite a few people out there desperately refusing to acknowledge the truth - including quite a few in our profession - mainly because their BTL portfolios will be in catastrophic trouble if prices fall to the sort of levels that to my mind seem inevitable. Sorry guys (and gals) but you can't deny reality forever.
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Posted Date: Friday 22nd July 2011
Shapps is a grinning idiot with no neck, who has done nothing for anyone since coming to power. What a waste of space. Interestingly, I read some reports that he's to be promoted! For what, precisely, I'm not at all sure.
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Posted Date: Friday 29th July 2011
These sites will be a magnet for the sort of cheapskates who frequently are price fantasists as well. I don't think any of us should be worried. A good EA provides local market nous, communications services, good marketing facilities and most importantly, negotiation skills at the point of closing a deal followed by sometimes very hard work to keep a deal on track. Get a reputation for these things and we have nothing to fear from a web site.
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Posted Date: Monday 8th August 2011
'70% of would-be first-time buyers think property is over-priced in their areas'. I am certainly getting a fair number of savvy-sounding potential FTBs who are looking but are clearly not in buying mode - mainly to get a feel for the area I think. I'm always pleasant to them - they might well turn serious some day - and I like to chat to them. Overwhelmingly, they see prices as too high. Significantly too high. It's not a despairing situation for them (as it might have been in 2007 for those anxious not to miss the boat). Rather, the last thing on their minds is to blow their precious deposit on the wrong property at the wrong time. Of course you still get the stereotypical henpecked bloke and pushy partner who just wants to jump in head first (often Bank of Mum & Dad funded). But I'm seeing an increasing amount of sophistication in young (indeed, often not so young) buyers. They don't see rent as dead money, the opposite in fact as houses in many areas have been falling faster than rent paid. They are happy to wait - they know that prices certainly aren't going up, and that if they do wait their deposit will be bigger, at a minimum. Most feel that prices are pretty sure to keep coming down. And they really are in no rush. What can we learn from this? Well I've said it before here. The savvy seller (and the savvy agent) follows the market down, offering good value just a notch ahead of the competition. The only reliable way to sell in this market is to appear to be in bargain territori to buyers, many of whom have all the time in the world, FTBs or not. In the sheer amount of denial from colleagues on here, I can only assume that they are either loaded to the gunwales with BTLs, or up to their necks in negative equity (or both). Either way, this lack of objectivity/willingness to accept reality really does their claims to professionalism no good at all.
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Posted Date: Monday 8th August 2011
Just read 'Would be FTB' who posted while I was writing and laughed out loud. You weren't round my office on Saturday morning looking at 3-bed semis, by any chance?
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Posted Date: Wednesday 10th August 2011
PeeBee, you are talking total rot. Negative equity has a huge impact on the market as it reduces people's options (frequently ruling out trading up or even trading down), impacts sentiment, and all in all adds to a reduction in transactions. In the current climate, negative equity (and fear of this increasing in future as prices drop) is driving credit-restricting behaviours in banks and building societies, a vicious circle that is putting even more downard pressure on prices, and putting more in negative equity. (The trend towards interest only mortgages is another reinforcing factor as loans for many now don't reduce over time). Weren't you around in the 80s and early 90s? Many people (including people in broken down relationships) got stuck in properites that didn't suit them (location, size etc) for years. It is happening again and definitely depressing the market. Negative equity and its impact on people is the flip side of boom and bust/bubble and burst housing market that we have here. The psychology of a bubble such as we had between 2001 and 2007 leads to people taking ever riskier decisions, until the whole thing dries up when the music stops (as it always does at some point). From a purely selfish perspective, it's also fuelling fantasy price setting as people go on the market looking for unrealistic prices, not because they are greedy but because they can't afford to move if they take any less. I feel for these people but they are asking us to do the impossible by selling their houses for more than they are worth and in general I find ways to see they put their instruction elsewhere. As always people's only option is to muddle on but it's patent nonsense to say it has no effect!
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Posted Date: Wednesday 10th August 2011
Peebee: You don't know WHAT the property is "worth". You know what you can get for it - TOTALLY DIFFERENT! Isn't the whole point of a free market is that goods (be they a pack of chewing gum or a 3 bed terrace) are worth what you can sell them for? Or has Economics 101 somehow been altered since I last looked? On the other point: You are arguing about individual sellers. I'm making the point that negative equity is a problem for the entire market and therefore is NOT irrelevant for anyone who either owns or sells property (whether they are in negative equity personally or not) due to its wider effects on depressing sales, impacting mobility, depressing lending etc. You can stick your head in a bucket of sand all you like but just because you don't see what's going on doesn't mean it can't creep up and kick you in the behind! Finally as for busting a gut to achieve impossible prices for those who bought at the wrong time (or blew their equity on holidays and 4x4s) ... I'll leave that to yourself, Superman, and that hypnotist off the telly ....
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Posted Date: Wednesday 10th August 2011
Gloria makes an interesting point: my kids aren't old enough yet, but would I advise them to buy in this market? Probably not. I'd advise to wait for further falls which I view as invitable. Is that hypocrisy as I'm still selling to people who come in through my door? No I don't think so. My duty of care to them (unlike a father's advice to his kids - for all they listen!) extends to being professional about the transaction, not in engaging in some great debate about their life direction. If they choose to buy at this time they've made and adult choice about buying a home for themselves. I don't see any hypocrisy from me or from Gloria for that matter. Would I advise people to sell, on the other hand? Well, one thing I wouldn't advise for say, pensioners selling up, is to live with high living costs in the hope of a cash windfall 'when prices recover'. Because I simply don't see that happening for many years. Indeed I would urge to sell sooner rather than later.
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Posted Date: Friday 12th August 2011
I fear we will see a lot more of this. I'm lucky to be in the south-east where, despite falling prices, we are still turning over sufficient numbers to get by. These peripheral markets like Scotland and NI where prices spiked late and briefly, at silly levels before the credit crunch arrived are the ones hardest hit, as they have SO far to fall from the peak, and volumes are so far down that new far-reduced price levels have yet to be properly established so things can move on. So the whole thing is frozen over. I have family up there but am bloody glad my business isn't in Ayrshire or Lanarkshire. As several have pointed out MEW is a big issue there too with spent equity long gone and no prospect for many approaching retirement of getting a sale that will cover what's owed. I really feel for those losing jobs but worry there's lots more of that to come.
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Posted Date: Friday 19th August 2011
It's a sad say but it's fairly obvious that a smaller amount of money in the system can't feed the same number of mouths. So unfortunately this may not be the last of these. The questions is: how do we ensure survival of our businesses, which many here have worked years to build up through hard work and attentiveness to customers. The only answer is the obvious one: for volumes to rise, values have to fall. Probably quite markedly, back towards the long term averages which the HPC'ers rant about, but which are indicators of a healthy market. The craziness of the boom years carried the seeds of their own destruction with them ... the crazy valuations which eventually caused the system to go into cardiac arrest (few of us imagined at the time how crazy the valuations were, we were too busy selling .. but we've now had time on our hands to reflect). The ever more shrill voices bellowing for maintenance of bubble price levels are, I'm convinced, purely those of people who bought (in many cases cases, their own) BTL hype and invested too much, too late, in the BTL basket. I resent their personal vested interest being put forward as some kind of representative view of our industry. What we really need is lower prices and more volume. The ever more contorted pseudo-arguments which purport to challenge this self-evident fact are, frankly, becoming a sick joke.
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Posted Date: Saturday 20th August 2011
Don't get your point, Raymondo ... got a few BTLs not working out as planned? An unblocked market - which will ONLY be achieved by lower prices, as boom finance is NOT coming back any time soon - benefits the huge majority of people, who are freer to move around, trade up, buy in at the bottom and so on. Not just estate agents. Those who paid too much in the boom years or who overborrowed on BTLs or mortgage equity withdrawal - well that's life, get over it. Happened in the late 80s/early 90s too and it came right eventually. (Not the BTL bit, obviously). And those retiring having made a pile on the massive market rise in the last 30 years - well they've made SO much they can afford to lose a slice to stimulate the market and benefit younger generations can't they? (Or should I say, can't we, as I include myself in that category?) We need to be working on getting prices down not just for our own benefit but for the good of the wider population.
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Posted Date: Saturday 20th August 2011
Raymondo, I think it's HIGHLY debatable about whether falling prices are bad for our customers or not ... people who are serious about selling and interested in trading up (or relocating/trading sideways) just want to be able to move and falling prices don't generally hurt them at all, it's the ability to sell that's important. The number of customers actually trading out altogether is relatively small and most have plenty of equity to spare ... some of the biggest blocks in the system are greedy children of a departed parent who don't need to sell but are quite happy to waste hours and hours of our time attempting silly prices, are these the sort of customers you are referring to? Falling prices across the board are, on balance, in the current climate, a good thing for housebuyers AND sellers, and will ultimately be good for agents too.
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Posted Date: Saturday 20th August 2011
Raymondo, I can only agree that no-one can be 100% sure of the answer to all this, opinion based on personal observation and experience is all we have to go on. As to Churchill's famous quote I'm right with you there!
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Posted Date: Wednesday 7th September 2011
Gloria is spot-on both about the three kinds of estate agent and about the negative social consequences of a dysfunctional market such as we have at the moment. I believe Fitch is right .. that doesn't mean 25% reductions are imminent, but the market trajectory is clearly down for the foreseeable, and the only option EA's have to stay in business is to work with those sellers who are serious to set prices that are genuinely perceived as good value, staying just ahead of market sentiment as prices fall. Gloria's strategy of straight-talking is exactly the one I have been adopting and it means that on the whole, the properties we take on sell more quickly than the majority of those placed with our competitors at fantasy valuations. Meanwhile, those EAs out there in Gloria's second category, whose concern is more for their BTL portfolios than to help customers from finding a sale through to completion,can continue their King Canute exercise as long as they want, right through to collecting their dole cheques. Assuming they are eligible of course - the DSS probably won't care whether their mortgage payments are less than their rental income, or not, they will only be concerned with what's coming in rather than what's going out!
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Posted Date: Wednesday 7th September 2011
@bob, I fear your analysis is spot on, with one exception, the banks don't WANT a drop (as it will cause no end of trouble for them in terms of capital ratios) but they do EXPECT one, which is the main factor constraining lending (and in particular the requirement for high deposits) - who in their right mind would lend freely on assets they expect to fall in value? As I keep saying, all we can do as a profession is to try to stay ahead of the curve. Ostrich behavior is comforting in the short-term but commercial suicide in the longer term.
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Posted Date: Friday 9th September 2011
We've seen a few victims of these schemes through the doors. Not a lot we can do to help most of the time. FTBs need a bit more patience to save that deposit, these schemes have all the down-sides of renting and few of the up-sides of ownership. The only gainers are the developers.
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Posted Date: Friday 9th September 2011
Whichever way it falls, London is NOT England. Thank goodness.
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Posted Date: Monday 19th September 2011
Wardy, don't talk nonsense, the 'BTL thing' as you put it is right at the heart of the overvaluing problem (and, increasingly, it is a big part of the 'stuck market' problem). I'd argue that those of us who were skeptical about the long-term viability of BTL as an investment proposition might even be outnumbered in places by colleagues who piled into it with gusto! As for Rightmove, Shipside's analysis is spot-on - even if his own prices are drifting into the same fantasy territory as some of the deluded would-be sellers out there ....
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Posted Date: Tuesday 20th September 2011
Intriguing idea but however much I think the industry is plagued by fantasy valuations (and for all the damage they are currently doing to sales volumes), I don't think criminalising stupidity is a good thing.
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Posted Date: Tuesday 20th September 2011
Ray you have this back to front (as usual), setting up an Aunt Sally to throw bricks at. No-one is asserting any god-given right of EAs to a living. But are you seriously suggesting that indulging fantasy pricing, either proposed by an EA looking for an instruction, or demanded by a self-deluding seller, helps anyone at all? (Other than providing a threadbare comfort blanket to despairing BTLers? Oh and selling the very odd property at over the odds, I mean there are still a small number of total suckers out there with cash to burn). My take on this is that I lay it on the line to sellers that they need to price aggressively - just a touch ahead of the falling market - if they genuinely want to sell in these conditions. This is generally to achieve some life purpose like up or downsizing, or moving location to be near work or family. (Or sometimes, just getting out from having been in over their heads). 'Pretend' would-be sellers who are only going on the market to realise paper/imaginary gains based on 2007 valuations, or who 'need' to raise these sorts of valuations because they have mewed it all away, I just send packing. They can suck the life blood out of one of my competitors: it's just not worth the hassle. This works for me and is working for the customers I do take on as we shift property generally quite quickly (and often at close to what we advertise it at) while our competitors either don't, or typically only do after much price dropping to catch up with the market, after they have had their hopes raised then dashed. Far rather a small number of hot prospects than a window full of stale, overpriced zombie properties.
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Posted Date: Monday 17th October 2011
I despair for our profession sometimes. This is the OPPOSITE of what's needed to bring about any kind of revival in volumes and in the long run it's doing our sellers no favours either.
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Posted Date: Wednesday 26th October 2011
I don't know what the answer to competitive 'highest bidder' valuations is, but this isn't it.
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Posted Date: Wednesday 23rd November 2011
This whole mortgage indemnity malarkey for new build is utterly pointless, and indeed irresponsible. I'm glad it's not being extended to other FTBs as it only encourages the sort of stupid lending to borderling borrowers that brought the market down in the first place. On top of that, how on earth are we to help previous FTBs trade up if potential buyers only need half the deposit to buy new build over existing properties? Utterly stupid and self-defeating, the only up-side is how small the scheme is, so the damage will be limited. Although completely unconnected to 'keeping the market going' he is right however about landlord registration but that won't happen until Grant Shapps - who canned this idea as his first act in the housing job - either gets the boot or (as is more likely - the reward for compliant idiocy - gets a promotion). Not least as it would help enormously with HMRC's crack down on tax evasion by landlords, which is rife as we pretty much all know. Joined up Goverment? I don't think so.
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Posted Date: Thursday 12th January 2012
This is what I've been saying for many months. We won't see a proper market recovery - in sales volumes and in people being able to move home when they need to and get on with their lives - until price expectations start to come into line with reality. 'I see sensible EAs are now letting the the over-value monkeys take on the impossible sell for 3 months and taking business back just in time for the money shot of a "reduced" price sale when the vendor gets fed up with the over-value money firm.' My strategy over the last year in a nutshell - and I'm doing just fine, thanks.
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Posted Date: Monday 16th April 2012
Trying to avoid commenting too often here here as it all too often turns into a fruitless (and all too personal) slanging match. But this is one of my pet peeves so I'll make an exception. AC, I fear you are 100% correct.. I've upped the ante on realism this year and lost quite a few instructions that I know I could have sold quickly on a sensible valuation. I know that most are likely to stick around indefinitely at these silly asking prices, though I have to say my success rate in getting these customers back second time round is not too bad (must be my natural charm!). I truly despair though when I read stories like 'record high asking price'. In this market!. While your analysis is spot on as to why it happens, to the casual observer, it does make us all look like a pack of idiots. And after a better than expected winter, things are s-l-o-w to get going. Most of the traffic is the usual window shoppers who haven't sold yet and aren't really proceedable, while those serious buyers with mortgage offers and big deposits in their back pockets are bargaining hard, making 20% off offers (lower sometimes). Only a few of these are being accepted (yet!), though let's see what happens by July when I predict a lot of this new stock is still sitting there unbought, alongside quite a few properties from the Winter and indeed, last Spring!
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Posted Date: Friday 20th April 2012
Shapps has been a complete and utter waste of space ... Bankrolled in opposition by construction firms, his policies have done everything to prop up new build prices (significantly UP according to the latest figures - all heading for the pockets of building companies) and nothing at all to unblock the wider market (which, as we all know, is most of it ...!) The astonishing thing is, in the current talent free zone that is the Tory party, he's tipped for promotion rather than the sack.
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Posted Date: Wednesday 25th April 2012
I fear CC is right about the new lending rules, the report above describes the usual springtime stream of dreamy-eyed FTBs who haven't had the meeting with the mortgage advisor yet. I saw one couple leave in tears the other week. Others have never been seen again. Another anecdotal, we lost an instruction recently to a competitor who valued an extended 3-bed semi more than 25% higher than we did, just the worst case of a lot of over-valuing to gain instruction going on (no doubt on the back of this 'optimism' we read about). Chance of a sale in a sensible timeframe: almost zero I would say. While this sort of double fantasy is going on I can't see volumes improving substantially. Double dip recession is a minor inconvenience with the general market madness continuing.
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Posted Date: Tuesday 8th May 2012
Can't really have it both ways, seasonal adjustment functions in a normal market to smooth out the yearly ups and downs, taking a bit of the spring-early summer bounce away and adding it onto the quieter months, precisely to avoid the appearance of a market in trouble when it's really just business as usual. Of course that doesn't work when, as at the present, the spring market doesn't pan out as expected in a lot of areas. Things have actually been going rather well here in my Southern counties patch, with my (sensibly valued) new instructions moving nicely, but as I predicted at the time, some of my competitors are struggling with over-exuberant valuations - bidding things up to record levels to gain stock ahead of what looks like another downturn (how steep is yet to be ascertained) isn't the brightest thing to do. Once again, I predict a few red faces as the year progresses.
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Posted Date: Friday 25th May 2012
There is merit in some relaxation in lending rules, particular around LTV - clearly there are many people who could happily pay back a mortgage that can't (because of rent levels) save much. 95% should be available to more people. I wouldn't propose going back to silly income multiples though mainly due to the risk of what happens should interest rates suddenly rise. This sort of easing would improve accessibility of loans without inflating prices again (which would be a bad thing in my view as it would kill off any revival as soon as it started). My sense is that the pendulum needs to swing back a little from extreme caution to caution. But I have to say this Wrigglesworth chap is a bit of a clown if he really thinks sub-prime is the way to go (as opposed to simply courting publicity).
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Posted Date: Monday 8th October 2012
No shit, Sherlock. But on the bright side, winning the instruction keeps the window busy!
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