Mark my words, property is on it's way down, London, Hove or wherever!
Property in the UK is the 2nd most overvalued in the world.
All this supply / demand business is true, however demand will fall as obtaining a mortgage is now harder due to the 'credit crunch', also mortgages of 6 times a salary are no longer possible.
Just look at what's happening in the USA, sub-prime is what killed it there and that's what'll happen here.
[cite]Posted By: reserves[/cite] All this supply / demand business is true, however demand will fall as obtaining a mortgage is now harder due to the 'credit crunch', also mortgages of 6 times a salary are no longer possible.
Status ( proof of income) and clean ( non-adverse) mortgages have not really changed- and, if appropriate, it is still easy to get a loan of 5-6 times your income, again no change.
But the people you want to self certify income at a high proportion of the property value and/ or have adverse/ poor track record of maintaining their credit will have more difficulty.
Whether this will adversely effect the market, i don't know.
Personally, based on nothing much more than a gut reaction, i think the housing market will be slow until the new year when the natural effect of people's life changes, ie wanting bigger/ smaller etc will get the market moving again, allbeit fairly sedately.
£250001+ = 3% on the total price of the house. Interesting divergence of views, personally after seeing whats happening at the bottom of the market i think you're in for a hell of a shock.
It is when you look at it like that, but when you look at it as a percentage of expenditure (I'm sure) it doesn't look that bad...
I don't really know what I'm talking about tho...I did actually think you paid it on house sale rather than purchase, so was quite pleased when I 'only' had to pay £12k something instead of the £14k something I was expecting....actually felt as tho I had saved £2k, so felt quite pleased with myself. Idiot.
The scary thing is I now work for bank and still don't really have a clue what I'm talking about.
Value- about £350,000. Nice 3 bed extended- downstairs has a 27ft lounge 16ft kitchen 12x 11 dining room as well as a downstairs loo.
3rd bedrooms a bit pokey,
Look at 4 bedroom house with smaller downstairs , would be £425-450 in similar area.
Would cost over £6k in estate agents fees to sell and about £13000 in stamp, that's nearly nearly £20k and not the end of the cost by a long way, and a major part of the cost of a loft conversion that would create a larger house that they would be buying for £75k+ more.
Now that's a lot of the reason why housing market has slowed and also why Builders are back driving expensive cars and why i have the time to type this lot. ;-)
Great stuff Charlton Charlie - all that waffle and then admits he hasn't a clue what he is talking about.
I always say that it is always best leaving things to the experts........be it plumbers, electricians, lawyers, mortgage/finance advice etc etc. You shouldn't be afraid to say " I have no knowledge in this particular field, so I will leave it to someone who does"
As a financial advisor of some 20 years standing, the last 8 years as an IFA it is amazing some of the things you hear from clients who think they know better than you. If you had a leaking tap and asked a plumber to have a look, would you then tell him what type of washer he needed - no, of course not.
So, anyone who is thinking about buying or selling a house, ask an expert, not your mate down the pub (who's a cabbie !)
Whilst ultimately I agree with golfaddick, I would have to add that the bread and butter fees of many "experts" rely on a very limited amount of knowledge stoked up with the punter's fear of making a mistake.
except Golfie, what one expert will tell you will vary greatly from what another expert will tell you, depending on where they see the future course of interest rates, inflation and housing price and demand going. Plus a lot of advisors will have a self interest.
The best piece of advice was earlier in this thread, where Stanmore said that first and foremost, your primary residence will be your home, not just an investment. Everything else is common sense and best approached with a cautious eye.
Might have applied several years ago, the regulation and potential redress involved in getting it wrong as a Mortgage broker nowadays makes getting it wrong a potentially very costly exercise.
We are possibly talking at cross purposes. I'm not suggesting that the IFAs make mistakes, just that some aspects of professional advice aren't exactly rocket science.
My comment was directed at, say, conveyancing, writing a will, filling in your tax return etc. The adviser plays on the fear of the individual that there might be that little nuance that they do not know about that means that they need "expert" advice. In many cases people are happy with the peace of mind that they get from having someone (or someone's professional liability insurance) on the line. The fact is that they are getting less value for money than they think.
It is not meant a s a dig at IFAs, lawyers, tax advisers or accountants (and indeed I am at least two of those things), just an observation. And if you sleep better at night as a result, everyone's happy.
it all about sustainability, i.e. demand not only for housing stock but also somewhere to live. Take Greenwich where my flat is and my mum's house is (which she is letting out), my house is in Falconwood. Because Greenwich is perceived as a good place to live and is very convenient for canary wharf and pretty good for the city, demand for rentals and purchases are high.
Other areas that have benefitted purely on speculation and low housing stocks compared to demand that is somewhat fuelled by low rates (are they still 'low' - not sure). These areas are more exposed as such.
I'm no expert but I do think about these things of course because of the investment I've made in keeping a flat to rentout. The threats as I see them are high interest rates, economic depression, a cataclysm such as london flooding etc. and or a combination of the above.
For me London flooding would smash the value of my flat at least in the short term as its in lowlying east greenwich, however if london seriously flooded inside the barrier we'd all be eff'ed. And anyway it would probably mean my mums place on the slopes in west greenwich went up even futher, and surrounding low flood risk where my house is in falconwood would rise.
A major economic downturn would affect rents and combined with a possible crash in the housing market that might accompany it, would mean i would end up with a liability i couldnt rent and couldn't sell and worse if i lost my job i couldnt meet any shortfall. But then the same might happen even if i didn't have a second property.
I'm no economist but what does worry me is whether this continuous steady growth we've had is sustainable, it seems to be based on huge government borrowing, which is then invested in public services - this wouldn't be so bad if the growth was higher although I guess that would be inflationary. Despite efforts to the contrary we have not reduced fuel prices and seem to be content to reap the higher duties to cope with the borrowing. Manufacturing and balance of trade are still mightily screwed despite these years of steady growth, which is odd.
Comments
Property in the UK is the 2nd most overvalued in the world.
All this supply / demand business is true, however demand will fall as obtaining a mortgage is now harder due to the 'credit crunch', also mortgages of 6 times a salary are no longer possible.
Just look at what's happening in the USA, sub-prime is what killed it there and that's what'll happen here.
Could be all bollacks though ;)
Status ( proof of income) and clean ( non-adverse) mortgages have not really changed- and, if appropriate, it is still easy to get a loan of 5-6 times your income, again no change.
But the people you want to self certify income at a high proportion of the property value and/ or have adverse/ poor track record of maintaining their credit will have more difficulty.
Whether this will adversely effect the market, i don't know.
Personally, based on nothing much more than a gut reaction, i think the housing market will be slow until the new year when the natural effect of people's life changes, ie wanting bigger/ smaller etc will get the market moving again, allbeit fairly sedately.
so if you buy at £245000 it's £2450 but £255000 its £7650.
I don't really know what I'm talking about tho...I did actually think you paid it on house sale rather than purchase, so was quite pleased when I 'only' had to pay £12k something instead of the £14k something I was expecting....actually felt as tho I had saved £2k, so felt quite pleased with myself. Idiot.
The scary thing is I now work for bank and still don't really have a clue what I'm talking about.
Value- about £350,000. Nice 3 bed extended- downstairs has a 27ft lounge 16ft kitchen 12x 11 dining room as well as a downstairs loo.
3rd bedrooms a bit pokey,
Look at 4 bedroom house with smaller downstairs , would be £425-450 in similar area.
Would cost over £6k in estate agents fees to sell and about £13000 in stamp, that's nearly nearly £20k and not the end of the cost by a long way, and a major part of the cost of a loft conversion that would create a larger house that they would be buying for £75k+ more.
Now that's a lot of the reason why housing market has slowed and also why Builders are back driving expensive cars and why i have the time to type this lot. ;-)
I always say that it is always best leaving things to the experts........be it plumbers, electricians, lawyers, mortgage/finance advice etc etc. You shouldn't be afraid to say " I have no knowledge in this particular field, so I will leave it to someone who does"
As a financial advisor of some 20 years standing, the last 8 years as an IFA it is amazing some of the things you hear from clients who think they know better than you. If you had a leaking tap and asked a plumber to have a look, would you then tell him what type of washer he needed - no, of course not.
So, anyone who is thinking about buying or selling a house, ask an expert, not your mate down the pub (who's a cabbie !)
The best piece of advice was earlier in this thread, where Stanmore said that first and foremost, your primary residence will be your home, not just an investment. Everything else is common sense and best approached with a cautious eye.
Might have applied several years ago, the regulation and potential redress involved in getting it wrong as a Mortgage broker nowadays makes getting it wrong a potentially very costly exercise.
We are possibly talking at cross purposes. I'm not suggesting that the IFAs make mistakes, just that some aspects of professional advice aren't exactly rocket science.
My comment was directed at, say, conveyancing, writing a will, filling in your tax return etc. The adviser plays on the fear of the individual that there might be that little nuance that they do not know about that means that they need "expert" advice. In many cases people are happy with the peace of mind that they get from having someone (or someone's professional liability insurance) on the line. The fact is that they are getting less value for money than they think.
It is not meant a s a dig at IFAs, lawyers, tax advisers or accountants (and indeed I am at least two of those things), just an observation. And if you sleep better at night as a result, everyone's happy.
El Capitano
it all about sustainability, i.e. demand not only for housing stock but also somewhere to live. Take Greenwich where my flat is and my mum's house is (which she is letting out), my house is in Falconwood. Because Greenwich is perceived as a good place to live and is very convenient for canary wharf and pretty good for the city, demand for rentals and purchases are high.
Other areas that have benefitted purely on speculation and low housing stocks compared to demand that is somewhat fuelled by low rates (are they still 'low' - not sure). These areas are more exposed as such.
I'm no expert but I do think about these things of course because of the investment I've made in keeping a flat to rentout. The threats as I see them are high interest rates, economic depression, a cataclysm such as london flooding etc. and or a combination of the above.
For me London flooding would smash the value of my flat at least in the short term as its in lowlying east greenwich, however if london seriously flooded inside the barrier we'd all be eff'ed. And anyway it would probably mean my mums place on the slopes in west greenwich went up even futher, and surrounding low flood risk where my house is in falconwood would rise.
A major economic downturn would affect rents and combined with a possible crash in the housing market that might accompany it, would mean i would end up with a liability i couldnt rent and couldn't sell and worse if i lost my job i couldnt meet any shortfall. But then the same might happen even if i didn't have a second property.
I'm no economist but what does worry me is whether this continuous steady growth we've had is sustainable, it seems to be based on huge government borrowing, which is then invested in public services - this wouldn't be so bad if the growth was higher although I guess that would be inflationary. Despite efforts to the contrary we have not reduced fuel prices and seem to be content to reap the higher duties to cope with the borrowing. Manufacturing and balance of trade are still mightily screwed despite these years of steady growth, which is odd.
Back to you.