Has the ED housing market reached the bottom yet ( II )

[macroban]

New Land Registry figures.

[microbite]

I'm sorry Chav, but you sound like a very bitter twisted person who takes joy in others (as long as they are not the working classes') misfortunes, I am sorry that you feel this way. On a number of occasions you have flipped from saying you would hate to own your own property to saying that is one of your main goals in life, to own your own property and land etc. but because people want to better themselves, because people want to work hard for what they get and have the opportunity of doing so instead of scrounging off the state screaming and demanding everything be given to them freely like it is their inherrant right, while erm the rest of us support your @rses, seems slightly twisted and selfish to me, to then express your obvious glee at families losing their homes and their lives being destroyed smacks of a little envy there, I would have loved to have known your views had mummy and daddy popped their cloggs and left you a house, land, money or whatever it is you so bitterly have a prob with other people having.

[Keef]

Erm, to be fair to CWALD (who for the record is not a he), she did say "Most of the home owners who joined the feeding frenzy but who have or are about to get stung, deserve our sympathy - but not a lot.", not actually sure if that proves or disproves Microbite's point.

I personally have a lot of repect for CWALD and her passion about environmental issues. However, on this thread, I think you have rather contradicted yourself, and maybe have come across in a way that you wouldn't actually like to portray.

Thing about this thread is the likes of Huguenot have produced clear stats to back his arguements. You have produced loads and loads of text, that is basically just written by someone who feels the same as you, but that doesn't actually come across as particularly reliable.

It's not for me to speak on someone's behalf, but having met her a few times, I honestly don't think CWALD would laugh at a person who found themselves out on the street. The whole bus / cyclist / punching thread taught me that you can say things on here that deep down you may mean, but in cold reality, such things would trouble you.

Aaaanyway, so how about that ED housing market huh? Crazy stuff!

Happy new year!

[Jeremy]

Well I haven't meet CWALD, and although I may not agree with many of her views, it's still interesting to read stuff from someone who thinks differently from the mainstream of posters on here. And I will concede that there is a certain justice in property speculators getting their comeuppance...

[microbite]

She was talking about the average person on the street who has bought a home for themselves and then losing it when mortgagees call back their mortgages etc. as opposed to realators and estate agents to be honest, and yes, intended or not, I certainly detected a bit of morbid glee in there aimed at those who have found themselves in these situations, a lot of them are from working class backgrounds themselves who no longer wish to become burdens on society i.e. expect every other person to look after them. I am thankfuly not in that position as my mortgage is nearly paid off, but I know many who are, I'm sure to the joy of Ms Chav! Would they not then become a burden on the State because they then do fall into the category of genuinely needing shelter and homes, but guess what, they are all taken by people who don't actually need or deserve them.

[Jeremy]

Don't get me wrong, microbite... I'm largely in agreement with you, in that people who claim benefits they do not need are a drain on society (and a council house is indeed a benefit). There is only a limited amount of council housing, and it is sad when the system is exploited and taken for granted.

But saying that "they are all taken by people who don't actually need or deserve them" is a gross generalisation, and a fairly ridiculous one at that.

I would also suggest that the emphasis should be on the government to ensure that housing is allocated correctly, rather than relying on the individual to do the right thing.

[microbite]

Ok Jeremy, point taken and I was rather rash in my generalisations, heat of the moment etc., what can I say...;-)

[*Bob*]

My Grandad lived in a council house, loafed and boozed his way through life before dying in a council house, bequeathing only a black and white telly, an ashtray (which you pushed a plunger down on the top flinging the ash into the container below) and a Bontempi organ worth ?30.

My Dad decided had slightly loftier ambitions, mostly spurred-on by not wanting to live and die like his Dad, I expect. Nothing flash, but a job, a house, maybe a car and perhaps even an occasional holiday which didn't involve camping in Weston-S-M in the pissing rain.

At least both of them seemed to have a clear idea of what they wanted, for whatever reason.

But Chav's in a muddle on this one. It's a result of being an educated person who can't reconcile their idealistic, materialistic and realistic ambition.

[Jeremy]

Did you get the Bontempi organ, Bob?

[indiepanda]

Jeremy Wrote:

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> And I will concede that there is a certain justice in property speculators getting their comeuppance...

I have to admit I recall someone advising me to get into buy to let a couple of years ago, as if they had some magic secret that I didn't - a car salesman who had been to one property seminar and they thought they were an investment guru and could patronize me - which bearing in mind I'm an economics graduate and an actuary was possibly a touch arrogant - I'm not close to being an expert, but I do know a little bit about finance.

Of course, the problem is it's not just speculators who will be harmed, it's many other people besides, most of whom are guilty of no more than financial naiveity, which is pretty common. And then plenty of other people get hit by second order effects which were well beyond their control or ability to forsee.

My dad was telling me about a small engineering firm he knows that had taken on an order for some piping work for the air conditioning at Lehmans - had just bought the required materials which were special to that job, and then they went broke leaving the company with ?100k of materials they might end up having to sell for scrap at a loss - lot of money for a small company to lose.

Going back to the naiveity, I think too many people are too inclined to trust an expert rather than research things and think them through for themselves because they find financial matters too complex and/or too dull... Problems is some "advisors" really aren't that smart themselves either, and some of them are downright devious and will say anything for a sale. There are some very good ones out there, but the better ones tend to restrict themselves to high net worth clients - the average person won't get that service.

And the banks have a huge amount to answer for - completely irresponsible lending - no one should be given a 100% mortgage, never mind a higher one. If you haven't managed to save for a deposit, how can you be trusted to buy a house? Worse still, lots of those large mortgages were sold on an interest only basis with no repayment vehicle in place.

Mind you, it's easy to point the finger at society and say something has gone badly wrong with our approach to investments, but bubbles have been growing and bursting for centuries - tulips in the 17th century, south sea bubble in the 18th century, railway mania in the 19th century etc etc.

I guess the difference with the more recent ones is that a much higher proportion of the population is directly affected with most people owning property and share ownership much wider, don't suppose your average working class man was investing in railway companies back in the 19th century. And it's so much more personal when it's your home on the line.

I think this one has still got a long way to go yet - forecasts for big rises in unemployment suggest things will get worse before they get better.

[bawdy-nan]

When the early surge of council housing was built after the second world war it wasn't designed for people "living on benefits" it was for working people on rlatively low incomes in a time when it wasn't the major aspiration or expectation to own your own home. The idea was to create a decent housing stock that was affordable, good quality and healthy.

Both of my sets of grandparents lived in council houses all of their adult lives. Neither family was out of work. They stuggled on relatively low pay but had a secure place to live that they treated as their own - tended the garden, re-decorated, put in carpets etc. They ended their lives as state pensioners (or early through industrial disease) but lived their lives small and carefully. After they died one set handed back the house in very good nick the other had made use of the right to buy (or rather their tory minded offspring had) and it languishes still, a tarted up 2 -bed terrace, in the doldrums of the housing market.

I rent in the commercial sector and don't really mind that I don't own my own house except that I have very few rights to stay in my home. I've lived in the same house for 5 years but can be asked to leave with 2 months notice. With 2 children at school locally this feels very precarious. I can't put up shelves or do anything that I might want to make my living environment better for my requirements. My rent is reasonable but still a very large proportion of my income. Despite having gathered savings sufficeint for a decent deposit I can't see my being able to buy for years (possibly not until the kids have left home and I need less space).

In the "olden" days I'd probably have been eligible for social housing of some kind but obviously don't get anywhere near now.

The whole reliance on housing as a capital investment vehicle is a relatively recent phenomenon. Looking in from the outside it looks crazy. I don't have much sympathy for the people who greedily eyed capital gains in their homes as a right and who are now finding they're stuck and have lost money. (Returns may go down as well as up etc etc). Of course its difficult to find you can't afford to move where you want or might lose your home but its surely the downside of the upside that was assumed was a right. Despite being a confirmed athesist I'm rather with the bishops on this... a little less emphasis on money as a signifier of status is something I'd welcome.

As a child in the eighties we were made homeless in overmortgaged circumstances. It was hideous for my parents but rather an adventure for us kids. Which is to say, circumstances change, fortunes shift and money isn't everything.

[Jeremy]

> When the early surge of council housing was built after the second world war it wasn't

> designed for people "living on benefits" it was for working people on rlatively low

> incomes in a time when it wasn't the major aspiration or expectation to own your own

> home.

I think we all realise that council housing isn't exclusively for people living entirely on benefits, but wouldn't you agree that a council house in itself is a state benefit? So by definition, council tenants are receiving benefits? Nothing wrong with that of course, as long as they are in genuine need of those benefits.

> I don't have much sympathy for the people who greedily eyed capital gains in their

> homes as a right and who are now finding they're stuck and have lost money.

I do tend to agree to a certain extent, I was never entirely comfortable with the concept of property speculation, as it has artificially increased prices.

[indiepanda]

bawdy-nan Wrote:

>

> The whole reliance on housing as a capital

> investment vehicle is a relatively recent

> phenomenon. Looking in from the outside it looks

> crazy. I don't have much sympathy for the people

> who greedily eyed capital gains in their homes as

> a right and who are now finding they're stuck and

> have lost money. (Returns may go down as well as

> up etc etc). Of course its difficult to find you

> can't afford to move where you want or might lose

> your home but its surely the downside of the

> upside that was assumed was a right. Despite being

> a confirmed athesist I'm rather with the bishops

> on this... a little less emphasis on money as a

> signifier of status is something I'd welcome.

I'm inclined to agree - a house is primarily a safe & comfortable place of shelter, a home, not something to show off and brag about. Somewhere along the lines that seems to have got forgotten...

But then that fits with a society where shopping has become a hobby in its own right rather than a practical necessity. And I'm as guilty of this as the next person (probably worse!) - just had to convince myself not to go sale shopping because I honestly don't need new clothes. Perhaps this downturn will help us focus back on what really matters? That's my resolution for this year anyway.... cut back on the acquisitions, save a bit for a rainy day, never know if I might be one of the unlucky ones who loses their job this year.

[lard]

macroban Wrote:

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> New Land Registry figures.

Good link that.

Interesting that a large part of the London boroughs' falls seem to be in the last month alone...many boroughs -2% in the month of November alone.

This means that London is tipping now and the relatively small yearly drop can be explained by holding up of prices late last year. For example Southwark fell 3.1% in the month alone with only 5.7% in the year.

Have a house for sale at the moment? Then realistically you have to drop it 3% a month just to keep it at a current price, nevermind making it an attractive offer by reducing it more.

[tommyt]

Is it just me or are there actually very few sales going through ED at the moment. I am an 'interested' renter and like to keep a look at what is happening in the market.

From the usual websites it just looks like there is very little stock on at the moment and people are renting not selling.

Does this mean that when people have to sell the prices they will get will be even lower or that they are not willing to sell at lower prices as there is a vacuum as no one sell or buys.

ps what do people think a 2 bed garden flat goes for in ED now. My old landlady was looking to sell for ?300k, she has reduced to ?275k but with a highest offer of ?250k. and this was a good road just of LL.

I had been looking to buy in Forest Hill and flats i was looking at in March 07 for ?260k are now on for ?210k

I think a good time to buy would be in mid 2010 - any view?

[snorky]

Buy when the economics makes sense and you can afford it as a direct competitor to renting and DONT rely on appreciation in value - view any unrealised gain or loss as just that - Unrealised - assume that you will be there for the duration.a pad with negative equity is only a problem if you want to move on/ up or out of the system altogether.

I know one lot who are moving out of London ( blah blah schools, quality of life, all the usual middle class bollocks ) but are "unable to sell their house" - no really, they CANNOT sell it at all ...our hearts bleed...oh really - this of course is a pile pile of shite, of course they could sell it, but what they think it is worth bears no relation to the reality of what people are prepared to pay.

[karter]

Tommyt, by what analysts say about EVERYTHING that is going on at the moment it would be hard to say when a 'best' time would be to buy. If you are loking to buy for yourself then you should buy according to your budget and also what Snorky said in his first paragraph above.

There was a 2 bedroom detached house available with garden available in Honor Oak but for some mysterious reason the vendor pulled it from the market. It was on the market at just ?150k.

Prices will go down, unfortunately for some.

[nunheadbelle]

I totally agree snorky, people CAN sell if they don't believe they their property is still worth the price it would have achieved a year or so ago. A property is only worth what people will pay for it and that price is a lot lower than previously, like it or not.

Whilst writing, I recently posted a link to a report on house prices being down to 2004 levels. House prices fall to 2004 level

snorky Wrote:

-------------------------------------------------------

> I know one lot who are moving out of London ( blah

> blah schools, quality of life, all the usual

> middle class bollocks ) but are "unable to sell

> their house" - no really, they CANNOT sell it at

> all ...our hearts bleed...oh really - this of

> course is a pile pile of shite, of course they

> could sell it, but what they think it is worth

> bears no relation to the reality of what people

> are prepared to pay.

[Lizziedjango]

The ED housing market has almost certainly not reached rock bottom yet. The terraced Victorian houses are only worth about ?120-140,000 so still have a fair way to go down. Whoever bought into the ridiculous notion that they were worth over ?500,000 needs their head examining - and the same goes for those people who risibly bought 1 bed flats for around ?250,000.

Property will probably revert to reasonable levels as it was in 1998. You could buy a Victorian house then off the Northcross Rd for ?120,000. That was still a lot of money, and more than three times my wage, but suddenly their price rocketed to ludicrous levels.

I feel some sympathy for people who bought ED properties during 2007 when they were at their unsustainable peak. These properties are now worth heaps less. My own house has dropped ?100,000 off what it was a year ago, but that is because it was valued far too high. It is still not worth what it might - if I was lucky - sell for now. I am expecting it to come down at least another ?50,000.

But my mortgage is low, and I never over extended myself, thank god.

Incidentally, you can tap in a postcode and see what a property is worth now on this website. I have been quite nosy and looked up several friends and colleagues' house and flat prices.

http://www.zoopla.co.uk/

[AD]

I bought a flat in the second half of 2006 so am obviosuly concerned that my flat will continue to go down in value. However the only positive is I did not over stretch myself and the property went up (according to Zoopla !) to 15% over what I paid for it about 6-9 months later, which I at the time thought was unrealistic.

I very much doubt however that a Victorian house on North Cross Road will drop to ?120k. The average UK wage and London wage was a lot less then and London was far less densley populated and the demand for rented properties was much lower. The property market still has some way to go I think but 50K flats and 100k houses in ED with the East London line coming in 2010 is unlikely I think........ hope !

[Lizziedjango]

AD, the average London full time wage was, tis true, lower in 1998 at about ?500 per week compared to about ?880 a week during 2008. However, goodness only knows how this average wage will drop in these very uncertain economic times.

I certainly don't earn anywhere near ?880 a week, despite being professionally qualified etc...etc.

Even if you are earning the average full time London wage of ?880 a week - roughly ?46,000 a year you will only get a mortgage for three times your wage now, as the banks are so wary to lend to anyone - so what will you get for ?138,000 in London I wonder....not a lot. You'd be hard pressed to find a 'orrible bedsit in Penge for that currently, so what would you get in ED for that? Not a lot. I see prices coming down significantly.

By the way, the East London line tube extension is not going to East Dulwich (it is remaining a train station only). The tube extension is going only via Honor Oak and Forest Hill......

[Jeremy]

I don't think things are quite as bad as you're making out, Lizziedjango. Buyers can still borrow around decent amounts, as long as they have a reasonable deposit. Yes times are hard and the average salary is sure to go down - but 120k is far too low. That would put a house (in a reasonably decent area of London) within the reach of a couple earning less than 40k between them.

You shouldn't try to guess when a certain demographic will be able to afford to buy. You should look at when it will become financially attractive for buy-to-let (or "borrow-to-let") investors to buy again (ie when rental income will cover the mortgage, and then some).

[Lizziedjango]

Jeremy, I have zero sympathy for people who thought they'd make a killing by indulging in the buy-to-let business. Pure greed.

[Jeremy]

I am inclined to agree with you, Lizziedjango. But like it or not, there will always be people out there who are on the lookout for ways to make a bit of cash.

Assuming rents stay as they are, (and that interest doesn't rocket up to ridiculous levels) the opportunity to snap up a decent terrace for around 300k-325k will be very tempting for any potential investor.

[mockney piers]

In all fairness Lizziedjango, it's hardly 'purest greed'. As the government is no longer keen on supplying houses to the rental market, where exactly do you think the housing stock for the rental market comes from? Assuming you and your family don't want to live in a shared house, and don't want to buy then you're going to have rent off a private landlord.

In which case surely they're placing their own capital at risk in order to provide a service in the hope that they get a return on their investment.

What's next in your sights, lets hope corner shop owners go bust due to their purest mercantile greed?

Admittedly I'm no great fan of the hordes of city workers who'd made a so much from all the speculation that got us into this mess, that they actually couldn't think of anything better to do than pump it into buy-to-let that helped fuel the housing bubble, however, broad brush strokes there.