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What's the housing market like at the moment?

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We have just sold a couple over Greystones which went for five grand more than asking price! so there are still houses out there that sell quick and for more money. Its a question of area - not as many people out there buying but the ones who are still will push the price up if the house is really nice.

 

we have a bungalow in Dore for sale , been on the market for months . don't agree area has anything to do with it at all .

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we have a bungalow in Dore for sale , been on the market for months . don't agree area has anything to do with it at all .

 

Not everyone wants to live in Dore though. Sorry if this upsets you but old people go to live in Dore and old people dont make up a big percentage of people looking to buy. They tend to stay put for a long time. Bungalows also only appeal to certain people not everyone finds living on one level natural.

 

Maybe you need to do some more aggresive marketing to get the buyers through the door.

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Sham you have been saying this for years. In the long term you will be the one losing money because in the 18 months since you sold out prices have still risen above what you sold for. With the small falls seen so far (little over 1%) we, the masses, are still much better off than you in terms of house values.

 

 

Very smug, but also very incorrect.

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Not everyone wants to live in Dore though. Sorry if this upsets you but old people go to live in Dore and old people dont make up a big percentage of people looking to buy. They tend to stay put for a long time. Bungalows also only appeal to certain people not everyone finds living on one level natural.

 

Maybe you need to do some more aggresive marketing to get the buyers through the door.

 

That's rubbish Dore is possibly one of the top 3 most desirable areas in Sheffield and any house there will always hold it's value long term.

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Sham you have been saying this for years. In the long term you will be the one losing money because in the 18 months since you sold out prices have still risen above what you sold for. With the small falls seen so far (little over 1%) we, the masses, are still much better off than you in terms of house values.

 

Yes if you sell up and rent. Otherwise you havent gained any money at all. As far as I can tell the difference between a small and medium house, medium and large house price also increases as prices increase so the next rung moves further out of your reach.

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Sham you have been saying this for years. In the long term you will be the one losing money because in the 18 months since you sold out prices have still risen above what you sold for. With the small falls seen so far (little over 1%) we, the masses, are still much better off than you in terms of house values.

 

We the masses are getting continuously worse off as the gap between where we are now and the next step on the ladder gets larger. At least that was the case until 5 months ago when it started shrinking again and it shows signs of accelerating, not slowing down.

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Won't the fact that banks are clamping down on their lending have a direct impact on house prices?

 

If people can't get a mortgage, or a mortgage for the full amount they require, then there will be fewer buyers out there which will force people to reduce their asking price. May not be happening yet, or at least it may not be happening as much as we fear it will in the future, but if the lenders and banks are in trouble, surely house prices will be too. Not that it is really too much of an issue to the average home owner as the market will pick up again. It should only really affect those mortgaged to the hilt, those wanting to sell NOW, or those with buy to let properties.

 

Surely first time buyers, assuming they can still get a mortgage, are in a good position....? Just sit back and wait for the prices to fall!

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thanks all for your opinions and advice.

 

I think I'll wait and see what happens over the next few months. One of the forum members(Sham69) said that prices could fall as much as 30%. Could you please advise me

on How this may come about, and don't worry if its a long explanation, I'm interested to know.

 

Thankyou all very much.

 

Buffey

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I've said before , it isn't the house prices thats the problem , more the fact evrybody has been scared to death to do anything . People just aren't buying at the moment , simple as that regardless of price . We know people that have reduced their properties by as much as 50k and it hasn't made any difference . So we have left ours at the asking price because come the summer it will be a different story. The only people that are going to be in trouble is the people that have been living beyond their means on cheap credit because unless they can now manage for a year or two something will have to go.

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Interesting report in the news this morning about the rate of repossessions increasing. People on cheap fixed rate deals coming off them this year are finding they cant remortgage and are stuck with their lenders variable rate which in some cases is much higher than their fixed rate deal. These are the people who are struggling to pay their mortgages not the first time buyers.

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thanks all for your opinions and advice.

I think I'll wait and see what happens over the next few months. One of the forum members(Sham69) said that prices could fall as much as 30%. Could you please advise me

on How this may come about, and don't worry if its a long explanation, I'm interested to know

 

Buffey - there are many reasons, but a few of the main ones are:

 

1. Supply vs Demand.

 

This has been a big argument for why prices can't fall.

 

But:

 

Demand is not economic demand unless it is backed up by having the money to pay for the thing you demand. We all want houses, but if we can’t afford to pay for them, our wants can’t support a market.

 

I want a £1mn house in Ranmoor but there’s no point factoring that into an analysis of the future price of houses in Ranmoor. For one simple reason – I don’t have £1m to buy one with.

 

Now if I could get someone to lend me £1m (and if I was fool enough to take it) that would be a different matter.

 

For the last 10 years banks have been lending the money to support the massive increase in house prices. But since the credit crunch, everything has changed. Mortgages are being pulled every day and mortgage rates are rising even though the banks have been cutting interest rates.

 

So the money is not there to support the current prices any more.

 

This can be seen by the 40% drop in mortgage approvals - the best indicator of where the housing market is heading.

 

2. It is correct to say that prices increase over the long term. Its about 5% per year over the last 80 years (taking inflation into account). But for the last 10 years, we have had price rises of 10-15%. This was only sustainable because of the incredibly relaxed lending criteria of the banks. Now that lending is returning to how it use to be (3.5 x salary, 80% loan to value), the prices will return to their long term average. The estimate is that they need to fall between 25 and 30%. But prices always overshoot on the way up and the way down, so 40-50% is not inconceivable.

 

3. Buy to let - this has caused massive speculation in the property market. It was seen as a one way bet because even though the returns on the rent wouldn't cover the mortgage, increases in the value of the property more than offset that (I WAS in to buy to let, but got out over the last 2 years - maybe a bit early, but its not a profit until you have the money in your hand. I wouldn't like to be trying to sell a BTL property now).

 

But now BTL has the following problems that will kill it stone dead (leaving only the old school property landlords who own hundreds of properties)

 

a. rents do not cover the mortgage and are not increasing

b. values are stagnating or falling (city living flats have fallen by up to 50% in value in some cities)

c. BTL mortgages are now very difficult to get unless you have a very good deposit

d. the new capital gains rules starting next Monday will encourage any BTLer who has bought in the last 2-3 years to sell as the tax has been reduced from 40% to 18%.

 

The end of BTL will take a massive amount of specualtive demand out of the market.

 

4. Our market is very similar to the USA, but we are about 12-18 months behind them in the housing market cycle. The main difference is that our prices have risen TWICE as much as the prices in the US and may well fall faster and further as a result.

 

5. Its cheaper to rent than to buy at the moment. We rent a nice 4 bed detached house in S10 and pay less than £800 per month. To buy that house would cost between 300k and 350k ( and we could buy a house like that if we wanted). But the interest on the mortgage (and the lost interest from the deposit we would put down not being in a savings account anymore) would be nearly £1600. Plus the landlord does all the maintenance and if the market falls we don't lose out.

 

The market will be back in equilibrium once renting and buying are at similar prices.

 

There are loads more reasons - you could go to http://www.housepricecrash.co.uk if you wanted to do your own research - but I need to get some work done now. Hope this helps.

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