Is the tide turning in the UK?

Lee&Nicky · I Like It Here Joined: 15 May 2004 Posts: 70

The one aspect of emigration I did not expect to have too much of a problem with is selling our house! We live in the SE of England and the response to our supposed "des res" has been underwhelming to say the least. Admittedly it has only been on the market just over two weeks, but I kind of expected a surge of interest at the beginning. I am beginning to wonder if all the scare stories we are reading in the press about a property market "cool down" is now quickly becaoming a stark reality, and the cooling off is both rapid and sharp. Anyone thinking/experiencing the same? What about in other countries? Whats the real estate market like, particularly for vendors, in the US, Canada and mainland Europe?

I can't help feeling we missed the wave and the tide is beginning to turn against sellers....eeek!

Moorf · Posted: Thu Jul 15, 2004 12:00 am Post subject:

My hubby is the one to answer this one! It is his pet subject.... we took an opinion back in Feb/March to sell up as we thought this was the best time (we sold a scottish property).

We are pleased we did so - prices in some areas of the UK are on their way down. We have also noticed here in Sussex that buyers are not offering the asking price anymore and are preferring to make an offer below that price. Luckily I've owned a property here since 1991 and kept it for renting out - we are now living in it (arg!) - but will re-rent it out when we go to NZ - we have seen rental prices rising too (my 1 bed flat will rent for 525 pm now instead of 480 last year) which might also suggest less confidence in buying at this current time .....

I am sure Woz will comment when he gets back later! Yes

Lee&Nicky · I Like It Here Joined: 15 May 2004 Posts: 70

Moorf,

Yes the rental market is picking up and some say that is because potential buyers are now deciding to sit tight for a few more months to see if prices start to drop back. Interest rates will definitely go up again in August and probably at least once more before end of 04. Also, in our area, properties are now generally going for less than asking price. We had one offer at approx 94% of our asking price, which we rejected as were advised we could get more based on similar "recent sales". Methinks such sales can no longer be seen as an appropriate benchmark as things are heading towards a buyers market. Got to make a decision by this weekend basically, or I fear we could be stuck with a house to sell when we actually want to leave the UK in Feb 05.

Agony, what bloody agony!

Lee & Nicky

Woz · Posted: Thu Jul 15, 2004 12:56 am Post subject:

The property market in the UK is on the turn. The speech by the Bank of England head after the recent rate rises the other month was the final nail for the market the way I see it.

The general city view is that we are now looking at 5 to 5.5% interest rate by the end of the year and possibly 6% by mid next year. With a probable rise next month.

Also a recent survey showed that about 40% of population think we are on the down cycle which is probably enough to make it happen as people now see the risk of falling prices and hence do not want to buy.

Parts London has been falling for about a year now and the high price areas such as South Ken has recorded a 10% drop over the past year although these figures have been hidden by the rises elsewhere in the market.

The trouble the UK market has faced is that first time buyers have no way into the market anymore so the whole bottom end of the market has been held up by a flood of buy to let properties on the back of low interest rates. Now the rates are on the up the buy to let market is dropping off and this will bring the whole market downwards.

I dont think we are in for a crash at the moment but again the city view is house prices 15% below their current prices in the next couple of years.

That said we are starting to see inflation grow and oil prices are helping push this up as the price of oil effects the cost of everything we buy and the massive amount of consumer debt (Currently at about 1 trillion on credit cards, loans and mortgages which is about £17000 of debt per person in the UK including children and pensioners) means that the market will be effected by interest rate rises and could push it into a spiral downwards.

A 94% of asking price might not be that bad as I think the average price paid in the UK (Does not include Scotland which has a different selling system) is 96% of asking price (Down from 98% late last year)

Sorry to sound down on this but its just the way the market appears to be heading. Hope that helps.

Raeven · Posted: Thu Jul 15, 2004 1:10 am Post subject:

Hi, Lee&Nicky,

I'll keep you posted.

Our house goes on the market next week here in California. The real estate market here has been absolutely nuts. Most properties going on the block in the past couple of months have been selling within hours at their asking price or above. Despite short-term interest rates rising, long-term mortgage rates have just bumped down a bit, which we believe will fuel the market even more.

With the US currency exchange rate dropping like a rock, we'll need our house to sell for top dollar. I have horrible dreams of selling the house -- which I love dearly and have struggled hard to part with -- for our asking price, then watching as the currency rate bottoms out and makes our dollars worth less than the Pacific Peso before we can get into the NZ market... gaaahhh!! Please, somebody wake me up!!

Whose idea was this immigrate-to-NZ thing, anyway?

Best of luck to you in selling your UK abode! - Rae

Lee&Nicky · I Like It Here Joined: 15 May 2004 Posts: 70

All,

Thanks for the comments so far, very very interesting!

Woz - not a downer, but your views square off with mine. I'm going to bite the bullet and see if we can get our prospective bidders back to the table and see if we can get a deal done by end of Aug. The property market is moving away from the seller, lets face it it had to sooner rather than later, the whole property ownership situation in the UK is just not sustainable.

Raeven - good to see US is still bouyant. I think consumer credit has become such an issue here in the UK it is in danger of blowing the whole economy off course, hence the need to put a brake on the main driver (ie increase in property prices). Like you, I expect long term interest rates to start dipping, so longer term fixed/capped rate deals would actually be quite attractive now or in the next year or so. I think the main problem is that we are only at the very start of the "uncertainty cycle", which means people don't look beyond the next 12 months and this short term view will dictate the market for sometime yet.

Hey ho, what a laugh this all is.

As for the exchange rate, the £ has dropped recently against the NZD, I would like to see a bounce back in Jan 05 (thats what is on my Christmas list this year!).

Lee

Lee&Nicky · I Like It Here Joined: 15 May 2004 Posts: 70

I've just spoken with our Estate Agent and she tells me a property round the corner from us that they sold a month or two back has just been downvalued by surveyor! Not a good sign! Not a good sign at all!!

Our prospective bidder is playing hardball, we've managed to squeeze them up to 95% of the askinbg price but want us to take it off the market immediately. I'm inclined to accept and move on so that I can concentrate on the important thing (ie planning the emigration for Feb 05). Should I take it, or hold my nerve for more........?

robothamma · Posted: Sun Jul 18, 2004 12:18 am Post subject:

Hi Lee & Nicky

We are in the very same position as you! The house went on the market 5 days ago! (OK so it's not long at all but it is when you've waited an eternity to get to NZ

) We still don't have a "For Sale" sign up The brochure has just been done this morning, It isn't in the shop window yet, and it isn't on the agents web site yet!

We did get a small newspaper ad on Thursday but still nothing! and just to really kick us when we are down we decided against going in at the high end of the valuations we went for the middle Eek

yet a house round the corner that is smaller and not in as nice an area sold within 3 days for £1000 more Eek

mind you they did have all their advertising in place! I suppose we have to hang fire and be patient but we sit with baited breath everytime we hear a news story about house prices and rate rises!
Will keep you posted best get off line really incase someone wants to view!

Woz · Posted: Sun Jul 18, 2004 1:12 am Post subject:

Kiwibound? · Posted: Sun Jul 18, 2004 7:31 pm Post subject:

Hi all,

Just thought i would add my 2 pennies worth.

I am in Hampshire (The New Forest), its in a lovely area and the house has been well and truely house doctored. We put it on the market in March and we STILL haven't sold it!!!! We have had 2 people want it and offer us the full asking price, but, they can't sell their houses!!!

So we have had to drop our price ...several times. We have ended up dropping it by £20K. When we first put it on the market we had 4 estate gents around to value it and we took the average price the valued it at. So I don't feel we put it on at a inflated price. I have noticed in the last week things have picked up and we had several viewer in over the last few days, so I'm hoping we might hear something back by next week.

I have had FAR more worry over the house sale, than the visa. Rolling Eyes

Good luck everyone..... fingers crossed

Sara.

Arthur1969 · Testing The Water Joined: 18 Jul 2004 Posts: 1

We are desperately trying to sell our property in Surrey. We had an offer of £400k in February which we foolishly rejected thinking that the market was booming (house on sale at £420k). Interest has been dropping and we have now been forced to reduce the price to £395k.

We are worried that the market is heading sharply downhill and we will end up chasing the market lower. If the house sells for less than £350k, our move to NZ will not be possible.

milliemoon · Posted: Mon Jul 19, 2004 12:31 am Post subject:

Hi guys,

The 'house selling bit' seems to be quite grim at the moment.The road next to ours has 7 sold boards in it, our has a few two, but I've no idea how long it took to get them.I began thinking a couple of months back that the house would be the major stumbling block.

Ours isn't on the market yet because we have an added problem. Sad

We have just exchanged contracts with a local developer who's trying to get planning permission on the bottom of our garden.(We live on a very large corner plot). Obviously, we won't get any money until he get's it, and we can't put the house on the market until we know one way or another.He seems pretty confident that it will go through and he has done quite a few.
We need the money from the garden to sort out the house so it's in the best possible state to sell, so that's putting things back quite a bit.
Mr M thinks it will put buyers off as is, but I thought that if we put it up for sale at a cheap enough price that might compensate.
What do you think Confused

We have thought about renting it out, but that wouldn't give us anything to take with us, and having two children, I wouldn't be happy about that.
The rental income would only just cover the mortgage sigh

We might be able to raise enough to sort out the house without the money from the garden, but then we'd have no cash for a trip over to sort out a job .

Aaaaaaarrrrrrrrrrgggghhhhhh. This is keeping me awake at night counting sheep

P.S. We have 110 points without a job offer, but a company in ChCh is very keen to employ Mr M as he's on the OSL, so we need a trip over Wah

Woz · Posted: Mon Jul 19, 2004 12:50 am Post subject:

After reading other peoples problems with selling and the market starting to drop quicker than I had expected I was shocked to see the following announcement today on gov plans for council tax rises.

http://news.bbc.co.uk/1/hi/uk_politics/3904271.stm

While this appears to be speculation at present it goes without saying that this will have a large impact on the housing market if it turns out to be true and will damage the market until the report is out if it does not prove true.

If interest rates rise next month (Which is expected by most of the city) this will just pile on more downward pressure.

I find it hard the government would even think along these lines at present as they want a soft landing to the market and not a crash. Guess G Brown has to fund his over spending somehow :(

To those that are fully commited to move I would say bail out the housing market ASAP as its all looking like its on a knife edge at the moment.

wilson182 · Posted: Mon Jul 19, 2004 1:31 am Post subject:

Hi Woz

Just out of interest, we were not planning to sell straight away. We were going to rent for a year or two, just in case we had to come home. In your opinion, do you think this is wise?

Woz · Posted: Mon Jul 19, 2004 1:31 am Post subject: