UK Property Market Stagnating

[WJT]

Gluestick, I am certainly no expert and from reading this thread and others, I know you know more than me about the financial markets. [:)] But did you see the program? It was very interesting. It appears that most of the Poles coming over are willing to accept anything but many are and will become very successful. The ones they were discussing were very hard working and were offered the same wages as the locals but as was mentioned before, the locals weren't interested and preferred to take the dole versus accepting the jobs the Poles were more than willing to accept. They are at the moment on lower wage jobs but it is changing and changing quickly.

I haven't seen a reduction of prices in my area just outside of London at the moment, however, it is definitely a buyers market. We downsized a few years back in order to buy in France and if we were ready to move to France permanently we would sell up. However, we aren't and there is no way we would sell up and rent keeping our fingers crossed that in the medium term prices will go down as predicted, unless of course circumstances change and we are convinced. . If we knew that there was a better investment than a smallish home with a garden in the S.E. of England for the medium term, I would love to know. 

 

[Gluestick]

Yes, in fact I missed the original prog and because I very much wanted to see this, I have just finished watching it on BBC IPlayer.

Some comments.

Many of these migrant workers are living 8 to a house! Which is a clear breach of housing regs.

The local fiscal strain on Schools, doctors and Policing, means that local residents and taxpayers are being deprived of services they have paid for; for many years!

Aparently, these migrant workers are only earning between £5-7 per hour. Hardly the stuff of a forward house price explosion!

I do agree about the thorny "Where do I put the money?" question.

That said, the pressure on value has meant that certain investment property we own, is now not a good investment!

The rent stream has failed to keep pace with value inflation. Thus far, the only financial benefit has been the increasing value.

Probably, I ought to have bought in Liverpool as I could have purchased four to five houses for the same capital as one local flat: and the rents would have been at least double!

It was a long way to manage, however, with my other professional commitments at the time.

Now however, we are hit by loss of Capital Gains Tax Taper Relief if we do liquidate!

The main benefit of investing in bricks and mortar and equities has always been that they produce income: but also tended to protect capital invested against monetary inflation as their value increased.

No more!

Both areas are now roiled by doubt and uncertainty.

Sadly, I don't know the answer, but wish I did!

That said, I am extremely bearish of the property market at the moment: Darling Darling's budget did nothing to alleviate my fears, and everything to increase them!

[8-)]

[WJT]

I do agree with you about the problems and strains on local facilities that this immigration is causing. I feel that immigration can be a very good thing and think that these immigrants will bring something very positive to the country. However, I also feel that it needs to be managed which obviously is not being done at all in this case.

We actually live in our UK property at the moment so it is not rented out. If I knew we could sell up now, rent and put the proceeds in the bank and come out ahead at the end of five years or so we would probably do it. But as dire as the property market looks, inflation appears to be an even greater threat and I have even less confidence in the stock market at the moment. So to my mind the explosive UK population growth taking place now will have some consequences in the end and lack of good housing may be one of many. But to be honest I don't have a clue and it looks like a gamble no matter what the decision. [8-)]

[Gluestick]

The Bank of England MPC are now on the thorns of a dreadful dillema!

The only weapon they currently have to try and control inflation is Base Rate.

With the rapidly growing pressure on wages and salaries, inflation will zoom this fiscal year, despite Darling Darling's bold words!

Then the MPC will be compelled to raise rates.

Which will scupper the residential housing market and foreclosures will become epidemic.

If the MPC fail to raise rates, then sterling will plunge even further, which puts up the costs of imports (food, gas, fuel etc), and thereby exacerbates the existing pressure on incomes and increases inflation still further!

All the direct result of a wholly dysfunctional economy which has been predicated on housing (the ONS's last stats indicated that the gross value of Great Britain was now represented 60% by residential property! That includes everything: ports, airports, roads, factories fields farms, commercial property, government buildings, capital plant ships aircraft cars: the lot.), where's the escape route?

For me, the property crash is inevitable and inescapable.

The core question is when!

[8-)]

[WJT]

That is very worrying, it looks bad all around really. Out of interest, I assume you still own property in the UK, if so, are you thinking of selling?

[Gluestick]

Yes.

At present, Mrs GS and I are sort of stuck here for business and professional reasons.

However, if I had had the choice, I would probably have liquidated all of our UK property holdings over one year ago and invested in a mixed currency fund, based offshore, pro tem, until the global capital markets demonstrate some sense and stability.

Our overall plan is to retain one appartment as a sort of UK bolt hole for the surviving spouse if and when they desire to return.

For those with significant portable wealth, I would recommend buying a small property in Andora and taking up residency there and thereafter, becoming a sort of PT (Permanent Traveller) in Europe.

Highly interesting to me that yesterday BBC TV interviewed a number of City dealers: they expressed concern over the non-Dom issues!

The reality of course is, that an increasing number of very wealthy and high income workers in the UK are all based offshore!

Sauce for the goose?

 

[johnnyboy]

Gluestick,you have a very sound knowledge of the market by the sound of it.Have to say my thoughts echo yours though,even only as a layman in financial terms!

Am just hoping that things hold together long enough over here,in order that we may complete our move to France asap.

Living in the SE of the country may not be the panacea to cure our financial woes after all. Having taken a huge knock in pension and investments since last year hasn't helped either. Add to that  employment in  a fairly risky business (airlines) and the omens  are not good,however we must persevere!

Fingers crossed that my gut feelings are wrong and that our renovations will be completed by june.

Johnnyboy.

[Gluestick]

[quote]Having taken a huge knock in pension and investments [/quote]

This is what I hate to hear and really angers me!

With all the computerised risk analysis systems and analysts and "experts", by now, one would have thought that the fantastically well paid people in the City etc would have it about right by now!

But they haven't, after all this time.

Mainly because the only reasons they are paying out millions in bonuses, is because they are gambling with the public's and saver's hard earned cash and losing much of the time.

When I went back to the City in the early 70s, I was working as a dealer through the Heath-Barber Boom Bust era.

Insurance companies, property companies and smaller banks were crashing: it was the time of the Slater-Walker collapse etc.

Skads of new regulations were rapidly brought in.

Then we had the nonsense of the 80s. One would have thought that with the advent of the new FSA, all this would have been behind us.

Not at all.

Which is pretty outrageous really.

 

 

[:@]

[homeagain]

They do say it is a buyers market.......and very little seems to be selling, ours included.  Every street seems overloaded with sale boards and to let boards on top of them, to cover all options.  The HIPS, which is such a waste of time and money will also put people off maketing their homes.  £400 for a few searches, that are all done by tapping a few keys, then someone coming round to check your energy saving light bulbs annoyed me greatly.  "your walls (which are two feet thick) don't seem to have insulting materials inside".........No, they are two feet thick, much like yourself!!  The market seems to have the jitters, but, everyone says that "after Easter it will pick up".  We will prepare for the rush after Easter Monday, please form an orderly queue...........[;-)]

[Russethouse]

Prices might be more realistic but here properties are selling very quickly, even two properties that have been on the market a couple of months have sold in the last fortnight, two other properties close to me sold within a week and my hairdresser sold his house the day it went on the market.

[homeagain]

[quote user="Russethouse"]Prices might be more realistic but here properties are selling very quickly, even two properties that have been on the market a couple of months have sold in the last fortnight, two other properties close to me sold within a week a my hairdresser sold his house the day it went on the market.[/quote]

By "here", is that in the UK, I am presuming it is.  The prices are more realistic, I agree.  Ours has been marketed since November and not one pair of feet has crossed the threshold to an immaculately presented home.  We too, have sold houses in the past, in less than a week.  Times seem to have changed in 5 years.

[Gastines]

I suppose it all depends on where you are,what you've got and not least,how much. My wife worked for an estate agency in Bournemouth for a short while,basically to try and get some tips etc, and has always seemed to be able to pick the right price. One property we had was valued by a leading agency in the area at£95k,another agent said £195k my wife put a price,which it sold at of £225k.I kid you not. The first agent was so belittling about the property that I told him to leave and not waste our time.I came to the conclusion that they wanted it as a new agency as there was a large shop premises with it.Last year we sold one in the same area 2 agents gave a price,my wife added £10k sold in 4 days.

We always used to look for properties that needed work or had some potential but I think that for the ordinary buyers like us ,they are now impossible to find. I did read that in that area,virtually every solicitors office had at least one person dealing with property purchase.

Still looking for a project but not in UK.

Regards.

[homeagain]

You managed to do very well and I am pleased for you.  It does depend where you are, here in the north west things seem different.  The market is, like many places, saturated with buy to let properties.  Prices are incomparable to those in southern areas, but, it is no use saying, if our three bedroomed terrace was in London it would be worth a Kings ransom........if's and buts.  One can only tempt the market by the fact that it is completely modernised, contemporary interiors, light, bight, super clean and ready to go.  Doing all the things that the programmes tell you will sell your house.  Anne Maurice would have nothing to do here [:D]  We had various guideline prices from local agents, two of which did not know that there was actually a world outside of the village, hence the low end value.  We seem to have settled on a "reasonable" figure, but it is frustrating at times, when you wish to move to be within closer proximity to ailing parents.  C'est la vie, we will just have to hold out and wait for the market to pick up.  Gone are the heady days of the late 80's when I sold my first house in 24 hours. 

[Alan Zoff]

[quote user="homeagain"] We had various guideline prices from local agents, two of which did not know that there was actually a world outside of the village, hence the low end value.   [/quote]

Not knocking your property but bear in mind that, unless you are talking castles, each location tends to have a maximum value, regardless of what you do to a house. I am not a huge fan of estate agents as a breed but I have more sympathy with those who face reality than those who tell people what they want to hear, just to get the business; then later, when no one has come near, they come up with reasons that were apparent from the start.

[jon]

Good arears...like Russets houses part of the world will still achieve easy sales.

But agents still need to be sesable with their pricing

[homeagain]

 

I quite agree and it is at that level, slightly less, since we lowered the asking price.  One agent did set a price that was way over the odds and said it will be sold in no time...........yes, sure and I will be winning the lotto jackpot on a weekly basis, like you say, be realistic, which we have been.

[homeagain]

[quote user="jon"]

Good arears...like Russets houses part of the world will still achieve easy sales.

But agents still need to be sesable with their pricing

[/quote]

Am not familiar with Russets houses, will have to trawl the net, for sure they won't be in the northwest.......

[Pads]

[quote user="homeagain"][quote user="jon"]

Good arears...like Russets houses part of the world will still achieve easy sales.

But agents still need to be sesable with their pricing

[/quote]

Am not familiar with Russets houses, will have to trawl the net, for sure they won't be in the northwest.......

[/quote]

[:D]...... Russethouse is a person , check back and read her post !!

[homeagain]

I did, just forgot to commit the sign in to memory...........russet houses are sheltered housing, just for info, [:)]

[Gluestick]

Whilst, no doubt estate agents are still suggesting to the gullible "Buy now folks, whilst they're cheap!", this morning's news from Wall Street simply adds to the case for us bears!

 

[:)]

[homeagain]

Yes, indeed, that was all the news we wanted, over-inflated by the media as usual and bound to work everyone into a frenzy.........

[Alan Zoff]

At least the American Treasury allowed another bank to step in quickly, rather than leave all the risk to the taxpayer. The UK taxpayer will be paying the price for Northern Rock for forever and a day.

[Gluestick]

[quote]over-inflated by the media [/quote]

Well, all news, particularly on subject matter not easily understood by Mrs and Mrs Average tends to be inflated, however, in this case, to those of us who have been tracking global capital markets and in particular, the US and UK economies for many years, this isn't "News" per se, rather the latest evidence of major fiscal and financial malaise......................................

As a matter of interest, despite clear forward profits warnings in 1928 by those then "Hi Tech" emerging companies, electronics and automotive manufacturers, the stock market keep on booming until its eventual catastrophic collapse in 1929!

All that had kept it afloat and rising, insanely, was belief that "It can never go down" and the false confidence of those who had far too much to lose if and when it did!

 

[Gluestick]

[quote user="Alan Zoff"]At least the American Treasury allowed another bank to step in quickly, rather than leave all the risk to the taxpayer. The UK taxpayer will be paying the price for Northern Rock for forever and a day.[/quote]

Mainly, Alan, because the Fed are fully aware of the growing dangers of the ultimate Domino Effect, now!

It nearly happened in the 1980s because of the collapse of Chicago Illinois: and again in the 90s with the collapse of Merriweather's Long term Capital Management.

Asia has now apparently "shut the window" on lending to US banks and more worryingly, US sovereign risk debt.

Reuters, today, has some interesting reads.

 

[Alan Zoff]

The secret with high risk investment is to get in early then convince the public that it's not high risk at all so that there are plenty of mugs around to maintain prices and to sell out to before the collapse. The regulators could stop it but they would be accused of stifling choice/free markets, or they simply aren't bright enough to see the problem themselves (the bright ones don't work for regulators - they are the ones making a fortune out of the deals).