Market for properties today.

Discussion in 'General Discussion' started by Redman, Aug 13, 2019.

  1. 13 Aug 2019 at 10:16 PM #1
    Redman

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    I have some spare cash and wanted to put into property, buy 1 or 2 run down place under my business somewhere in London/Greater London, get them to top standards, then sell for a margin.

    You hear lots of mixed opinions, but mostly from people with no experience, what do our cutters think? I read in the FT last week a no deal brexit will lose a 20% mean across the UK housing market, can that even happen?!
     
    Last edited: Aug 14, 2019
  2. 13 Aug 2019 at 10:23 PM #2
    Yanto

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    Henry145 is your London property man (I think...unless I’ve got him mixed up with someone else)
     
  3. 13 Aug 2019 at 10:51 PM #3
    ExCop530dT

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    Hi Redman,

    Many people have a similar thought to you - myself included! It's been a mixture of those who are within the property market (aside from owning their own house) in some shape or form and many who watched Homes Under the Hammer. There's been an 'air' of thinking it's easy and straightforward and the reality is very often that it's stressful, time consuming and budgets often overrun than initially anticipated. Costs to buy a 'fixer upper' in London/Greater London will still be astronomical and even more so if you find one in an area where once fully and very well renovated will most likely bring in a substantial profit. Most but not all of properties like this will go through an auction so you'll need funding in place prior ( I think that's the rules with auctions, you'll need to double check)

    Can the Housing market contract by 20%? it's possible for sure, not sure if you remember the house price crash in 1989 where many many people got badly affected. Homeowners and investors, property flippers etc of course are all hoping hard there's no severe reduction that happens quickly in the 1,2 to 3 or so years after Brexit, so it comes down to knowing if you are going to be able to weather such a hit if it happens with the project you take on.

    PM if me you like ;)

    Cheers, Dennis!
     
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  4. 13 Aug 2019 at 10:57 PM #4
    Retromlc

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    I used to own a masonette, too half was bought in 89 for £50k I bought it at auction in 95 for £17k if it goes south there will be winners and losers
     
  5. 13 Aug 2019 at 11:04 PM #5
    Yanto

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    Good advice. I also remember well the collapse in the sports car market in the early 90s. Keep forgetting some here will not have gone through this cycle....but it’ll come...it always does !
     
  6. 14 Aug 2019 at 12:10 AM #6
    toplad

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    20% loss is just project fear talking rubbish again.
    Similar ridiculous predictions didn't happen when we had a vote to leave, these same people claimed job losses, houses price drops and unemployment just on the vote alone.
    Now everyone thinks (and the cutters crew) seem to think there is another recession heading our way, (there is of course, but one happens every 20/25 usually, so we are always heading for one, just not yet) but the reality is investment is up in the UK for the first time time in years (not down as the media would have you believe)
     
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  7. 14 Aug 2019 at 12:20 AM #7
    Johnnyno5

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    The UK property market is built on a cycle of boom and bust. Those who are cash rich and pick the right moment to buy will benefit the most - of course this timing is difficult to say the least!

    I think a sustained correction in house prices will become self-fulfilling when mr average Joe Blogs and national tabloids begin to talk about a house price crash. I don’t think we’re quite there yet.

    A 20% correction is certainly within the realms of possibility. Affordability across most of London is an issue. Top tier earners can’t save enough to get a deposit together due to homes being so expensive, not to mention saving whilst paying rent is nigh on impossible. I don’t believe incentives like the Help to Buy scheme can continue into perpetuity to support the UK housing market.

    Combine this unaffordability with some people borrowing 5.5x their income with small deposits. So even a small reduction in house prices will mean their equity shrinks disproportionately - so they can’t get a decent rate on a remortgage after their fixed term ends - meaning they can’t afford their homes/maintain their lifestyle. This is ignoring any situation in which interest rates go up (to support a weak pound??). That would be a perfect storm and a massive conflict for the Bank of England.

    As for buying, investing and selling goes, I would say it’s difficult to compete with investors who refurb more than one property at a time due to efficiencies and those who are in the trade - builders and the like. They can get work done far cheaper than most, particularly work done by themselves/their team. Which means they don’t mind paying over the odds for a run down property since it may still be worth their while.

    Also, I think investors might prefer to rent out property than to sell.

    My two cents but I’m no expert, just a genuine interest in this sort of thing :)
     
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  8. 14 Aug 2019 at 1:44 AM #8
    stuartk

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    We are heading for recorrection. 20% IMO is overestimated.

    I think the crash will be caused by the media scaremongering about brexit rather than brexit itself.

    To sumnarise how uncertain things are Countrywide have closed several hundred branches this year.

    Personally i wouldnt be buying right now. Especially not refurbs and especially not anywhere south of Watford.
     
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  9. 14 Aug 2019 at 6:55 AM #9
    bootyman

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    My brother has a flat in Croydon which was valued at £275 a year or so ago, He tred to sell it last week and it was valued at £200k. My mum also lives in a nice part of Surrey where houses normally fly off the shelves, but the guy across the road had his 4 bed detached house on the market for over a year before it sold and her next door neighbours house has been on he market 6 months with just a couple of viewings. It's defo not the right time to sell, but the right time to buy and even more so if we leave with no deal. I think bying cheap to fix and rent might be a better option as people will always need to rent, but you would have the same issues as sellers now with prices reduced and not many people looking to buy if you are looking to fix and move on
     
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  10. 14 Aug 2019 at 10:16 AM #10
    cfoster

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    We visited a financial advisor a couple of weeks back to discuss future investments etc, we have 5 properties all bought within the last 5-10 years. His advise was that investing further in property would be the last thing he would recommend to his clients at this point in time. Thankfully we have some great tennants, low mortgages on them all but of course the tax man does take his portion out of the income.....
     
  11. 14 Aug 2019 at 10:42 AM #11
    gauravM3

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    Echo what others have said. We Live in north London and my Mrs was having a look at properties around the area a couple of years ago (unfortunately we had a break in so she was desperate to move). At the time some of the asking prices were ridiculous, I calculated it would cost about 100k to move to a similar house, so not even an upgrade! We decided it’s best to remortgage (got a really good 5yr deal) and just keep overpaying. Needless to say those same properties are still being advertised with a significant reduction!

    I’d stay clear of London/Greater London in the near future. Maybe look at Hertfordshire border (Stevenage etc) or Essex? Essentially places with decent connections into London as I believe more and more people will be forced to move out of London if they want to buy.
     
  12. 14 Aug 2019 at 3:56 PM #12
    M10clm

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    As above I am selling our house currently which was valued for a remortgage at £540k exactly 1 year ago. We had this sold at £520k and our buyers mortgage Val downvalued is to £480k - £60k drop in 12 months. Speaking to a few in the industry they are sure there is a directive to be cautious on values and protect lenders if / when we see a full on downturn. Got the mortgage Val on the house we are buying Friday so should be fun and games what we get back from that!
     
  13. 14 Aug 2019 at 4:01 PM #13
    Johnnyno5

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    Where is the house you are selling located? That’s quite a fall
     
  14. 14 Aug 2019 at 4:03 PM #14
    M10clm

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    Wokingham in Berkshire. Was absolutely fuming and thought they were joking at first. Have calmed down a little and renegotiated somewhere in the middle but still feels an absolute p*ss take from the surveyor
     
  15. 14 Aug 2019 at 4:32 PM #15
    zeta4

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    I think someone said investment was up in this country. I beleive its due to stockpiling rather than true business investment. Growth forecasts still look poor. There,s no doubt brexit will adversely affect our economy but by how much and for how long is unknown. Not a good time to be investing in property unless its for the very long term I think.
     
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  16. 14 Aug 2019 at 5:01 PM #16
    bighead

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    the Brexit "affect"has already happened ..just look at all the high street shops that had close down in the last two years !!
     
  17. 14 Aug 2019 at 5:22 PM #17
    Johnnyno5

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    It’s easy to forget how purchasers who are in a chain are impacted by downward valuations.

    Suddenly, as a seller, the sale value you were relying on isn’t realised, and you have no choice but to reduce your offer as a buyer on the next property and so on further down the chain.
     
  18. 14 Aug 2019 at 5:25 PM #18
    Autobahner

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    Nothing to do with Brexit. Everything to do with people’s on line shopping.
     
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  19. 14 Aug 2019 at 5:55 PM #19
    Johnnyno5

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  20. 14 Aug 2019 at 7:35 PM #20
    ExCop530dT

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    Hi Toplad,

    Could you please link to the articles where the above points you mention have been reported/discussed?

    Cheers, Dennis!
     

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