benmorg

tommy Wrote: ------------------------------------------------------- > Anyone with equity in E.D looking to take > advantage of low interest rates and "trading up" > locally ? It's very difficult to trade up at the momen%t because most people have declining equity as a result of falling prices, and you need minimum 20% equity to get a decent mortgage deal. E.g. someone who had 40% equity at peak now only has 20% equity, so can't get a mortgage on anything more expensive than their current house. The mortgage drought has pretty much put a complete stop to trading up for all but the richest or those who've owned their home for many years and consequently have a tiny loan to value ratio or own outright.

Ayres bakery's sausage rolls have a lot to answer for.

Kingsbury David Wrote: ------------------------------------------------------- > Just for the picture over the river, our house > prices have not dropped. Not a pound or Euro. Not > in the cheaper areas or the posh ones. Our > newspaper ads still plug 3 bed semis in grey > suburbs for ?330,000 just the same as at the peak, > so presumably some remote places have dropped a > lot to change the average but not anywhere > popular. I presume Dulwich is the same although > when I was looking 15 years ago I found it to be > the best value area of all so probably relatively > still is. If you drive a few miles to Blackheath > it's back to the maximum but I looked all over > London and only ended up back here as Putney > proved just beyond my means after losing a > property at the last minute there. Blackheath > however was way off the radar. > > With all the tricks the government are pulling > (sorry, the bank of England is independent isn't > it) they are stringing the boom out endlessly by > artificially lowering interest payments (that > can't last 25 years can it?) and shovelling our > cash to mortgage firms supposedly to lend to > buyers but being spent on bonuses. The conditions > that fuelled the credit/debt mountain are now > being increased to deepen the hole even further, > which explains why there has been no price > correction north of the river at least. You're probably just looking at asking prices, which paint a misleading picture. They are well above the level at which deals are actually being struck, and of course those properties that do sell quickly disappear from the listings - you moostly see ads for the stuff that's got stuck on the market because it's overpriced.

pearcesa Wrote: ------------------------------------------------------- > > We've all seen the mass media headlines screaming > about the dire % drop in house prices over the > past year, but somehow I don't see it being over > 25% in one year, maybe 25% in 18 months or so but > this kind of scare-mongering is not going to do > any of us any good when we've just entered a > recession! It isn't over 25% in one year, it's more like 16%. But prices started falling much more than a year ago, remember. The peak was later summer 2007. Total fall since then is just over 20% according to nationwide and halifax. But this is just an average for the whole of the UK. Some properties/locations have fallen less, others more.

It's hard to answer this with hard data for east dulwich but I can offer an anecdotal. I pulled out of buying a small victorian half house on landcroft road about a year ago. It came onto the market in 2007 at ?385,000, then dropped asking price to ?375,000. As it needed a lot of work, I negotiated the price down to ?340,000. In the meantime, an identical house in better condition a couple of doors down the road completed in november 2007 for ?395,000. After I pulled out I kept my eyes on the market while renting. The house I was going to buy for ?340,000 sold to another buyer. The price at completion in august 2008 was ?250,000. That's 35% off the original asking price and 26% off the previously agreed 2007 price. house is no. 78 landcroft - completion details here: http://www.nethouseprices.com/index.php?con=sold_prices_street_detail&street=LANDCROFT+ROAD&locality=SOUTHWARK&town=LONDON&cCode=EW&year=All&house_style=All&house_age=All&search_radius=&outcode=SE22&incode=9JP as someone else has pointed out, as lot of the unsold stock has ended up being let. You could regard this as "pent-up supply" that will come back onto the market at some point in the future, which is one of the reasons to believe prices have further to fall.

Jeremy Wrote: ------------------------------------------------------- > You need to be very organised to buy at auction... > valuation (and maybe survey) completed, mortgage > agreed before the auction. Before you even know if > you're the winning bidder. And as someone said, > there's a risk of losing your 10% deposit if you > can't get conveyancing completed in 3-4 weeks. So > it isn't really an option if you have a property > to sell. It's more suitable for investors (who > naturally will be willing to pay a lower price > than someone actually looking for a home). yes all true. But auction prices are still probably a useful guide to true equilibrium value, even if they're somewhat below open-market equilibrium, because they're based on a much more efficient way of determining value. The gap between open-market asking prices and auction prices has widened massively over the last year, and that suggests asking prices on the open-market will fall as the market readjusts.

Brendan Wrote: ------------------------------------------------------- > Wouldn?t a good way to calculate it be to look at > the market, first time buyers, people looking for > a second home, buy to let landlords etc. find out > what types of properties each of these groups will > be interested in and on average what that group > will be able to afford considering the current > climate? > > Surely in general nobody is going to be able to > pay more than they have and nobody is going to > sell for less than they can get. there's a lot of overlap between these different groups, so it would be wrong to treat them as separate markets. But one relevant piece of info that might help you figure out value in the current market at the moment is rental yield. The kind of property investors who are buying at auction at the moment (as well as buying with cash on the open market) use yield to figure out what price they should pay. Average rental yield being achieved at Allsops auctions is 6.7% for assured tenancies and 7.4 for assured shorthold tenancies (across whole of UK). So call it about 7% on average. You can use this average yield to work out how much you'd get at auction for a house in a state fit to rent. Say for instance that your home would rent out for ?1000 per month. The total annual rent would be ?12000. Divide this by 7% (i.e. divide by 0.07) to work out how much an investor would pay for it at auction (?171,000 in this case). I've used this method to guess what various stuff selling at Allsop's auction would achieve and found it pretty accurate. Trickier with properties that need refurbishing though, as you have to factor in the cost of renovating the property to make it fit for rent. edit: i should add that a property in immaculate condition would probably be worth more than this calculation implies, as the average rentable property at auction is probably not especially nice!

lard Wrote: ------------------------------------------------------- > Jeremy Wrote: > -------------------------------------------------- > ----- > > What ratio of properties are being sold at > auction > > vs traditional channels, at the moment? > > > > I don't know. But unless you have those stats > to > > hand, how can you say that auctions are the > norm? > > I didn't say they were the norm. > > I'm saying you can use them to see real sold > prices...prices that will appear on the land > registry in a few months time...ie they are > meaningful as a guide to where the market is now. if you believe classical economics, then prices achieved at auction represent the true equilibrium price where supply and demand are in balance. Currently asking prices on the open market are set too high above equilibrium, with the result that (a) almost nobody is buying; and (b) prices will fall towards equilibrium, where they will stabilize. Auction prices indicate where this equilibrium might be. but a lot of people think classical economics is nonsense, so feel free to take with a pinch of salt.

???? Wrote: ------------------------------------------------------- > ...there haven't been repossesions yet because > Unemployment is only just starting the journey > upwards.....I think there will be a lot of > political pressure to keep repossesions low...but > they're coming I'm sure there will be more, as well as rising unemployment, but I don't know if the numbers will be high enough to drive the crash further at the current rate. Bear in mind that nominal house prices didn't fall during the recessions of the 1970s and 1980s even though unemployment soared (in fact nominal house prices have only fallen twice in the last century: briefly in the 50s and for about 6 years in 1990s). Though saying that, real house prices did fall steeply in the 70s because inflation was so high. If the gov't succeed in defibrillating the housing market in time for an election (which is surely what Gordon Brown has his sights on), I think we might see a bit of a sucker's rally in the housing market next year. Followed by long-term stagnation as unemployment sets in and the recession deepens. If deflation sets in, get ready for a Japanese style 15-year house price crash. But I think the gov't's efforts to push house prices back up will fail because sentiment has been well and truly annihilated. And I don't know if we're in for a deflationary recession or rebounding inflation caused by the govt's desperate spending, IR cuts and plummeting value of sterling. It's all guesswork at the moment, but certainly looking pretty dire for UK plc. Never seen a mess like this in my life.

Jeremy Wrote: ------------------------------------------------------- > The problem is that reposessed properties at > auction traditionally go for up to 40% less than > the rest of the market, so this isn't a meanigful > comparison. > > Is buying at auction really becoming "the norm"? > Bit of a sweeping statement... that's not quite accurate. During the boom, auction prices were often on a par with the open market because demand was so great, and because bidders mistakenly thought auction properties were always a bargain. A lot of the properties that sold at auction in the boom had some kind of problem, e.g. unmortgageable short lease, structural problems, weird layout and no garden, etc. What's interesting about the current market is that even flats that are only a few years old and in prime condition are selling at silly low prices at auction, the reason being that there's so little demand on the open market. But it's also noteable that there have been very few repossessions so far, particularly in London. The last crash was driven by mortgage rates surging, causing a tidal wave of repossessions, but this time round there have been fewer "forced sales" and the crash is being driven solely by lack of demand. In theory the gov't could rescue the situation by cutting mortgage rates so repossessions don't surge, but I don't see how they can push first-time buyers back into a falling market, no matter how cheap mortgages are.

AllforNun Wrote: ------------------------------------------------------- > There is something going on, way more planes > coming over. No doubt the pressure from certain > groups and politicians out west has started to > have some effect, "not in my backyard" has clearly > worked.....now they are in yours ! It seems to > have all started soon after Boris hit office. > Maybe they think we would be a softer touch then > the Kew set ! > > You could use the freedom of information act to > get flight data for the last few years, i think it > would make an interesting read. are you saying they've stopped flying over kew and are now approaching heathrow via east dulwich instead?

serif Wrote: ------------------------------------------------------- > I bow to your wisdom and your educated guesses > benmorg. you missed out the word "superior". Also, you didn't answer the question...

Jeremy Wrote: ------------------------------------------------------- > benmorg... I am of course guessing, but > considering it's on an 'A' road with > not-quite-so-smart properties surrounding it, > maybe 650k or so, if it was in a good state? > > I'm not denying that it was a good buy... but lots > of people have got good deals at auction on run > down properties over the years. I don't think we > can take places like this as indicitive of the > market. 650 sounds about right. I'm not sure I agree that auction prices are generally bargains. During the boom people often bidded up auction properties to the same level as open-market prices or even higher. Now that the boom is over, auctions prices have fallen back substantially. Yesterday's guardian had an interesting article about property auctions arguing that the prices currently being achieved are a leading indictor telling us where open-market values are heading: http://www.guardian.co.uk/business/2008/oct/30/house-prices-mortgages-crunch-recession Quote: "the 28.6% average price fall of homes sold at auction gives a true picture." I'd suggest that the three ED houses mentioned above have sold for about this much below peak value and represent the true value of property in East Dulwich at the moment.

serif Wrote: ------------------------------------------------------- > serif Wrote: > -------------------------------------------------- > ----- > > Are you speaking from experience on the refurb > > front benmorg? > > > no, just an educated guess. > > - that's a shame benmorg, I was hoping you would > share your contacts - I've done several complete > refurbs and ?75k is well below reality. how much do you reckon it would cost to refurb a 5-bedroom house if you kept the existing layout (in this case preserving the house as two flats) and did no major building work, such as extensions or loft conversions? the house on ED grove had four or five missing windows, but all window frames were sound timber. Plasterwork throughout was sound. No sign of subsidence or damage to brickwork. Roof was new.

EDOldie Wrote: ------------------------------------------------------- > There were some bargains there today but overall > people were paying a little less than they might > have paid last year in line with the way prices > have moved downwards over the last few months. I > thought the Milton Road (Herne Hill) house for > ?360K looked good, pretty house in a nice road. I think "a little less" is a bit of an understatement... 3-bed house in Landcroft road sold for ?241,000: http://www.auction.co.uk/residential/LotDetails.asp?A=545&MP=125&ID=545000231&S=C&O=A new build opposite the plough for ?100K: http://www.auction.co.uk/residential/LotDetails.asp?A=545&MP=125&ID=545000102&S=C&O=A 5 double bed in ED grove for ?375K (above) that's a lottle less than last year!

Jeremy Wrote: ------------------------------------------------------- > I don't think that purchase price is as amazing as > you're making out. For a start, that place would > *never* have reached 750k - it's on a main road, > and not a particularly smart road at that. It sold > at auction, where prices are always significantly > lower than regular purchase prices. And bear in > mind that developers would expect to take a profit > of tens of thousands (maybe 40-50k if they're > lucky), after fees. > > All in all, it's probably roughly in line with the > 15% decline that the media have been reporting. true, it's a noisy road. what price do you think it would have fetched last year on the open market in top condition, with 5 double bedrooms and two bathrooms?

serif Wrote: ------------------------------------------------------- > Are you speaking from experience on the refurb > front benmorg? no, just an educated guess.

this 5 double bedroom house in East Dulwich just sold at auction for ?375,000: http://www.auction.co.uk/residential/LotDetails.asp?A=545&MP=24&ID=545000025&S=C&O=A It needs work and is not currently habitable (windows missing etc), but is structurally sound, has a new roof and a 50-foot garden and is a short walk from the station. Cost of work to refurb it probably ?75,000, so total cost around ?450,000. That's amazing for a house that would have achieved ?750,000 last year in top condition.

EDOldie Wrote: ------------------------------------------------------- > There are quite a few ED properties in there, some > nicer than others, you shouldn't take too much > notice of any guide prices they are always much > lower than the reserves and there to whet the > appetite. Although it could be different this > time. I hope to go on Thursday and will report > back on any ED lots if I get there. .. though one of the houses on Colwell Road sold for well below the guide price at the last auction: http://www.auction.co.uk/residential/LotDetails.asp?A=544&RQ=SR&MP=85&ID=544000120&S=L&O=A some of these lots are clearly underpriced, e.g. lot 222, the 3-bed house on landcroft road with guide price of ?230,000. There have been queues of people waiting to view this house at weekends, all no doubt hoping to get a bargain. Chances are it will get bidded up a lot. Am going to the auction myself, as I suspect will many other members of this forum. Though the bargains are likely to be a lot more tempting next year.

ibilly99 Wrote: ------------------------------------------------------- > Some guide prices to auctions here. > > http://www.auction.co.uk/residential/onlineCatalog > ue.asp?S=C&O=A&P=6 > > Real shocker is 479 Lordship Lane the modern wood > decked apartments up near the BeefEater - ?90k ! > > Click on the online catalogue to view. most recent comparable sales in that development were flat 2 (?235,000 in dec 2007) and flat 5 (?250,000 in dec 2007). The auction listing says 'by order of mortgagees', which means it's a repossession. the moral of the story is never buy new build.

EDdownunder Wrote: ------------------------------------------------------- for those that chose to ride instead of scoot, what > was your reasoning? advantages of scooting: faster, more fun, easier, can ride in work clothes advantages of cycling: healthier, safer, much cheaper, easier to pass traffic, easier to park, use of cycle lanes and bus/taxi lanes, less maintenance, warmer in winter (no heavy jackets etc. needed)

a huge number of cheap restaurants in the West End are doing two-for-one vouchers at the moment. people in my office have piles of the things. Evening Standard reported about a week ago that low-to-mid price restaurants in central London are really struggling at the moment because everyone is tightening their belts. I think the same must be true of east dulwich, so we might see one or two restaurants struggling to stay afloat over the next year. i would have thought some of the more frivolous gift shops will also have problems.

I think when you've been cycling for long enough you learn that energy is precious and wasting it getting angry at useless drivers just isn't worth it. Also you become quite skilled at avoiding problems before they happen. I love it when I see other people road raging at each other - kind of fun to watch.

karter Wrote: ------------------------------------------------------- > How long though until they get de-nationalised? > > Any thoughts? no idea, I'm afraid. NR have been extremely aggressive in pursuing repossessions since nationalization. Like rotweilers in fact, but then they've been under great pressure from the government to recapitalize and restore their balance sheets. The worry is that the newly nationalized banks could become equally merciless, but the government seems to be trying to pressure them into lending at 2007 levels again. very odd. re 4x salary multiples still being available - that's not really significant. The average first-time buyer is only borrowing 3.2x salary (and that ratio is falling), so house prices are still falling. In any case, mortgage availability is now old news. Recession and fear of unemployment are likely to soon become more significant drivers of house prices than mortgage rates.

Jeremy Wrote: ------------------------------------------------------- > Let's please stop posting low quality tabloid > articles in the pretence that they have any > value... FT? It might be boring as heck to read, but it isn't a tabloid.