First Time Buyers

[Slim]

haha then that means the estate agents are fixing stupid prices lol

 

Slim i think you have said enough

 

You can't invent a value for a property, the estate agent will just estimate what he thinks its actually worth. You can't fix that price. If it's too high, the property wont sell, see?

[Slim]

And why is their lack of supply? Because developers have historically choosen not to build to meet demand so property prices remain artificially high, and the estate agents are valuing property on the high side because they know that to be the case and that something will sell eventually because there is a lack of property on the market.

 

Developers chosen not to build? What evidence do you have for that? I think more important is a lack of land zoned for bulding, pretty much everything I'm aware of zoned for building has been built on. There's a big NIMBY problem here, and it's been extremely difficult to get land for development.

 

But this doesn't mean estate agents are fixing the price. If Estate Agents are valuing what a property is worth, not fixing it artificially high.

 

Its not simplistic to blame developers and agents because on an Island like this they create the market. The other factors are secondary as they are the same factors present in the UK (low interest rates, low unemployment) but the very high relative prices here are pure opportunism and manipulation.

 

Developers definately have a large influence over this small market, I agree there. In particular developers are known to release properties slowly onto the market and rent proerties instead of selling them to keep supply low. High prices are opportunism? Of course they are. Again, this hasn't got anything to do with estate agents, they're only going to charge what the markets prepared to pay.

 

As for claiming this is a local problem, it isn't. A 3 bed semi in liverpool will cost close to 200k also.

[Tonto]

There are a few points I'd like to reply to:

 

Firstly I see no problem at all in a 21 year old wanting to buy a flat - I've never said a house. Why shouldn't you want your own home at that age? And why should you pay 600 to 700 pound a month to pay someone else's mortage? You might as well pay it out for your own. How big a deposit did you have saved up when you were 21? I bet it wasn't anything like the money my daughter has saved up through hard graft since secondary school.

 

And my point about the governmnet grant is not that I am 'moaning' about having to wait, I am moaning about the fact that there is no point in waiting because she's never going to get to the top of the list - that in my book is unfair. It's also my tax and hers which is paying for the grant system and why shouldn't we take advantage - if that is the right word - of the loan if it is available? Is anyone seriously expecting me to believe that if they were in a position to take advantage of a loan they would walk right past and say oh no I couldn't possibly take tax payers money - what tosh.

 

And the other thing is that people who are moving up the list are not - as someone quaintly put it - couples wanting to start a family - these people already have a family, and why should they take preference over someone who is single for heaven's sake? In the real world you cant say to your boss oh I should be paid more than her because I've got a family to start!!

 

I typed that email late last night and I wish I hadn't now. end of 'moan'.

[Slim]

What Island do you live on? There is loads of land zoned for building that's not built on and more importantly virtually all of the farmland outlying existing towns is already landbanked by developers either directly or indirectly. They could develop it if they wanted to. But they don't want to because over supply is their worst nightmare and it would actually devalue the building land they own.

 

Is there? I know developers hold a lot of that land outside of towns but I'd gathered much of it was tied up in the planning process.

 

I've seen first hand examples of estate agents fixing prices. Like not passing on lower offers made for property. The owner never even knows in some cases but its the agent deciding he can get more (commission) by holding out for a higher price. It happened to me and when I called the seller directly to ask what the score was the offer had not even been passed on. The agent had basically decided that its worth more to him to wait for a sale at the right price.

And did that property sell to you at the price you offered, or did it go for a higher price?

 

 

If that is not proof of the manipulation I was talking about, that you said did not exist, what is?

 

I've never denied that developers manipulate the price, I just dont think estate agents are soley responsible for the price of housing over here as was claimed above.

 

Yes but the average UK property price is a hell of a lot less than the £260,000 that applies here.

 

Hmm, averages dont really fit, we're a pretty different demographic. There's 3 bed semi's for sale here for £175 comparable to those in liverpool, so I dont think our prices here are vastly more than the mainland, suggesting that it's not local forces driving prices high, but a UK wide thing.

[Slim]

Tonto: The grant system is bloody fustrating, it's forever been out of step with the needs of the market. The home improvement grants are shite too. My first property was a flat, an old one. It didn't qualify for a grant for purchase, and as it's a flat didn't qualify for any improvement grants either.

 

Now I've bought a house, I dont qualify for improvements grants other than a bit towards heating and insulation because I earn more than the £15,000 pa to qualify.

 

So lets clarify that, you have to own under 15k and own a house, not a flat. Who's going to qualify for that?

[Juan Kerr]

quote name='Tonto' date='Mar 18 2007, 05:57 PM' post='225656']Firstly I see no problem at all in a 21 year old wanting to buy a flat

 

Well I must say in the real world, and from having grown up on this Island when property was still affordable virtually nobody at that time bought a flat house or whatever at 21, and therefore I don't see why the taxpayer should help a single 21 year old to do so. We have a duty as taxpayers to support and help families and make sure affordable housing is available not to help out people whose aspirations seem to ignore the reality of their situation.

 

Its no great hardship renting, and its how most people in their 20's start out. Why should this generation expect anything different?

 

And why should you pay 600 to 700 pound a month to pay someone else's mortage?

Because you can't afford to buy a house and they can. Its called economics.

 

Is anyone seriously expecting me to believe that if they were in a position to take advantage of a loan they would walk right past and say oh no I couldn't possibly take tax payers money - what tosh.

 

Grants and loans should be available to people that need them. A 21 year old with no dependents and no family does not need state subsidies to get on the property ladder. They are buying a house for personal reasons, not out of necessity or to accomodate dependents and therefore why should the taxpayer foot the bill? I fancy a new Jag, I wonder if there's grant for that because they're bloody expensive.

 

And the other thing is that people who are moving up the list are not - as someone quaintly put it - couples wanting to start a family - these people already have a family, and why should they take preference over someone who is single for heaven's sake? In the real world you cant say to your boss oh I should be paid more than her because I've got a family to start!!

 

Your daughter clearly is not on a low income and has no dependents so why should the state subsidise anything she does? If you have people dependent on you then they should take priority over single people when it comes to grant and other subsidy schemes.

[Tugger]

Does this state subsidy system not operate to keep house prices artifically beyond the reach of most first time buyers?

[Juan Kerr]

Does this state subsidy system not operate to keep house prices artifically beyond the reach of most first time buyers?

 

This I suppose is the crux of the matter - clearly they do.

 

By making it easier for people to buy as there is a £25k grant cushion (or whatever subsidy) it means developers etc don't need to drop their prices to an affordable level. If the grant was not there its harder / impossible to buy so prices would naturally be expected to fall medium term.

 

The banks are also complicit in this as well.

 

Years ago when I bought my first house they'd lend you 3 x salary and insisted on a bigish deposit. Now they'll go 5 x salary minimum and give you a 100% mortgage. If they didn't do this virtually no first time buyers could afford to buy so rather than allowing property prices to drop to affordable levels because nobody is buying, the banks have made it easier for people to take on more debt to buy at ever increasing prices.

 

Its criminal. The only people who win are the banks (until it all goes tits up) and the big developers most of whom are also bankrolled by the banks for cashflow etc.

[Slim]

Again, overly simplistic in my view. When lenders were offering 3x salary, interest rates were 3x what they are now unemployment was higher, etc.

[Juan Kerr]

Again, overly simplistic in my view. When lenders were offering 3x salary, interest rates were 3x what they are now unemployment was higher, etc.

 

You should set up your own property website given your such an expert.

[Tris]

Single females in their 20s buying a house is now not that uncommon at all (and far outweigh their male counterpart).

 

At the end of the day it comes down to affordability and the government have it spot on with the salary determiner. Sure a 20 something female should have assistance purchasing her own house just like anyone else. Whose to say if she is ever going to earn more, get married or so on? You can't put definitives on anything so the option has to be there, tbh it shouldn't even be debatable. But if a couple with combined income still can't buy a house in their own right they should definitely have priority to a 1st time buyer house - its a no brainer.

 

The problem we face over here is there is a massive gap in quality between something for £120k and £140k. So Tontos example above is what is going to happen unfortunately. Perhaps the government should widen their requirements a little in that respect.

[Cambon]

Again, overly simplistic in my view. When lenders were offering 3x salary, interest rates were 3x what they are now unemployment was higher, etc.

 

Actually, it is not even as simple as that. The banks would offer 3x the male salary and 1x the female. They can not do that these days as it is seen as sexual discrimination. Also, interest rates were not 3x what they are now, they were not even double. It was just sensible lending.

 

I totally disagree with the Government grant. All it does is push the price of an entry level house up by £25,000. That then continues up the market.

 

Oh, and Slim, you are wrong about the buyer setting the price of a house, the seller sets the price by accepting or rejecting the offers.

[BigDave]

I totally disagree with the Government grant. All it does is push the price of an entry level house up by £25,000. That then continues up the market.

No, it doesn't. The grant assistance on open market properties is a token gesture - there's very little out there you can apply the grant on. The only homes on which you can use the grant and the low rate top-up loan to it's full potential are approved dwellings which are price fixed by DoLGE and not truly part of the property market. Even after you've bought it and lived in it you must offer it back to DoLGE to sell on to another first time buyer. The grant takes 25 years to get written off as well.

 

For it to have a real effect on the open market in the way you suggest is for the grant assistance scheme to be open to all regardless of income and applicable to any property regardless of price. There are too many restrictions on it to be a big enough part of the market to make any real difference. The majority of properties hold under the HPAS are approved dwellings built exclusively for the government to sell on and as such cannot be considered a true part of the property market as they are witheld from the open market when first sold and for a considerable length of time after.

[Slim]

Actually, it is not even as simple as that. The banks would offer 3x the male salary and 1x the female. They can not do that these days as it is seen as sexual discrimination. Also, interest rates were not 3x what they are now, they were not even double. It was just sensible lending.

 

Was always a fairly daft system, as it didn't take into account disposable income.

 

Oh, and Slim, you are wrong about the buyer setting the price of a house, the seller sets the price by accepting or rejecting the offers.

 

Yes, you can set the price to whatever you like. That's not going to influence the market price though, which is what someones going to pay you for it. You can't push the price over what someone will pay, or it wont sell, see?

 

It's the buyers who set the market price, what they can afford to pay for a place.

[Cambon]

Yes, you can set the price to whatever you like. That's not going to influence the market price though, which is what someones going to pay you for it. You can't push the price over what someone will pay, or it wont sell, see?

 

It's the buyers who set the market price, what they can afford to pay for a place.

 

But if the buyer cannot afford to pay the seller what he wants, the seller will not sell. For example, if a house is for sale for £200K (estate agent guideline) and I offer £100K it is likely to get refused. If I offer £190K the buyer may accept it if he wants a quick sale. On the other hand he may reject it if he thinks he can get more. If there is a lot of interest the buyer may refuse £200K and go for more. The price is not set in stone until the buyer accepts it, and even then he may get a higher offer and gazzump!