Property Prices

[special1]

Just to give an indication of the current property situation in the UK and how desperate housebuilders are -

 

Got a firm offer for my Cheshire house in July 2009 for £135,000. £11k less than what I originally set it at when first on the market in February 2009. Went to see a few property's in the area where we lived, but none of the vendors would move on the price. They were still in the mind-set that the property downturn didn't apply to their house !! - Called into a Persimmon site only to be told that the house I could just about afford £189k (meaning a hefty mortgage) wouldn't be ready for 6 months. Couldn't wait that long as buyer of my house wanted to move in within 28 days. Just as we were leaving the sales office the salesgirl asked if we liked the showhouse. Showhouse was 4 bed, 3 storey, 2 en-suites & garage. Obviously really nice but at a price tag of £215k it way out of our price range (or so we thought !)

 

Within 20 - 25 minutes we had the salesgirl willing to take £175k - then it went to £161k, then £154k. Cutting the story short, she asked us what we would be willing to offer. We are now the proud owners of a brand new house, really nice area with views over farmland and all for the price of £149k. As a result of this massive saving I paid cash for it, so no mortgage worries.

 

Currently there are terraced houses in Liverpool going to auction at £8k (yes £8k but admittedly in a really crap area).

 

My personal opinion on the Isle of Man property market is that a downward price adjustment is certainly on the cards. Historically, IOM's main revenue comes from tourism and financial and both of these are not the strongest areas for generating income at present.

 

 

The likes of Easyjet & Ryanair make it easier for more people to travel further. People are more adventurous when it comes to holidays,compared with the 60's, 70's & 80's. Back in the 70's how many of your friends said they were going to the Dominican Republic and the like? Seychelles or Peel for a 2 week holiday, which would you choose ? - Flights to IOM appear to me to be mostly carrying business flyers, so that leaves SPC. I'm not even reopen the argument of the crazy inflated prices they charge, needless to say it has a detrimental effect on the number of tourists coming to the island.

 

From a personal point I like the island and the people, if the boat was a reasonable cost I would be over a lot more than I currently am. If property prices do adjust, I would also consider moving the family and my business over aswell.

[manshimajin]

Currently there are terraced houses in Liverpool going to auction at £8k (yes £8k but admittedly in a really crap area).

Well done in getting the house. It sounds great. Hope you will have a very happy life there. But don't foget to come over here sometimes!

 

You reminded me of the housing slump in the early 90s. We were based in Portsmouth at the time. Wanted a garage so went to an auction. The garage we were after sold for more than a 1 bedroom, ground floor flat. As the auctioneer said to the assembled multitude, "you could buy the flat, knock a hole in the wall and turn it into a big garage and sell it for a lot more than you paid for it as a home!'

 

Funny how property cycles go around again and again.

[gazza]

And on the back of these downwards prices, there be a few ppl that make millions in the years to come.

[Slim]

 

Eeeeeeeeeeeeeeeeeeeek! That Albert Tatlock was pretty much spot on in 2007.

 

 

 

Heh, bollocks. Alberts been predicting a crash for ever, it's not happened on the Island. He might be right eventually, but that's no cause for congratulations is it?

 

http://news.bbc.co.u...ess/8517757.stm

 

"House prices in the UK rose by 2.9% last year, according to the latest government house price survey."

Repeat what I've said in the other thread, where's the evidence of a 'crash'?

[jimbms]

Bye bye, I'm off to where the sun (££££) shines brightly.

Ok bye, have fun, that's one more job vacancy free for someone.

[GD4ELI]

Repeat what I've said in the other thread, where's the evidence of a 'crash'?

 

None - as many have said:

 

• the Island's private sector is healthy,
• there may be demand from 'across' for retirement homes where tax is not 50%,
• even if 500 government employees are 'let go' - this will not unduely influence things.

There will always be sales where the vendors have to sell at any price, apart from this I expect to see stagnation then a gently drift upwards, question is how long will stagnation last? IMO 3 to 4 years.

[manshimajin]

He might be right eventually, but that's no cause for congratulations is it?

Nor, frankly, is living in a fool's paradise where housing becomes less and less affordable for people - as happened in Ireland and the UK - hence the dramatic falls in average house prices in both markets (by about 25% in UK and 50% in Ireland).

 

Speciial 1's experience related above indicates that the UK situation is not an even 2.9% increase - it is very patchy. Northern Ireland is still down significantly (-17.2% annual change, Scotland down 6.8%, East Anglia down nearly 4% but London and the South East which has the greatest number of houses up over 5%).

 

I suspect GD4ELI's forecast is a 'best case scenario' given the prospect of rising unemployment, higher taxes and higher interest rates and reduction in mortgage relief over the next few years. Our best hope is for comeovers from the UK - but house prices in our core North of England target market have fallen again this year by an admittedly small 0.2% but are way down on where they were in 2007.

 

The fact that so many houses are not selling because they are over-priced in the current market is also something to watch - will the owners hang on grimly to their expectations or will they be forced to negotiate because they need to move?

[Pierrot Lunaire]

Funny how property cycles go around again and again.

Not really. That's what cycles do.

[manshimajin]

Funny how property cycles go around again and again.

Not really. That's what cycles do.

Ha Ha :lol: Not my trusty old bike though.

[cheeky boy]

House vendors seem to be sticking to their prices and won't budge much, however things are very different in the apartment market

 

A flat in a block on the prom was recently sold as a investment to an individual, he rented it at 700pm on a short let.

The developer of the site had a number of unsold apartments in the block and unable to sell them, they were let at 400pm leaving the private buyer no option but to drop his rent to the same

 

Somebody do the math for me, but what would a fair price be for an apartment which rents at 400pm?

[pongo]

Somebody do the math for me, but what would a fair price be for an apartment which rents at 400pm?

 

Well it would represent a 5% PA return on £96K.

 

But if it was an investment property then there would be costs involved obviously - the cost of buying and ultimately selling the property. The cost of servicing any mortgage. Maintenance and management costs. Now potentially you might make money on the property rising in value over time - but who would bet on that at the moment - especially when there are so many new apartments ?

 

So less than £96K given the hassle involved and given that you can get about 4% - 5% in a building society at the moment if you actually have the cash sitting around. Maybe 4.5 %.

 

ETA: so knock off 10% for the state of the market and maybe risk offering them £86K. Even that seems like a generous offer, all things considered.

 

ETA: and the price going down every day.

[manshimajin]

House vendors seem to be sticking to their prices and won't budge much, however things are very different in the apartment market

And a lot of their houses are sticking in estate agents' windows too so they are not getting the money.

 

This is what I meant when I said that the Castletown estate agents I have talked to have told me that properties that are 'moving on the market' are usually selling for 10% below their sticker price. Given that this is estate agent information the actual discount to sell may be a bit more than that?

 

It's a shame that there isn't something like the Halifax report over here - or something that 'marries' information on asking price, selling price and average times to sell.

[oldmanxfella]

I remember how crazy the property prices were when I moved to the island in 2006, and how estate agents making profits on inflated prices p'd me off.

Now that we've had the recent announcements regarding severe cuts, tax rises and rather sober times ahead, what's are peoples opinions of the house market ?

 

Funny how it gets a bit sticky and the first thing the comeovers do is start bricking it about falling house values. Nobody cared about the locals when you were ramping property up to unaffordable levels for us in the previous 10 years. Lets not forget, you created the boom not us. Many of us are sat on massive mortgages just to stay here because we had to compete with the flood of cash coming in from new residents.

 

I'd agree with Pongo - the prognosis is not good. Tax raises in the UK should have helped us as it would have created new residents fleeing higher taxes in the UK - but as the ones we want are going to Monarco, Jersey or Guernsey (in fact anywhere but here) then I would suspect the downside for the IoM market is reasonably clear - its not looking good. Apartments and higher value property on new estates are looking very vulnerable.

 

Best sell now, thanks for coming and all that.

[manx viking]

Bye bye, I'm off to where the sun (££££) shines brightly.

Ok bye, have fun, that's one more job vacancy free for someone.

Ah hah, have a sprat to catch a mackeral - got one.

[taz8130]

I remember how crazy the property prices were when I moved to the island in 2006, and how estate agents making profits on inflated prices p'd me off.

Now that we've had the recent announcements regarding severe cuts, tax rises and rather sober times ahead, what's are peoples opinions of the house market ?

 

Funny how it gets a bit sticky and the first thing the comeovers do is start bricking it about falling house values. Nobody cared about the locals when you were ramping property up to unaffordable levels for us in the previous 10 years. Lets not forget, you created the boom not us. Many of us are sat on massive mortgages just to stay here because we had to compete with the flood of cash coming in from new residents.

 

I'd agree with Pongo - the prognosis is not good. Tax raises in the UK should have helped us as it would have created new residents fleeing higher taxes in the UK - but as the ones we want are going to Monarco, Jersey or Guernsey (in fact anywhere but here) then I would suspect the downside for the IoM market is reasonably clear - its not looking good. Apartments and higher value property on new estates are looking very vulnerable.

 

Best sell now, thanks for coming and all that.

 

 

For the record - I'm not "bricking it" - I'm fine with the situation as my family & I am here on the island for the long term. I'll take the up's with the downs. My question was based on curiosity. With regards to not caring about the locals, when I set my business up I made a point of trying to employ locals. This was not always the best choice. But I'll put that down to possibly my poor interviewing skills rather than launch into a bitter rant about people I hardly knew, I'll leave that to the "armchair politians"

 

I hope my time on the island will be long and enjoyable, and I pray that I don't end my days trawling the forums looking for any opportunity to criticise other people, who I don't even know, just to give myself a feeling of worth.