Is the Credit Crunch affecting YOU?

[clv101]

We're currently seeing the pound lose a lot of value against the Eastern European currencies and at the same time average wages are increasing in Eastern Europe. It isn't anywhere near as attractive to come here to work in 2008 as it was in 2006. I wouldn?t be at all surprised if 2008 doesn?t end up showing a net loss of economic migrants.

[SunnyJim]

Houses will drop 40% IMHO

IMF reckon a 30% drop in the next few years. Told a couple of property developers that last week, with the response being 'never happen - look how small our country is and how many people there are.'

That'll explain the property prices in Bangladesh then.

Great point. Well made. If the IMF say 30%, I'm betting 40%.

[SunnyJim]

I have been to plenty of auctions John, not once, ever, have I seen a property go for anything like the guide price, always way way more.
Guide prices are set low to attract interest, not as a useful measure, that has been my experience anyway.

Yeah, I agree with that. I've been following the land auctions recently. You don't get anything for guide. Often you can double the guide price for land. I think the guide prices are creaping up now though.....

[Miss Madam]

Houses will drop 40% IMHO

IMF reckon a 30% drop in the next few years. Told a couple of property developers that last week, with the response being 'never happen - look how small our country is and how many people there are.'

That'll explain the property prices in Bangladesh then.

Did anyone see the interview with Financial Planner from Housepricecrash.com (yes I know GHPC is FAAAAAR better and without the nazi tendencies!!!) on the news, he reckoned we are going to see a 40% decline in prices over the next four years. The surveyor from Savils also on the programme's panel looked like she'd been bitch slapped.... hehehehe. He came up with the best sound bite in response to the surveyors statement that house prices will never crash due to supply and demand: 'I want a Bentley - it doesn't mean I can afford one though'. Chuckle...

[JohnB]

I have been to plenty of auctions John, not once, ever, have I seen a property go for anything like the guide price, always way way more.
Guide prices are set low to attract interest, not as a useful measure, that has been my experience anyway.

I auctioned my house last year and the guide was set about 10% below the price I would have liked, but the bidding stopped half way between. The auctioneer spent ages explaining the reasons to me. I also missed out on a building plot because no one turned up to bid (including me!). If this place goes for near the guide I think it will be a bargain, so maybe it's worth turning up in case there's no interest. People might be thinking twice about buying at the moment.

[Blue Peter]

I auctioned my house last year and the guide was set about 10% below the price I would have liked, but the bidding stopped half way between. The auctioneer spent ages explaining the reasons to me. I also missed out on a building plot because no one turned up to bid (including me!). If this place goes for near the guide I think it will be a bargain, so maybe it's worth turning up in case there's no interest. People might be thinking twice about buying at the moment.

May indeed be worth going. Have a look at:

http://www.housepricecrash.co.uk/forum/ ... opic=73751


I've only vaguely looked in at this, but it seems to me quite often properties (including land) are going for around the guide price,


Peter.

[JohnB]

I've been thinking about it some more, and it feels like the sort of thing I want. The house is about 60sq m, and looks like I can just move in without having to do any work, it's got a good outbuilding, and an established garden, so I can move in and get started. I can then develop the site gradually without having to take on any major jobs. Lack of like minded neighbours is the downside, so a better option may be to buy a big house with other people, that can be divided, and with enough land that I can have an acre or two, plus maybe some shared woodland. So maybe this place has shown me what I'm looking for. The problem with that is finding a couple of other people with the cash available now. Maybe prices will fall by 30-40%, making it a bad time financially to buy, but maybe it's the start of the time to get the right place before everyone else has the same idea.

[Blue Peter]

I've been thinking about it some more, and it feels like the sort of thing I want. The house is about 60sq m, and looks like I can just move in without having to do any work, it's got a good outbuilding, and an established garden, so I can move in and get started. I can then develop the site gradually without having to take on any major jobs. Lack of like minded neighbours is the downside, so a better option may be to buy a big house with other people, that can be divided, and with enough land that I can have an acre or two, plus maybe some shared woodland. So maybe this place has shown me what I'm looking for. The problem with that is finding a couple of other people with the cash available now. Maybe prices will fall by 30-40%, making it a bad time financially to buy, but maybe it's the start of the time to get the right place before everyone else has the same idea.

My feeling is that you should do something as soon as the finances sensibly stack up. It takes a long time to set up a rural business, so sooner rather than later. But there's no point trying it if you have to stretch yourself to breaking point to do it. My experience (ha! ) gained by painstakingly watching property porn and makeover shows is that things always cost more than you expect. And, if you're thinking of buying at auction, does that mean that you haven't had time to get a survey done on the place? Does a HIP give you enough info? Many of the properties I see on the websites (and ones I've seen in person) need quite a lot of work to do them up - they haven't really been maintained at all well.

As for buying something bigger and splitting, it does have its advantages, but the supply of suitable properties is even lower and they are still expensive - a property suitable for two family units is roughly double the price of a property for one family unit.

It's possible that prices won't fall in this type of property, but I'm not sure that I see why. The rich are going to get hit by this coming storm as much as anyone,


Peter.

[JohnB]

My feeling is that you should do something as soon as the finances sensibly stack up. It takes a long time to set up a rural business, so sooner rather than later. But there's no point trying it if you have to stretch yourself to breaking point to do it............And, if you're thinking of buying at auction, does that mean that you haven't had time to get a survey done on the place?

As for buying something bigger and splitting, it does have its advantages, but the supply of suitable properties is even lower and they are still expensive - a property suitable for two family units is roughly double the price of a property for one family unit.

That's why I feel I need to start looking, and grab anything that fits most of my requirements. Both the places I've looked at this week would cost the same, or probably more, as a building plot if they go for around the guide price, so if the house falls down it's still a good buy. The one I don't think I'll go for needs at least some work, and is quite a complex building and feels too much for me to take on, but the one I fancy is a small and simple structure. It looks in good enough condition to live in as it is, and any individual job on it should be manageable. If it falls down I can afford to replace it with something super energy efficient, and probably enhance the value of the site.
I agree about big houses to divide, but it's a people rather than a money thing. Like minded neighbours to share resources with and to help and support each other. That's worth more than money.
Just arranged to spend next week volunteering at Monkton Wyld, so maybe in a weeks time I'll have changed my mind again

[stumuz]

- a property suitable for two family units is roughly double the price of a property for one family unit.

Not sure I quote follow this. Are you saying that if you buy a 6 bed detached town house for ?100k and split it into 2x2 bed semi detached town houses; you could get ?200k?

[JohnB]

- a property suitable for two family units is roughly double the price of a property for one family unit.

Not sure I quote follow this. Are you saying that if you buy a 6 bed detached town house for ?100k and split it into 2x2 bed semi detached town houses; you could get ?200k?

A house with some land that can be divided into 2 tends to be at least 600k, plus the cost of alterations, and you could probably get something half the size for half the price. There's a farm I know in Cornwall that was for sale at ?1.8m, with 6 houses with residential planning and 30 acres. Divide that 6 ways and you get six 5 acre smallholdings at well over ?300k each by the time you add the conversion costs. Maybe a bit less than buying separately, but not much.

It's not an argument about making money by dividing big houses, it's an argument that it's difficult to save money by buying a big house and dividing it. Plus the difficulty of several people getting the money together at the same time.

What country, or planet, can you buy a 6 bed detached for ?100k in? And would it be somewhere suitable to survive what's ahead?

This reply is a challenge to prove me wrong, as I've got my share of the money to buy it waiting

[Miss Madam]

Well the credit crunch has come home to roost at our company, management have just announced that 5% of partners, 10% of administration staff and 12% of junior consulting staff will be made redundant - I guess this is due to the drop off in our sales related to mergers and acquisitions as I mentioned in an earlier post. The mood in the office today is very sombre.... I'm lucky to be in climate change which is still booming and we are actually seeking to boost staff in our area, but its very interesting to see peoples' whole attitudes changing and I think most of us will be increasingly cautious with any expenditure this year.

[eatyourveg]

I run a couple of community websites (to be added to my other sins) on which local companies can advertise, the hits for May show a very marked downturn on the big spend stuff eg. builders, conservatories and what have you.