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County begins to feel squeeze
7:01am Wednesday 3rd September 2008
The annual average price of a house in Oxfordshire has dropped for the first time in eight years, according to Land Registry figures.
The Government's official body, which checks on the number of house sales, has revealed an average home cost £245,293 in July - 0.3 per cent lower than in the same month last year.
It is the first drop since the Land Registry started collecting figures in 2000 and echoes concerns about the housing market around the country.
Now one Oxford estate agent has warned the situation in some areas of the city may actually be a lot worse.
Robert Maxwell, branch manager of Andrews estate agents in Cowley, said: "We have seen property prices fall in the last year.
"In Cowley, properties that were fetching up to £285,000 12 months ago are struggling to reach £250,000 this year.
"A lot of asking prices are not realistic and some properties have been on the market for six months as there is now a lot of choice and people are going for the lowest figure.
"Last year anything would sell. Now it is properties that are new to the market or which have been reduced in price which are moving."
Oxfordshire house prices also fell by 0.3 per cent on the Land Registry's June figure.
Prices have fallen for the sixth month in a row with almost £8,000 - more than three per cent - wiped off the average price of a property in the county since its February peak.
But Gavin West, residential director of Summertown-based estate agents Kemp & Kemp, said values at the top end of the market were less hit by the downturn.
He said: "Poor sentiment in the market has led to a drop in the volume end of the market - properties worth £1.5m plus are much less affected.
"The feeling is anyone buying a house today could be facing another 10 per cent loss in the value of the property, which is not necessarily true. But I'm reasonably hopeful for the rest of the year provided interest rates come down and mortgage lenders can offer rates below six per cent."
Earlier this year, the Land Registry also showed transactions in the county had tumbled to their lowest level since the turn of the century - less than 600 a month. Last year sales were running at about 1,000 a month.
According to figures from the Bank of England, the number of mortgage approvals has dropped by 70 per cent to a record low.
Just 33,000 loans were agreed in July - six per cent lower than the previous month and down from 114,000 in July last year.
Robert Pinheiro put his home in Princes Street, East Oxford up for sale in May for £350,000 but the property is now under offer for £300,000.
Mr Pinheiro, 32, marketing manager for Oxford finance firm Critchleys, bought the property for £263,000 in October 2005, but recently spent £45,000 on a new kitchen and extension as well as redecorating the house from top to bottom.
He said: "I'm disappointed at the length of time it has taken for a serious offer to be made. Especially, given the amount of money and time that has been spent on renovating and extending the property.
"We have received a cash offer and have offered on another property for below the asking price.
"It's now just a waiting game with the owner of the house we want to buy."
The Government has moved to throw a lifeline to first time buyers by freezing stamp duty on properties costing £175,000 of less for the next 12 months from today.
It means the current £125,000 threshold will be changed and lifting the one per cent levy means a home buyer could save up to £1,750. Stewart Lilly, Harwell-based board member of the Federation of Property Professionals, said: "Every little helps, but it is not a big enough increase to help the market place in Oxfordshire. It needs to be on properties worth up to £250,000.
"It will assist the first-time buyer market and, hopefully, help move a lot of standing stock of flats developers are unable to sell."
On one property website last night there were more than 900 homes under £175,000 on the market in Oxfordshire.
Your Say YourOxford
Tarbatt, says...
8:44am Wed 3 Sep 08
So he's alive and well and working at Andrews? It doesn't seem that likely to me - I doubt if a shrewd financial operative like Bob would work for a team of bungling incompetents like Andrews. I had some dealings with this bunch a while back - it was Welcome to Amateur Hour!
Dicky, says...
8:57am Wed 3 Sep 08
Tarbatt wrote:I wouldn't trust him as far as I could throw him off a boat....
Robert Maxwell, branch manager of Andrews estate agents in Cowley So he's alive and well and working at Andrews? It doesn't seem that likely to me - I doubt if a shrewd financial operative like Bob would work for a team of bungling incompetents like Andrews. I had some dealings with this bunch a while back - it was Welcome to Amateur Hour!
Lee Blackbird, says...
9:35am Wed 3 Sep 08
Keep hoping, Mr West. The reason we are in this mess is because the banks lent out too much money, leading to house price inflation. Now there's no money left and it's payback time. Houses are overpriced, and prices will have to come down. Your suggestion is akin to curing a hangover by carrying on drinking.
Jay, oxford says...
10:38am Wed 3 Sep 08
Lee Blackbird wrote:It's not as simple as that though.
"But I'm reasonably hopeful for the rest of the year provided interest rates come down and mortgage lenders can offer rates below six per cent." Keep hoping, Mr West. The reason we are in this mess is because the banks lent out too much money, leading to house price inflation. Now there's no money left and it's payback time. Houses are overpriced, and prices will have to come down. Your suggestion is akin to curing a hangover by carrying on drinking.
If prices drop say 30%, it would leave so many people in negative equity that they couldn't sell, meaning that all those hoping to buy a house "when prices drop" will find that their only hope is on bagging themselves a reposession.
Simon, Oxford says...
11:00am Wed 3 Sep 08
£350K for a terraced house.
So this is a correction to the market bubble.
Alan Page, says...
11:37am Wed 3 Sep 08
Jay wrote:Better than a bedsit. The only people in negative equity will be greedy bastards who were responsible for their own demise anyway.
Lee Blackbird wrote: "But I'm reasonably hopeful for the rest of the year provided interest rates come down and mortgage lenders can offer rates below six per cent." Keep hoping, Mr West. The reason we are in this mess is because the banks lent out too much money, leading to house price inflation. Now there's no money left and it's payback time. Houses are overpriced, and prices will have to come down. Your suggestion is akin to curing a hangover by carrying on drinking.It's not as simple as that though. If prices drop say 30%, it would leave so many people in negative equity that they couldn't sell, meaning that all those hoping to buy a house "when prices drop" will find that their only hope is on bagging themselves a reposession.
Making a profit driven free market out of a common necessity like housing is obscene.
Serves them right!!
Jay, oxford says...
11:55am Wed 3 Sep 08
Alan Page wrote:
The only people in negative equity will be greedy bastards who were responsible for their own demise anyway.
Making a profit driven free market out of a common necessity like housing is obscene.
Serves them right!!
My mate bought a 2 bed property in Oxford almost a couple of years ago AS A FAMILY HOME, as they were sick of living in rented and not being able to decorate etc... Does that make them a greedy ****?
The interest on their mortgage is also £150 a month LESS than what they would have paid in rent on an identical property, so to me that property certainly doesn't seem over-priced compared to what you'd pay in rent.
So do you STILL think anyone in negative equity is just a greedy ****? Some are, but the majority are just people who wanted a family home.
Alan Page, Guildford says...
12:01pm Wed 3 Sep 08
Why should we feel sorry for middleclass property owners? They can afford housing, unlike many others on Council estates.
Its all very well saying nobodies to blame but the profit motive is the reason a lot of people buy houses these days.
Lee Blackbird, Blackbird Leys says...
12:02pm Wed 3 Sep 08
Jay wrote:Sadly it is that simple.
Lee Blackbird wrote: \"But I\'m reasonably hopeful for the rest of the year provided interest rates come down and mortgage lenders can offer rates below six per cent.\" Keep hoping, Mr West. The reason we are in this mess is because the banks lent out too much money, leading to house price inflation. Now there\'s no money left and it\'s payback time. Houses are overpriced, and prices will have to come down. Your suggestion is akin to curing a hangover by carrying on drinking.It\'s not as simple as that though. If prices drop say 30%, it would leave so many people in negative equity that they couldn\'t sell, meaning that all those hoping to buy a house \"when prices drop\" will find that their only hope is on bagging themselves a reposession.
Not everyone will be in negative equity, so many sellers will still be able to sell for much lower amounts. They just need to wake up to the reality of lower prices.
Those in negative equity who can't afford to sell will either have to sit tight or be repossessed. Whatever the scenario, prices can only come down.
It's about time too. The madness of the last few years is summed up by Mr Pinheiro paying £45,000 - enough to buy a flat in Oxford ten years ago - just for a kitchen in a little terraced house!!
This has been going on across the country - people borrowing on a scale that would make an African dictator blush, in the misguided hope that it would 'add value' to their property, and now it's all come crashing down. The sooner we wake up to the lunacy of the last decade, the better.
S, Oxford says...
12:38pm Wed 3 Sep 08
Mr Ison, England says...
12:54pm Wed 3 Sep 08
G, Oxford says...
12:55pm Wed 3 Sep 08
Alan Page, says...
1:45pm Wed 3 Sep 08
S wrote:Well, there you go then.
I agree with Jay. Does wanting to own your own home make you a greedy b*astard. My partner and I brought our 2 bed flat nearly 2 years ago as first time buyers. Nobody tried to discourage us at the time, people still thought the prices would continue to rise. If we get into negative equatity it will be due to being unlucky and buying at what looking back was just at the wrong time, not through being greedy! I object to Alan\'s comment about \"why should we feel sorry for middle class\" Although I don\'t class myself as middle class we wouldn\'t have qualified for a Council House as we both earn decent salaries and have no dependants so had no other choice but to get on the property ladder at some point.
Clearly too rich to be on a council estate so why are you whining?
Jay talked about people who buy properties as family homes. What relevance has that to negative equity unless they were going to sell?
The only people who are now out of pocket are those who gambled on pocketting an obscene amount of money on property deals and have come unstuck.
Do we feel sorry for people who blow hundreds of pounds in amusement arcades? No.
Why should our hearts bleed for greedy bourgeois? After all their credo is "Compassion is only for those who want to remain poor."
Jay, Oxford says...
3:33pm Wed 3 Sep 08
Alan Page wrote:
Jay talked about people who buy properties as family homes. What relevance has that to negative equity unless they were going to sell?
But what if they need to sell due to being relocated with work? Or they need to move closer to a sick family member? It makes it very difficult having negative equity.
Just a thought: If someone bought a property for £200k with £40k equity (20% deposit), and then it dropped in value to £140k. Assuming they still owed £150k on the mortgage, then they would have to find £10,000 to be able to sell it and move. BUT... if this property could be rented out for £900/month, would they be allowed by the mortgage company to do that, given that although the mortgage would be 107% of the property value, the rent would cover all the interest, plus the majority of the equity?
Tony Brett, Oxford says...
4:18pm Wed 3 Sep 08
Alan Page wrote:Actually we bought our house because we like the area (Cowley Marsh) and we like the house.
Depends on what he was planning to sell it for.
Why should we feel sorry for middleclass property owners? They can afford housing, unlike many others on Council estates.
Its all very well saying nobodies to blame but the profit motive is the reason a lot of people buy houses these days.
Those things still apply. The house is probably worth rather less than it was 6 months ago but I don't really care about that because we didn't buy it to make money we bought it to have somewhere nice to live.
So long as we can afford to keep making the mortgage payments then we'll continue to be happy.
S, Oxford says...
6:12pm Wed 3 Sep 08
Matthew, Oxford says...
11:46pm Wed 3 Sep 08
I always thought there was a disclaimer on the bottom of a mortgage agreement, stating that the value of a property can go down as well as up.
I expect most recent buyers did not take the possibility of the economy/housing market going bad.
If they didn't take any precautions beforehand to ensure they could pay their mortgage if rates went up, or the "bills" increased - like they now have - then I have little sympathy. It seems many have stretched themselves to the limit - should we be sympathetic to stupidity, greed or even recklessness?.
Trotting out the old line "poor little homeowners, only trying to make their way in life" doesn't wash with me I'm afraid Jay.
Alan Page, Guildford says...
2:25pm Thu 4 Sep 08
S wrote:And if your happy with it why worry about negative equity?
I don\'t even know why I am retaliating to people like Alan really but you really don\'t know what you are talking about!!! We didn\'t buy our flat to make loads of money we bought it so we could move out of our parents homes. Obviously though we would need to move one day as we intend to have a family, that\'s when we might have negative equity. We would have brought a bigger house initially but unfortunately we were priced out. How you can even say we are too rich to be on a Council estate??? Have you tried to get a Council House recently??? I probably know more about it than you as our house is shared ownership and in order to get it we had to go on Council list. I think the wait was at least 20 years!!
And having to move? Well that would only occur if you had a couple of kids by which time the good old free for all will be up and running again.
Again you are whining without reason.
Alan Page, says...
2:27pm Thu 4 Sep 08
Tony Brett wrote:Good, that's the spirit.
Alan Page wrote: Depends on what he was planning to sell it for. Why should we feel sorry for middleclass property owners? They can afford housing, unlike many others on Council estates. Its all very well saying nobodies to blame but the profit motive is the reason a lot of people buy houses these days.Actually we bought our house because we like the area (Cowley Marsh) and we like the house. Those things still apply. The house is probably worth rather less than it was 6 months ago but I don\'t really care about that because we didn\'t buy it to make money we bought it to have somewhere nice to live. So long as we can afford to keep making the mortgage payments then we\'ll continue to be happy.
Jack, Oxford says...
6:37pm Thu 4 Sep 08
The housing bubble has got to burst! A home is for living in, not for making a profit. THat's where the problem started in the first place.
Rob, says...
7:03pm Thu 4 Sep 08
E. Agent, Oxford says...
1:03pm Sun 7 Sep 08
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Robert Pinheiro put his home in Princes Street, East Oxford up for sale in May for £350,000 but the property is now under offer for £300,000
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Jay, oxford says...
8:13am Wed 3 Sep 08
In theory this could make the whole situation within Oxford ringroad even worse, as if prices fall, many will choose to let their homes out instead of selling, making it even harder to buy a home in your chosen location.
There's SO many very overpriced homes in Oxford, although there's also quite a few reasonably priced ones, where the interest on the mortgage is actually less than what you'd rent the property for!