Local price increase 30%

[pearlylum]

Thought it was a one off but the third house in our street ( identical to ours) has again sold for 30% more than we paid for our property 2 years ago. We chose this area hoping that this would happen.
Anyone else in such a nice circumstance?

[ThroughThickAndThin01]

So much for the fear of Brexit dampening house prices!

Where are you?

[pearlylum]

I live in Scotland, near Edinburgh. This area has seen the longest stretch of longest new domestic railway to be constructed in Britain for over 100 years, opening up many towns and villages to very quick access to the heart of Edinburgh, a thriving European business and commercial hub.
We bought a property 5 minutes walk from a station on the new line a year before it opened.
House prices all along the line are going crazy.

[ThroughThickAndThin01]

Sounds like a wise move.

I'm in kent and its a funny old market at the moment. Houses seem to be sticking here, but then I read other threads where posters are saying everything is flying in terms of properties going straight away to sealed bids etc.

[HainaultViaNewburyPark]

We've just remortgaged. We've been here 3 years, and our house was valued at 34% more than we paid for it.

It makes me a bit sad. If we were trying to buy the same house now, I doubt we would be able to afford it (despite having fairly good pay increases in the interim).

[pearlylum]

Sealed bid is the way most houses are sold in Scotland.
Once a property is on the market viewers register interest and a closing day and time is set. Buyers submit bids in secret and offers are opened by solicitor. If an offer is accepted ( usually the highest) that is binding. No gazumping, no retraction.

[pearlylum]

Why sad? HainaultViaNewburyPark
You can always move to another area to enjoy your profit.
I love this area but will be looking to downsize in 10 years or so. I have a 5 bedroomed house and older teenagers- we won't need this amount of space forever.

[HainaultViaNewburyPark]

I bought a house to live in, not as an investment vehicle. The increase probably means that we're attracting buyers from London, which will have an impact on locals with regard to their ability to buy.

The small 3-bed terrace we sold when we moved here (for £165k) is currently on the market for £225k

[chelle792]

We had our place valued in the summer and recently a house on our road sold for 11% more than that. Identical houses but ours is less run down. It's madness

[pearlylum]

I bought a house to live in, not as an investment vehicle.

I agree. i adore my house as do my teenagers- they can be in the heart of Edinburgh in 18 minutes. It's a bonus to have such an increase in worth.

[evrybuddy]

The house we're in now has probably gone up by about 50% in 5 years or so.
I'm really chuffed about that apart from everything else in the SE seems to have gone up by more...

The house we left for this one has gone up by about 66% possibly more in the same period.

So, I guess we've lost really.

Where does it end though?
It's depressing thinking of the impossibility of ordinary young people, with no bank of mum and dad, ever being able to own a home unless the rest of us are willing to take a property crash.

[Badders123]

I'm in the east Midlands and my house has gone up by £50k in 5 years.
Mad

[Themoleandcrew]

We've been in our house in the London suburbs for 4 years. It's now worth 200k more than we paid for it. We'd like to move to get another bedroom but those have gone up as well so we can't afford to. Particularly as we are trying to get the mortgage paid off asap. We have three kids and are thinking we'll have to either downsize or remortgage in a few years time to help them out when they want to move. There's no way they'll be able to afford to buy otherwise.

[YogaDrone]

Our house has increased by around £230k in 5 years (house identical to ours sold for this amount 3 months ago). 60% increase. Ridiculous. We're not in London but are in the South East.

[evrybuddy]

How do people see this panning out over the next 1 - 30 years?

We moved from an expensive area to a cheaper place to bank the equity accumulating in the house.

Now the same is happening again as house prices continue to rise.

But with no matching growth in salaries, unless one inherits, there's a very limited ability to move up the ladder.

Unless you move to a cheaper area - and of course, cheaper areas are no getting more expensive.

Relatively speaking property price/value differentials seem to be being maintained - ie Kensington is still more expensive than Dulwich for the same property and so on ... but all property is floating upward and out of reach of the non-propertied.

Where does it lead? Crash or revolution or market paralysis.

[concertplayer]

Where does it lead? The prices will eventually either remain or fall
depending on the area.
As you quite rightly point out there are people like you who have bought but cannot move up. I know people on the 2nd/3rd rung eg 3 bed + who cannot sell as there are not enough buyers who can afford it. In the past people came in as FTB in a flat or small house and then moved up
to the traditional 3 bed semi and possibly -only for some- up and on.
I am wondering what the effect of these Interest only mortgages will be
I know 3 who will have to downsize as they are only effectively paying
rent albeit living in abetter place in the meantime. The effect of this will
start to kick in the next 5-10 years. Will it put even more pressure on the
lower end as downsizers compete with FTBS?
or will the promise by the govt to build more places have kicked in by
then?

[namechangedtoday15]

It's only theoretical though isn't it? Whilst I don't necessarily think prices will fall, we don't really know what's round the corner. It only really matters if you're selling now. If you're not selling for a few years you don't know how much it'll be worth.

FWIW we bought in 2010 I think prices were increasing very slowly for a couple of years but have shot up recently. It's now worth 50% more than we paid. We also wouldn't be able to afford it now and if prices do carry on rising, it's sad because there is no chance our children will ever be able to buy locally.

[evrybuddy]

What worries me is the effect on the market/society of people buying in a rising market with high LTV - small deposit, big mortgage.

This 'locks' the selling prices high - there's no flexibility for these peole to sell at a lower price.

The nearer the top of the market/higher the price you buy - the more vulnerable you are to any instability in the market - the higher your future selling price s locked.

Of course, we haven't had job instability in the south east in a good while, so people are feeling confident about repayment ability, especially with low interest rates.

But if the market shifts at all downwards, if the FTBs(investors) or overseas buyers dry up - then we would probably get stagnation rather than falls - as long as the job market is buoyant.

When you realise that you can never afford the next step up house in your local area, something's wrong.

That your income will never rise enough to allow you to borrow enough more money because the gap in price from 1 to 2 bed or 2 to 3 bed etc is so huge.

People can't just keep moving further 'out' to get a bigger house.

Because the original people who were already living 'out' have to play their part in that game by dying or moving even further 'out' themselves.

Eventually there is no further 'out',

[pearlylum]

I am already "far out" living in Scotland.
Quite a different housing market to the SE.

[evrybuddy]

Different place - same big rises - same issues for hopeful FTBs.

Edinburgh has surely always been a 'boom' market though?

Speaking from ignorance of course, but I would imagine a beautiful university city with a big tourist draw would have a similar property market to Cambridge or Oxford both of which outperform London and the south east for property price growth.

[StepAwayFromTheThesaurus]

House prices aren't spiralling rapidly everywhere. Our house has increased in value by about 25% in 4 years, but most of that was because we did it up (so it hasn't increased wildly beyond what we spent). The rest of the increase is because of the combination of two things: the change to stamp duty made paying a little bit more than £250k viable whereas before that was the ceiling price for our road (and the surrounding area); and there's a but of a localised schools place crisis but this house is located in a little tiny area where the catchments of several sought after schools so there's plenty of demand from families.