Will house prices finally fall?

[PupInAPram]

They've been defying gravity for so long, but surely now there are too many downward pressures?

@Thestagshead

Wow, what a complicated and interesting post. I had to read it twice to understand it.

Our first house had fallen from approx 69k to 52k when we bought in 1991.

We thought we had hit bottom of the market but we sold in 1994 for 48k

We bought in 1994 for 75k a house that had been on the market for 18 months at 120k.

Since then mortgaged owner protections have improved, I think, which might help a bit and employment is currently OK. It depends on so much. When we moved in 1994 most houses we looked at were repossessions, although the one we actually bought wasn't.

I think as in the 2008 crash it will be worse in certain parts of the country. The area where I live has a blip for 2 years when people couldn’t get mortgages and if you were a cash buyer you could get a bargain but since then they’ve just risen again
In the blip very few houses came on the market and there were no new builds.
If prices do fall or stagnate there will not be new builds available as they’ll stop building and only people who have to sell will put their houses in the market so there will be very little supply
In a popular area this may keep prices higher than other areas.

@Enzbear would you not please? It's not a nice thing to do.

[quote GlasswareisOverated]@Enzbear would you not please? It's not a nice thing to do.[/quote]
I'm not a landlord but I do believe that they do provide a service to those of us who don't want to buy.

@Kezzie200

Our first house had fallen from approx 69k to 52k when we bought in 1991.

We thought we had hit bottom of the market but we sold in 1994 for 48k

We bought in 1994 for 75k a house that had been on the market for 18 months at 120k.

Since then mortgaged owner protections have improved, I think, which might help a bit and employment is currently OK. It depends on so much. When we moved in 1994 most houses we looked at were repossessions, although the one we actually bought wasn't.

I think the big big change since then is the dramatic fall in interest rates. In the early 90s it was affordability of mortgage payments due to rising interest rates that was the issue.

The lower interest rate environment from 2008 allowed for less of a correction in house prices.

I'm not a landlord but I do believe that they do provide a service to those of us who don't want to buy*

Some do

Yes definitely the interest rate drop has allowed prices to rise. Whatever happens to interest rates will impact house prices.

But the pandemic has as well. Fewer moving so less supply.

And here everyone bought holiday lets which pushed prices up but what if the bookings drop (now we can go abroad again ) and the costs of running them rise (electric etc?)

I’m in C London and had my home valued. Flats valued at >1m in my area are currently under offer within days. Neighbour’s went after 3 viewings and didn’t need marketing on the net. I asked agent who the buyers are and he said FTBs. Bonkers. There is no shortage of money here.

We're in the midst of massive socio-economic upheaval. In the next 20 - 30 years it likely that the chasm between rich and poor will lead us back to Dickensian times and overwhelming majority will not own property or large assets of any kind.

I think price rises may slow down but not stop and not reverse. There are a couple of government schemes ATM but not surprised if Sunak stopped them.

@passthebiscuitsthisway

Nah. Minimum wage is too high now.

9.50 an hour is too high?! I'm guessing you don't live on that

@Yxzl, in that scenario LL would just let to someone who can afford rent. Where I am there are not enough rental houses for demand and they frequently let for higher than advertised as a rental bid war erupts. Eg. A 2 bed house near ours was up for £680 rental was eventually rented out for £740.

Interest rates are on the up and I read a few days ago banks and building societies are now factoring in rises in cost of living so making it harder to borrow.

[quote GlasswareisOverated]@Enzbear would you not please? It's not a nice thing to do.[/quote]
8 people viewed our property that recently came up on the first day. 6 had pets, which we allow, one was leaving her h and until finance sorted wouldn't be able to buy and lots of similar stories. Whilst empty we decorated, had a new boiler, carpets.
Not a nice thing to do? Please just stop!
I have no guilt. We're providing a pretty good service. First time buyers viewed the property when we did and all turned their noses up and made no offers, because of a quirk.
Yes it's funding our eventual early retirement just like our pensions. So what?

Certainly not in south/west Manchester. Perfectly average two bed terraces are being put on for offers over 300k. Three bed semis are offers over 350k. The ‘offers over’ are going up to £40k. If £350k is genuinely all you have to spend then you have no chance.

@Cahliah

Certainly not in south/west Manchester. Perfectly average two bed terraces are being put on for offers over 300k. Three bed semis are offers over 350k. The ‘offers over’ are going up to £40k. If £350k is genuinely all you have to spend then you have no chance.

To add, the stamp duty freeze was the most idiotic decision the chancellor ever made. It’s caused the most ridiculous house price surges.

A flat in my development just went up for 58k more than what I bought it for in 2019. This is in London.

I was talking to an estate agent and maybe its just estate agent speak, but she said things are selling really fast including the 3 bed flats that i am looking at and it is across the board i.e. not just the houses.

UK house prices will not fall significantly until housing supply starts to meet demand.
The population of the UK has increased by c 10 million since 1982 and is projected to continue to rise. To meet increased demand for housing governments would need to build 10 cities the size of Leeds.
There will be temporary ups and downs but until the demand question is addressed, the underlying trend will be up.

There will also be an element of buyers who have locked into a better mortgage deal then they would get now in are trying to buy before that offer expires.

The market was not flooded with folks suddenly deciding wow, my house has lost value, think I shall sell it

I bought in 2019 but it would be easier for me to move up in a falling market.

It's certainly not what happening in Kent. My youngest has been saving hard and looking to buy - a one bed flat, pre- owned flats are in such short supply and expensive or grim, or cash buyers only due to EWS1, and the new builds - Kent is awash, the prices are just going up and up with each new release. I can't imagine a downturn here any time soon.

Prices are still rising steeply here too.

We bought our house for 172k in Jan 2021. Looking on rightmost now, if we had waited to buy we would be priced out now.

If we had continued renting, we also would have been priced out. Rents have increased £200-£250 a month in the three years we have lived in this area.

Comparable houses are over 200k. 175k was our absolute limit.

We only managed to buy for the first time in our 40s, and we had to move 150 miles from where we were living to be able afford somewhere, and only managed to buy at all as dh Grandmother died and left him enough for a deposit - years of renting in London meant we couldn’t save a penny.

@Lizziekisss depressing isn't it, when your kids do everything right, but you can't do the bank of mum and dad thing. They are stuck renting forever 😔

@Lizziekisss Kent is going up because all the Londoners are going there cos its relatively cheaper. If your youngest is commuting, might be worth looking in outer suburbs of london, might be more affordable despite being more expensive on paper due to lower transport costs. And I think demand is not as great because people tend to either want central locations or home counties- the in between is less popular esp for 1 bed flats.