House prices What is going on?

[flopseyR72]

I am looking to buy a house. Have been waiting since before lockdown. I’m in rented so not selling.the estate agent has just told me the marker where I am Greater London east ( golden triangle Loughton Chigwell to Epping and brentwood) is going crazy. I just don’t understand why people don’t seem to care about a imminent economy recession coming. Does anyone think I should just buy now or wait. I’ve been waiting a long time and wasting money on rent.

@AnneOfQueenSables - really you seriously think that with Covid plus Brexit - London is going to hold up????

Also, any interest hikes will inevitably mean house prices drop -salaries haven't gone up all that much since 2008/09 - whats changed were the mortgage interest rates. Any change in those in order to stabilise the pound or dampen inflation and house prices will go down. Unfortunately, it probably wont be in one swift move and so it still makes sense to buy rather than rent. But lets not pretend that London will be fine and it'll be as easy as pie......

Yy Greenhats I do and I've been in this sector for over 20 years. You're looking short-term but OP is looking for a family house not a short-term investment.

We moved to a bigger property a couple of weeks before lockdown.

It’s our home, not an investment and we hope to be here for next 25 years. If it ‘looses’ monetary value in the next couple of years so be it. Couldn’t put a price on the benefit of spending lockdown in this house.

no, am also looking for a home, so am conscious of the fact that mortgage rates increasing to say 4-5% might seriously hit affordability.hence my advice to buy now and fix for 10years.

Realistically, how many people buying now can afford mortgage rates at 5%, because that's the problem not a price drop.....

So my advice stands, buy now, fix for 10 years, dont over stretch, over pay and never think about it again....

I’ve got a 2 bed retirement property on the market in that area (inherited) - it’s been on since Jan and we’ve dropped the price once.

I suspect Covid is making some families re-evaluate priorities (as PP have noted, more time at home means wanting more space and bigger gardens and less money spent on holidays/going out/childcare means room in the budget) and older people are (understandably!) hesitant about moving into properties with similarly aged neighbours/communal areas etc, and both phenomenon combined are causing extra pressures on the larger family home part of the market (demand is outstripping supply, despite the uncertain financial climate, because no one is downsizing).

I don’t think you’ll see much change on your market, even if prices go down nationally. Bummer for both you and I (I’d like to sell ASAP to fund a bigger family home up north but the situation is what it is and I can’t see the retirement property market having much movement for some time to come). If I were you I would buy ASAP.

As long as you intend to live in the new house for 5 years or more I'd go ahead and buy as soon as you find something you like.

Primarily, a house is a place to live not an investment.

In my opinion, I think the best time to buy was between 6 and 12 months ago! This was when it was a buyer's market and they could get a deal. The uncertainty of Brexit was making people wait and it stalled the market. People desperate to sell would have been more likely to accept offers we there was hardly any buyers about.

So many people have waited to see what happened after brexit and when that turned into the pandemic people couldn't keep waiting forever to buy. The stamp duty cut has got most sellers and buyers on the market so now it's a seller's market. So you kind of missed the boat.

I don't know if there is going to be a crash, but if there is, then there probably won't be many houses on the market. All the people that have been waiting for a right time to list their property are doing it now for sure.

Obviously if people start losing their jobs then this could mean a lot of houses could get re-posessed and go on the market that way...

I think tho the government will keep trying to protect home owners as they won't want a property crash (hence the reduction of stamp duty). So might offer more mortgage breaks etc. Really they shouldn't have offered these mortgage breaks to people that haven't lost their jobs. Should have only offered for those that were made redundant etc.

Honestly, as you are paying for rent when you could be rent free... You are losing money each month. I would get looking now. You are still in a great position with that massive capital. Sellers will be very keen for you to buy their homes! So go for it! If you wanted to wait you might have to wait a few years and that's not even guaranteed that there will be a crash in prices. This will push prices up if anything.

@beakerbabe72

It’s not even two average salaries as the tax is much higher as a single person. Plus i pay all the childcare costs myself.

and its not 2 average salaries is it, more like 4 times

the average per week is £511 (*52 = 26,572)
www.ons.gov.uk/employmentandlabourmarket/peopleinwork/employmentandemployeetypes/bulletins/averageweeklyearningsingreatbritain/april2020#:~:text=For%20February%202020%2C%20average%20regular,per%20week%20for%20March%202008.

even with tax etc removed
monthly takehome on 27,572 - £ 1,809.08
monthly takehome on 100,000 £ 5,553.33

so while its not 4 times its easily 3 times

Renting from owner means you get your repairs and maintenance sorted, think of buying as more renting off the bank but you do the maintenance and can own the asset eventually. If you're so anxious buy a 3 bed and a sofa bed for your mum, put down a low deposit and take out the longest mortgage and put your money somewhere else. Or stay renting

You might even be able to get a good discount due to your big deposit

Have you looked at auctions?

I would buy now as you will make a huge saving on stamp duty. No point in waiting. If this is going to be a long term home even if there is a downturn in property values it always goes back up again. I've bought at the top of the market more than once and while I 'lost' money on the value of my home initially, after a few years the value went up again. Good luck.

@squiglet111

You might even be able to get a good discount due to your big deposit

Have you looked at auctions?

A vendor isn’t going to give a shit how big the deposit is. They want the best price for their house.

We are on the South Coast and prices here are stable.There is no certainty of a crash coming ATM.At any one time one could happen really .No one can know for sure .I would have a look around ,and see what is about .Maybe over the next 6 months or so you may be able to get a feel of where prices will go.People still have to live somewhere though!

@Alsohuman not true, in this market I would pick a buyer with a 20% plus deposit over 10% deposit, the former is less likely to have issues getting a mortgage making the process less problematic and quicker. It also makes devaluation less of an issue the bigger the deposit. I would accept a lower offer from someone who is going to make the process easier. Not as powerful as a cash buyer, but definitely more negotiation power than someone with a smaller deposit, especially as a FTB too.

As long as you are buying to live in it long term it doesn't matter as London prices always bounce back eventually.

Where I live houses are currently selling really quickly and prices are going up. The estate agent told us it is people wanting gardens and also people putting money into property before a huge recession. We are putting our holiday cottage on the market as it has a good size garden for the area and there is huge demand. We only want to achieve what we paid and invested in it. If it doesn't sell we will just carry on with it.

[quote modargh]@Alsohuman not true, in this market I would pick a buyer with a 20% plus deposit over 10% deposit, the former is less likely to have issues getting a mortgage making the process less problematic and quicker. It also makes devaluation less of an issue the bigger the deposit. I would accept a lower offer from someone who is going to make the process easier. Not as powerful as a cash buyer, but definitely more negotiation power than someone with a smaller deposit, especially as a FTB too.[/quote]
I wouldn’t have the temerity to ask. It’s none of my business. All I’d want to know I’d that they’ve got a mortgage in principle.

@Alsohuman it's your prerogative to ask, it's not about being nosey it's business, working out which is the simplest transaction, that's why when you are a first time buyer or a cash buyer you mention it to sell your position. Trust me when you come to sell you want the simplest chain, you don't always have a choice of course, but if you have a couple offers on the table of course you find out their position to weigh them up, it is not always the highest offer that wins.

@Alsohuman and a mortgage in principle means nothing, 50% of MIP's didn't progress to mortgage offers in June, so it would be a risk to take a MiP as a benchmark credential alone in this market.

Thank you for patronising me @mordargh. I know exactly what’s involved in buying and selling houses. I would never ask that kind of personal question of a potential buyer. I might ask the agent who’s most proceedable but that would be it.

Estate agents usually asked to provide what our approximate loan to value would be on houses as part of the offering process presumably to pass this information to the sellers.

*asked us to provide

@Alsohuman I apologise for the trust me comment that was patronising, but there really isn't room for politeness, if you asked your agent who was the more "proceed-able" aka desirable buyer and the main difference is deposit size that's what they'd tell you and that's what you'd base it on, so you're getting the same result. You said deposit size doesnt matter, I'm just saying, as someone who had a sale nearly fall through last month due to the buyer only having 10%, that deposit size does matter at the moment. It mattered less 4 months ago.

@Alsohuman

Thank you for patronising me *@mordargh*. I know exactly what’s involved in buying and selling houses. I would never ask that kind of personal question of a potential buyer. I might ask the agent who’s most proceedable but that would be it.

*@mordargh* is spot on. Estate Agents in many popular areas often ask for MIP documents so they can compare potential buyers, and recommend one to the seller. They look at everything from salary / job to % LTV. My estate agent pushed my offer through to our sellers by the fact that we were London commuting professionals needing less than 60% LTV.

If your estate agent isn’t filtering then you should definitely ask more questions.

We were buying and selling last year in a popular area. Put in 3 offers before 4th was successful (outside our preferred area).

Estate agents for all of them asked for information Grumpy suggests - I did feel if we didn’t provide it we would be way down the pecking order.

In turn we obtained this information for the 5 potential buyers on our house and sold to the person with no chain and the largest deposit.

It’s a horrible process.

I'm really curious about the questions asked by estate agents. Many are linked to financial advisors. Do they ask such personal information to try to sell you mortgage and insurance products?

It has been a long time since I bought a new place to live in so this is new to me.