To be confused about how the property market is so hot at the moment

[Tuliptuliptulip]

I think I must be missing something!? If it's a case of lots of people moving from cities and towns to more rural areas, surely there would then be more properties available in the towns so the prices there wouldn't rise? However prices are going up across the board.

Houses where I live are going instantly, even houses that would previously Sat on the market for a while. There also seems to be a real lack of rental properties too! I'm in the south West.

People are wanting to make the most of the stamp duty holiday, I imagine. We're in the process of buying a property, an estate agent said 40% of properties are selling before they're even listed on Rightmove and when we've viewed houses there have easily been five or so different buyers lined up to view that same day.

I'm in Greater london/surrey and its absolutely insane at the moment. 1 house in 4 weeks has come up on rightmove in our area that is within our budget, called to view an hour after it went up and it had already sold.

Honestly I'm finding it so heartbreaking right now. We put our flat on the market back in Jan 2020, took exactly 12 months to sell due to falling through twice so we moved in with relatives, now we are ready to buy but completely priced out within 1 year. Honestly have no idea what we will do!

@Fieldsoftripe9

I'm in Greater london/surrey and its absolutely insane at the moment. 1 house in 4 weeks has come up on rightmove in our area that is within our budget, called to view an hour after it went up and it had already sold.

Honestly I'm finding it so heartbreaking right now. We put our flat on the market back in Jan 2020, took exactly 12 months to sell due to falling through twice so we moved in with relatives, now we are ready to buy but completely priced out within 1 year. Honestly have no idea what we will do!

Have you registered with the different estate agents? Most of the houses we saw we were emailed about by the agents before they went online. Even then, they were often selling between the time we booked our viewing, and the viewing itself.

Don't forget a lot of professionals have managed to save up a lot of money in the last 12 months, not to mention the SDLT holidays.

Between my partner and I we have saved £12k on train season tickets, extra cash on not eating out, no holidays. We have probable saved about £25k in the last year, so we are now seriously considering putting the house on the market and making our next move up the ladder a little earlier than we had planned. Whilst I appreciate this isn't the same story for everyone, the majority of our friends are in the same position.

I live in an unpopular area, where tightfistedness is a matter of local pride - larger houses are being converted to bedsits at a really alarming rate, and larger family homes have shot up in price (though the most expensive still on the market for over 6 months).

We want to move as need more space working from home, but the numbers just don't stack up.

People have been stuck inside for a year. They are fed up of their houses, and want to be elsewhere incase there are further lockdowns, or even if there’s not. They are seeing the faults of their houses because they’ve been in them more - and for some people, they’ll be home more from now on, too.

The stamp duty holiday has only added to that, but most people won’t complete in time for that unless their sales are well progressed now, so it’s likely to just be psychology right now.

• There's a lot of pent up demand from lockdowns etc - so what would normally have been more spread out is all concentrated now

• Lots of people's working situation have changed with WFH more, so where before they couldn't afford to buy somewhere, they can now look further afield and can afford to

• Mass exodus from London is driving prices up across the country

As I see it there are two main drivers:

1. A considerable amount of pent-up demand, especially for family houses in certain areas
2. The Westminster government has been fluffing the housing market like never before.

I would say that in my current area (SW London) although houses are being fought over like the last sausage roll at a funeral buffet, flats are not moving as much. Some are still ensnared in EWS1 issues, and some are just not shifting because they have no outside space and look onto a roundabout.

The asking prices not even the sold prices for flats on the development where I currently live have dropped by about a quarter since summer 2019. And these are otherwise nice places, with big floorplans and river views.

1. there's been huge pent up demand not just cos of lockdowns but because of several years of Brexit uncertainty. In Jan- Feb 2020 the market went absolutely nuts because a brexit agreement had finally been reached. then lockdown happened.

1. lots of people have saved significant amounts over the past year. Whilst some have sadly lost jobs lots of others have saved on transport, holidays, days out etc to help towards a deposit

1. people have been stuck at home a lot and want more space or things that didn't bother them so much when they were only there a few hours a day are bothering them more now. poss also wanting to be closer to family etc as childcare has been more limited

1. stamp duty cut.

I always forget that some people have saved a lot of money from wfh. I've been furloughed on 80% so haven't been able to add a single penny to our savings. We were hoping one day we would have saved enough for a deposit but it seems unlikely now, with missing a year of being able to save and the speed at which prices are increasing, and the really low interest on savings.

I think there's a worrying divide between people who are better off now and those worse off. I saw someone on reddit call it a 'K shaped recovery'

I do wonder what will happen in the future though. Surely affordability will be stretched even further now which means prices won't go up all that much over the next couple of years.

If I was brave then I'd say buying a nice big flat somewhere would be the way to go as they are clearly under-priced. But am not brave so we've upped our budget and are currently in the process of buying a 4 bed house for the three of us. Pre-Covid our goal was to get a 2 bed flat.

However, I do wonder whether the houses have now peaked whereas flats might go up a lot more in the future as there is more give there. In London one of the biggest problems was affordability - surely for a lot more people only flats will now be affordable with the price of houses shooting up.

I think it's knock on, you've got people moving further out which then frees up properties to those that were previously renting and still want to stay central, and have probably saved a ton of cash towards a deposit in lockdown.

I'm in SE London and it's not comparative to anywhere else. I don't think flats will take off after lockdown, people want a garden.

A tiny two bed near me in Z4 went on the market Monday at £995. It has a postage stamp garden and had an STTC sign up today. That is crazy money.

First time buyers will still only be able to afford a flat in London so flats wont tank in the long run.Garden or not garden - houses are now completely out of reach of most 1st time buyers so what are couples in their late 20s/early 30s going to do?

I agree that the trick is to be well in with some agents so that they call you as soon as a house gets ready to come on. It's not quite the same situation, but family houses in our popular area were flying out like hotcakes when we were buying and we missed out on several, but the agents knew we were legit. They called us before our now house even officially went on the market, we viewed it straightaway and had an offer accepted that day. By the time something goes on Rightmove it's too late. You have to be on the agents' list and be ready to view and offer straightaway.

Where I am prices have jumped up
but selling prices are inline with the last few yrs particularly for flats (SW London). I know a lot of people who have left London & quite a few of them did have to reduce/had sales fall though last yr.

We have saved quite a lot of money but like many neighbours have used it for home improvements.

Prices are going to stagnate I imagine, wages are just not going to see huge increase, more taxes, much harder to build equity in many places now & the gov are running out of props.

It's a good time for property developers and LL.
My ds1 has just bought 3 this week.

I think the 95% mortgages are crazy & imo the problem the last few yrs was not getting people on the ladder but moving up. The stamp duty pause helped that.

The historically low interest rates caused by massive QE (quantitative easing) let people with assets borrow against those assets for virtually no cost to buy more assets like property (or Bitcoin or gold or shares or whatever) ... fuelling a speculation bubble.

And cementing a generational transference of wealth that will see those with assets get richer and those without poorer - unless the bubble bursts of course.

Central banks pumped in billions last year, and continue to do so. It is meant to stabilise the debt market, but the side effect is that most of the money flows into assets like houses, stocks and other speculative assets.

The rich get much richer and the poor lose out. We've seen the superrich have their portfolios double throughout the Pandemic.

House prices to earnings are now far greater than they were back in 2008 during the property bubble.

Politicians have addressed this (Theresa May talked about it), but the general public don't understand and aren't interested. Meanwhile the gap between rich and poor grows and grows. It is literally noses in the trough.

Can the bubble burst though? The pain will be immense

@bottyg

Can the bubble burst though? The pain will be immense

Only if there is a big drop in demand. It might cool slightly when the stamp duty break ends, but the basic problem of there being too many people chasing too few houses isn't going to go away.

A drastic population cut (10 million or so) might change things. Otherwise, no risk of things "bursting" - there is too much vested interest in keeping prices rising.

If the gap between flats (1st-time buyers' territory) and houses (2nd step on the ladder) continues to grow then who will be in the position to buy these houses in London?