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.

As for BTL the extra tax has priced a lot of people

Yes it's quite hard to make money on BTL these days that's why I was intrigued by @Devlesko son turning 20k into 1m in a few yrs. Is the 1m the value of the property or cash in the bank?

House in my close went on market for £249k. A week later the seller agreed on an offer of £345k. 4 bed detached, on east Yorks coast. Crazy times.

I do wonder though who is buying up all the small houses and flats that people are moving out of to buy up the bigger high demand properties. We’ve been trying to buy since before the first lockdown (one purchase fell through due to vendors just before exchange and lots of offers made since). We lost out on a house last week, huge offer made well over guide price. But vendor is looking for an even more in demand rural property (the sort we’ve been trying to buy for the last year!). It’s impossible. I can’t imagine she’ll find anything before her buyers need to complete or get fed up. So much surely must be going to stall when people can’t find properties or can’t complete on the one they are trying to sell.

A house 3 doors from me went from being listed to STC on rightmove in 7 days. Fit £95k more than it sold for in Dec 19.
Shocking

Let to buy.

Some people choose to hang on to their city flat to rent it out and start afresh elsewhere.

I am on the south coast and the property market has gone mental.
Big detached houses are selling over night for£800k plus. The local estate agents have a list of people waiting for bungalows and are leaflet dropping weekly. Flats are not selling unless they have an outdoor space or are in the new seafront builds which are pretty much lock up and go for out of area buyers to have a holiday home. They are not for the local people as locals can’t afford £700k for a brand new sea front flat with door man and own gym.

Conveyancer here. As well as what others have said I also have a lot of files that are private matters (died from covid) or divorce pushing the sale. If I had a £1 for every client that has said lockdown has driven them to divorce...!

There was a lot of pent up demand. I live in East London. The houses I saw for sale sold quite quickly. Maybe PP was right in that some people managed to save more during lockdown.

To be fair though there’s not much for sale around here so houses go quickly.

In my area houses at £600k plus are selling straight away.

The ones lower down price scale are not selling so fast.

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

Aren't they just?

I bought this house 28 years ago. It was £49k and I was earning £17k.

The house is now worth approx £480k, so has increased nearly tenfold. The salary for my old job is now £37k, so not much more than doubled. If salaries had kept pace with house prices, the salary for my old job would now be about £150k - for a lower level management job in local government!

Admittedly, interest rates were much higher then, but even so, that's a huge gap between prices and earnings.

A house very similar to mine, just round the corner, had 8 buyers after it before it went on Rightmove. I popped into the agents the other day, and they confirmed that it had gone to best and final offers and went for more than the asking price.

They now have have 7 disappointed buyers desperate to buy something similar and were practically begging me to put mine on the market, but I don't want to move until next year.

Lakie, yes that is the big difference - the house price v earnings.
The comparison will vary with careers however. Our first house (3 bed terraced zone 5 London) cost £40k and my salary was £6250 and my husband's £7500 (we were trainee solicitor in London and head of dept teacher). Today the same top firms pay about £40k for trainee solicitors 9 (I am not sure about teachers although this suggests outer London upper pay is now about £40k too and he was that kind so probably fair comparison www.nasuwt.org.uk/advice/pay-pensions/pay-scales/pay-scales-fringe-outer-london-and-inner-london.html.

So for those full time professional jobs then we had £13,750 pay and £40k house price and today £40k x 2 = £80k.
So the pay has risen by 6 times since 1984. I checked inflation since then which would have taken those salaries to £45k. So the London lawyer and teacher pay went up much much more than inflation which i assume is because of things like student loan obligations plus much higher rents and house prices.

So our couple today on their joint £80k are after . Here is a house very very close, same street, to our first house and they now sell for £455k www.rightmove.co.uk/house-prices/detailMatching.html?prop=72774603&sale=92345874&country=england

So let us assume 1984 taxes and 2021 tax on salaries are about the same although there will be some differences. I will keep it simple.

Can our couple on £80k borrow to buy the £445k house? They can probably save up 2.5% each of £445k for a 5% deposit. = £11 125 each. They have been wise as we were and my parents were and bought with 2 full time professional salaries before babies came.
May be we will have to send them out to the end of my tube line to where my son bought a 2 bed terraced just outside the M25 in January of this year for £350k but that will be more commuting time and more expensive tube fares (although if they will mostly work from home now that may not matter)

So I think they can save the £11k each. That leaves the question if it they can borrow 5.5x their salaries. In 1984 we could borrow up to 2.5 joint salaries
In 1984 mortgage rate was 12.5% so the interest rate part of the loan was 4750 compared with 13 750 salary. and say 1520 a year capital so about 50% of gross salaries on the mortgage. Today they may pay about 1.3% (which I think is my mortgage interest rate) but more likely they pay 3.5% as borrowing so much..

Gosh these comparisons are complicated. The bottom line is for these specific types of professional jobs the couple can still buy the house we bought. Whether these days they are prepared to slum it with the long commuting time and the area (which is not Mayfair) is another matter.

Oh bugger. Completely wrong thread! Reported self

We sold our flat last summer (South Coast) and it did take about 12 weeks to sell as everyone wanted private gardens (this one was communal). I am so glad we got out when we did and bought our house as no way could we have afforded to buy what we have. Our very very max was 250k which is what we bought this one for. Already it would probably be about 260k (without any renovation). We are renovating it from top to bottom, it hasn't been touched since it was built in the 90s, and a lot of it is just falling apart but it is mainly cosmetic. Electrics, plumbing etc..... are all good, it does need new kitchen and bathrooms, and we have done 1 bathroom and 2 bedrooms so far (moved in early January) . When it is all renovated I don't know how much it will be worth as I am fully expecting some kind of correction when the stamp duty holiday ends. Not a crash but maybe a 0% price increase for a couple of years.

House prices here have gone up around £30k since start of the year, it’s a rubbish time to be trying to buy.

Printy printy of £.

I do wonder though who is buying up all the small houses and flats that people are moving out of to buy up the bigger high demand properties.

Also first time buyers who would have otherwise been renting but managed to save up small deposits due to wfh with no season tickets/no socialising/no paying for child care for a while (that's our situation).