To just be so upset about house prices

[spuddy56]

We started looking in December after scrimping and saving for years and its got more and more out of reach with every passing week since then. We've had two sales fall through due to downvaluations, so not only did we need the huge deposit we had saved up for years, we needed 10k on top of that which is impossible for us. We are paying rent and have no family help. We viewed a tiny house that we love and has been on the market since beginning of April with no offers but the seller won't budge on the price. Based on one year of sold prices in the area its about 40k too much, even taking into account the 10% rises over the last 12 months. Theres just no way a mortgage company would lend that much. Been to view another one and it's tiny, has had no offers and is worth a lot less but agents don't think they will go lower. We've had to adjust our expectations down and down despite being what we thought were healthy earners. How are first time buyers managing to buy right now without help?! I'm so so upset at not having somewhere to settle and call a permanent home.

Thats true, when I first bought a property I thought I had to get life insurance. I had just had (at the age of 23) some tumours removed, I couldnt get life insurance. So I didnt bother and then found out it wasnt mandatory as it had been 'sold' to me by the mortgage company at the time

Further down the line, I wouldnt be stuck if my partner died, he might if I died though. But neither of us would get insurance for any good price we both have health conditions.

And thats before I mention the amount of stories Ive read about insurance companies wiggling out of their payouts, finding some excuse not to.

I haven't RTFT but I didn't get anywhere near what my last house was worth when I sold it. I went on rightmove in my chosen area (North but in a city) and looked at what I COULD afford. I got a 12 yr old 3 bed 2 loo house (old enough to not have the snagging problems of a brand new, new enough to be WARM & well insulated!)
Not the best of areas on paper, as near industry that used to be grubby but now only warehousing & the like. Quiet, clean & friendly. Not far from the city centre & all ameneties. £107,000 cash.
You have to 'cut your cloth according', as my mum would have said.. !

www.rics.org/contentassets/6914ab4d1ed542328801f609c0ea6180/4.web-april_2022_rics_uk_residential_market_survey_tp.pdf

Why do you think that landlords are leaving the market?

I’d love to know where this is, because in the big university town l live in, DS has lost 5 houses to btl landlords. They can pay higher and pay cash leaving first time buyers like him kicked off the ladder.

Large parts of Manchester (probably not the bits near the unis). Finding a house to rent is like hen's teeth. Rent has sky rocketed because demand outstrips supply. My friend is currently buying a house, about half he's seen are currently tenanted - he'll be ousting the tenant prior to completion (because he'll be an owner occupier).

I’m in Sheffield. All the popular areas equivalent to Chorlton, W Didsbury, Whithington are being priced out by landlords.

DS grew up round here and came back, a 2 bed terrace in any equivalent area is pinched by landlords. It’s really pissing me off. He can’t even buy a tiny house in a city near his friends.

I’ve just been sat talking with a journalist on national press and someone with a PhD in Economics.

House prices have only dropped twice since the war. Once in the 70’s and one in 2000’s. And it doesn’t affect houses in desirable areas.

The journalist had to do a piece on it.

Was the journo drunk in the early 1990s...?

@ArseInTheCoOpWindow

our next door neighbours house halved in value in the 80s. He held in there but couldn’t afford to maintain it

Late 80s, London. People were posting the keys back through the letter boxes

It’s a lot harder to repossess now hence the banks make you jump through so many hoops to get a mortgage

He was talking about significant drops.

lt’s area dependent. All the houses I’ve lived in which is 4 have never dropped in price. They’ve just continued to rise.

l had a friend who was in negative equity with her flat in Newcastle in the 90’s. My house bought for 39 k in 88 sold at 90 k in 95. I know the 90’s were bad for some people but not everyone.

Housing is driven by the law of supply and demand. There aren’t enough houses. So prices will continue to rise.

l will check with him again today, l was a bit drunk so it may have been me. BUT whenever it was, there have still been only 2 times of significant drops. And that means all houses not just some.

And late 80’s where l lived was crazy. Lawson created a false bubble in 88 allowing some tax benefit for Co habitees.

There was the early 90’s when interest rates were awful. That may have triggered a lot of problems.

House prices since 1950

The shocking thing about that chart isn't the two troughs, it's the astronomical rise since the 1970s. How exactly do you expect that same trend to continue? Wages are not rising at anything like the same amount.

Other factors such as life expectancy increases, retirement ages increases from the 1970s to now matter too - someone buying age 30 is unlikely to retire before age 65 these days, but is likely to live another 20 years after that retirement age.

Additionally, people moving away from taking annuities and actively managing pension funds themselves may well not see continuing to pay a mortgage on a house that's appreciating as a significant problem.

Wages to house prices is one comparison but my understanding is that the percentage of household budget taken by repaying the mortgage hasn't increased much and still looks good? (Happy to be proven wrong here).

They dropped in the 90s too.

Prices are not driven by supply and demand. They are mainly driven by access to cheap credit. Interest rates have started to rise and will need to rise further. This means that mortgage repayments will get more expensive so 'demand' will reduce. In addition, we are likely to be in recession now and many other countries worldwide look to be in/ at serious risk of recession. We have a stagflationary crisis. In this situation, job losses will follow. Many pensioners (those on fixed incomes) may struggle too. All these factors will lead to a fall in prices.

@Bubbleha - the huge rise took place from the late 1990s when access to cheap credit really took off. Does anyone know when banks started taking the woman's salary into account in relations to mortgage borrowing? I'm guessing it was around then or a little earlier.

Housing is driven by the law of supply and demand. There aren’t enough houses. So prices will continue to rise.

You think low interest rates & QE has no effect?!

I'd guess the same so you can understand the significant rise. There isn't that 'excess' wage input into the system now so if prices rise they'll just become unaffordable for more people and will need to re-correct. Question is how long will that take.

Yes but the question isn’t how long it will take for prices to drop low enough for more people to get into the market …. it’ll be a case of the corporate’s removing the people from the whole process. Wages v’s borrowing haven’t been relevant for a long time.

@Nothappyatwork - no it won't, at least not for long. What corporation is going to want to hold masses of assets that are losing value?

@Bubbleha-I think they are going to 'correct' very soon. Some areas have cooled significantly, including mine. There are lots of properties here just sitting on Rightmove which would have been snapped up last year. Some people are still scrambling for low interest deals but the rates will continue to rise and this will clearly have an impact on prices plus the increased cost of essentials, recession, generally very poor outlook, etc.

UK economy falls deeper into the red shrinking 0.3% in April
mol.im/a/10910577

@Nothappyatwork economy still booming outside of your £45 million project.

I’ve never commented on the wider economy, I’ve commented on what I can see within Tech and replied to those suggestions that Tech was going to hell in a handcart, I said no it wasn’t and it still isnt.
I can give you weekly updates if you like ?

@rainingsnoring when Assets are dropping that’s the perfect time for the big corporations to sweep in and steal them from under peoples noses as a reduced price, that’s probably be in the plan all along for us to own nothing in the longer term. It’ll definitely be corporate landlords that benefit from any housing crash I’m not your man in the street, if they’re actually it’s one.
just make sure you’re not overleveraged and it’s not you that becomes one of the victims.

but to be honest youd have to be damned overleveraged to get into any sort of trouble, just thinking what happened in 2008, most people were alright.