To think current home sellers are living in a fantasy world?

[CanStopWillStop]

We are looking for a new home (out of necessity unfortunately!) so I am now deeply buried in Rightmove.

The most significant pattern I'm noticing is that dozens of sellers, who according to Land Registry bought their properties in 2019/2020, are listing their homes at £100-200k more than they paid two years ago.

Considering the current dire outlook for mortgages &cost of living etc, AIBU to think that this is absolutely ludicrous money they are chasing?

I understand some people may have remortgaged or are looking to upgrade but a £100,000 mark up on a 3-bed bungalow you've lived in for a couple of years is mind-blowing to me. What's happening here? Greed? Desperation? Do they really think people can actually get mortgages on overvalued properties? AIBU?

Also bowing out. Oh man.

@aboutanidiot you still buy the house, the bank doesn't own it, but yes it's leverage. What are the stats for the amount of homes repossessed? Statistically speaking, how likely are you to have it repossessed? House prices dropping are only a problem for people with mortgages when they HAVE to sell or if they struggle to keep up with payments, of course that's a very real risk, but again, statistically speaking, even after 2008, how many people ceased to be home owners?

Yes there have been blips in the market, and we may well be headed for another, but thus far they've been nothing but blips, that many people manage to ride out. I'm not saying that's right or wrong by the way, just an observation on it.

about. I am a lawyer. you DO buy a house when you have a mortgage. You are the registered owner. You own it in law. You might owe £20k to your mother securued or unsecured or £100k to the bank but you do own it.

Trez ever since I first bought in 1984 I have wanted house prices to fall. Even then we started married life in a school flat as London could not in that area get teachers without housing them (my husband was and still is a teacher) - London prices were just so dreadfully high the teachers London weighing allowance was a joke. We were able to buy later that year. I don't think all house owners want prices to rise. I will never sell so if in the next 40 years the house goes up that's fine. if not that's fine too. My parents died in the one house they owned and lived in for 50 years. My children who all do own somewhere now will probably only move up the market to a bigger house so again it is in their interests if prices drop. So I don't agree all house owners want prices to rise.

@woff45 but where they are now is completely unsustainable & wages need to increase. I'm not talking about small increases to keep up with 2% inflation clearly.

Stagnating wages have been as harmful as rising house prices.

Of course because it's linked to the emergency rates we have been on. The economy has below grown since 08, look at productivity. All we have had is inflation of assets which as I said benefits very few people.

barely grown not below

@toulet completely agree to your first point, it's not sustainable currently, your second point is interesting (and outside of my expertise but makes sense)

It doesn't necessarily sound that surprising.
I bought my new build for £280k exactly 2 years ago. The identical model next door is now being sold for an asking of £425k. Seems ludicrous to me, my wages have only increased 4% from then, I wouldnt be able to buy my own house now!

You don't own anything until you pay for it.

This is free market. Your house is worth as much as anyone is willing to pay for it. Prices are dictated purely by supply and demand. It’s the same for everything

Wrong.

Your house is worth as much as anyone is able to pay for it.

What people are able to pay for houses depends on all the things - CoL, wages, security of employment, interest rates, mortgage criteria - which are expected to hit the skids massively.

How anyone thinks house prices won't be severely affected is beyond me.

You don't own anything until you pay for it.

Nope. Not how it works. No one is saying you can't lose the house, but legally you own it, no matter what your subjective opinion thinks.

People are going to hit reality soon.

In my area, some houses have been listed at stupid prices, but they aren't selling. I like looking at houses, the if-I-had-the-money-what-would-I-buy thing, and I've noticed house at higher prices being reduced.

I don't expect all non lawyres to understand, but people definitely own their house even if it has a mortgage. It is not the same as hire purchase which is a different form of contract where you do not own the goods until you make the final payment. Onwing real property (a house) under English law is not like hire purchase. You own it (and the owners can all be checked at the Land Registry by the way if you pay £3) and are stated on the property title for registered (most) land on the register. The register also notes any mortgages over the house in the charges register which is a list of the lenders who have rights to seize it if you do not pay. However you do still own it.

@Xenia you can stand down with the lawyer stuff, the poster is being facetious, you don't need to be a lawyer to understand homeownership.

@CanStopWillStop

The estate agents we saw justified their prices by printing off listings for properties that had sold recently, as well as their selling price when known.

We were aware of the local market as we’d kept an eye on the land registry database.

The 2008 "recession" was a blip compared to the 90s when over 40,000 properties were repossessed every year for 7 years.

IMHO we're heading for another 90s style recession.

Shortage of supply is the reason that prices are high.

Where we live, homes are being put out at a high price to bid, and generally make £150,000+ over the asking price. That’s because our area is being somewhat colonised by people from neighbouring areas that are now so expensive that even the high earners that previously lived there can’t afford to move to larger houses there.
When these buyers move in, they typically extend sideways, into the loft and back into the generous gardens, turning the housing stock from typically 3-bed into 4-6 bed properties, and generally “gentrifying “ the area, making it out of reach for young people to purchase to be near their own parents and the place they grew up in.
It’s terrifying to think that in the 25 years we’ve lived here, house price average has risen to TEN times more than it was in the late 1990’s, especially since wages/salaries haven’t - and it means that the demographic is also very different now, too…
If that’s not the case in your area, OP, try making offers under the asking price, but be prepared for these to be unaccepted - at least until the houses have been on the market for some time with no offers at asking price, that is…

There are so many factors that have changed since the 90s in terms of borrowing regulation and in terms of employment law and job security. I hate to sound like Boris and use the word unprecedented but we are in an precedented times we cannot look to history as an indicator of future performance any more.

I'm looking and noticed this. One home had nothing done to it in 2 years and yet the vendor expects £90k profit to "enjoy the money". I saw a home yesterday that is up for the same as a well fitted out one that sold last year. It's like they think that's the ceiling price so I'll have that.

When I last spoke to an EA she said that there are so many homes coming to market but so few buyers.

I'm all ready to go but I will not and cannot buy at these prices.

Sounds like East Dulwich where I used to live the housing stock is mostly small victorian terraced 3 bedders so these maxed-out houses have a bit of Emperor's new clothes about them as the tiny land footprints aspire to be Notting Hill or Hamstead but never will be. Posh and very yummy mummy though and I did very well out of it having bought in 1987 when it was more than a tad rough. But back then London was cheap and that's what made it so good - everybody could find their price point, buying, renting and even squatting.

Some people pulling out because they are worried about much higher interest rates once any mortgage offer fix is over. I don't think in my bit of outer London London there is ashortage of buyers, so far just a massive shortgage of the kinds of properties people want to buy - either very cheap family houses with a garden or larger family houses for those with more money. We are still getting on our road glossy post cards from local estate agents encouraging us all to sell our houses. However anything over priced where the seller will not back down will not be selling now.

I certainly remember the 1990s. We bought our third home (i.e. 3rd move having gone from terraced to semi and then the 1990 detached one) and had only been able to afford it with an interest only loan where some of the interest was not paid now and was added to the loan - known as a deferred interest mortgage and it was based on 4x my salary. Interest rates were about 10% in 1990. I remember the day base rate rose 2% and then 3% in one day - Black wednesday. We also had bought 2 small flats which I now call buy to lose flats as they made losses all the time and when we sold them in about 1996 we sold them at about 50% less than we paid for them. I sitll have never been able to use those income and capital losses. We also then sold our family house in 1997 at a loss too over the 1990 price and bought then where I currently live.

I wonder if Labour bring in big property taxes on London houses they will compensate those of us who have made big losses on our homes in the past?

Taxation is never retrospective so the quick answer is no. But they will be looking to tax BTL more aggressively.

The Labour Party will look at raising the tax on rent from buy-to-let properties if elected, an MP has said.
In a speech on Friday (May 20), Tulip Siddiq, shadow economic secretary to the Treasury, said the party was committed to “unlocking capital”.
"Unearned income [such as rent on buy-to-let property] is taxed at a much lower rate than earned income,” she said.

''@Mezmer
This is free market. Your house is worth as much as anyone is willing to pay for it. Prices are dictated purely by supply and demand. It’s the same for everything. 🙄''

This simplistic analysis is only correct if you assume that everyone is a cash buyer.

In reality if someone needs a mortgage then your house is going to be worth what the bank surveyor says it is worth and all will depend what buyers are able to borrow/what the bank will lend them which is based on practical things like deposit and wages.

So of course if mortgage interests are going up and the cost of living means people have less and less disposable income it will have an effect on the property market.

If people don't have enough money/can't save enough for a deposit and can't borrow from the banks they won't buy houses.

That's also how demand works...

@Redqueenheart I think you fail to realise just how many cash buyers there are out there.

This country is weird about house prices.

It’s the same in many other countries, inc. the US (parts of it) Canada* and Australia, and part of Europe. A Swedish friend who returned to Stockholm and bought a flat there about 4 years ago told me recently how shocked she was at the price of an identical one in the same block now.

*A Canadian relative who visited recently told me how crazy prices have become in Toronto - she wonders how her dcs will ever be able to afford to buy. I gather that in Vancouver it’s considerably worse.

My sister’s area of Massachusetts has always been expensive, but even she was astonished when selling her house only a couple of years ago - two well over-asking price offers on the very first day of viewings. And she’d been startled at the EA’s valuation anyway.

You can still buy a house (relatively) very cheaply in various parts of France - we visit at least once a year so have seen many ‘A Vendre’ signs, but the cheap ones are in areas with very few jobs, and where (in many small town cases that I’ve seen) there are many boarded up shops, also for sale or to rent. French people we know in one attractive small town in Bourgogne have told us sadly that the town is dying.