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?

Anything you buy is only worth as much as someone is willing to pay.

It's the sellers with great expectations who put up the prices and put pressures on the estate agents.

There will be a property crash in the next 6 months. Guaranteed.

Lots of stuff near me is getting reduced but it's an expensive area. I think cheaper houses became more attractive to FTBs because of remote working, changes to stamp duty.

Pop-up shops might. Established firms won't.

well neither of us have a crystal ball but I am pretty sure prices won't reduce

prices will reduce, there are flats near me that sold this year for less than bought & that was when the market was overheated.

This country is weird about house prices

Agree, it's ridiculous. Ever increasing house prices off the back of emergency interest rates has fucked productivity & the economy. Despite the fact it benefits very few many people love that their house has made them rich on paper 🤷🏻‍♀️

We went on the market yesterday and I am so nervous. We have lived in this house 3 years and it has went up 20k in value. Personally I don’t even agree with that and it’s not even a fraction of the money you’re talking about. I’m in Scotland though (I think things work differently) so the value is what the home report states and we are on at offers over £5000 less than what it states.
The specific area we live in the house prices don’t rise dramatically however just a few streets up and beyond do. We did spend a lot of money on the house and improvements but even with that I’d personally have valued it 10k less, if they get me what’s on the home report I will be dancing!

I’m also watching Rightmove at the moment, OP, and I’ve observed the same as you. As RM lists property sold history, it’s so easy to see the difference in prices and it’s always worth a look.

One in particular that stuck out was an absolute wreck of a run down property (complete with piles of washing on the floor, unmade beds and clutter everywhere, so not even ‘staging’ it to sell, let alone a lick of paint) sold for £120k less earlier in 2022, than the current asking price. That’s a big leap inside one year. It will be very interesting to see how recent events affect these inflated prices in the coming months.

This will differ significantly by area but where we are zoopla/rightmove estimate the house has gone up 80k in the last 2 years. Both our immediate neighbours have sold and completed this year at a price that (if we achieved the same, which presumably we would as condition and sq. foot is comparable) then that would sit at around 100k increase. There have also been 3 other sales in the road in the last 12 months at a consistent price, all easily viewed on the land registry to confirm accuracy rather than hearsay, the email zoopla sent me the other day informed me that our postcode and town are some % above the national average for rising housing costs which presumably explains it.

I check rightmove a lot as this isn't a forever home but I would say it absolutely sits in line with pricing in the town in general. Had we not have bought when we did just before the first lockdown we would have been priced out entirely I suspect.

I have noticed the last couple of months sales seem to be stalling and an awful lot of the same properties still for sale or being reduced by 10k or so fairly regularly. I would always make an offer if you see something you like, you just don't know what someone's circumstances are and what they would be willing to accept.

Nope, it will sell for whatever someone is able to borrow against it.

Which very soon will be sweet fuck all.

Why don't people understand economics and the basics?

Interest rates are rising. You must be aware of that? Therefore, the cost of a mortgage is rising. Add to that, inflation at astronomical rates, political turmoil, international faith in UK business is plummeting and jobs will be lost!

So.

John and Sally both work. They bought a one-bed flat 4 years ago and now have two babies under 3. Their jobs however are both dependent on a buoyant economy. On paper, they could qualify right now for a mortgage of 600k. However, what lenders and the markets and the banks are not willing to risk, is John, Sally or both of them, losing their jobs in the next 5 years.

Banks and economies have fallen into this trap before. So, now John and Sally can't buy their little terraced two bed house with a garden. So they're stuck. Which means, that the owners of the little terraced two bed house with a garden can't sell.

Nothing has a price until you want to either buy it or you want to sell it.

Zoopla thinks ours has gone up £150K in 2 years, so doesn't seem far off that.

I am not sure I agree with that. In a downturn, most people don't lose their jobs. Even in the worst downturn in the last 100 years, there was only 22% unemployment (post WW2). So the vast majority (78%) were still in employment.

I think the main threat that banks see for them getting their money back is life events like divorce or long term illness which force a sale and could leave you owing money to the bank after the sale. They indemnify themselves against that by requiring bigger deposits or insurance.

Only 22% unemployment?
Currently, the UK is at 3.5% unemployment.

The cost of living crisis will hit pockets, spending power and businesses within the next 3 months.
You would be utterly insane to buy now as the housing market is inflated. It will, without a doubt, crash within the next 6 months. That is a certainty.

What is the UK debt 2022?
Public sector net debt excluding public sector banks (PSND ex) was £2,427.5 billion at the end of August 2022, or around 96.6% of gross domestic product (GDP), which was an increase of £195.2 billion or 1.9 percentage points of GDP compared with August 2021.

Just to repeat that. Two and a half thousand BILLION.

Kamikaze and Kwasi cooked up figures which would add a further 60 billion this year.

The IMF have had stern words with the UK about their borrowing.

Sterling is crashing and the UK really has no fucking selling point!

In order to maintain the underfunded NHS and overfunded Defence, every other department will have to cut costs by 15%.

Do you have any notion about anything?

We can not sustain our spending. Therefore there will be cuts made. What do cuts look like? Job losses.

So then, Sally and John, despite their insurance policy are fucked.

I used to buy a coffee every morning.
£2.50.
My mortgage has risen so I've decided that I can do without my coffee.
Presume that 50% of people who frequent that coffee shop are going through the same?
That means 50% of staff at the coffee shop lose their jobs.
Less tax paid
More people on benefits.

They're living in fucking fantasy land in No.10

Uk bonds will shortly become junk bonds. Unless Liz goes and Hunt works some sort of magic spell.
The cost of borrowing will spiral and the country will go BUST.

The UK is about to become bankrupt.

A house close to us, bought in 2019 for £440k, asking price was £525k.
They have replaced the kitchen, it wasn't necessary but they obviously wanted something different, and decorated to their taste.
House went onto market last year for £725k, just been relisted with new agent for £695k
They have no chance selling at that price, if it was realistically priced it would have sold, it is a lovely house.
Pure greed!

It's like a film I watched a few months ago called Don't Look Up!

Nobody believes what is being explained to them in 10 different ways by multiple sources! FFS.

It’s not the sellers, it’s the estate agents. No so much “location, location” as “commission, commission”.

I agree the UK is hurtling, full-speed, towards an abyss.

Fortunately, the UK will not become a banana republic due to having neither bananas nor the status of a republic.

As it is, the UK has already become a laughing stock to the rest of the world. A world that is watching this full-speed hurtling with a mixture of horror, disbelief and, I imagine, a whole heap of glee, particularly in previously mistreated ex-colonies.

What comes after being a laughing stock?

I don't know, but that's definitely where the UK is headed.

There was a house in our new town we looked at during the property rally of 2021. It wasn't budging at £1.1m. We were quite puzzled as it looked amazing in listings (not so much in reality), but the house did have lovely views of rolling fields, a beautiful garden and a pool but location was terrible. Isolated from the town and on a national speed limit road with cars flying past, even during lockdown. Took me ages to even get off the driveway with all the traffic. Road noise was so loud you couldn't even hear yourself think in the back garden or even from the house with 70's double glazing. The EA reaked of desperation and even gave us an incorrect address so we wouldn't get there before her and be horrified at how busy and loud the road was and not even view the house. She even came clean and said as much. It didn't help it was unfurnished so you could see lots of stains on walls and ceilings. Anyway it eventually sold months later for under asking for £1.05m. Owned for about 6 months when I saw a for sale sign outside. The listing claimed it had been 'renovated' but it was exactly the same - just furnisned with nice stuff. Photos even showed the same stains on the cealings/walls. Now it's on the market for £1.25m!!! £200k increase in 6 months? Don't even understand what reality the EA is living in. Every property website still shows the late 2021 listing in the history with photos showing no such renovations and has the last sale price prominently featued. Anyone seeing that would come to the assumption that it's a dog with fleas if the current owners are selling up 6 months in! Wish the sellers luck but they are dreaming.

Sorry it was an early night for me! @CanStopWillStop . In this area that isn't all that big a leap, houses have gone up 20-25% across the board in that time. We hopefully won't have to sell for a long time as this is intended to be a very long term home. That's the valuation based on no home improvements, we actually have done some which will probably add more when we have them taken into consideration (to get the ltv down further etc).

I dont know how well places are selling around the country at the moment, I expect the market is slowing a little in places but not here yet, though of course it may well do in time. I also think this will probably be short term and just mean we don't see such huge rises continue in the next year or so.