Properties relisted at pre-COVID prices - are sellers in cuckoo land?

[househunter2020]

Started property search in February (London) and saw various properties quickly sold, obviously riding on post election bounce. We did not put in offer for any. Now we are seeing from this week properties that were sold get relisted at previous asking price (Jan/ Feb time). Are sellers in cuckoo land?

Just spoke to one agent about one relisting and asked if seller is reducing the price and was told oh that one was priced very well already and sold straight away last time it was listed, only now the buyer pulled out due to work problems... Of course it was February or a century ago...

I would expect about 5% reduction from previous listing. What do you think?

I'm not so sure about the landlords, many of them (myself included) already make no profit on rental, but yet I keep the properties because they are hoping for long term capital gains, and income in retirement. For me that's 30 years away. What happens in the next 5 or 10 years is irrelevant to me. If the property became void, and i couldn't let it, and i still couldn't let it at a lower rent, yes in those circumstances i'd probably have to sell up but I'd still cling on for a year or so to see if the tide turned.

I just don't think the impact is going to be immediate.

I suspect it's different in areas which didn't start off with inflated prices.
I live in an area with some of the lowest house prices in the uk. This is only a problem if you want to move area or view buying a home as a way of making money. I've lived in same house for 30 years so it's value means little until I want to move.

After speaking with 3 EAs I put my late DMs property up for sale on Saturday at the top end of the valuations and had an offer of full asking price yesterday.

@chocotrio

www.propertyreporter.co.uk/property/why-the-housing-ladder-no-longer-exists.html

www.google.co.uk/amp/s/amp.ft.com/content/5c49931e-9ddd-3db3-8a67-3fc2bc18f0d2

For my neighbours & friends it's not even about status. For many of them who would traditionally move a bit further out to get the extra space & bedroom the costs are still prohibitive & the jump in earnings just hasn't made up the difference. Plus one may still be part time & or need to be available to do the school run.

The only people who my area who have upsized & stayed locally have had hefty inheritances.

I have accepted an offer 1.1% below my pre covid offers over price. House went back on market on Tuesday, viewing yesterday and negotiated a figure I am happy with. It's 4.7 % below the sale price I agreed before lockdown with a different buyer but if it goes through successfully it is actually well within what I hoped for when I put the house on in February anyway. Fingers now crossed.

@DexyMidnight that's what I said about people relying it on for retirement which may or may not be risky. A lot of landlords have interest only mortgages so have to rely on prices going up. Some areas haven't recovered from 08.

Will capital gains tax change, there have already been changes this yr. Who will the gov target to pay for all this intervention?

www.lse.ac.uk/News/Latest-news-from-LSE/2020/e-May-20/Capital-gains-reveal-extent-of-top-one-per-cent-income

Your relying it on for your retirement so you do have a date you have to sell which may or may not be favourable.

There is a theory (not sure I agree with it) that because so much property is concentrated in the older generations (I think 1 in ever 10 under 30s owns 1 home whereas 1 in 6 over 50/60 owns 2 homes) that there will be a glut of larger homes & 2nd homes coming on the market at the same time as people look to downsize/release cash.

“ at the top end of the valuations and had an offer of full asking price yesterday”

A fool and his money are soon parted. I would like to thank you for accelerating this very natural process.

@snowspider was your house priced competitively out of interest?

@dunnybum It is a unique property so a bit hard to value, but I think the price was sensible pre Covid and indeed I had three viewings and three good offers. So I agree with @Rustybear up the thread you can only start at the same point post Covid and see what the sentiment is.

Ah I wasn't very clear. I don't currently need or want to sell them when I retire (the mortgages will have been paid off 20 - 25 years prior to retirement) but the rental income will be a nice top up for my occupational pension and any state pension I may be entitled to at that point.

I know my financial circumstances are unique to me but I can't be the only landlord who will just batten down and ride out any dips in the property market. As I said, I don't do it for the money currently anyway (i actually now make a small annual loss as a result of the tax changes) - it's a long term plan for me.

@dunnybum

Thanks for providing those links. Really interesting articles. Again, that word and concept of luck reappears.

I think luck plays a huge role with life as well as the housing market and for some people that's uncomfortable because it doesn't always feel "fair". A bit like Snakes and Ladders - you can do your best, but luck can help you climb the ladder to gain an advantage or unexpectedly slither down the snake to be at a disadvantage (sorry - I've just been playing Snakes and Ladders with dc and thought too deeply about the game lol!).

It's in the final paragraph of the first article you sent: "Of course, there are still buyers today snapping up the larger and more expensive homes, but these purchases are now driven more by inherited wealth opposed to accumulated equity and will remain out of reach for those who are not lucky enough to inherit a sizeable sum from the earlier generations of homeowners."

Why the “housing ladder” no longer exists

Absolutely @ChocoTrio I "worked hard" but I got on the ladder early with help from my parents & could live at home. If I didn't have that help I would have had to wait & likely would have been priced out &/or not have anything like the equity I have now. Prices are crazy, my inlaws bought their property for about 40k in the early 80s & their neighbours sold for 1.8m last year.

@thequantofmontecarlo No accelerating involved. I said that house prices here are low, there have never been huge gains to be made. The house is a nice 2 bed in a nice area, the three valuations I had were within 5% of the £100k asking price. Neighbouring houses sold for similar prices in the last three years.

It is a tough one to call. I have been reading this forum a bit and noticed that those renting and hoping to buy, but with well paid jobs (for now, anyway), are the ones who are more adamant that house prices are going to drop in the next 12 month or so. There's a bias and vested interest in those comments. So, I am now treating the statements with some scepticism, not much, but some.

Bingo.

RE: "Lots of people in expensive areas are actually stuck on the ladder despite hefty equity & good jobs. There was a good article in the FT about it."

My ex boss is in this position. He has a £4m property in Chiswick, and he and his wife had wanted to move to a slightly larger property a little further out. The stamp duty alone for somebody to purchase his property would be in the 400k region, not to mention the stamp duty he would also have to pay on new purchase. He told me it looked like he and wife were going to have to put their plans on hold.

I personally wouldn't base decisions on any opinions on these threads including mine.

@dexymidnight I would argue most landlords are in the game of making money short term but obviously not all. The btl market is less popular in London now & investors have turned to other cities because the gains are greater. One of my older colleagues sold their btl ly because of the section 21 changes as they had had issues in the past with tenants.

@dunnymob - I would agree with your comment "The btl market is less popular in London now & investors have turned to other cities because the gains are greater."

The next 2 big cities after London, Manchester and Birmingham, have become more popular. Although, maybe even those markets have become saturated. There is an expectation that HS2 will change the game (assuming it's ever built).

The latest place for BTL to be is Liverpool, apparently. Best buy-to-let areas in the UK for 2020

@Smallgoon - your ex boss's situation sounds like a mixed blessing. On one hand - great to have a £4m home! But if it restricts his freedom to move and live life as he wants to due to a £400k stamp duty tax, then underneath it all it sounds like it's actually a bit of a curse. That kind of stamp duty is seriously good income for the government though!

I don't think one can be that restricted with a 4m budget 😄

Stamp duty is an interesting one, it definitely has slowed the market so the gov could meddle but it's also a great money maker & they need every penny.

@dunnybum - Quite. But I think the point @Smallgoon was making is that all is not what it seems due to the extra and hidden costs involved.

Also - are you the same as @dunnymob? I got mixed up whilst tagging!

Our house went onnthe market last November. We had two viewings, no offers.
Just before lockdown we had a viewer who said she was going to offer.
Last Friday, we had two viewings, on Saturday we had one viewing. Come Saturday evening we had two firm offers and an 'if we can sell our house we will buy yours' offer. All at pre covid prices.

The market has improved for us....🙄

So put in an offer at 95% of asking price and see if anyone out bids you.

yes @chocotrio I name changed for a different thread as a little personal & then couldn't change back but then it let me.

Where are you Vicbar?

@ChocoTrio Stamp duty is an interesting one. I was looking to pay in the region of £5k before the adjustment for FTBs meant I actually ended up paying £750. At least govt know they have an ace up their sleeve should the property market take a severe tanking, and they need an incentive for people to buy...