Are prices shooting up where you are?

[Focusanddetermination]

Just that really. I'm in a small Midlands town, have a high amount of activity and prices shooting up in the past few weeks even.

I thought people would be more hesitant with a looming recession, but it's almost the opposite.

yes @Smallgoon that's my reasoning and again for some it's not necessarily an issue.

Are Prices Shooting Up Where You Are ?

Absolutely not. Houses that were Sale Agreed are now back on the market. Sad for my two friends - both really needing to sell their houses. They are gutted.
They were selling different types of houses of similar price in the same ( considered an upmarket ) area of Dublin.

Interesting thread on so many levels.
Feel I should point out to the house prices never drop brigade what has only been mentioned by a couple of people. In 1982 interest rates went up ( twice in one day ) to 15%. Knock on effect obviously was credit cards etc then were about 30%.
House prices stabilised, then many areas saw prices drops. We knew people in negative equity in a number of different areas of the country. We ourselves sold a house we had bought in 1995 in 1999 for less than we had paid for it, it has happened before and may happen again but the UK really needs to get out of thinking property is an investment and look at it as a home. Would benefit nearly everyone.

the UK really needs to get out of thinking property is an investment and look at it as a home. Would benefit nearly everyone.

I agree with you but we're selling it at less than we bought it for and it still won't sell. I don't even want to make money, I just want someone to buy it. But there's a limit to how low I can go before we're in negative equity, you know?

@dozzyf it's privileged because we know owning is a privilege, rent prices are very high, it can be insecure, property is an investment particularly into retirement and it often be cheaper than rent. Some people can only buy with a 5 or 10% deposit, so you are very lucky if you have the security to a) not feel pressure to buy or b) be able to buy with less risk attached with a bigger deposit. So it does come across as very arrogant to say you wouldn't buy with that deposit, lucky you for not being in that position. It's just very goady.

@notheragain4 Owning property is a privilege that not many people have, but your post almost assumes that anybody with a deposit higher than 10% was somehow 'handed' this money or hasn't worked hard for it. I spent the best part of a decade saving for my deposit, whilst also paying London rent. So whilst I agree I was fortunate to be able to put a bigger deposit down, I certainly worked (and at times suffered) to achieve this.

I'm not saying you don't have an argument about the wealth inequality in this country, but I'm not sure this is the right thread for it. Advising somebody who has a 5% deposit that they should reconsider taking on a 95% mortgage, in the current market, particularly if it's on a 2yr fixed, is not goady. It's giving sensible advice.

So it does come across as very arrogant to say you wouldn't buy with that deposit, lucky you for not being in that position. It's just very goady.

I can't express an opinion because you deemed it arrogant. Not over stretching myself is not arrogant or goady. By that logic you could argue that taking a high LTV mortgage is arrogant as is owning a home in general.

It's the epitome of arrogance to want everyone to validate your choice. Like I said your life, your choice.

This isnt about LTV but about the overall borrowing sum and fixing interests for as long as possible. You could have a 50%LTV but be borrowing more than what you can afford especially if interest rates shoot up....it's not about LTV if you are prepared to stay somewhere for 10years or so.

Even in the 1990s - most people who had stayed in the house for 10 plus years were not selling for less than they bought it for (if they bought it just before the crash) or at least not much less so.

Basically right now people can just buy somewhere and assume that it will be easy to resell in three years time - your starter home is now your long-term home. If people are happy with that, then go ahead. If not, maybe see whether there's a crash in a year or so

Basically right now people 'cant' just

I did say @Greenhats10 that for some high LTV is not an issue it's just not for me as I don't particularly like the idea of being tied for a long time to a house/area.

your starter home is now your long-term home yep you need to future proof as much as possible.

Plus you often get better mortgage deals with a lower LTV

@dozzyf - i know you are right. I think it's just because lots of people say oh dont get a 90%LTV mortgage but it's ok if you have say 50%LTV - so I was just trying to point out that there'a certain level of complexity. For some people 90%LTV might be totally manageable and a lot lower than their rent, but say 50%LTV could be really high.

For example, in our case, by the time we pay for building insurance, save up for maintenance, etc we'll almost be paying out as much as our rent which is quite high already. But in London - it's hard to get to a family home etc without borrowing 300k or so which at our age is actually quite a lot of money

Interest in our village has rocketed recently. Easy access to countryside (lockdown outside exercise was never a problem), good schools (first/middle/high pyramid, most schools Outstanding), and access to motorway network for several large towns and cities. Suddenly we’ve becoming very popular with people in those towns and cities.

I think it's just because lots of people say oh dont get a 90%LTV mortgage but it's ok if you have say 50%LTV

The reason people say this is because often it is presumed (whether rightly or wrongly) that the decision to take on a 95% mortgage is because the buyer simply does not have the funds to contribute towards a higher deposit. A 95% mortgage is likely to be borne out of necessity rather than choice, whereas those with a much larger deposit have a choice, and are likely to have more financial flexibility.

The advice of 'don't over-extend' is universal, and should apply to everyone, regardless of what the LVT is, this is true.

I was just pointing it out because somewhere like London it's quite a stretch to move from a two-bed flat to a house and people do end up over-extending themselves in order to get there, which might not be wise in this current climate

How is saying "I wouldn't buy with a 5%-10% deposit" arrogant? It's a personal choice. I would argue it is just as if not more arrogant to band around advice like "avoid this area of the town, avoid leasehold, avoid houses by busy roads or with shared driveways, avoid downstairs loos, you have to be in the catchment for this school" knowing full well that less well off people literally cannot avoid those things if they ever want to buy.

We've saved up a 20-25% deposit over 5 years. I could have bought a couple of years ago with 5-10% but didn't want to as I felt that level of debt was too risky personally. Then again I live in an expensive town where rent is cheaper than a mortgage, so I am quite happy renting until I can buy with a level of debt I'm comfortable with.

I would argue it is just as if not more arrogant to band around advice like "avoid this area of the town, avoid leasehold, avoid houses by busy roads or with shared driveways, avoid downstairs loos, you have to be in the catchment for this school" knowing full well that less well off people literally cannot avoid those things if they ever want to buy.

@BeijingBikini

You missed "avoid a terraced house, go for a semi"

Agree that I find the above way worse... Yes, we know having a side access to your garden is an absolute must, but that doesn't mean it's an absolute must for me, thanks.

West Midlands here, a house opposite to my cul des sac had for sale notice up one day and two days later owner told me they had sold stc. She said they got full asking. The house opposite to that one has now been put up for £18k more and the houses are virtually identical. I thought that will take ages to sell but another neighbour told me they accepted offer 3k under asking price so 15k more than first house. These within 8 or 9 days of each other. I can only think people who could not buy due to Covid now can and also no stamp duty and so low interest rates making people take the plunge.

@caringcarer

West Midlands here, a house opposite to my cul des sac had for sale notice up one day and two days later owner told me they had sold stc. She said they got full asking. The house opposite to that one has now been put up for £18k more and the houses are virtually identical. I thought that will take ages to sell but another neighbour told me they accepted offer 3k under asking price so 15k more than first house. These within 8 or 9 days of each other. I can only think people who could not buy due to Covid now can and also no stamp duty and so low interest rates making people take the plunge.

The stamp duty government prop makes no odds to pretty much most the country and is irrelevant to first time buyers up to £300k.

As I’ve said before there is one specific reason why they did this and that’s because the annual house price index had turned negative. That’s precisely what the government doesn’t want as people tend become more conservative with spending. House prices increasing makes people ‘feel’ richer so they take on more debt and spend. That’s precisely what the government does want post COVID to try and limit the economic damage.

By applying the stamp duty prop, more properties around the £300-£500k mark will shift due to the saving, which will skew the average sell price statistics upwards. This will stave off the annual negative growth figures and kick the can down the road until next year.

Smoke and mirrors. That’s the plan, time will tell if it works. It’s up to the surveyor valuations and the banks willingness to lend, if they smell blood in the water, mortgage rejections will go through the ‘roof’ (pun intended)

There is always different patterns in different areas, people who are selling flats without gardens I think are really going to struggle to sell.
There is certainly a lot of activity around us, driven by the fact people have spent much time on Rightmove etc in lockdown and want a change in scenery, combined with the SD changes this may lead to some temporary spikes. But I feel that this will make the inevitable drop more acute.
Whilst I do respect the, I'm buying a home not an investment argument, if you knew the car you were buying may well be 20% cheaper in 12 months wouldn't you wait even though you weren't buying that for an investment? I'm personally following the 'when people are buying I'm panicking and when people are panicking I'll be buying' rule of thumb!

Whilst I do respect the, I'm buying a home not an investment argument, if you knew the car you were buying may well be 20% cheaper in 12 months wouldn't you wait even though you weren't buying that for an investment?

Not the best analogy since a car decreases in value the minute it leaves the showroom... Same can't really be said for property. Many people bought in 2008, weathered the storm, and did well when they came to sell.

I feel as though I keep harping on about 'individual circumstances' - sure, for those buying with the intention of selling in 2 years time, your car analogy may be a fair one. Though I very much doubt those purchasing in 2020 are buying simply to 'flip' the property in a few years.

if you knew the car you were buying may well be 20% cheaper in 12 months

What do you mean if you 'knew'? How could anybody know this with certainty?

@Smallgoon

Whilst I do respect the, I'm buying a home not an investment argument, if you knew the car you were buying may well be 20% cheaper in 12 months wouldn't you wait even though you weren't buying that for an investment?

Not the best analogy since a car decreases in value the minute it leaves the showroom... Same can't really be said for property. Many people bought in 2008, weathered the storm, and did well when they came to sell.

I feel as though I keep harping on about 'individual circumstances' - sure, for those buying with the intention of selling in 2 years time, your car analogy may be a fair one. Though I very much doubt those purchasing in 2020 are buying simply to 'flip' the property in a few years.

if you knew the car you were buying may well be 20% cheaper in 12 months

What do you mean if you 'knew'? How could anybody know this with certainty?

I appreciate that the analogy isn't perfect as it's near impossible to draw parallels with property. Irrespective of when you intend to sell, if you felt on the balance of probability that your house purchase would be cheaper in 1 or 2 years time, that could be circa £40,000 on the average house price, I think you may wait.
Of course I could well be wrong, I do intend to put my property on the market in a few months time and if I see I shall go into rented accomodation then repurchase in a few years time and hopefully move up the property ladder at the same cost.

I am getting nervous again. The message today seems to be the recession won't be as deep as feared, but perhaps more prolonged?

At the same time, prices in my area still seem to be going up not down. A year to 18 months ago I could have got a 4 bed for about £210-240. Now 3 bed semis are in that range instead.

And they seem to be selling.

People seem to be asking really daft prices where I am. But they aren't selling. Quite a few have sold subject to contract at reasonably fair prices before Covid but now people going mad and putting latest for sale on at very inflated prices.