Wtf is happening to the property market?

[viatheapp]

First time buyer with a decent deposit. Trying to buy a small house in Manchester...every house I've seen has actually sold for about 15k more than it was marketed at!

Obviously I've never bought a house but I assumed they went on the market at a certain price and people usually offered lower? I understand supply and demand etc but why aren't agents putting them on at what they expect to get? It's getting really frustrating 😢

No point me looking at lower price point as I won't get anything in a half decent area for that. Might have to give up!

If you are really clear about what you want I don’t see the need to wait around or offer below.

I'm not waiting around at all, I'm in contact with all the agents and seeing houses before they even get on rightmove. I'm offering over the asking price on every one, but I can only afford so much, and people are offering more than 10% over asking price.

My neighbour just sold their house for £50k more than they bought it for 2 years ago. It’s had a new kitchen and bathroom but it’s just insane money, and £200k more than we paid for our house 10 years ago! Our house is bigger because we built and extension, I’m tempted to get it valued just to see what we could get for it.
We are in north Manchester and prices are silly money here, I have no idea how a FTB is meant to get on the ladder.
When DH and I bought our first house in 2002 we paid 40k for a 2 up 2 down terraced house, we sold it for double that in 2011 and it’s now just sold for 120k.

We are currently on the market in Scotland- the positive here is the seller pays for the home report so you know what it's been valued at (appreciate mortgage valuer could say different but we are priced accordingly to other properties sold in the area

We are offers over £5k below home report to gauge interest- we have been on the market for 5 days and have a closing date set for next week

We are looking to move to a new build which is obviously a fixed price , otherwise any offers we get over HR value would have been swallowed up by offering over the HR on the next property!

If you can’t get what you want in a lower price bracket I guess the only real option is to wait in that case. You might find you get lucky in that the buyers can’t complete at those prices anyway. My house went to best and finals but the buyer with the highest price ended up pulling out shortly after as they got carried away and couldn’t actually afford it. I imagine this happens a lot.

www.ft.com/content/077131a5-4d04-4191-98b9-cff174c046de

Keeping Sunak awake at night apparently...

“A rise in global interest rates that could destabilise the UK’s public finances is one of the risks that keeps him up at night, chancellor Rishi Sunak told MPs on Thursday.
Giving evidence to the House of Commons Treasury committee on the Budget he outlined last week, Sunak said it was too soon to tell how much long-term damage the economy would sustain from the coronavirus pandemic.
But the other big threat to the UK’s fiscal outlook was the risk that a long-term decline in interest rates — which has allowed governments to increase borrowing at much lower cost than in the past — might go into reverse.
“The public finances are much more sensitive to changes in interest rates and inflation than they were previously,” Sunak told MPs.
“Interest rates are and have been exceptionally low — still, they could rise . . . to what would still be historically very low levels, and that would have a significant impact . . . on the public finances over the next few years.”

Global inflation is already well baked in. Forget Brexit or anything else estate agents will tell you. The housing market doesn’t move on supply and demand it moves on the ability and willingness of the banks to lend. People would borrow millions if they could without any thought to affordability.

The central banks interest rate policies will react to government long dates bonds. Yields are rising rapidly (i.e no one wants them because currency will devalue more than the return aka inflation) Interest rates will rise once inflation runs too hot to slow it down. This rise in the base rate then changes what the mortgage rates what the banks can offer (Mortgage rates are already rising in the US). Yes the government are providing a negative equity buffer, but it’s still up to the banks to lend based on affordability. The average house price is x8 the salary now going towards x9. That is unsustainable.

This is the worst recession/depression in 300 years. Once government furlough and stamp duty ends the real financial repercussions will be felt. That combined with interest rates rises means that all the current sugar rush of cheap debt will end and house prices will be going one way.

Yep it's nuts here too, we've been in our house a couple of years, got it valued recently. Conservative estimate is it's gone up by 20% in those couple of years but estate agent said potentially could get another 5% on top again as it's gone mental. We live very rurally, not near a city, 10 mins away from a small town. Houses in our small village (no school, no pub, nothing but houses) are going up and getting asking price within 2 weeks, before they've even had a chance to print the brochure. Estate agent's not letting people even look at houses unless they have an offer on theirs or are 1st time buyers with mortgage offer lined up. It's because people who might not have wanted to live round here a couple of years ago because it's not near employment or cities now have the option to live further afield because of homeworking. Nothing else has changed - schools locally have always been good, no new roads or amenities built locally. So it's the working from home thing that's affected the market round here.

I agree with previous posts, it's a bubble. Wages haven't risen 20% or 25% in that time. Demand is currently outstripping supply. It's all got to burst at some time.

Completely recognise this. We bought a 2 bed terrace in chorlton in 2016, sealed bids - seller made about £50k from when they bought it in 2011.

We sold it 3 years later for £20k more.

When we started looking having been brought up on location location location I thought it was all about getting a deal - the reality was paying £10k over asking...

I read that FT article last night @Lightscribe.

I think I already said on here that the government's stamp duty policy and 95% mortgage guarantee scheme policies are extremely irresponsible and now this article stating that Sunak is worried about interest rate rises. What on earth made him think these policies were a good idea then? Encouraging people to get into more and more debt when he is allegedly worried about rate rises. The housing market didn't even need a stimulus as there was so much pent up demand after lockdown and people wanting to move due to WFH, change in priorities already.

This thread clearly demonstrates how the government's policies have only served to push the prices up more and more and out of reach of people without huge amounts of equity. So wrong. It only means that, if a crash happens, it will be far worse than it might have been if successive governments had not meddled. I'm sure the government will try to avoid a rise in interest rates as long as possible but it will happen at some stage.

@viatheapp- so sorry that you have been priced out. It's really hard to know what to suggest as there are no signs of the market slowing right now. It might be worth waiting a few months to see if things settle in the Autumn once furlough, SD holiday finally end but, then again, Rishi may have a few further tricks up his sleeve!

Where about’s in Manchester are you looking? Are you willing to expand your search area? Do you need to travel to work in Manchester ?
If not and you can work from home then look at further towns with good transport links. Warrington to the west, places like todmorden to the east or Stockport to the south might give you more options.
It does depend on whether you want to be close to family and friends though.

Want to be close enough to get taxi back from town 😂 I've been looking at Eccles, Swinton, parts of Salford etc. Don't want to be much further out than Worsley.

I live in South Manchester and the property market is nuts. Lots of houses going for high prices, some selling very quickly. Quite a few of them come back on the market though, they must be falling through.

There was a Guardian video ages ago explaining that high property prices aren't mainly due to demand, they are due to low interest rates which enable buyers to borrow more and push the prices up. If you can borrow more, you can push your offers that much higher, and if everyone does it, the prices go up.

Interesting about the interest rates @Lightscribe. I honestly don't know what will happen. The prices seem to be at a peak, it's hard to know if they will continue to rise or will fall.

@viatheapp have you considered looking further out along the line of the guided busway? E.g. Mosley Common, Tyldesley etc? The buses run so frequently they're just as quick/easy as getting a taxi into town.

@gorillasinthemist

I read that FT article last night *@Lightscribe*.

I think I already said on here that the government's stamp duty policy and 95% mortgage guarantee scheme policies are extremely irresponsible and now this article stating that Sunak is worried about interest rate rises. What on earth made him think these policies were a good idea then? Encouraging people to get into more and more debt when he is allegedly worried about rate rises. The housing market didn't even need a stimulus as there was so much pent up demand after lockdown and people wanting to move due to WFH, change in priorities already.

This thread clearly demonstrates how the government's policies have only served to push the prices up more and more and out of reach of people without huge amounts of equity. So wrong. It only means that, if a crash happens, it will be far worse than it might have been if successive governments had not meddled. I'm sure the government will try to avoid a rise in interest rates as long as possible but it will happen at some stage.

Why is the government pouring fuel on the fire? Because they have no choice. The housing market is worth £7.6 trillion. They can’t bail it out without it destroying the economy. They will do whatever possible to kick the can down the road until their ability to prop gives way.

The government needs people to spend spend spend post pandemic and people will only spend if they ‘feel’ like they have wealth. An implosion of negative equity will do the opposite and have a knock on effect for the construction and housing industry and everything that feeds it. A decline in construction, and a large swathe of government tax income disappears.

Most MPs are landlords and have some hefty donations from house builders chums too, so there’s the continued need to keep the plates spinning to please everyone including the main home owner voter base.

The bitter taste in my mouth is when they say they are doing it all for to help make generation rent, generation buy. They know that isn’t true, generation rent knows that isn’t true and so does everyone else. They really couldn’t give a shit if the younger generation are left to pick up the pieces for decades to come - that’s not their voter demographic. The only thing that matters is the here and now.

@viatheapp have you looked at prestwich/sedgley park/kersal much? On the met line into victoria etc so might make it a better commute.

I second Prestwich and Whitefield. On the tram and close to town/ cheap taxi. Though more expensive than Swinton and Eccles.

Stretford is close to town.

Hi @Lightscribe- I understand why the government are desperate for house prices not to fall. Most of them are extremely wealthy with property portfolios so it is in their own interest and that of their wealthy connections, donors, etc. Plus what you said about their core voter base, property owning >60s and people needing to feel wealthy in order to spend.
What I dislike is the lies and hypocrisy and the fact that they clearly don't care at all for the younger generation and the future of the country, simply themselves and the next election results. What I was trying to say was that the housing market was already moving well after the end of the first lockdown so intervention seemed completely unnecessary. Surely a plateau in prices rather than huge increase would have been far more resonsible given the general economic outlook.
How much longer do you think the government can continue to kick the can down the road for?

@gorillasinthemist

Hi *@Lightscribe*- I understand why the government are desperate for house prices not to fall. Most of them are extremely wealthy with property portfolios so it is in their own interest and that of their wealthy connections, donors, etc. Plus what you said about their core voter base, property owning >60s and people needing to feel wealthy in order to spend. What I dislike is the lies and hypocrisy and the fact that they clearly don't care at all for the younger generation and the future of the country, simply themselves and the next election results. What I was trying to say was that the housing market was already moving well after the end of the first lockdown so intervention seemed completely unnecessary. Surely a plateau in prices rather than huge increase would have been far more resonsible given the general economic outlook. How much longer do you think the government can continue to kick the can down the road for?

www.ft.com/content/c3a53ccf-2dbf-439c-aea6-afaa1ec35c48

“A “storm” swept through the US government bond market on Friday, sending a key
measure of long-term borrowing costs to the highest level since last February.
Treasuries dropped in overnight trading after a large sale of long-dated bond futures in Asia, according to people familiar with the matter. Yields on the benchmark 10-year note, a key marker across global asset markets, jumped to 1.63 per cent, having traded at about 1.53 per cent the day before, and remained around that level throughout the day.
Analysts said the scale of the move underscored how jittery the $21tn market had become against the backdrop of a more robust economic rebound.
Treasuries have been under pressure since the start of the year, as investors anticipate higher inflation and growth in the coming months following another enormous injection of fiscal stimulus with the passage of the Biden administration’s $1.9tn package.
But the magnitude of the recent move caught investors by surprise, especially after three large auctions of debt this week went relatively smoothly compared with a sale last month that triggered a sharp sell-off and bouts of hectic trading.“

Not very long. But they need to be seen as doing ‘something’ akin to arranging the deck chairs on the titanic. Then they can say ‘at least we tried’.

We're in London. Estate agent told us not to sell our house a few days ago ... He said prices will drop (he's certain) and although our small house will drop too, of course - 10% off ours will be less than 10% off what we're trying to buy.

I couldn't believe he was being so honest. Not sure he was, tbh. But he was talking about stamp duty holiday, furlough and mortgage lending coming to an end - it all makes sense.

@Panda368 yes I'm looking all over, there really isn't much under 160k unless I want to live in a flat, which I don't, or move to Moston/Gorton/Droylsden.

There are houses going on the market in the areas that I like, in my price range, but then they are going for over what I can afford. One went on in swinton at 145k, and has apparently accepted an offer for "substantially more" than 155. As I said, if the agents just put them on at the price they think they'll go for it would help, rather than creating bidding wars.

@dotdashdashdash not a hope of getting anything in Stretford in that price range sadly.

@viatheapp It's shit isn't. Are you buying on your own? I'd definitely sit tight and wait for things to take a downward turn because it's coming.

[quote viatheapp]@Panda368 yes I'm looking all over, there really isn't much under 160k unless I want to live in a flat, which I don't, or move to Moston/Gorton/Droylsden.

There are houses going on the market in the areas that I like, in my price range, but then they are going for over what I can afford. One went on in swinton at 145k, and has apparently accepted an offer for "substantially more" than 155. As I said, if the agents just put them on at the price they think they'll go for it would help, rather than creating bidding wars.[/quote]
That’s the problem though isn’t it, can afford to buy just not in the exact area or type of house you want. A flat is what most people can afford to start with. You need to buy what you can afford, build up equity and then move up to your next house. That’s what most people have done and have always done, it’s not realistic to expect exactly what you want straight off.

@Dustyboots

We're in London. Estate agent told us not to sell our house a few days ago ... He said prices will drop (he's certain) and although our small house will drop too, of course - 10% off ours will be less than 10% off what we're trying to buy.

I couldn't believe he was being so honest. Not sure he was, tbh. But he was talking about stamp duty holiday, furlough and mortgage lending coming to an end - it all makes sense.

I wouldn’t necessarily believe that. People have been saying that for years and it hasn’t happened yet. The estate agent has no idea any more than the rest of us. Buy when you want and when you can, or you’ll get stuck in a cycle of waiting for prices to crash forever.

That’s the problem though isn’t it, can afford to buy just not in the exact area or type of house you want.

This is true, but according to rightmove there are houses that fit my criteria...until it comes to putting an offer in, then suddenly it's going for 15k over the bloody asking price 😂