Waiting for the current housing boom to calm down

[stuckinaditch]

We were originally planning to buy a new (larger) property last year but decided to wait due to the current property boom fuelled by pent up demand, more WFH, v low interest rates and government policy. Things seem to be peaking now in many areas currently with many houses selling in a week at over asking price, bidding wars, etc

We have decided to monitor the market and wait as we are not in a huge hurry and don't want to get involved in what seems to be a frenzied market. Obviously there are risks to waiting but equally there are risks to buying now.
Has anyone else decided to do similar?

I agree with your point flashbac, it's going to be pretty lumpy, with the midlands/ north probably faring well, and south east/london plateauing but the crash will not happen.

As above, the Tories are firmly bedded in, likely to win the next Election with the dismal Labour party in opposition, and it's in their interests to keep the market at a peak. Not necessarily racing as it has the past year or two, but at least stagnant.

Anyone waiting for a crash is going to be sorely disappointed.

Agree Countrylane. Family member works at director level in London, regularly head hunted and change job every year. They moved to the South Hams and spent 12 months trying to get a job in Plymouth or Exeter, nothing, not even a 40k job. They also realised that because a say, 60k salary is exceptional down here they'd be expected to work far harder than in a far better remunerated role in London. A shop job/waitressing job down there would get well over 200 applicants even before Covid.

I also wonder about everyone escaping to the Cotswolds. It may have changed but 10 years ago I hated it after moving there for a partner. Beautiful but boring and very little going on that wasn't hugely expensive. It was a local cliché (possibly unfair) that ex-London mums turned to drink to survive. The blow in community was very friendly but a lot of the locals were very resentful, which felt fair enough at the time.

Countrylane has read the runes pretty accurately, and CorbynTrouserPress explains succinctly what the job market is like in Devon and Cornwall. The only people who earn £50k+ here are doctors, headteachers, entrepreneurs, respected tradesmen and a handful of people who do very specialised work on a freelance basis -- like talented senior software developers; there are very few middle management jobs locally, and while I know of some very wealthy people, they usually inherited or made a fortune in the City.

It's such a dilemma isn't it?! I'm a ftb who almost moved beginning of this year after having offer accepted in the winter. Seller pulled out last minute and market has gone out of control ever since. The offer we had accepted wouldn't get a place anywhere near as nice now and going going to view twice is a distant memory!

After feeling defeated by bidding wars which end up tens of thousands over the asking price and the stress of trying to view before the places sell, we decided to take a step back thinking that this climate surely isn't sustainable even though we have the worry of being priced out in the back of our minds.

In the meantime, we've found a great place about 20 miles further out than we hoped but are going to give it a go when viewings start. I'm going to be an absolute pita and persistent as so far waiting for calls back from the EA etc has only led to disappointment.

If we weren't so unhappy where we are I think we'd wait as it doesn't sit right with me to overpay and make the biggest purchase of our life with one rushed viewing (currently in a horrible area, no outside space, neighbour has four untrained dogs in an apartment with no garden which we listen to all day while trying to wfh).

Good luck everyone, I think we are going to need it!

Agree @Countrylane/ @CorbynTrouserPress/ @XingMing, all sensible points. I wouldn't be surprised if some people move back or move to cities and possibly fine their lovely properties might be worth less by then. A London based friend of mine is thinking of making a family move out of London. I have suggested that she try spending some time in the areas she is considering as I am worried more rural life might not suit her.

I hope you find the right place for you at the right time! @LopsidedWombat

@LolaButt- I have to admit I don't take those sort of articles too seriously. There will be a big surge in spending now and some degree of recovery in the short term but that is inevitable when so many sectors have been entirely closed.

neighbour has four untrained dogs in an apartment
how dreadful, I've had bad dog neighbours too
hope you find something soon!

I think a lot is linked to the pandemic... People are really bored, a house and location move gives them a project. Cities seem very unappealing when the theatres and art galleries and gigs and bars and exhibitions and restaurants that make them great places to live are all shut.

I'm amazed by people moving way out because they can work from home now... Firstly that trend may change (albeit to a hybrid home and office model rather than full time office), and secondly if you do the kind of job that is most often based in London or Leeds or Manchester and you get made redundant, you will be looking at a much reduced pool of possibilities if you can only work from Cornwall.

@Blue5238 I agree with that, people making long-term decisions with short-term info. My partner and I wfh regardless of pandemic so are hoping to find something further afield than we planned.

@Miasicarisatia nightmare isn't it! They start at 4am when neighbour leaves for work!

I think there is definitely a bubble at the moment, but we spent the whole of 2011-12 waiting for the bubble to burst. We ended up paying more for the house we bought than we would have in the beginning, and sold it 4 years later for 50% more than we paid. Saying that, I do think these things are area specific.

Completed on our purchase less than 2 weeks ago. Maybe we bought at the top of the market, but I'd rather that than risk being priced out of it.

If you scroll back ten years or more even on the property board you'll see the predicted crash has been expected for quite some but not happened. I think if someone is in a position to buy they should just go for it, but don't let themselves be drawn into a bidding war of amounts they don't think the house is actually worth.

The conservative government will keep propping up the market as long as is humanly possible, so this crash some people are holding out for is very unlikely going to happen in the medium term at least - and if people are moving into/staying in rental purely hoping to beat the system and take advantage of 'the crash' then they should be prepared for their money to go into the bank accounts of their landlords to pay off the landlords mortgage for the foreseeable!

As PP have said, I don't think there'll be a huge crash, just a slowdown on the market. Over a medium term period, say 5-15 years, I expect prices will continue to increase, albeit at a slower pace,

Since my first heart over head property mistake, I have only ever bought property head first, heart later. Don't fall in love and be drawn into a bidding war which results in you heavily overpaying. I've walked away whenever there's been one, because I know I'm not going to ever pay over the odds. Yes, I might have lost out on securing a couple of properties that way, but have then gone in on others as a chain free buyer with mortgage AIP to make myself more attractive.

If you need to move now do it, just don't let your heart rule your head, and you'll be fine in the long run.

I don't think house prices are likely to fall until interest rates rise.

I wouldn’t put up house for sale now as there is no where to buy. People definitely holding off round here and anything decent that does come on is fought over and very expensive compared to start of the year. We sold in January and haven’t been able to establish an onward purchase after some near misses. They may pull out or we may pull out. Feel awful about it but they are pushing us to go into rental and there is no way we can do that in this current heated market. Ours is also worth quite a lot more than we have sold it for in that short time. We are in a holding position at the moment to see it the market picks up and softens so we can carry on. We want to move, there just isn’t anything to go to!

I wouldn’t put up house for sale now as there is no where to buy.

This is what causes the problem of supply and demand as most people are in a property chain.

If you think about it nothing would ever get put on the market if everyone waited to see their perfect house for sale first. It’s like dominos - someone has to start it.

Also is it really just the FTB or moving to a totally new area who are at risk because if you are already on the ladder it’s all relative.....your existing home / new home would go up and down at the same rate.

If you are buying a home that you can stay in for 5 years I would assume that any bumps would be ironed out.

Same here.
I've currently pretty much given up for now.
I finally just saved up for a deposit too.

Any house that we like. We ring up for it. Sometimes we get told its already been sold.
Other times we might be given a time for a viewing.
Then before the viewing we will be told its had an offer and now off the market.

I'm not going to offer until I've seen it and am or going to rush this decision because I want to make the right decision.
So it seems currently we are just missing out on pretty much everything. Literally just as I had saved the deposit.

If you find a house that's perfect for you, don't wait. We've just completed on a property and love it. A year ago the house next door sold for 50k less (albeit it needed more work). But the thing is all the other houses on this road have had people in them for 10-20 years. Hardly anyone moves out. If we'd waited we'd never have been able to live here. But then we live in a town where we know some properties exist in our price bracket and needs but not many. We couldn't afford to miss one of them.

If you know you'll be after 1 of 100 similar houses, then you can risk waiting it out.

@Constance11 Very true. I remember my parents and their friends talking about an imminent price crash and a "bursting of the bubble" when I was still at school in the 00s. We bought our first home just after the Brexit referendum and our current property at the height of the pandemic. Both times there's been talk of a crash and people told us to wait to "see what happens"...if we'd listened we'd still be renting a crappy flat.

As it happens we got a good deal both times...the market is heated at the moment but we managed to buy a great house in a decent area for under asking price. It wasn't easy and we were outbid on loads of places and walked away from others. With this house it was pure luck for us, previous sale had fallen through and the house sustained some storm damage just when it was put back on the market, so no one wanted it then and we have some savings to do the repairs.

If you want to buy and are in a position to do so then just go for it...obviously be level headed about it, don't overpay crazy amounts...there are still good deals to be had, depending on the area.
And even if there's a crash at some point, you still have a home of your own that you can live in and/or pass down to your children one day. A home is more than just a monetary investment.

We sold our first house in 2007, twithin 3 days for significantly more than we had paid (and more than we expected!). It was well looked-after by our buyers, but changed hands again a couple years ago, for less than we sold it for. This wasnt unusual in this area: for a lot of property 2007 house prices were irrationally high and rose to a level only really seen again in 2016 onwards.

In our area, houses are now selling at very inflated prices at a sealed bids within a few days (similar to 2007 market).

People are sick of their neighbours, bored shitless, fed up of their house, want a change, moving costs are relatively low (stamp duty holiday), and so IMO loads of people are moving who would otherwise stay put.

It's all a bit relative if you're not a FTB and have equity. We are in the process of buying and probably overpaid 10% compared to last year. But we sold ours (2 houses) for 10-15% more than we thought we'd get.

My advice would be don't wait. The economy predictions are better than expected and as others have said, the Tories have a vested interest in keeping the housing market afloat. Just don't panic and buy something which doesn't suit your needs

We have been looking and seen some houses that we have liked recently but others obviously like them too and they are going to sealed bids and going for more than we are prepared to pay.
That's why we have decided to wait a bit and see.

I totally agree with @flashbac and @Constance11 about the Tories doing anything they possibly can to prop up the housing market.

@Souther

Same here. I've currently pretty much given up for now. I finally just saved up for a deposit too.

Any house that we like. We ring up for it. Sometimes we get told its already been sold.
Other times we might be given a time for a viewing.
Then before the viewing we will be told its had an offer and now off the market.

I'm not going to offer until I've seen it and am or going to rush this decision because I want to make the right decision.
So it seems currently we are just missing out on pretty much everything. Literally just as I had saved the deposit.

You need to strike up a good relationship with your local estate agents so you can be on their list of people who they show properties too first, before they have even hit Rightmove/Zoopla. If you are waiting until they go online it's often too late. Which is crazy but true at the moment! Good luck, I hope you can find something soon!

Waiting 5 to 6 months doesn't mean waiting for the house market crash,
It just want to see the situation/market better, Without the STD and furlough those government intervene policy, how the market react & turn to normal, assume the mortgage payment holiday will be over by then.

Current market is definitely not normal, one house got 20/30 bids over, most house are sold over asking price. Without strong job market support, it's not sustainable. Unless the economy got quick recovery/bounce back fast as government expected, I just don't see it will last long after September.

It's right in long run, house price are always increasing, but if you see the trend of last 20 years, it's not always straight upwards line, it will dip a bit or correction slightly reflect corresponding policy/interest rate.

Any decision takes risk. life itself is full of choice, sometimes it's like gambling.

@stuckinaditch

We have been looking and seen some houses that we have liked recently but others obviously like them too and they are going to sealed bids and going for more than we are prepared to pay. That's why we have decided to wait a bit and see.

I totally agree with @flashbac and @Constance11 about the Tories doing anything they possibly can to prop up the housing market.

Op if you’re being priced out now, waiting is hugely likely to just make it worse.

@rabbitcarrot

Waiting 5 to 6 months doesn't mean waiting for the house market crash, It just want to see the situation/market better, Without the STD and furlough those government intervene policy, how the market react & turn to normal, assume the mortgage payment holiday will be over by then.

Current market is definitely not normal, one house got 20/30 bids over, most house are sold over asking price. Without strong job market support, it's not sustainable. Unless the economy got quick recovery/bounce back fast as government expected, I just don't see it will last long after September.

It's right in long run, house price are always increasing, but if you see the trend of last 20 years, it's not always straight upwards line, it will dip a bit or correction slightly reflect corresponding policy/interest rate.

Any decision takes risk. life itself is full of choice, sometimes it's like gambling.

Agree with this completely. This is not a ‘normal’ market and the fear of missing out is making people go crazy. This is world wide pretty much and across all assets. I’ve been reading about the ‘everything bubble’ and about inflation coming because of all the stimulus. Who knows what will happen? Nobody.

If you have the money and really need to move then go for it as you’ll have a nice new home, which is the important thing. Be prepared for a lot of competition, mega chains and not many properties though.