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Original poster

Waiting for the current housing boom to calm down

134 replies

stuckinaditch · 25/04/2021 16:11

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?

OP posts:
Cheekyweegobshite · 28/04/2021 10:30

I don't think there will be a crash because the government will keep propping things up and they also have a vested interest because of help to buy. However, we're now starting to see inflation rise because of brexit and the pandemic. A lot of people have amassed a lot of savings and I suspect this is going to exacerbate inflation. If the BoE decides to raise interest rates then things could get difficult for some people quite quickly. I think/hope that a small rise in IRs plus the withdrawal of stamp duty relief could calm things down later in the year.

Alonim · 28/04/2021 10:33

It’s all a bit shit, isn’t it?

MidnightMeltdown · 28/04/2021 12:23

@Sinner10

I don’t know if I’m being a bit stupid but is the stamp duty savings not cancelled out by the hiked up house prices? Potentially a lot of people will be in negative equity soon?
It might be because people can't put stamp duty on a mortgage
MidnightMeltdown · 28/04/2021 12:29

@ChochoCrazyCat

What I don't get is, why is there such a shortage of houses on the market...if so many people are wanting to buy, then surely they must have to sell their current house? They can't all be first time buyers surely?
I think a lot of it is driven by people who already own a home. They are looking for second holiday homes, Airbnb's, properties to rent out, or properties for their kids. This is because the government has been printing massive amounts of money during the pandemic. It means that the value of cash goes down, and people rush to put money in assets.
ThinkAboutItTomorrow · 28/04/2021 12:43

I think negative equity is quite a low risk. Banks aren't letting people borrow as much as they used to and a lot of the movers at the moment have pretty hefty deposits from the equity they have built up.

So if the overheated part is big family houses which are probably only on 70% mortgage, if that, there'd need to be a 30% plunge before negative equity kicks in.

Lots of the talk is of cash buyers too so no risk there.

There's a few people risk losing a chunk of their nest egg but not handing keys in to the bank.

ThinkAboutItTomorrow · 28/04/2021 12:49

Although new mortgages are looking hot atm.



ThinkAboutItTomorrow · 28/04/2021 13:05

But still January mortgage borrowing was up 20% vs pre-Covid level whilst household savings were 300% up vs the same.

And savings rates are so rubbish it's worth splashing it on a forever house, even buying at the top of the market the long term return will be better than any bank account.

Original poster
stuckinaditch · 28/04/2021 19:48

@Outonmyear

We missed out on a house on our current road in late 2013. We later bought the equivalent house on the same road in mid 2018 and it had gone up 45k which is about 8% increase per year. Didn’t think about the increase, it felt normal and we live in a desirable area. We were happy to pay that.

What’s freaking us out is prices have gone up about 15% in about 8 weeks and the atmosphere is frenzied. That is not normal and definitely not sustainable.

When we bought our current house the seller asked us to wait 5 months as they were emigrating. Didn’t give price increases then a second thought - they probably missed out on a few thousand but nothing in the grand scheme of things to avoid renting.

According to current valuations on our house we’ve missed out on £17k by selling at the end of January. Prices have gone up on what we are trying to buy and we are in an impossible situation.

I think when Kirsty Allsop thinks house prices are over heated then things are weird.

I don’t know whether the new prices will stick around but just flatline for a long while rather than crash.

Nothing to rent around here either.

Indeed. The rapid rise feels very odd.

I read about KIrstie Allsopp's comments the other day too. She is right, at least that's my feeling too.

Time will tell as always!

OP posts:
ManyMaybes · 28/04/2021 20:10

Interestingly I haven’t seen many houses go SSTC in my search criteria (south london large houses) in the past few weeks. I think mostly because they are all at high asking prices which compared to 2019 sold prices seem insane (and the recent high sale prices haven’t hit land registry yet).

TortolaParadise · 28/04/2021 21:27

You may well be correct Bluntness100; the agent carried out the evaluation and set the price. He claimed it was an easy sale and he'd been doing his job for twenty years and knows the market inside out. Well!

TortolaParadise · 28/04/2021 21:30

'valuation' that should read

DonGray · 29/04/2021 09:04

@TortolaParadise

You may well be correct Bluntness100; the agent carried out the evaluation and set the price. He claimed it was an easy sale and he'd been doing his job for twenty years and knows the market inside out. Well!
Did you get multiple valuations before choosing an agent?
Sssloou · 29/04/2021 12:01

@Alonim

An estate agent told us to wait too OP. We had a valuation in March and he advised us not to sell at that time.

We were shocked and wondered what his motive was. But now I believe he was right. It’s wiser to wait.

Interesting on motive - hard to believe that they are turning away business.

I suspect that THEY are just overwhelmed capacity and logistics wise - it’s futile for THEM to have to show the same property to 30 bidders - they just want to pace THEIR business.

They may we’ll be correct that the market is over heating / over heated - but if you are selling then this is your moment (if you can go into rental for a couple of months)

Alonim · 29/04/2021 13:56

Sssloou - I see what you mean about this is our moment if we can sell. But we have kids, one of whom is doing GCSEs - I"m worried about the upheaval of rental - plus rental round here (London) is so expensive and we have no idea how long we'll be renting for. There is nothing we want to move to at all. Barely anything to choose from. We could be renting for a year, pouring money down the drain.

And what if prices continue to rise?

hammersmithbridge · 29/04/2021 23:52

Alonim, hello from the other thread 👋🏼 totally same shoes, and completely understand you wouldn't want to move twice, and certainly not sell to move into rental when you don't even have an onward property lined up. I think we'll hang on until more houses that we'd possibly buy start popping up, then market, and then snap up a house that subsequently comes up for sale. Some degree of luck with be required I think, but what else can we do? 🍀

Alonim · 30/04/2021 00:00

I'll follow you then hammersmithbridge - we can't get going at all with moving. It's been a plan for years now and things just keep getting worse.

I've only just found this section of mumsnet so will try and use it to keep focused and find courage at the right time.

tanguero · 30/04/2021 13:45

Aberdare: scores of people camping overnight in the street to reserve homes on a new build site. (BBC news website).

The last time I remember seeing this was in the 1980's.

Sssloou · 30/04/2021 15:22

@tanguero

Aberdare: scores of people camping overnight in the street to reserve homes on a new build site. (BBC news website).

The last time I remember seeing this was in the 1980's.

I witnessed this relatively recently (2016) in Reading - just before the Brexit vote - fuelled by Help to Buy and Cross rail.
WishingHopingThinkingPraying · 30/04/2021 15:24

This only makes sense if you are a first time buyer. As you have a house to sell, you pay more for your next one but also get more for your own. In simple terms.

tanguero · 30/04/2021 16:34

WishingHopingThinkingPraying Fri 30-Apr-21 15:24:44
This only makes sense if you are a first time buyer.

Am not so sure - a large percentage of house purchases are second-home/BTL purchases. One in ten British adults own a second-home. One in six 'boomers' own a second-home.

SilverLiningSearching · 01/05/2021 13:14

I’m done with my property search, it’s so demoralising. Making an appointment then the house selling before I even view it.
If I do get a viewing: discovering the lovely garden in the photos is in reality the size of a stamp , if the property is halfway decent it’s best and final bidding war!

The last viewing I had the vendor was gloating about how many viewings she had lined up, but I think the final straw was the new Zoopla advert!

For context, I am FTB single parent with a decent deposit, I don’t want to be mortgaged to the hilt.

BestOption · 01/05/2021 14:53

@WishingHopingThinkingPraying

This only makes sense if you are a first time buyer. As you have a house to sell, you pay more for your next one but also get more for your own. In simple terms.
Not really. I'm 'sizing up' or should I say I'm 'trying to, along with the majority of house buyers. A 10% increase on my Property isn't the same as 10% on what I'm buying. Plus if I sell now & have to wait to find a property to buy, the market is moving up, but my sold price remains the same. Ever increasing financial gap.

FTB can move quicker.

I've considered selling & renting until I find the right place, but the worry is the gap widening too much

surreygirl1987 · 01/05/2021 15:38

Yes exactly this! We are also upsizing, by quite a lot. We are moving into rented accommodation and I think it is the right decision but I share the same fears as you.

Original poster
stuckinaditch · 01/05/2021 15:51

@WishingHopingThinkingPraying

This only makes sense if you are a first time buyer. As you have a house to sell, you pay more for your next one but also get more for your own. In simple terms.
We have actually sold already and are renting (more than one factor involved in this decision). I think the current boom calming down would be to nearly everyone's benefit.
OP posts:
flashbac · 01/05/2021 19:13

@tanguero

WishingHopingThinkingPraying Fri 30-Apr-21 15:24:44 This only makes sense if you are a first time buyer.

Am not so sure - a large percentage of house purchases are second-home/BTL purchases. One in ten British adults own a second-home. One in six 'boomers' own a second-home.

Wow! Those statistics are scary!