House prices , ridiculous at the moment or no?

[Dizzybrunette445]

Hi everyone, I just need to rant about the current property market. Is it a joke where you are as well??
We are trying to find a bigger house as I've just had a baby.. they have been listing houses in some scummy areas where we live for £340k.. which is our budget.. everything has shot up to an extortionate amount, everyone is offering over the asking price for everything and not by £500.. by £20k to be truthful, it's getting on my tits.
Is there any light at the end of the tunnel for us all??

Or are agents cherry picking people they think will save the chain by stepping in, so it doesn't get re listed online?

Yes this is happening here. Some stuff is being listed again online - but I often get emails from EA saying they need a quick sell as the chain has collapsed and wanting people to step in. Those houses never make it back on to rightmove - as there's so little out there people are desperate to get anything.

Its manic. And yes, lots of offers over. We're buying a house that came off the market during COVID-19 due to the seller being CEV. We're basically buying at pre pandemic prices, we pestered the agent to see it and no one else did. We put in an offer before viewing. Would have like to pay £5k less but still happy with the deal.

@Alonim

Or are agents cherry picking people they think will save the chain by stepping in, so it doesn't get re listed online?

Yes this is happening here. Some stuff is being listed again online - but I often get emails from EA saying they need a quick sell as the chain has collapsed and wanting people to step in. Those houses never make it back on to rightmove - as there's so little out there people are desperate to get anything.

We experienced this too.

Definitely! A 2.5bedroom house in the area I am looking is on for £735k. The last sold house in the area was December 2020 for £575k. Fair enough the £735k property is detached, however the third bedroom is 7'x6' (hence 0.5 of a bedroom), and the garden could best be described as a courtyard (and that's being generous). Apparently the EA is booked solid with viewings, though I'd be surprised if they sell for anywhere near asking.

I am feeling extremely thankful that we secured the property we did without a bidding war and slightly under asking (-£4K). But the house market is crazy. The council are taking forever to turn the searches around. I just want to get it done and dusted without being gazumped or the vendor changing their minds.

I think the problem with massively over offering only works if you don’t need a mortgage if it gets down valued and then you can’t get the finance the seller is already determined to get that price and then goes back to market again until they can secure someone who can afford the price.

One house I wanted to buy last year sold for £575k in September came back to the market 7months later, no decorative changes or otherwise at £650k sold in a couple of days. Agreed the housing market is mental, but we’ve been waiting about 2 years to move so just had to bite the bullet and cross our fingers.

Feeling thankful we bought in summer 2019 and are happy where we are for another 4/5 years or so.

It's an ex council house that we have renovated, area is gradually getting better but it's still a council estate at the end of the day. Prices have gone up so much we now couldn't afford to buy around here at all, not even a complete fixer upper. Madness!

People are always saying there will be a crash / it will stabilise / level out yet it only ever seems to go one way and thats up

I’ve been saying on here for several months there is pent up demand and all the stamp duty holiday did was keep it ticking over. So prices were going to explode when viewings could happen again and people went on thr market/decided to move.

And got shouted down every time by the usual suspects saying it will crash, telling people don’t buy (at that point) hold off and wait till now, all the redundancies and you’ll be quids in.

It’s total bullshit. And it’s always the same.

Totally crazy here in the NW, we live in a £350/£400K max area, houses are going on the market at £500K+, and selling in about 48 hours. As a result, there are now about 5 houses for sale on a street where houses are rarely available as everybody is getting the idea that there is money to be made. They don't seem to realise that they will be paying over the odds for their new house though too.

So pleased that we bought our house when we did as there's no way we'd be able to afford it now, nice equity though!

I agree. A year ago you could buy a decent 2 bed house for around £150k where I am, now you're looking at £220k minimum. It's a big jump in a small space of time.

Rent has also shot up. A year ago you could rent a 2 bed house for around £600pcm. They're now over £1000pcm, which is nuts. Average salary where I live is £22k and hasn't gone up, so I do worry for the average family.

@Bluntness100: 'I’ve been saying on here for several months there is pent up demand and all the stamp duty holiday did was keep it ticking over. So prices were going to explode when viewings could happen again and people went on thr market/decided to move.'

Do you mean pent up demand because the market was 'closed' for 6 or 8 weeks or because people were desperate to move out of cities?
I completely disagree that the stamp duty holiday kept it ticking over. It was entirely the wrong thing to do due to all the pent up demand plus low cost of borrowing, furlough, QE, etc. But the Tories are intent on keeping house prices as high as possible.

Agree with this sentiment: 'Average salary where I live is £22k and hasn't gone up, so I do worry for the average family.' I really feel for people on low or average salaries without any family wealth. Many are even struggling to rent.

@Dizzybrunette445- the house prices are absolutely ridiculous. I think the crazy boom will calm down but no one knows for sure what will happen to the prices. The 'experts' generally get it wrong.

@stuckinaditch pent up demand has gone back as far as 2016. A lot of people were nervous about Brexit and the market was relatively stagnant since with people making do until things looked more certain. Then Covid happens, a ton of people re-evaluated their homes and decided they needed to move. Add the stamp duty holiday and there we go, it suddenly feels safe and a good time to move. Covid made us pack up and move to somewhere we never imagined moving to, because we realised in that 6-8 week window exactly what we needed, we aren't alone in that.

[quote user8783]@stuckinaditch pent up demand has gone back as far as 2016. A lot of people were nervous about Brexit and the market was relatively stagnant since with people making do until things looked more certain. Then Covid happens, a ton of people re-evaluated their homes and decided they needed to move. Add the stamp duty holiday and there we go, it suddenly feels safe and a good time to move. Covid made us pack up and move to somewhere we never imagined moving to, because we realised in that 6-8 week window exactly what we needed, we aren't alone in that.[/quote]
Yes, I understand about Brexit uncertainty. It does seem strange though that with the much greater uncertainty of a global pandemic, and all the potential implications, that everyone has decided to move. I think people re-evaluating their housing, working from home, etc has made some difference but the stamp duty has put a rocket under the market and the lower interest rates.

@stuckinaditch we bought on a new build estate and literally all our surrounding neighbours bought post Covid for a bigger home and office space, garden with train links but further away from cities we are working in. I think the stamp duty holiday is getting far too much credit for the last year tbh, it might have ignited the initial boost of confidence, but doesn't really explain the panic buying happening to this day with prices far out stripping stamp duty savings and lots of sales agreed now knowing deadline won't be met, people aren't as daft as some want to make out. I'm not saying it's had no impact, but I think it's ridiculous to suggest the market will suddenly calm down when it ends, there's more fuelling this than the holiday alone.

We agreed our sale and purchase prior to the stamp duty holiday, and just got lucky we benefitted from it.

Houses are going like hot cakes where I live - seaside town in Scotland. Apparently it's because lots of people from England and bigger places in Scotland are desperate to move to a seaside Idyll post Covid.

Sadly they'll be disappointed to find it's full of gossiping bigots who never let the truth get in the way of a good story

A lot of people have made big moves like @user8783, which has caused a big shift in market. London prices have shifted to rest of the country.
Historically London prices have been much higher than rest of the country, because of unique opportunities to earn and spend that the city offers.
Lot of people have made the decision that they can retain their London wages and embrace the country life.
It will be interesting in few years time, will they still continue to enjoy this new life style.
Also to be seen is how the employers will use this opportunity and it's impact on London wages.

To add some historical context. It's a feature of the UK housing market that rapid increases in prices occur. In historical context the current 'boom' is modest - though, of course, no-one knows how much further it has (or hasn't) to go.

In 1973 average UK house prices increased by 44%
IN 1979 average UK house prices increased by 32%
In 1987/8 average UK house prices increased by 38%
In 2021 (to date) average UK house prices have increased by 10%

landregistry.data.gov.uk/app/ukhpi/browse?from=1966-01-01&location=http%3A%2F%2Flandregistry.data.gov.uk%2Fid%2Fregion%2Funited-kingdom&to=2018-04-01&lang=en

And....2008/8 average UK house prices rose by 38%

@DblEspresso as youve named me and spoken about London I just want to clarify we are not fleeing Londoners, it wasn't a "big" move for us, only 20 miles! But an area we hadn't previously considered for various reasons but we could get more for our money, so not a big lifestyle change for us really. Covid just made us re-evaluate our priorities and give us the nudge we needed to do the move we'd been putting off. I ended up getting promoted shortly after and am now completely home based earning much more, and no not London weighting wages, I'm national civil service. I know the SE is getting a lot of attention but it's not all London and the SE!

My take on the market is that it is fueled by

1. Stamp duty holiday

2. People realizing that home will be even more important in the future as working from home either partially or fully is a reasonable possibility

3. Bounce back loan money seeping into the housing market

4. Household saving stronger because of less expenditure on holidays

5. Interest rates - no talk of any upward movement

HOWEVER, when we come off the morphine I think that there will be a correction and the increases in tax and cut backs in government expenditure will bite and prices should fall back

I have predicted nine of the last three downturns

I think the stamp duty holiday is getting far too much credit for the last year tbh, it might have ignited the initial boost of confidence, but doesn't really explain the panic buying happening to this day with prices far out stripping stamp duty savings and lots of sales agreed now knowing deadline won't be met, people aren't as daft as some want to make out.

I’m surprised people are thinking this too. The reality is the stamp duty holiday just kept it ticking over. There was a huge amount of pent up demand, where people didn’t wish to move during lockdown, and that pent up demand has been released causing thr market to get busy. It’s nothing to do with the stamp duty holiday.

Agree with the above PLUS (it's never mentioned) population increase.

The UK's population increases by 1,000 a day. The official (ONS) projection is that we'll have another 5 million people by 2040. That's ten cities the size of Manchester.
Then you have 'events' eg. 300,00 Hong Kong people have. so far, been granted UK visas.....and those are just 'heads of households', each of those 300,000 will have the right to bring in 'family' too.

They are a bit ridiculous near is too. We've been looking nearly a year as we had one fall through. We had an offer accepted on a lovely house at the end of March. I'd had my heart set on another road, but we really loved the house and it was what we wanted, and there wasnt anything in the area I wanted. I was a bit worried about how I'd feel if one did come up. Well I needn't have been, as one of the smaller houses on my favourite road came up last week, 20k over our budget. Last year we could have afforded it. I'm so glad we bought when we did and really hope it doesn't fall through.

@user8783- 'I'm not saying it's had no impact, but I think it's ridiculous to suggest the market will suddenly calm down when it ends, there's more fuelling this than the holiday alone.'

I wonder if you are referring to someone else because I haven't said that. Prices were starting to calm down as the first stamp duty extension was due to expire and then they took off again in February when Rishi announced the extension so clearly that had some effect. The practically negative interest rates are a big factor too. I was making the point that the stamp duty was totally unnecessary as there was already plenty of activity in the housing market which I think is what you are saying too relating to your own new estate. I think you are one of the lucky ones with a price agreed before the rush took office so you just happened to benefit.

@tanguero- those statistics don't tell the full story. If you look at the chart the overall rate of increase in house prices takes off hugely from the late 1990s. It's dramatically higher than the previous decades shown. Also, in the 1970s/early 80s there were huge peaks in rates of general inflation plus rapid increases in wages which clearly isn't the case at the moment (inflation has been low for many years and wages have stagnated/ gone down for many in real terms). There is definitely a risk of higher inflation coming though.

'I’m surprised people are thinking this too. The reality is the stamp duty holiday just kept it ticking over. There was a huge amount of pent up demand, where people didn’t wish to move during lockdown, and that pent up demand has been released causing thr market to get busy. It’s nothing to do with the stamp duty holiday.'

I still don't understand this statement. It seems contradictory to say that there was huge pent up demand causing the market to get busy and also that the stamp duty kept the market ticking over. It hasn't been ticking over, prices have gone up hugely and there has been a buying frenzy.