Anyone noticed the market has changed?

[yaxe]

We are in the process of buying (have sold) & it was mad in March, lots of overbidding etc. I've noticed now reductions & stuff is staying on rather than going in a wk. It's making me a bit nervous tbh.

How does that work?
No sale is legally binding until exchange of contracts.... you can't 'sign something' that forces you to pay the agreed price...

It was in some newspaper about it. They were signing legally binding contracts to pay the difference between the doen valuation and purchase price. Let me see if l can find it.

Wonder if they can't complete before help to buy ends?

@ArseInTheCoOpWindow

My comment refers to someone who said banks WILL tighten up lending. I said banks ALREADY HAVE tightened up lending. As evidenced by the "down" valuations.

Or do you think the "down" valuations by lenders ISN'T tightening up lending?

Possibly I hadn't thought of that.

@plugee 'I'm not convinced about prices dropping = much harder for FTBs.'

I don't think anyone has suggested this at all, just that it wouldn't necessarily be amazing.

@ArseInTheCoOpWindow - it sounds as if your area is always hot but hasn't really changed whereas @snowspider's and mine was red hot last year/ second half of 2020 and ha distinctly cooled now. The higher end houses in my area aren't moving at all, some reduced and still not selling. Medium/ lower, some selling but taking longer.
I don't think what you are suggesting is happening in London re buyers signing to see they plan to find the difference would be legally binding given that nothing its legally binding until exchange.

@FortonServices - was that directed at me? I agree that banks have clearly already started to tighten. They will do so more if prices fall/ the economy deteriorates further.

Interestingly... I've just read that the recommendation for affordability checks will be removed

www.bankofengland.co.uk/news/2022/june/financial-policy-committee-confirms-withdrawal-of-mortgage-market-affordability-test

Totally irresponsible move from the BOE. They have clearly learned nothing from 2008. Pump up the banks and house prices and never mind anything else.

I don't think the banks will want to saddle themselves with lots of bad debt though.

@rainingsnoring

No it was directed @ArseInTheCoOpWindow

I don't think the banks will want to saddle themselves with lots of bad debt though

Agree. Hence the "down" valuations we've been seeing. If interest rates go up further then the "down" valuations will continue. It's basically the banks saying, we don't want to end up in negative equity, so we'll only lend you 80% of what you want to pay for it, not 90% of what you want to pay for it. I'm not sure the removal of mandated affordability checks will make much difference, the banks will still make decisions that they consider to be commercially safe for themselves.

@rainingsnoring

Seen the news from Canada (up 1%) and NZ (up 0.5%) today? FED meet on 27th July and BoE on 4th August. Fancy a virtual bet?

Hmm. I would say 0.5%. They have been talking tough recently (for a change). I wonder if they might rise even more if the Fed does..

Banks are clearly tightening up lending too.
www.telegraph.co.uk/business/2022/07/14/banks-cut-mortgage-lending-fastest-rate-since-lockdown/

Given the rising interest rates, banks tightening lending and the increased cost of living, I think house prices can only go one way, at least in most areas.

I was thinking 0.5 too but if the FED go hard then possibly 0.75. We have the lowest interest rates in the Anglosphere now.

Indeed. We have a huge amount of debt so the BOE are clearly very anxious.

@rainingsnoring

ECB are still low though. I don't know if there'll be another default. One of the PIGS again maybe.

I'm sure that's why the ECB are being so incredibly cautious.

I can't see any way that they will go back down. Can you?

@FortonServices I can't see rates going down at the moment, no. How much more negative can they go even without current rates of inflation?!
I was just looking at that thread of people trying to sell their houses. It doesn't fit with the market still on fire reports. A lot of them are having difficulty finding buyers having been told that their houses would sell easily or having sales fall through. It sounds pretty tough and a definite change from last Summer.

@rainingsnoring

It's changed since 3 months ago, it was still manic then.

I don't know if prices went up to high for buyers to bare, if banks are tightening up lending, if it's interest rate rises or the cost of living crisis biting. But buyers seem a lot thinner on the ground.

I think it's a combination all of those and it will get worse rather than better. In my area, the listing prices are frequently very unrealistic. Some of them seem a good 25% over priced. They aren't selling so clearly potential buyers think so too.

I’m looking to either buy cunty ex out of his share of the home or purchase a property in C London. I have started viewings. Agents are saying deals are starting to fall through due to uncertainty and buyers having to renegotiate mortgage offers with brokers. I viewed 4 yesterday, and all were tenanted. Landlords are offloading.

One flat, which is 900k had been beautifully refurbished by the owner. She bought it at the same price as 10 years ago. A few weeks ago, two parties overbid on it. Transaction fell through.

I’m getting more emails from agents where vendors are “open to offers”. Agents are saying vendors need to be realistic about prices and the days of best and final offers are over for now.

I reckon September/October is when more will come on the market.

@rainingsnoring yes agent said the same - buyers are savvy and know when things are overpriced.

Think is even if prices drop a bit by the end of the year mortgages will likely cost more.