House prices are starting to fall

[Greenfairydust]

In the news this morning: house prices are falling. Property prices fell 1.1 per cent in February, the largest decline in a decade and this is expected to continue for the next few months.

www.ft.com/content/c09efd19-9920-4f4c-876b-d1e1a0235852

How will this affect the market I wonder and buyers/sellers behaviour?

As a buyer viewing houses at the moment, It won't put me off buying but it means that I am giving myself a strict budget and expect sellers to be reasonable and price their house accordingly.

What do other people think?

DeadHouseBounce! It’s nice to see you back but how come you are able to use normal font all of a sudden??

The map is produced by House Buyer Bureau, whoever they are. No idea if it's accurate or reliable but alleges to use sales figures from the last four months for each postcode area.

This is all over the Guardian this morning: UK house prices in biggest fall since 2009, but recession avoided
https://www.theguardian.com/business/live/2023/mar/31/uk-national-accounts-gdp-growth-recession-house-prices-inflation-eurozone-us-pce-business-live

So thankful I'm not actively in the market. Suppose it might help the OP negotiate.

Thanks for sharing, interesting to know although I'm not seeing a change in the asking prices in the (large) area I am looking to buy.

A typical example is a house that has just come on the market at £470k. Looking at sold prices in the road, the most recent was October 2021, for a slightly larger house on a larger plot (similar condition) which sold for £400k.

However, I am seeing most houses just sitting unsold for months on end.

Oh yes, lots of unsold round our way. Prices are same or higher than summer 2022 but feels as if people can't stretch as far to get them. I suppose that's the difference between 2% rates and 4% rates!

Recession avoided! Phew.

We can just hope all this inflation disappears now can we?

Recession is a lag indicator (just like job cuts) and we haven’t even begun to feel the effects of it yet, it’s ridiculous when newspapers say ‘it’s been avoided’.

Its global, Germanys food price inflation hit 22.3% this month.

Rightmove data is very specific and shows a 3.1% drop year on year. This is based on asking prices not sold prices. The Halifax also has a limited range of observation, both of them exclude cash purchases which tend to negotiate lower because of ease of transaction.
The best indicator is figures by the land registry which tends to reflect mortgage offers made up to 6 months before and then a three-month lag for reporting so ons figures for February will reflect mortgages agreed up to nine months ago, when interest rates were around 2% for mortgages. I'm seeing local properties going from 1.2 million pounds down to 850k within two weeks in a small village in Hampshire.

Zoopla says a drop of 5 percent in my area over the last 12 months.

'Recession is a lag indicator (just like job cuts) and we haven’t even begun to feel the effects of it yet, it’s ridiculous when newspapers say ‘it’s been avoided’.'

Exactly. It's not been avoided. Job cuts have started and will get worse later in the year.

I'm surprised that you are seeing such huge drops in price @RollerCoaster2020. Most sellers seem to be reducing by 5% or so and fairly slowly. Agree that there is a huge lag in terms of data.

Loads of flats can’t sell at the moment due to the ground rent / AST issue
in my sons block at least 12 flats have SSTC but realistically won’t be able to sell

I thought there was a massive delay at Land Registry?

I've noticed the same. Silly prices being asked too, but I suspect because the sellers are not in a hurry.

I heard two landlords saying they were selling up the other week. Neither actually are selling up, they are just saying they will. I will believe it when I see it, in those cases.

35% would be an extraordinary drop, and negative equity generally only affects you if you want to move, so try not to worry too much.

Or remortgage...

And no 35% will not happen

I think you are right about doer-upper types of houses. There is one near where I work that looks nice, but needs rewiring and all sorts, as any survey would reveal. Fair enough, it's on for less than a similar one that may need less work, but the price + the cost of doing the work would, IMO, make the total cost masses more than it could be worth, to say nothing of the disruption. (I know about those costs because I have been doing the same work on my house locally.)

It could depending on some areas that have seen the biggest rises.

Remember house prices have increased 25.7% since the start of the pandemic.

Salaries haven’t nearly increased as much and we are only just seeing job cuts now. Now with mortgages costing x3 the amount it’s only a matter of time before that has an effect.

It’s not supply/demand that pushes up house prices it’s the supply and cost of credit. That dictates housing market liquidity from the bottom rung upwards.

We're really quite screwed if things fall by 35% so trying to make a plan so we best case scenario don't lose money.
Can't work out if to save as much as we can, or overpay mortgage to try to mitigate.
Or we move now either paying a £12k early exit fee and rent and hope that pays off, or move to another property.

It's terrifying.
I'm not sleeping and can't enjoy my home ATM, which is a shame.

Not for the first time I'm sure, I wish we'd waited but nowt we can do now except hope it's not as bad as I think it will be.

There's a overpay v save calculator on money saving expert

https://www.moneysavingexpert.com/mortgages/mortgage-overpayment-calculator/

The increase costs and difficulty in getting building work done has made doer uppers much less attractive 😕

As I’ve used the analogy countless times on here, the housing market is like an oil tanker (due to so many having a vested interest, and for many their only investment).

Its very slow to change direction and very hard to stop once it’s going in that direction. If we were to get a 30-40% correction (in some areas) then it would take years to get there from peak to trough.

Mortgage rates should dip slightly later this year (due to dropping treasury yields and in turn swap rates). That will be an ideal time to fix for as long as you can.

Interesting. I was sort of scoffed at on here recently when I mentioned that a local estate agent had mentioned to me that for the first time in their career fully refurbished houses were selling at a premium because people were very reluctant to take on renovations.

Not sure how things are going price wise in our area in London, but I think the agents are getting desperate for inventory. We've had three calls and one drop by in the last month asking if we're interested in selling (we're not).

the agents are getting desperate for inventory
they must be feeling the squeeze! But inventory is worth nothing if none of the vendors will drop to a price that the property will sell at, stalemate and the EA's go to the wall.