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?

The reno house I mentioned upthread has just had a price drop..... I think your agent is probably right. We bought a doer-upper just before covid. The dotty house price increases since, plus the increased costs of renovation, would mean there would be no way we'd be able to buy anything like it now. Even for those smaller houses that are around what we paid for this, renos are overpriced now, given the costs of work that needs doing.

The majority of renovations are clearly probate, or empty due to an elderly person moving into a care home. Clearly in the first instance the children want to max out the price and are in no rush, and if the person had savings, the latter too.

Empty homes (6 months+) need to be seriously financially punished. Then you’d see a market correction like no other. Force these fire houses into the hands of people willing to put the money in to fix them up: don’t rip them off to start with.

Dire, not fire.

Thing is, even if prices are rising, you often can lose out if you wait, as you have to maintain the place which costs money, insure it, which is expensive especially if it is empty for a long time when you may struggle to insure it at all, and you have the 'opportunity cost' of not being able to invest the proceeds of the sale, or even more so, pay off any of your debts with it if you have any (including a mortgage), which is usually saves even more long term.
People are daft about this- they hang on for a higher price and then if the market catches up, think they have done a clever thing when they sell a year or two down the line 'I told the agent it was worth this much' , when most often they have still actually lost money. Only in a fast-rising market is it usually worth hanging on. And a wreck can lose value even in a rising market if it's empty for a long time.

Where I am in Scotland really good properties are still selling quickly at offers over home report. Houses with a bit of a compromise - on a busier road, not so great garden etc are now sticking a bit when even 6 months ago I think they’d have sold really quickly when people were buying literally anything they could get.

I'm in a "naice"market town area of Hampshire and the stuff is dropping by 50,000 pounds every couple of weeks

I have noticed a couple of houses sstc in my search area over the past week. They are all family homes at the cheaper end of the market, so I assume people who need to size up. I mentioned it to my EA friend as I thought I was good news, a spring bounce, but she is still pessimistic - fewer new properties coming on, unrealistic vendors, sales much lower than she'd expect in the run up to Easter. She said buyers are there but looking for big discounts and won't entertain anything that needs work (can't get anyone in until 2024, too expensive).

Market has stalled where we are and I am involved in a sale where there is an issue with probate as family dispute and I’m pushing hard to get it sorted as really don’t want to lose our buyers. My uncle thinks they will stick around as it’s a great price. I think he is deluded. My cousin is selling a house which needs lots of work. Buyers asked for 10k off yesterday, she said 5k if you complete next week which they have agreed to.

We have had an offer accepted at 10% under asking and it does make me twitchy reading this as needs work . But as the surveyor said, other than the kitchen and bathrooms it is cosmetic. We do have various people we use and no building work involved so hopefully will be ok.

Speaking of ‘fixer uppers’, this is my favourite:
https://www.rightmove.co.uk/properties/124238957#/?channel=RES_BUY

Been on since middle of last summer at least. So far reduced from 425 ( or more) to 375.
Chasing the market down.

You would be crazy to pay a 12k early exit fee, that is money definitely wasted. Prices are only stagnating or falling 5-10% in most parts of the country so why assume worst case scenario?
I don’t know the mortgage Interest rate you are paying. But look around at high interest savings accounts if you have a spare 12k. If they pay higher than your mortgage interest rate then put the money into a savings account. If they pay less, it would make more sense to see if you can pay 12k off your mortgage ( but continue paying the same monthly amount for now if you can afford to).

The tiles in that one @C4tastrophe are similar to ones we had in first house that used to give me migraines when I was pregnant ! Bath is the same colour as the one we are buying, I quite like it as reminds me of my childhood.

Our sellers were pragmatic about price. On for 450k, rejected 395k saying lower than what they were looking to accept at the moment, could we go higher rather than saying piss off. They then accepted 405k. It’s a good plot with little overlooking and space for several cars, a garage and decent garden plus ‘good bones’. Houses don’t often come up in that road according to surveyor who thinks it is a very good buy.

We have been incredibly lucky with timing and completed on last house day before Truss budget. Not by any good planning but wanted to move home to support my Stepmum as my Dad died suddenly last year. We did however accept 30k less than an offer the year before as didn’t want to chase the market down and it has paid off well.

I've got mine on the market in South Wales. One opposite has been stuck there 5 months and reduced the price and I've had 5 viewings 3 were cancellations and no shows. During Covid these houses went very quickly but now it's dead. Considering reducing price but I doubt it'll make much difference.

I also looked on Zoopla yesterday and people are dropping prices by 10-20k after 4-6 weeks and more.

Yesterday several articles are suggesting that markets expect least another two interest rises of .25% by June ! That takes the base rate to close to 5%. The problem with this is that those who have to sell, will have to sell at much lower prices. This then sets a new expected normal price for that type of house in the local area. Few analysts expect interest rate reductions this year. Short term it looks like significant falls are likley. My nephew wants to buy but we have persuaded him to look again at what's happening early next year and to keep saving as hard as possible.

@yellow13 please try not to panic about predictions of massive falls in house value. All the predictions I've seen of 30%+ have been in "real terms" ie adjusting for inflation. So for example, if inflation is 10% house prices would need to rise 10% to keep track with inflation. And if they stay the same in that situation, you can say they've "fallen" 10% in real terms.

Obviously you then need to add on any falls in house price when compared with the peak of the market, but these currently aren't that massive in comparison with inflation. And if you didn't buy at the peak you'll be even less affected by falls in value.

It's certainly nostalgic for the 1960s...

The Lytham st Anne's house they clearly need to sell but they still want to hang on for as much money as they can possibly get, if only they put it on for a low price at the summer it would be done and dusted by now.
I think they'll end up dropping and dropping and selling for far less than they could have got last summer....

It’s pure greed. Stupidity too.

If only council tax went 5x after 6 months dormant.

“we need more homes built” is such bullshit. Empty property is the real problem in this country, followed by foreign investment landlords.

“we need more homes built” is such bullshit. Empty property is the real problem in this country, followed by foreign investment landlords
I agree there are enough homes to go round the problem is that some people are allowed to hoard much more than they need.
The mantra about not enough homes being built is just to distract us from the real problem, ie failure of the government to properly legislate the housing market, choosing instead to fill the pockets of themselves and their rich friends and donors.
The rest of us have to suffer because rich people just indulge themselves and do whatever they fancy. 🤬
It's not right, the people at the top are only there on the backs of the workers at the bottom and yet they continue to shit on us from their great height, enabled by our billionaire prime minister, the effete princeling, Mr breathy voiced children's television presenter 🙄

Property always goes in cycles, seen it many times over the years. It’s a little naive to think, that won’t happen again & that gov can/will control it. I hope things level out and we don’t see a drop steep enough to cause negative equity.

The government can't control it but they sure as hell Will milk it all they can for their own benefit 🤬

Good properties are selling in my area after reductions. Those needing work or with huge service charges are sitting. I’ve seen 3 flats from the same vendor as per of a probate sale sitting on the market since October. They have done a straight 10% reduction this week. All need masses of work. I’m tempted…

Do sellers (who are "holding off") not realise that what they buy also comes down in price? It's not rocket science.

Not according to the Nationwide statistics.

It’s tiny amounts in the grand scheme of things, I think some people are still
under the illusion that £400k
houses are suddenly going to be selling at £250k. In reality you might get a £400k house for £380-390k. Hardly life changing.