House Prices

[LGBirmingham]

House prices still seem to be rising? Does anyone else think this?

I have nor problem with people asking. Worst a seller can do is say no
And genuinely if someone's mortgage offer has run out then they may have to reduce their offer to proceed anyway
Admittedly that isn't the sellers problem really, but to keep the chain together accepting a lower price might be the only way

Just had a quick look at a mortgage calculator to show an example of why people may have to gazunder

Repayment on a 500k mortgage at 2% over 25 years is circa 2100 a month

To keep the payment the same with a 6% mortgage rate the max you could borrow is 330k

So in that case to stay with the same repayment/affordability, the buyer would have to reduce their offer by 170k!!!

I think this is what the sellers still asking prices from summer 2022 or above aren't understanding, the cost of borrowing money has massively increased, so if they want to sell then they have to accept a lower price

I do feel very sorry for anyone who bought at their max affordability during or since covid. World of pain coming if you have to sell or remortgage in the next few years

I don’t think there’s any excuse for lowering your offer literally just before Exchange. To do so after a bad survey or a few weeks before Exchange is justifiable though, in my opinion.

I think not being able to afford what you offered due to changing interest rates is a perfectly reasonable reason
The headline of 'on the day of exchange' is clickbait

Oddly, having just looked at the houses in my area yesterday and seeing that there are a LOT being reduced compared to those coming new to market, and quite a few that have been hanging around a while. Zoopla estimates suggest my own house is going up. Are people playing games. Put on 20% above expected and then expect a reduction of 20% and prices actually remain the same?

When I was looking (and subsequently bought) in spring the agents were finding then that a lot of purchases were falling through at exchange because of the issue of mortgages changing and being pullled. Now, in my area, I am not really seeing things going down but more like they are just not coming on the market. For example I haven’t seen one house recently that I would like to buy. ones in the price, location and specification range I was looking at are just not coming on the market. Because of my work I both own property and am probably going to be buying again in the near future so I have bo vested interest in a crash or otherwise. I have accidentally bought at the peak before and been horrified but eventually waiting it out meant that prices rose again. Like a PP said however it would be awful if people were in the position of negative equity and foreclosures.

@Freetodowhatiwant I have been the same, bought at the peak. But luckily at that point got an amazing mortgage deal. By the time I came to sell prices were back up again and I had saved a fortune in interest.

I've just done the sums and a 20% crash would buy me my dream home, in the perfect area with a very manageable mortgage. And I think that a correction is necessary for future generations, as I posted earlier. In my area average house price is 15xaverage full time salary. Which is frankly ridiculous. But I also would not like to see people suffer, and selfishly don't want to live through he repercussions of a crash, negative equity, etc. So I am not sure what will happen or how.

For me, it's less about a percentage and more about value. We are looking to buy in an area that is just starting to become popular. House price rises were pretty gradual until the Covid boom so if I could get something at 2019 prices I would be comfortable with that. But this is in an area where the council has a clear plan for regeneration including things like tram extensions so that combats the risk of negative equity.

I don't know if I would be brave enough to lower an offer so close to exchange, but I do think it's understandable if someone's mortgage offer expires and they can no longer afford the original offer, or if the seller is dragging their feet. I'd like to see contingencies brought in like they have in other countries, ie this offer is contingent on being able to move in by x date, and if the seller stalls or is unwilling to break the chain if their purchase falls through then the offer is up for renegotiation.

Individually, it is always possible that that 20% correction is available right now on a particular property. There will always be some people desperate to sell especially at this time of year. A video has just been posted "Home Hunters: How To Bag an Early Bargain Before the Bottom"

So now Halifax are claiming a month on month increase, just like Nationwide did, partly claiming lack of supply. Can anybody explain that to me? We know from the stats show that listings are running at the same weekly volume as the 3 years prior to Covid. And we know that overall supply is growing as a result of 10% fewer sales. Where are Halifax and Nationwide getting their seeming nonsense from?

I think that what is happening, as Alex said, is that their indices are transaction indices - not prices indices. And that they are easily boosted by a larger number of higher value properties selling even though all prices are falling.

If someone’s mortgage offer expires or the interest rate suddenly increases so they can no longer afford repayments then I agree that is a valid reason to reduce the offer just before Exchange. I just don’t agree with people doing it for no other reason than the market is falling because in reality it probably won’t have fallen much in the 3 or 4 months since the price was agreed and they made their offer knowing the market.

It would equally be unethical for Sellers to suddenly increase the price just before Exchange in a Sellers market.

market looks to be recovering

House prices rise for first time in six months, says Halifax https://www.bbc.co.uk/news/business-67342307

I think those with mortgages will ride this out , people will only sale up if they are desperate. There are options also short term to ride it out eg IR only mortgage or longer term.

But not everyone is moving up. There's a lot of downsizing going on, plus any death/divorce/moving into retirement home sales.

25% accepting a lower price rather than losing the sale is not a lot in a falling market.

House prices rose 1.1% in October ending six consecutive months of falls, according to latest figures from the Halifax. That reduced the annual rate of decline to 3.2% from 4.5% in September although London prices fell at a slightly faster rate of 4.6% to an average of £524,057.

The data echoes figures from fellow lender Nationwide last week that also showed prices ticking up in October. It also comes after the Bank of England put rates on hold at 5.25% for the first time in nearly two years in September, followed by another “no change” this month. Yesterday the Bank’s chief economist Huw Pill hinted that rates could start to come down by the middle of next year.

Kim Kinnaird, director, Halifax Mortgages, said: “Prospective sellers appear to be taking a cautious attitude, leading to a low supply of homes for sale. This is likely to have strengthened prices in the short-term, rather than prices being driven by buyer demand, which remains weak overall. Across the medium-term, with financial markets not anticipating a decline in the Bank of England’s base rate soon, we expect house prices to fall further overall – with a return to growth from 2025".

House prices rose by 1.1% in October says Halifax (msn.com)

@hannahcolobus
*
It’s actually 75% of sellers accepting a price reduction to save the sale.*

Nope

75% of 1/3 = 25%

Must be a very strange weighting to get -3.2%
All of the biggest markets are down waay more than that with only Ireland and Scotland doing better... some strange number fiddling going on I think

I think you’re forgetting the chain of events that follow during recessions. If property, retail, service markets are bare there will be plenty of redundancies. And as history shows many people are cash poor, but debt rich, which will leave them with no other choice but to sell. Also riding it out doesn’t necessarily mean that your current full asking price will get you more once you manage to sell after 10 years, than 20% discounted asking price now.

Well they couldn't ignore Northern Ireland and Scotland at one end of the scale and the South East/South West at the other end of the scale could they?

*Nope!

75% of sellers who were asked, accepted the reduction. Not 25%.

You can’t get a percentage overall, because some sellers weren’t asked to reduce the price. You can’t come up with a percentage for a scenario that doesn’t exist.*

🤦‍♀️

A third were asked to reduce

75% of that third did reduce

So 25% of all sales reduced the sale price due to gazundering

Getting fed up with Mumsnet

Can't quote a quote and bold doesn't work

Looks like I'm talking to myself half the time 😂

Oh wait I am

As long as you agree with yourself it's all fine