House Prices

[LGBirmingham]

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

The truth is that you have no idea what will happen to the housing market over the next few years. Even the 'experts', who tend to be people who work in the industry, so with an obvious bias, generally agree that falls are expected next year, which would be exactly the sort of correction that you refer to.
It may be that prices will fall slightly/ stabilise for a while but it is v likely that they will fall substantially at some point.

Why do you think that if you don't own a house your life is on hold 🤷‍♀️

What would I be doing different today if I owned the house I live in as opposed to renting it 😂

Whenever I check rightmove there is more and more reductions and more and more unsold properties. Sellers are now trying to do the "modern method of auction" to get a sale and the auction date passes and the property is still up for sale.

@Twiglets1
Apologies if you've already explained elsewhere, but why do you think price rises are "very likely"?

"Why do you think that if you don't own a house your life is on hold 🤷‍♀️"

Exactly, just another one of the silly memes put about by mortgage lenders that many of the public happily latched onto without critical thought. Nothing will put your life on hold faster than soaring monthly payments on a big mortgage debt, I think next year is when a lot of people start rolling off fixes into the real world of debt re-payment?

I think with a lot of people it is hope more than anything, there doesn`t often seem to be much real world economic thinking involved.

Look at the sales volumes though, LOL, are people really so daft that they think prices are sustainable?

https://www.plumplot.co.uk/house-prices-by-region.html

I’d be interested to know any sort of meaningful statistic that compares what people pay for their mortgages over time compared to the rent equivalent.

I don’t buy a house because I’m dribbling with glee at the thought of price increases over time, I do so because every house I’ve ever owned has been cheaper and more secure to pay a mortgage on than rent. My current house would cost £3000 to rent pm, my mortgage is less than a third of that. And if there is going to be an increase in monthly payments, I can anticipate it and plan around it rather than be beholden to a landlord.

The fact that ultimately I will then own the house is a bonus, for me, that gives me choices in a few years - such as to downsize.

There are a lot of thoughtful differing opinions on this thread, but also what appears to be a maniacal delight in other people’s perceived stupidity and misfortune. Even if proved correct, it remains pretty unattractive.

From an economic stand point this is expected. The cost of servicing the debt (mortgage) should be lower than the cost of rental cost since the latter bears more risk. In other words, a rational investor would request a higher return for holding an uncertain assets with maintenance cost and risk of vacancy/unpaid rent than holding a bond collateralised by a fairly stable asset. I guess from a people’s perspective, having a mortgage gives you the discipline to save a fixed amount over 20+ years, which many renters might not do, so giving the impression to be better off financially at the end. Of course if one, was investing their growing savings diligently and in the absence of house price increase, it s unclear that buying is a better financial decision than renting. Now in the UK, renters have little rights and are often forced to move which makes it unsuitable for families with kids at the local school.

Regarding the "not enough houses/too many people" argument for why prices must go up:

I've just found an interesting resource that contains an analysis of floorspace per person in England (scroll down for it)

https://data.london.gov.uk/housing/research-notes/

Apparently the available floorspace, in M2 per person, has actually increased in recent decades.

I haven't had a chance to read beyond the initial summary but thought I would share in case anyone's interested

Agreed. I bought my house in 2020. When I first bought, the mortgage was around the same as the monthly rent for the equivalent property.

Now however, you'd struggle to rent a 1 bed flat for the cost of my monthly mortgage on 3 bed house with a garden. Even renting a room in a house share is almost as much as my mortgage.

There's a lot of talk about mortgage rate rises, but the rental market is worse. You are almost always better off buying imo.

I feel they are mostly coming down now.
In September it was a big of both, some areas were slightly rising, some areas decreasing, but now it feels they're coming down.
Interest rates are still high and even if they appear to be coming down, unfortunately a lot of people can't afford those monthly repayments.
that's the main issue. affordability per income :(

I have seen two houses advertised in the last week where the owner is offering to pay the mover's stamp duty.

South East London here, prices are definitely falling. 3 bed semi local to me, would easily and quickly sell for 750k in 2022. House round the corner being sold by someone I know went on for 750 in october 2022, went under offer after multiple offers, fell through in January, back on at 750, no viewings, down to 725 no viewings, in March went to offers over 700, adamant wouldn't take under. Went under offer for 705 in April. Fell through in September so put back on at offers over 700, no viewings again. Now she has to sell she has put it on at offers over 650k. Got a few viewings lined up, so fingers crossed for her, I think she really needs to sell now too financially

There is enough jam wrapped up in housing to prevent a drop. I see them levelling out for a year or so. Pent up demand will then start another cycle of pump second half of this decade.

missing the data? they're already dropping.

anything to avoid reducing the price x

Can`t see that being true for people coming off fixes TBH.

Can you link to it?

Absolutely ridiculous isn`t it, LOL.

@CrashyTime

Maybe not if you live in London and have a massive mortgage, but it's certainly true for me in the north.

I'm not remortgaging for another couple of years, but even if I remortgaged now at 5.5%, I would still be paying at least £200 per month less than the rent on an equivalent house.

Rents increase annually, while the amount that you pay on a mortgage is fixed for 5 years. The mortgage would have to increase by an awful lot to make up for 5 years of rent rises

Average house prices in the UK will fall by 1% next year as competition increases among sellers, Britain’s biggest property website has forecast.
Sellers were likely to have to price more competitively to secure a buyer in 2024, while mortgage rates would settle down though “remain elevated”, said Rightmove.

A year ago, Rightmove predicted that average asking prices would fall by 2% in 2023. On Monday, the company said the average was 1.3% lower than in 2022 as the property market continued to contend with significantly higher mortgage costs and a cost of living crisis that refused to go away.

The website records asking prices rather than the actual one properties are sold for. It said it was predicting that these would typically be 1% lower nationally by the end of 2024. The market was continuing its transition to “more normal levels” of activity after the busy post-pandemic period, it added. Rightmove said the number of sellers who had had to cut their asking price during 2023 had risen to 39%, compared with 29% last year and 34% in 2019.

https://www.theguardian.com/money/2023/dec/04/uk-house-prices-likely-fall-1-per-cent-2024-rightmove

"Rents increase annually"

No they don`t, I was speaking to someone yesterday who has not had a rent rise in five years, the landlord is smart and wants to keep good long term tenants, they know that every rent rise takes you closer to the void. Can you link to these rental houses so we can have a look with PropertyLog?

Did it mention sales being down 60% from peak, LOL.

Look at how sales have collapsed in The North (and everywhere) It is just a matter of time until house prices collapse.

https://www.plumplot.co.uk/house-prices-by-region.html

Do you have a source for that statistic Crashy? The one I saw when I just Googled it dated back to 2008.