House Prices

[LGBirmingham]

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

*lower LTVs

Home counties naice town. Nothing selling apart from new builds. Prices otherwise stagnant or slightly dropping.

2 houses that came up on the streets near ours sold in weeks, one was listed quite cheaply I thought. Demand still outstrips supply but I think people are rightly more concerned about houses that need work

In my area for July 23 cf July 22 :

Sales Agreed -5%
New Properties on the Market +15%
Available Properties +125%
Price Reductions +150%

The South East is mad - a lot is unaffordable

Asking prices still going up in my bit of London but people getting much bigger discounts now. Before you were laughed out if you didn’t offer full asking.

Have a look on builtplace.com
It only goes to June and is based on land registry so a bit of lag, but has nicely presented data on local markets
In my area (expensive, SW) for example, prices have fallen 2.3% from Jan this year

For more up to date impressions I've been monitoring Rightmove numbers. In my area the proportion of houses unsold (Vs sold or under offer) has doubled since last summer. I've also started to monitor the proportion of unsold houses that are reduced. Reductions used to be very rare but are now at 30%

My two bed terraced rental in the North West was valed at £180,000 August 2021. I had to wait until February for the tenants to move out. I completed last week and sold for 143K. I priced to sell and had a few offers.

According to figures released today house sales down to 2010 levels

Yep, if the VIs are releasing bad news you know it is worse, but lets be honest a lot of cheap property hitting the market is a net positive for society.

"Demand still outstrips supply "

No it doesn`t, sales and mortgage approvals are well down, all those people who have withdrawn from the market still live somewhere.

@CrashyTime where are they all living then? I am basing demand outstripping supply on the fact that houses are being bought within weeks of going on the market in a certain area as long as they are desirable and reasonably priced. I remember all this from 2008, people waiting for a crash that didn't happen. House prices may well reduce in certain areas but the idea of the bottom falling out of the market and house prices in free fall is unrealistic. Many people do not have mortgages or need to move remember. Mortgage holidays, interest only and extending terms exist as options for those who own as well as renting out. Not to say that is fair but it is the reality.

Yeah, my mum had her house on the market but pulled out and is now looking into having lodgers to help her pay her mortgage.

my friend’s mum also pulled her house off the market too because she was getting barely any interest.

I think a lot of people who want to sell are holding off.

A housing crash would be very good for me personally but terrible for some people I care about.

Either way It doesn't seem to be happening on the ground where I live. Maybe a bit of a reduction but prices still much higher than before covid. House prices seem to have just continued to shoot up since those regulations on buy to let that George Osborne introduced and never calmed down, was it 2015/16?

"I am basing demand outstripping supply on the fact that houses are being bought within weeks of going on the market in a certain area as long as they are desirable and reasonably priced."

That is the wrong way to think about it, you need to look at mortgage applications and approvals and actual number of houses sold at a national level all of these measures are way down as demand has dropped significantly.

To answer your first question - They are still living where they lived before they started the house viewing/buying process and then decided to drop out due to mortgage costs or their bank telling them they couldn`t get a mortgage.

2008 rates were being cut, and house prices were much lower, today rates are going up and house prices started much higher! This is 2008 in reverse, actually quite funny but unfortunately some people are going to be in a right pickle with their debt.

OK I stand corrected. House prices set to plummet any day now, just keep waiting for something that has been predicted every decade of my life and never happened. This one is different

How do you think people will be in a pickle with their debt?

Depends on what you would consider the timeframe of ‘your life’. The nearest frame of reference to this set of economic circumstances was the 1970s, there were three waves of inflation and interest rates had to rise to 20%, so yes real estate and debt was affected.

80’s, 90’s and dot com bust all saw property ‘crash’ corrections also but in 2008 it would have been far worse had they not cut rates to ‘emergency’ lows and print QE. They can’t do that now.

So yes a property value correction is very likely, not because of what people ‘perceive’ their value of property to be (those with low LTVs/mortgage free and choose not to sell), but because of the supply and affordability of credit that dictates the market (forced sellers and first time buyers). That can sometimes take years from peak to trough to adjust and bottom out to find its new level of affordability in something akin to like an oil tanker changing direction.

https://inews.co.uk/news/housebuilders-expensive-new-homes-cannot-sell-crisis-coming-2581788#:~:text=It's%20official.,of%20the%20global%20financial%20crisis.

The timeframe of my life is that I was born in 1966 and have made money from property over the years despite going through some house price "corrections" for example in the early 90s. Likewise my parents also made money from property & the timeframe of their life is longer. House prices rising and falling is cyclical as this graph shows and I don't doubt that they will rise again though it may take a few years.

https://www.allagents.co.uk/house-prices-adjusted/

Just sold a flat for £25k over asking. 2 offers within a week of marketing.
Coastal South East city.

Obv hard to say from that but I don't get the impression things are slowing down.

Rents are through the roof too.

Ahh, but was this ever such an issue compared to now either in your parents or your lifetime? That’s the key difference.

The multiple was high in 2006 @Lightscribe prices went down and then rose again.

Bingo. You’ve just hit the nail on the head of my previous point. 2008 would have been a lot worse, but it was saved by…. drum roll… you guessed it cutting rates to emergency lows and printing trillions of QE (both of which isn’t an option now or else the economy ends up in hyperinflation)

Rising here, NW coast. Lots of sold signs.