Did the market peak in summer 2022?

[Areyootakingthepish]

If so, what would you be offering now in the current climate?

I know each market has its nuances, but ultimately given that people just can’t afford to borrow now at the rates they used to, at what level are prices at?

My concern is that EAs are still pricing high to win the business. We are under offer, and given the current climate we don’t want to over offer

It very much depends on the area, some have fallen more than 10% and some hardly at all. Where are you ? It's worth remembering if your trading up - that waiting until the falls to work through (my guess 12 to 24 months) could save you a hefty chunk of money.

We are SE London

Yes I think so. In my area they have fallen by 6%.

Totally agree with the poster above. The price falls in recent months are from offers made several months ago and do not reflect the many interest rate rises since then, which should drive them down further. There might be a tiny bounce for spring but I suspect there are many months of falls ahead. I'd only buy right now if I had to or was downsizing, and I'd offer low.

@DrySherry Sorry if this is an ignorant question, but why would the low prices take months to work through..? Surely if the mortgage rates are high now, prospective buyers are offering less now and houses are reducing now accordingly..?
What happens in 12-24 months that makes it happen then..? Confused

So my thinking - is that because two thirds of mortgage borrowers have not yet had to pay the new rate of borrowing (they are still paying the very low rates of pre Truss borrowing). So we have not yet seen the new cost of borrowing filter through to prices. Some of this will obviously be offset by wage inflation. But probably the increases in cost of living will also soak up much of people's wage inflation. So more and more people coming off fixed ultra low rates will find the reality becomes that they can borrow much less than before for a move, remortgage or additional purchase. Add to the mix a similar situation with many highly leveraged BTL landlords who find they suddenly don't make any money as they transition to higher borrowing costs. This assumes of course interest rates will stay high for a prolonged period. My assumption on this could of course be wrong, but it doesn't look like the interest rates will come down by much for a good couple of years at least and we may never return to the "emergency" low rates introduced post 2008. All these negatives take time to filter through as many people don't need to move or sell. Slowly over time though those that do sell (from death, divorce and distress etc) set new lower price expectations in the local market. It will take time.

@DrySherry I think that's exactly right.

Regarding the effect of these repeated interest hikes every month, I heard someone describe it as like buying 10 tequilas: you don't feel the effect of the first one until you're on the last. And that's why they're so dangerous!

We have had an offer accepted on a property for home report value (£190,000). Last year this house would've been sold of at least £230,000.

We have been really lucky as there was a lot of interest in the property but the seller wanted a quick sale (we are FTB) and is happy that it went to a family rather than a landlord

@DrySherry ah yes I see, that makes sense thx

Yes to this.
Also, the general impact is much wider. Businesses who borrowed at v low rates during the pandemic will need to re-finance at some point. There are lots of zombie companies who have been paying interest on loans and a lot of these companies are expected to go bankrupt. A lot of other business, in the UK's very heavy discretionary economy are very squeezed in all ways with both rising costs and reduced turnover. These things can only mean increased redundancies in the future, probably in the next 6 months.
I would agree that the market peaked in Summer 22 on average. It's already born out in the ONS figures, I believe.

Thanks for your thoughts all.

Houses are still going on around here at silly prices. It’s just not affordable anymore given the rate rises.

We are upsizing but we are under offer so do need to get moving (plus need more space).

We are thinking of making some lower offers (around 2021 prices) to try and cushion the blow a bit. However I don’t think all sellers are being realistic.

Depends where you are, if you read reports today houses on average have risen slightly however not in all areas.

That's just asking prices. They keep going up but sold prices keep going down

My estate agent friend described house prices as generally increasing by about 5% per year. During the stamp duty holiday, prices went up by about 15%, so will plateau (or even drop a bit) until they're back where they would've been without the spike, if they had consistently risen 5% year on year. We're in Rutland, and it seems to be true of this area.

That's just not true.
It is yet another deliberately misleading Rightmove report. Initial asking prices that are up and even they said that some sellers are 'over optimistic'. RM conveniently ignore all the reductions in their figures.
These sort of vested interests are a major reason why sellers keep pricing so high. Obviously they want to believe that they can get a very high price for their current home but it actually just wastes everyone's time and slows down transactions.
Good luck with your offers @Areyootakingthepish

Where we are in NE London, the peak was Spring 22. 4 bed semis were going for around £700k back then, now going on the market at around £650k.

Sellers are definitely not being realistic. There are several houses on the market near us that have been for sale for months because the owners are flatly refusing to accept current market value and instead want what they 'think' it's worth instead.

We saw a nice house at the weekend, but it was so overpriced. If I even offered what I thought it was worth, the sellers would be so offended (£1.05m on a 1.3m listing) that I didn’t even bother 😂 Told the EA we really liked it but the compromises did not match the high price tag. The EA knows it’s overpriced and I said if there is any movement in the price to come back to us.

I think most sellers are in denial, and I think it’s got a massive correction coming.

Our experience is that the market peaked in late spring/early summer 2022 and that you can offer below the asking price now and buy.

We sold our house in May 22. It was newly decorated and quite smart, but nothing special. At the time property was flying off the market so when ours came to the market it was the only bungalow for sale at that time in the area. It sold for £10k over the asking price to the first person who viewed it.

A year on and there are 40 bungalows for sale in the same area. Some have been on since Christmas and many are reducing in price.

We've been renting since. Last month we viewed a house and put in an offer 15% below the asking price which was accepted.

I’ve been selling my BTL’s and looking to buy something to live in (we’re renting) and I think it’s all dropped 15%

I think it will get worse next year.

Not sure about Rightmove, I tend to look at Rics and trade reports.

Not sure about trade reports although they will obviously be heavily biased towards making people believe that the market is buoyant. I have seen the RM report regurgitated everywhere though with headlines implying that house prices are rising which clearly isn't the case. The ONS data shows 3 or 4 monthly falls now from around July/August last year.
I'm sure it will get worse in the second half of the year and 2024.

How does the offer you accepted on your house compare? Surely you accepted an offer that you believed was right for now? So what you offer will be coherent with that?

I'm confused the most recent rics report was really negative? Large majority of respondents saying they expected price falls in the coming months.

The housing market will be fairly resilient. When any random Joe can pay 2% stamp duty surcharge to launder their money through our housing system, it’s a recipe for never ending rises.