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

We are in SE London

3 bed semis were going for around £600-650k back then, and now going at around £650-675k.

This is your problem though. You can think everything is over priced, but you can only buy a house at a price someone is willing to sell it. So your choice might be a) pay more than you think a house is worth to progress the move or b) lose your buyer or go into rented, and wait until houses are selling for what you think they should be.

When you sold, did you accept an offer at 2021 prices?

Nationwide believes house prices are rising again (I know some people will say they have a vested interest but they have data)

My opinion is that you never know when the bottom of the market was until you have passed it and prices are rising again. We know the market isn't at the top at the moment, so it's not a bad time to buy (maybe not the best but definitely not the worst)

https://www.theguardian.com/money/2023/may/02/uk-house-prices-rise-nationwide

I’m in the SE but I have no idea where the supply side of the market is going.

We have a severe lack of builders, a competent bricky on £250 per day in 2021 is now commanding £400 per day. It’s the same with carpenters, roofers and window fitters.
I have a few properties I rent out and I get 30-40 enquiries every time I put one on the market. That will also affect the market.

I agree we peaked in summer 2022 but I don’t see prices dropping dramatically.

Agree about not knowing prices have dropped until a good while after it's happened.

Where I am (east anglia) prices have not dropped, they are still edging up.

Yes we’ve accepted an offer at about 5% under asking.

Exactly so no one wants to buy a doer upper as it just doesn’t make financial sense at all. Anything decent is just very overpriced.

The thing is though, borrowing is just so much more expensive. That’s not borrowing any more money either, that’s just servicing the debt. So naturally people’s budgets shrink and therefore I don’t see how you can keep pumping prices.

So maybe it would be reasonable to assume that you will also be able to buy at about 5% under asking.

But if you bought in Summer 22, AND fixed for 5 years at low rate, then I’d argue you are about the same as if you bought the same house now for 5% less but have to have a rate of 5%, albeit you could not fix for so long…

please feel free to check my maths:

£300k house. £60k deposit. 2% fix for 5 years
= £1k pcm
-5% dip
£285k house. £60k deposit. 5% fix for 5 years
= £1.3k pcm
So £15k saved, but £18k more in interest over a 5 year fixed period.

I’m just talking about house prices not affordability. So there is no need for me to check your maths.
My comment was merely that the market seems to be showing tentative signs of recovery, if you believe the Nationwide data. I think it’s still a buyers market but not to the extent that buyers can expect absolute bargains just because their mortgage interest rates are higher.
I would expect most buyers to be able to negotiate about 5-10% off asking prices currently, though this can be dependent on area. That’s not an unusual situation. I’ve bought several houses over the last 30 years and the reduction in asking price is normally in that same ballpark region.

@Twiglets1

Bargain? I don’t think such a thing exists in the U.K. housing market.

I could quite happily see no “recovery” to the housing market, as a FTB who might buy in the next year. If prices remained constant for 10 years, and salaries increased, then everyone would be better off. The only people who lose out are landlords and old people in their final house.

That's a one month rise after seven months of declines in price according to Nationwide. As I'm sure you can see the trend has been downwards. A one or two month rise doesn't negate the trend. If the rises continue for seven months consistently that would obviously be different. Even the most successful companies have dips in their stock prices, nothing ever goes up/down in a 100% straight line.

@Areyootakingthepish have you considered selling and renting? If you want to sell and buy at the same time, it is going to be more difficult to negotiate a lot off asking prices as your buyer may get fed up.

I know the trend has been downwards just interesting to note something different in the latest data, from Nationwide at least.

@rainingsnoring we would but need to port our mortgage which is on a really good rate. Otherwise we can’t afford to move. That’s what I don’t understand, who can afford these prices when the cost of borrowing has got so high. Unless you’re getting inheritance I guess.

Even old people in their final house might wish for a stagnant housing market for the next 10 years for the sake of their children. That is very unlikely to happen over such a long time scale though, in my opinion.
Over one more year possibly, but not 10 years.

Did you say you are in London? I'm sure there are far more people receiving large gifts inheritances in London and SE then in the rest of the country. You would probably be competing with more wealthy foreigners too.
If you need to port your mortgage, what happens in 2 or 3 years time when it runs out if rates are still 4 or 5% or even higher?

Well yes that’s all true but we are not one of the wealthiest areas of London, quite normal folk around here!

yes we have stress tested up 6/7% but it’s just in the next few years we are getting hammered by nursery fees so need the lower rate for the next few years.

SE London is quite a large and varied market. Schools seem to play a big factor.
I think you are right, the market there peaked summer 2022 but most sellers now seem under no pressure. That is, they are selling because they want to, not because they have to (death, divorce, debt).
I've just searched and found a 3 bed end terrace house (needs full renovation) that was listed summer 2022 for £1,700,000 and gone under offer in last two weeks. Do I think someone is paying that amount? No I do not, but only time and land registry will tell for sure.
The bank of England rate will keep rising until inflation is under control, so at some point people will have to accept that summer 2022 prices were the top and accept offers accordingly. Or simply withdraw and wait because they don't really need to sell.

I think this is very area dependant. Prices didn't seem to peak last year in my area - things are still be listed higher than normal regions sold prices and going over asking (from what see and hear).

*previous sold prices (not normal regions)!

In my area (East London) prices are still high because supply has massively reduced. People don’t seem to be selling unless they have to. From covid up until recently there was a steady stream of nice houses being sold by families moving further east and out of London. That seems to have completely dried up now.

It’s not just about wealth in the traditional sense now in London though. There’s huge amounts of money being passed down generations for very ordinary houses.

I’m originally from SE London - standard working class family. My aunty and uncle died recently, they never had dead posh jobs but they worked hard, always saved and bought their very average terrace 50 years ago. My cousin is now a millionaire because he’s an only child so he inherited everything.

He’s quite normal so you wouldn’t think it if you met him - he’s not flash, still has the same hobbies and frequents the same places but now he lives in a slightly bigger nicer house he owns outright instead of social housing.

The buzzword of summer 2022 was undeniably "market peak," with investors and retailers nervously wondering if the economic rollercoaster had reached its apex. In such volatile times, staying ahead of the curve requires data-driven strategies.