Will house prices fall sufficiently to offset the increase in interest rates

[rosetintedmemories2023]

For most of my adult life (I am 30), people have told me that it would be easier to buy if interest rates were higher as this would depress housing prices. I would then find it easier to upsize and FTB would find it easier to buy property provided they had a decent deposit. The only people who would lose out were investors and downsizers (and downsizers could probably afford to wait).

This doesn't seem to be happening; yes house prices are falling or at best stagnating in many areas. I think it was much easier in 2019 for me personally when we bought a 2 bed flat as there was a slight dip in london flat prices at that time due to brexit (and interest rates were low). I don't envy FTBs today.

Older mumsnetters who have experienced the 1990s house price crash, would love to know your thoughts esp if you bought and sold in London. Thanks.

Actually, step back and look at what I posted. Lots of those facts DID sell in 2022 and 2023.

@XVGN

I read what you posted. I don't think all the sales in your first post are in the same building and judging by online news reports, they failed safety checks at different points.

I have a friend who owns a flat in a building with cladding issues and she was planning to put the keys through the door of the mortgage provider and move abroad until the govt announced their intervention with high rise blocks.

I really don't see that this issue has anything to do with interest rates apart from maybe being the final straw for some very distressed owners.

It's the final straw. Actually, it's the end of a 13 year aberration.

@XVGN

Do you not think it's just a tad disingenuous to post sale figures for a specific property and ignore all other highly relevant contextual information?

Those kinds of posts just come across as a bit desperate to prove a point.

If you are right then you don't need to trawl through data looking for the worst case scenario to convince us of it because we will already know about it.

I'm sorry that you feel that. I wanted to answer the OP question about whether prices will fall to account for increased interest rates. Yes they will.

The data here indicates that we are returning to a normal period - rather than something unusual. People should not be hoping for, or expecting, a return to low interest rates. That was an aberration.

It also demonstrates that prices can and do fall, and that it can take many years, not just 2 or 3, to get back to where we were. This is important as many folk here are suggesting to FTB's and movers that a blip in price is likely to be temporary. It may be but I feel that is unlikely. All of this is very useful information in the decisioning process. It can save people making costly mistakes.

@XVGN

You don't think it was in any way disingenuous to post sales about a building with cladding issues as proof of your theory?

The fact that you haven't been gracious about this and have just doubled down makes you look dodgy as hell.

I notice this all the time on the property boards, there are a very loud minority with a very clear agenda. I'll add you to the list of posters to ignore while reading. Cheers.

Lol - I think @XVGN was rather cherry picking a particularly bad postcode as they like to wallow in how bad it's all getting.

We could all easily pick postcodes that would show a different picture.

@XVGN your post is inappropriate for this thread. There will always be anomalies but exceptions do not prove a rule.

@Twiglets1

I should really stop bothering with the property threads, there are so many people posting in bad faith, it makes it all a bit boring and pointless.

No please stay - we need to keep the people with no agenda!

in relation to the mortgage term, I bought in 2004 with a 25 year mortgage age 23. I moved in 2008 with a new 25 year mortgage age 27 and again in 2015 with another 25 years age 34. It should be paid off when I’m 59. For those saying 35 year mortgages are a bad thing, how is that different to me having originally taken out a longer mortgage initially age 23 for a bigger house?

Genuine question by the way - this all baffles me somewhat!

@HippyDays

I can only think you are less likely to face negative equity at any point in your life as you’d built more equity over the years by moving up the ladder. That’s my suggestion

@HippyDays the trouble is if 35 year mortgages become standard everybody has more money to access, which pushes prices up.

@LadyTemperance by now 35year mortgages are standard

I agree that 35 year mortgages are now the norm.
I actually think house prices will drop slightly, but to a plateau. I don’t think they’ll move significantly with the rates. I think the rates will
fluctuate faster than house prices.

You would have repaid a lot more capital than if you would have taken a 35 years… whether you decided to then take the outstanding borrowed amount over 25 years at each re-mortgage stage is more a personal decision. There are useful comparison tool online but the cost (I.e interest paid to the bank over the period) exponentially increase with maturity terms. At 35 years, it’s pretty much interest only the first few years.