Large price increases since last sold

[Give0fecks]

I’ve noticed a lot on this forum lately people saying “what did the vendor pay for it when it was last sold” eg buyers on this forum seem to feel they should be paying close to pre Covid prices.

I mean really?! I know it’s area dependant but prices here have shot up by over 40% in the last 5 years and there isn’t a chance in hell they are going any where near back down.

I actually have no agenda as we are trying to upsize so it would be great for me if house prices did reduce, but it’s just not going to happen to any significant extent here.

Even nationally I could see maybe another 5-7% but not back down anywhere near pre Covid levels?

thoughts?

A vast increase is an increase far more than what a reasonable person would consider acceptable.

You say it yourself : "little bubble". Implying that your area is special. And maybe it is. But it's not the general case over the UK.

You are seeing the whole of the UK in terms of your own area. It's not the case.

If a price has increased by a significant amount, then you need to ask the reason why. If every house in your area appears to have increased in price significantly, then that is a potential explanation. But what I am talking about is stand out increases far and above what the local market has experienced. I've seen stuff priced at 400k that really should be on at 200k even after local rises. These people genuinely do exist out there - chancers that are hoping to strike it lucky by buying a place, putting it on the market at a vastly inflated price and hoping someone will come along and not do their homework and pay the money.

The general prinicple of looking at what a house previously sold for in terms of price in order to get some idea of whether it is currently priced appropriately or not is a sound one, as is looking at the sold prices for similar houses in the area.

Prices have definitely gone down in my part of the North West. I bought my two bed terraced house in a great area (conservation area with outstanding primary schools) for £121,000 back in 2016. Waited for my tenants to move out earlier this year. Sold it for 143K. In the summer of 2022 it was valued at 180K. There are unrealistic sellers who will wait a long time to sell if they won't reduce the asking price.

My main thought would be- You have stated an opinion, but what is the thinking that leads you to that conclusion, what economic factors are you basing that on?
I think your idea is false, I think people are dreaming if they think a 2017 price for example (sub zero interest rates) somehow HAS to be higher now (heading for 6% interest rates) all the wages rises are being eaten up by COL and mortgage debt costs now, they can`t be the factor that drives prices higher?

I think the term "Ladder" should be retired now, it is a debt ladder yes because as mortgage rates rise you pay more to live in your house, but that isn`t really a positive use for a ladder?

But are these houses listed at inflated prices actually selling in your area? A 33% increase in less than 2 years having made no improvements is just pure greed.

I my area and others that I follow, there is a lot of huge price inflation going on in asking prices but they aren't selling and are gradually being reduced, often too slowly and by too small amount which means that they still don't sell.

I disagree with you that prices will only fall 10% or so for various reasons which I have already given on other threads. You are right that it will vary in different areas/ for different types of property.

@rainingsnoring some selling, some sitting on the market. Maybe about 50/50. But the vast majority with no reductions, even after months.

They are large houses owned by mortgage free older people who aren’t in a rush to sell, and want to wait for the right price. Some say they will just wait years for the market to recover. Some have already moved out so the properties are sitting empty but they still don’t reduce.

In my small rural area, if they all
hold out the prices stay inflated!

I don’t disagree about greed, long story but we have had a terrrible time trying to buy and being royally messed around by vendors on 4 different properties - and sorry to say all these older people type who feel they “have all the power” in the transaction.

The types who feel they "have all the power" are going to be disappointed, they will be staying in their houses for a very long time. LOL

Good advice, the chances of getting someone "just paying the money" now is minimal, almost non existent I would say.

The problem is that there is a cost for doing that. They will continue to rack up council tax and bills for maintaining the house, gardening bills, insurance. Houses do not really like being left unoccupied, especially in winter.

I thought you were talking about houses bought in 2021 and then listed with a 30%+ uplift. Are these the same houses that are owned by older people? Seems odd that they want to move already. I think they will be waiting a very long time for the market to 'recover', possibly never in real terms. Perhaps their greed may come back to bite them. Sorry you were messed around so badly by some many sellers.

@GasPanic is absolutely correct about costs mounting up with empty homes too, more things likely to go wrong in an unoccupied house so it's possible that owners may get fed up with this or be unable to afford to run two places after a while.

We bought in early 2021, and three comparable houses recently came on at c. 25% more than we paid, all under offer within a month. I obviously don’t know what they accepted but suspect it’s more than we paid. This is in London. Every area is going to be different.

Yep, lots of people can`t afford to run two houses, all the heating bills in winter and double council tax in some places, many will eventually buckle and just sell for what they can get, this will keep the market moving and prices reducing.

Sounds very unlikely they got 25% more, can you link?

@CrashyTime It would be too outing, but I doubt they accepted a lot less after 1-2 weeks.

Ok, fair enough.