Sellers don't want to admit that the market has changed!

[FantaLemonade]

I'm a ftb and have been house hunting for nearly a year. I'm taking my time and not rushing into anything as I want to find the right house within my budget etc, but I do check right move most days (has become a bit of an obsession tbh!) so I tend to remember certain properties. I've noticed a lot more sales falling through recently and properties being re advertised online. It doesn't surprise me with all the uncertainty, interests rate rises and affordability criteria changing. Anyway, this one made me laugh (pic attached). Obviously the seller is entitled to list and sell the property at whatever price they want, but what on earth are they thinking?!. The house was only taken off the market around 3 weeks ago after being on the market since end of March and having 2 reductions, which even in todays market is still a long time for the area. Clearly the sale has fallen through, but I have no idea why they think it would be a good idea to re-list and add on an extra 5k. It's not as if the market has improved in the last 3 weeks, is it?! Utterly bizarre I think. Is this just another example of sellers not wanting to admit that the market has changed?!

Is that "London Money" drying up?

Yes, a lot of people seem to struggle with the idea that prices will have to go back to where they were when borrowing rates were higher, wages certainly won`t fill the gap left from a global cheap money bubble bursting!

@CrashyTime It will be even worse when you factor in people who have borrowed a lot on cheap rates to fund extensions. I know a couple with low to average salaries. They didn't have the best credit, so even with combined earnings were only able to borrow £160k. They had to get a 30% deposit from their parents just to get a small 2 bed. I remember them bragging about borrowing an extra £130k (might be more by now) for renovations. Yet the house still has a small downstairs, tiny kitchen, small garden, and they've removed the only external access to the garden. The condition is still pretty much the same. I'm sure they'd expect to get back what they spent on it, plus some profit on top but I don't see that happening now. Can't imagine what their repayments will go up to once their fixed rate ends.

People are not often forced to sell their properties, though.

Most people selling to a FTB will be upsizing, and they won’t be able to accept a lower price unless their vendors, or vendors of suitably upsized properties, reduce the price.

Many people will stay put rather than sell at a loss.

So not much moves… which is the current situation in many places.

"Can't imagine what their repayments will go up to once their fixed rate ends."

Scary to think about really. People actually used to brag about their debt didn`t they? Seems from another world now.

People who need to sell for whatever reason will reduce the price, the last Halifax statement on house prices had them down about 5%, and that is before the true impact of rate rises even kicks in!

I think one of the biggest issues is that a lot of sellers, primarily those that have done most of their buying/selling in the last 15 years, don't realise that it isn't just the interest rates that have changed. Buyers' mindsets have as well.

You forget that some of us, over a certain age, bought in the 80s when building societies rationed mortgage lending - so we might have had to wait 4 months, just to get the funds allocated to us, before we could go house hunting. Interest rates were 15% for me on my first mortgage. I remember the big property crash, when many people had taken out maximum mortgages and found themselves in negative equity. We used to see all the banks’ repossessions on the news.

Our attitude is, we’ve seen all mindsets in the last 40 plus years and this current state of the housing market won’t last forever, because fundamentally there is an overall shortage of homes.

Where we live, the fall in house prices in the last year has been 0.02%, because people move out of London to here, as it’s cheaper, has outstanding schools and there’s a better quality of life. Londoners keep the house prices fairly stable.

I think this is to do with the AD on RM. A neighbour of mine did this, sale fell through and so 10k was added then they reduced the 10k back off and it showed up as being reduced this meant it would show up if searching for properties listed in the past 24 hours.

Interesting to see prices had risen by 6% in York to August. It definitely feels like they’ve been dropping for a while so I think that increase will slow or stop once sales register from later this year.

I looked at a house recently which is on for £300k. Everyone I’ve spoken to says it’s not worth a penny over £250k. It’s a much smaller house than others on the same street which have all sold for around £300k. Its been on for about a year and the sellers will
not budge on the price (it’s a probate sale). I’d be interested at the right price but it needs too much work. As far as I’m aware they’ve had plenty of offers but appear to be living in cloud cuckoo land about how much the property is actually worth.

This current state of the housing market is the change from cheap lending to more historically normal lending rates, the housing market of the last 20 years is never coming back, the 80s was a different time, back then the only debt most people had was their mortgage, now the fallout of higher interest rates is much wider and much more damaging to peoples finances. The BBC2 programme that went out tonight and I linked to in the other thread doesn`t happen by accident, they are prepping people for a very large property crash.

the 80s was a different time, back then the only debt most people had was their mortgage, now the fallout of higher interest rates is much wider and much more damaging to peoples finances.

You must have been living somewhere else to me. The world I lived in, it was quite normal to buy cars on HP. People still had overdrafts and credit cards. Businesses had HP, overdrafts and loans. I remember an ordinary firm of high street solicitors might have a £100,000 overdraft. I also remember the next week, a client telling me they couldn’t sleep, with worry about their overdraft. Overtrading was a problem, because their customers wouldn’t pay them; and there were insolvencies. There were three million unemployed iirc, at one time.

If people had their house repossessed, they got a poor credit rating, no chance of getting another mortgage in the short term and nowhere to live. How was that not a serious situation for them?

This current state of the housing market is the change from cheap lending to more historically normal lending rates, the housing market of the last 20 years is never coming back, the 80s was a different time, back then the only debt most people had was their mortgage, now the fallout of higher interest rates is much wider and much more damaging to peoples finances. The BBC2 programme that went out tonight and I linked to in the other thread doesn`t happen by accident, they are prepping people for a very large property crash.

I totally disagree. Personal debt was rife then too. People were hugely indebted aside from mortgage debt with high unemployment, negative equity was common and there were many repossessions. The only difference is that there was more social housing available for the families made homeless. This would fall heavily on any future government. In the past property values have been cyclical and with limited supply and a growing population it probably will level out eventually, but when, nobody knows.

Sorry @Quisquam but this really is a misrepresentation. Most people in the 80s did not have massive car loans, large credit card debt, etc. Some may have done in your world but that was unusual.
The financial big bang was only end of 1986 and loose lending took off in the early 1990s which is when debt started to escalate.
The amount of debt that governments, households and businesses have now, 50 years later is so many, many multiples of what people had then. The situation now is nothing like it was and you really shouldn't pretend otherwise.
The situation now, in terms of levels of debt, is precarious.

The situation now is nothing like it was and you really shouldn't pretend otherwise.

Do not patronise me, by accusing me of pretending. You haven’t answered my question - how was the situation for people with maximum mortgages, and whose property was repossessed by the lender, not serious? If you were on the verge of bankruptcy then, how was that not serious?

I think its more about the amount of people that are in that kind of debt now is a much, much larger pool.

Plus, limited to no social housing available, even as a last resort which wasn't the case then.

I don't think any generation has had an easy ride, but today's situation feels particularly bad.

I didn't say that did I. You know the answer to your question so there is nothing to be gained from answering it.
You are trying to imply that people/ businesses (and governments) were as indebted back in the 1980s as they are today which is simply incorrect. I am pointing this out and you don't like it.

Well if sellers don't want to adjust to new market conditions that is their privilege.

There are unrealistic sellers. But there are also unrealistic buyers.

If sellers keep the prices too high no one will sell and the market will beat some sense into them.

But there is no point bothering yourself with people who are unrealistic. Just let them know what you think and move on. If you like the house that much, then letting the EA know that you like it but would only pay X is a way of leaving the door open in case the seller has a change of heart.

A lot of sellers are delusional! Just had an offer accepted on a property - prices in the area were inflated grossly over covid. We have signed on 60k under budget even then I felt it was over it was over priced - but I’d fallen in love with the house. We have a full and final and walked away - 5 days later they came and accepted.

I don't think you can really blame people for wanting to get the best price possible for their asset, and you can't blame buyers for wanting to pay the minimum. It's just negotiation and shouldn't be taken personally.

After all, I doubt whether there are many people here who would willingly give up 50k unless they thought they absolutely had to.

Well I dont agree with you, the average 18 or 19 year old in the 80s didnt have a car on monthly payments, a credit card, access to cheap flights all round the world (that kicked off in the mid 90s) and dreams (nightmares?) of buying a house in London at 15 times their income, IMO to argue that it was a similar world is just ridiculous, and I dont know why you would try to do that? The MASSIVE difference that you also seem to be missing is that the 80s debt was priced at realistic to high market rates, that discouraged most people from going overboard, the exact opposite of what has been happening for the last 15 years or so!

I don't think you can really blame people for wanting to get the best price possible for their asset, and you can't blame buyers for wanting to pay the minimum.It'st negotiation and shouldn't be taken personally
Agree with this, but think people do take it personally on their home because they see it as an emotional judgement on their home rather than a valuation of an asset in a fluctuating market.

I know someone who keeps thinking about selling their home. They're convinced that a house that might need a rewire, needs a new bathroom and new kitchen and a full facelift is going to sell for the same price as other houses locally that have been modernised. They tell me what they're being quoted by estate agents and it's in excess of what other local well-presented houses are going for. They now think people are being cheeky for offering a reasonable offer.
I blame the estate agents for leading them up the garden path.

If prices look like they are rising, that's likely to be because more expensive houses than usual are being sold.

I looked at York yesterday, 200-400k homes. 47% of them have been reduced. That's the highest level of reductions I have seen in any one location during a few months of monitoring three others - by 8%.

Good points, the massive drop in sales has skewed sold price statistics upwards (these stats are based on deals done many months ago) giving sellers one last chance at self-delusion, it isn`t going to last, the moves on bond markets are starting to get very pronounced.

Yes, it's across the board in the York market. We started looking in autumn 2021 when it was all madness. Over that time we've bought but I still keep an eye on Right Move and almost nothing sells before it's been reduced. Our house would probably go for 50k less now I reckon; we probably overpaid even when we bought. People are rationalising it away ('that house has gone for 100k less but it IS nearer the main road' type stuff) but any 6% rise is old numbers now.