House prices

[Twiglets1]

Hi Guys, we got to the end of the last thread so need another one on this controversial topic!

And to respond to @CrashyTime I don't say "demand is strong" over and over again. In fact, I rarely comment on demand at all. My posts are more focussed on house prices and interest rates/mortgage rates.

And I don't deny economic "reality", I just don't exaggerate how bad the house price correction is likely to be. I have a running bet with @XVGN that property prices generally will fall about 5% in 2023 and another 5% in 2024 so I do believe prices are falling in most areas. Just nothing like the 30-35% crash predicted by some!

Yes, London especially looks ripe for a proper implosion, good news because people throwing London bubble money around has caused multiple smaller bubbles up and down the country.

I think there are lots of people who are over exposed. Defaults have already increased, despite some government intervention, although not to a high level yet.
So far, we have seen not only real falls but also nominal falls. I would expect these to worsen as the economic situation worsens but agree with you that the government will absolutely wish to avoid a 'crash', particularly in an election year. I think this is one of the reasons for the limited/ poor reporting and the positive spin which is being put on figures and the probable inaccuracy of the stats.

This Sasha Yanshin is worth watching. He is a little shouty but explains things clearly.

That is a good point about London with people moving or investing further out. Halifax & Nationwide HPi seem to be out of touch as they only cover about 20% of the market and this doesn't show the cash buyers. I would say by the end of 2025 maybe into 2026 all of the gains from the covid bubble will be wiped out.

The government is considering a radical scheme to help first-time buyers by guaranteeing mortgages which would require just 1% deposits. Government sources said a Treasury-backed scheme to help “generation rent” is one of the big ideas being discussed for Mr Hunt's spring Budget on 6 March.

However, property experts warned that the “short-term political fix” could backfire by pushing up house prices without addressing the dire housing shortage. The audacious measure would be a significant extension of the government’s previous Help to Buy scheme – which saw Britons able to purchase new build developments with only 5% deposits.

Banks and building societies still typically require deposits of at least 10%, sums which young renters continue to struggle to save. But by backing lenders to create 99% loan to value (LTV) mortgages – involving deposits of just 1% – it would mean many renters could buy a home with a deposit of just a few thousand pounds. But some property experts warned against the idea of 1% deposits – arguing it could overheat the market and inflate house prices.

https://www.independent.co.uk/news/uk/politics/sunak-hunt-budget-mortgages-deposits-b2481536.html

I wonder if Jeremy Hunt has an interest in propping up house prices? Oh, that's right.

https://www.standard.co.uk/homesandproperty/celebrity-homes/jeremy-hunt-property-portfolio-chancellor-homes-downing-street-pimlico-surrey-southampton-b1033210.html

It's a real death trap for FTB. A slight decline in prices and they're in negative equity and all the perils that entails.

Well...20/21 was insane

I'm starting to see houses bought at the height of the covid madness coming back on the market...for more than the 20/21 buying price! (I assume they bought with a 2/3 Yr fix?...)

None of them are moving, unsurprisingly

A house I've had my eye on (if I ever win on the lottery...) has just stc at £560k...it was first put up for sale at £675k...12 months ago. That's a BIG drop in price.

I still think it's overpriced tbh and expect to see it back for sale in a few weeks, sadly.

Good luck. Remember that prices are set at the margin. If four properties out of 100 identical properties sell, then the prices they achieve reset the market for the other 96.

As someone who bought their first home recently, I am not convinced this will help so much. Deposits are an issue, but I think salary multipliers on mortgages and affordability checks are even more of an issue- for example having large fixed childcare costs, student loan debt, car finance etc all impact how much you can actually borrow, it's not as simple as 4.5x your gross salary as some people report.

I also think that a lot of people who've rented for a long time aren't so keen to buy at any cost, and people are savvy about the issues of negative equity.

Around here, a lot of starter properties are increasingly bought for short term let e.g. Air BnB, which is the worst of all worlds as they aren't even available to rent! I think until Air BnB is properly regulated (even to the same level that private rents are regulated), in my area there will be significant pressure on housing which will probably prevent any sort of price crash.

There are a lot of houses being built around here, but on one estate I looked at they smallest homes they are building are 2 bed semi-detatched houses with an asking price of £275,000- that's not really "starter home" territory in a place with historically low wages.

Hi, I wonder if any one on here has any specific insight into Scottish house prices? It seems very rare for the houses to drop below the "home report value" with some houses sat there for years at the same price. Seems madness in a falling market. I think our house probably would have achieved £410k a year ago, but now more likely £350k(rural area that attracted Londoners during COVID) . We are going on the market end of February, moving to Scotland. I'm a little concerned that, whilst we are willing to readjust our expectations,many vendors are not. This will surely scupper onward moves?

www.rightmove.co.uk/properties/139155821

So we viewed this house yesterday.
Shown by a guy who was obviously an EA Saturday part timer and he could only partly answer our questions. I did ring the EA main office afterwards and they managed to answer my immediate questions.

The house is ideal for us. I think we would leave the kitchen as it is, particularly as it has a separate dining room, but we would add a toilet under the stairs.

There is no onward chain and we think the vendor is living with her partner in his house, hence why it's been up for sale since last August. The house was warm but it didn't seem lived in. There was no food in the fridge.

She has had offers previously on the property - the EA didn't reveal what they were but was obviously eager to see if I wanted to make an offer. I did tell the EA that it's very overpriced and what I'd discovered about the latest house sales in the area over the past 10 months.

She is also open to offers, but who knows what her bottom line is.

My house hasn't yet sold so I'm not really in a position to offer yet but if I were I'm unsure what to do. It also depends on what I get for my house. I'm paying off my mortgage so don't need to do all of that mortgage markarkey thank goodness.

My very top amount for a house is £210k and that would ideally be move in condition. This house isn't worth that though.

Would it be best to offer £195k with a view to going to £200k - or just say my best and final offer is £200k and then just walk away?

You'll get different answers.

If the property is worth £200K to you (we know you can afford it based on the other details you provided) then I'd offer that as the maximum comfortable offer - along with all the recommended other actions and words.

It seems like the target price for that property is £210K so it would be a good deal.

@BG2015 sorry but I’m laughing at the fact you looked in their fridge!? It would never possess me to do that!

Re your question - only you know how it compares to other similar houses, but personally when negotiating I like to start off at A and then raise to B if rejected - but say that B is my best and final. That way if they accept it both sides feel they’ve achieved ed something and you don’t get drawn into nudging ever upwards. Everyone’s different but that’s the approach I take.

I honestly didn't do it on purpose - I was looking for the fridge and freezer which were side by side under the work top as we couldn't work out where they were and just noticed it was empty.

I really aren't 'that person' lol

Hopefully the bond market is coming for the UK government soon, it will be like the scene in Jaws where they spot the shark closing on them from the stern of the boat. I genuinely feel sorry for anyone economically illiterate enough to buy into any of these Help The Developers schemes, they will be caught out badly if rates stay up or need to go up further. Hopefully enough people will be off their fixes from the SD scam before this nonsense sees the light of day to demonstrate what happens when you get caught on the wrong side of rate rises with bubble debt.

You need to look at historical prices and also use PropertyLog to see where the sentiment of other sellers is at the moment, IMO they would be doing well to get 150K.

Yes I agree with the tactics you mention, and I am also laughing at the thought of a buyer looking in the fridge. Just shows that when you're selling no area is out of bounds! 😂

I'm afraid your opinion is slightly discredited Crashy from the fact you think every property mentioned on Mumsnet is overpriced.

You're consistent though, I'll give you that.

Do you hear the Jaws music in your head Crashy every time someone posts on Mumsnet about a potential property purchase?
"you're gonna need a bigger boat!"

Honestly, you aren't in a position to be offering or formulating an offer until you have sold your own home. You need to have your own place under offer for you to be considered a serious buyer. Only offer once you are in a position to be proceed.
Personally, I don't know why you would want to pay more than the 192k that a v similar property on the same road for in April 23. The market has fallen since then so maybe 185-190k but it's up to you. Obviously, what you an afford will depend on what you are offered yourself.

I agree with @rainingsnoring in that it’s highly unlikely anyone will consider an offer as meaningful until you yourself are under offer. I saw the house I’m hopefully buying before I’d even gone on the market and it was what motivated me to get ready and list asap. Luckily mine sold quickly and I was able to secure it.

@Twiglets1 making me chortle yet again with your posts 😁

Yes I did say that in my post that I'm not in a position to offer yet, but always good to get your thoughts in line.

Properties around here seem to selling quite quickly. I've been keeping an eye on them for 6months or so, obviously I don't know what they've actually gone for as those figures aren't available yet.

I'm just confused as to why the vendor hasn't thought why her house hasn't sold? Maybe she's genuinely in no hurry with having no need to buy on. She could be quite happy to wait it out...but how long for ?

I'm looking at a house up for a "guide price" of £235-260k, it needs new windows and new kitchens and bathrooms as not been updated in 20 years but still functional so I get that's personal preference. It's tattier and outdated compared to others of a similar size in the area have sold. There is only 2 recent (last 2 years) comparable properties nearby that have sold for £256k and £226k (but that one was leasehold)

We personally think it's worth £235k but we would like to try and get it for less as we would want to do so much to update it.

What does guide price even mean?!

We are tempted to place an offer of £210k (it's been on the market for 9 months and is sitting empty with only "a couple of crazy offers made" said the vendor.

Would £210k with a view to negotiating up to £225k be way off the mark considering there is a "guide price" starting at £235k?

Oh and to add it was listed for £280k and dropped in September to £235-260k

I hear the Jaws music every time you post one of your "expert" articles, they are paid by the banks to set up the bait.

Some insist on it. KFH, for example. Specific online form they make you fill in.