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!

UK House Price Index: October 23

• Average UK house prices decreased by 1.2% in the 12 months to October 2023 (provisional estimate), down from a decrease of 0.6% (revised estimate) in the 12 months to September 2023.
• The average UK house price was £288,000 in October 2023, which was £3,000 lower than 12 months ago.
• Average house prices over the 12 months to October 2023 decreased in England to £306,000 (negative 1.4%), decreased in Wales to £214,000 (negative 3.0%), but increased in Scotland to £191,000 (0.2%).
• Average house prices increased by 2.1% to £180,000 in the year to Quarter 3 (July to Sept) 2023 in Northern Ireland.
• The North East was the only English region which saw an increase in average house prices in the 12 months to October 2023 (0.2%), while London saw the largest fall (negative 3.6%).

https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/housepriceindex/october2023

Thanks @Twiglets1. Isn't it strange that the BBC News website has chosen not to report this months formal figures (or last months) but were willing to publish the sample of Halifax prices suggesting a rise, on 7 Dec? Seems BBC News no longer wants to be taken seriously.

Anyone keeping up will remember that last month the ONS said prices had fallen by 0.1% MoM, but they have now revised that to -0.6%.

So in summary, ONS are saying that prices agreed around May 2023 were already falling by over 1%. That will have accelerated as the base rate increased further after that.

The ONS have indeed revised the September MOM fall in prices from 0.1% to 0.6% but they did warn us at the time that "these estimates are provisional & subject to revision" - more so than normal due to lower transaction volumes. They have used the same wording this month too. Is a difference of half a percent really that significant though?

I see the BBC as more or less neutral re the way they report house prices going up and down. They have reported house price falls many times in 2023.

Maybe you don't share my faith in their impartiality, fair enough.

Yep. 0.5% MoM is significant - equivalent to -6% per annum just in revisions.

BBC have started not reporting the official data (not the odd BS or two, or RM) since prices started falling. Could be just a coincidence of course.

Has anyone else heard about a rumoured stamp duty holiday to be announced in the spring budget to get the market moving?

I haven't heard that. Seems to be wishful thinking. The market will get moving when sellers adjust their expectations appropriately and that will more than offset the costs of stamp duty.

Longer term, SDLVT is a stupid tax. It should be scrapped completely. Better would be a LVT applied annually on the size of homes and their land, together with a poll tax element to account for the number living in a household. That would replace both SDLVT and the existing Council Tax. I won't hold my breath!

A stamp duty holiday would suit me very well indeed! We bought our house as FTB but it isn’t really a typical FTB house and now we have nearly finished doing it up I am getting itchy feet to do it again, despite moaning about all the work. If we had envisioned this we definitely would have made much safer design choices.

I don’t usually post on these threads so have nothing to add except a question: how accurate are Zoopla estimates? I look at that every month and take reassurance from it, but maybe I shouldn’t?

I haven't heard that but I wouldn't be surprised.

I think it likely the Tories will come up with something big in the Spring budget to try to bribe people to vote for them again. Surely it can't work or can it??

Sorry to be downbeat but I'm afraid that Zoopla estimates are notoriously unreliable.

Thank you, that is great to know! Better to not be labouring under a misapprehension

I will be a buyer in 2024. In some respects I might be in a reasonable position - no mortgage and in rented so flexible.
But there is absolutely nothing on the market to tempt me. Lots and lots of new builds which command a decent premium over other houses and are on cramped overlooked plots compared to says 80s/90s houses. I don't want a high maintenance character property or a massive garden. I also don't want to pay a premium for expensive interior decor/new kitchens and bathrooms which won't be my style.
Given the market might fall a little bit more, I want to find a home that I genuinely like (albeit there will always be compromises).

@Twiglets1 unreliable in the sense they are over inflated?

That's fair enough. I have heard lots of people say there isn't much good property on the market at the moment, which is understandable from a sellers point of view. Why sell when it's not an optimum time to do so, unless you have to?

If I was in your position I would be very fussy and wait for the right property to come onto the market that isn't a new build and isn't a character property needing lots of work doing to it.

@Twiglets1 ?

They just aren’t very accurate because they don’t take a lot of things into account like whether a property has been extended or improved or not, the condition of various properties etc.

The price Zoopla estimates is often too high or too low, it just isn’t a reliable source.

Do you use PropertyLog on RM?

Poll tax brought down the Thatcher government? Can`t see them going back there TBH. I think the next stage is going to be local councils going bust because a lot of them have been playing at being Donald Trump with commercial property which is now crashing instead of just emptying the bins. To be fair I think government encouraged them into these daft office block schemes to find more creative ways to raise money ( or was it to help prop up the Property Ponzi, not really sure?) Councils going bust will be interesting, that is going to turn a lot of places into non-desirable places to live.

Not my version of poll tax, which would be combined with a LVT.

No just check RM a couple of times during the week and think gosh that's still woefully expensive. Some stuff hangs around and some of that gets reduced but not by enough. But some houses still fly off the market within a week.

I agree there isn't much good on the market at the moment. Some people wanting big money for 'done' houses where they've ripped out all the period details, rendered the front and fitted grey windows (basically ruined the house). Some people still wanting too much for a house that's had nothing done for 30/40/50 years and would need gutting back to brickwork, when you estimate how much renovations would cost you just wouldn't get the money back.

Anything well done tastefully sells very quickly, within days. I would assume they are achieving asking price in this scenario.

The economic "experts" have been forecasting for 2024.

HPI ranges from +5.5% to -12.1% with a median of -2.9%.

https://assets.publishing.service.gov.uk/media/6582b680fc07f300128d451a/forecomp_Dec_2.pdf

"Anything well done tastefully sells very quickly, within days"

No it doesnt, sales are down massively, that will include tastefully well done properties. You have seen a couple that sold, but that isnt representative of the whole market.

Yes I can imagine that’s the case re anything done tastefully & well still selling quickly even in this stagnant market. It’s exactly the same in my area.

Many poorly maintained or badly decorated properties hang around for ages getting reduced but the best ones still get snapped up quickly. I think buyers are more discerning in this sort of market. Unlike in a property boom, they won’t be panicked into buying something sub par but will hold out instead until they see a particular good property come to market.

I'm sure you're right crash, it would suit me if you are tbh. But I don't have the time or inclination for in depth research. My evidence is all anecdotal based on looking at what's for sale in my area and people I know are moving. Some friends moved from my street to go elsewhere closer to family. Their simply but tastefully just finished house sold in less than a week.

Thing is materials are so expensive at the moment it's going cost a fortune doing a house up compared to when I last did one. I work in the construction industry and I know how badly the increasing cost of materials has affected my projects, albeit much larger scale than a single house. Perhaps still worth it if you get a really good price on a house that literally needs everything doing. But it's not worth paying for a house that has been done say 15 years ago and is OK technically but out of fashion, as you don't get the discount for it being a wreck but you're likely still going to spend a lot on it.