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!

Depends on where you are. Around here, the done up ones go quickly. The ones needing gutting hang around for months.

But not much comes into the market - currently 8 properties on the market within a half mile radius (which in London is actually a lot of houses).

Article in the Guardian today: UK house prices on track to rise 3% in 2024

After a year of sustained price falls in 2023, the global property consultancy Knight Frank said it was updating its forecast for UK house prices to rise by 3% in 2024, up from an earlier estimate of a 4% drop. Against a backdrop of falling inflation and growing anticipation of interest rate cuts, it said it expected that rising mortgage approvals seen in recent months would translate into at least a 10% increase in transactions this year.

Rightmove said asking prices for new sellers had risen by an average 1.3%, or £4,571, between December and January, the biggest increase for the time of year since before the pandemic. While prices overall remain 0.7% lower than a year ago, it said there had been a “tentatively promising” start to the year, with 15% more new properties coming on to the market, and growing buyer demand. About 20% more sales were agreed at the start of January than at the same time a year ago, indicating returning confidence, it said. Since Christmas, Rightmove said it had seen nine of its 10 busiest days on record for people getting a mortgage in principle to see what they can afford to borrow.

Banks, building societies and estate agents had previously all predicted falling house prices for 2024, but a succession of unexpected monthly rises in the past three months and a larger-than-expected fall in the official UK inflation rate has prompted a reassessment.

Tom Bill, head of UK residential research at Knight Frank, said the outlook had become more positive over the past three months as interest rate expectations have changed. “The best five-year fixed-rate mortgage is now under 4%,” he said.“Data from Halifax and Nationwide certainly suggests a corner is being turned. While the former reported a 1.7% increase in 2023 and the latter posted a fall of 1.8%, that compares to a 5% decline that both identified in August.”

https://www.theguardian.com/money/2024/jan/15/uk-house-prices-on-track-to-rise-3-in-2024-says-leading-agent

They won’t be going down in my town anytime soon thanks to people from London flooding in and buying up all the properties and people buying up homes and turning them into airbnbs. It’s become completely gentrified over the last few years.

2.5 k drop just this month in London

https://uk.finance.yahoo.com/news/average-price-tag-home-jumped-095614319.html

Thing is, if the house costs £1.5m, a £2.5k drop is really not much.

No it's based on the average I think, which is about 700k.
Your right though, it's not much in a month, but quite a bit if it happens every month ;)

I'm trying to avoid weekly commentary on whether prices are rising or falling. I don't believe that it is particularly instructive in the scheme of things. Instead I'm just waiting for the ONS figures in Jun/Jul which will indicate how much prices rose or fell in 2023 and my guesstimates will be held to account then.

As the London equity dries up this should happen less, and I can`t see AirBnB being a good place to be if we get a recession, many will go back to long term rental IMO, helping to put more downward pressure on rents.

You mean if the seller is asking 1.5 million, the house costs what someone is willing to pay in the end?

Someone selling a 1.5m house will probably be dropping 100k at a time.

The 2.5k fall in London asking prices in January apparently represents a fall of 0.4%, according to the article.

A house is only ever worth what somebody is willing to pay.

Interesting as I've finally noticed houses coming to market a bit cheaper round here. Perhaps Birmingham just always lags behind?

Well it used to be what someone was willing to lend because large numbers of the public seemed to separate their brain from reality when it came to house value over the last few years and just took as much debt as they could get? The sellers were loving it of course.

Or maybe Birmingham reflects reality while someone with a VI in property is just trying to encourage/scare people into the market?

Buyers & Sellers are often the same people Crashy. Most sellers are also buyers (moving to a different property) so they aren’t loving high prices either.

Downsizing sellers were loving it, looks like the gravy train has come off the rails now though?

If you can compare people with a lot of equity in their homes making a bit less profit on the sale to a train coming off the rails then Yes.

Hi, I'm new to the thread. Our house is going 'live' this week and for sale board going up on Friday.

We've seen a house we like the look of, viewing is on Saturday. Traditional 3 bed semi and it's on for £220k. It's been up for sale since last July. Not sure if it's had any offers on it, until we ask the EA on Saturday.

Looking at similar houses in that road, the last one sold for £192k last April 2023.

The house we're interested in has a long galley kitchen where there is definite scope to knock into the adjacent room and make a big kitchen diner. It also only has 1 toilet so would also think about incorporating a downstairs loo.

We're just wondering why it's on for so much and hoping they aren't holding out for the asking price.

I don’t think anyone can tell you why it was valued so highly compared to the last sold price - maybe it is in much better condition than that one, has a bigger square footage or maybe the owner was just unrealistic and wanted it listed at an aspirational figure. Regardless of the reason, it has now been on the market for 6 months so should have been reduced down to about 200k in my opinion.

Until the viewing & a frank conversation with the EA, you don’t know the history of the house as possibly it had previous offers that fell through? In any case you shouldn’t offer any more than you think it’s worth which may well be under 200k. I would post on here again once you have viewed the house & spoken to the EA about the price. Try to apear a little interested but not too interested.

Is there a more depressing indicator that recent prices are bad for the economy?

Check out my tools for buyers thread, and especially the last video which may give you extra tools for that viewing.

Are you using PropertyLog to see what other sellers in the area are doing?

Lower housing costs should mean MORE money going into he economy, but you mean that people can`t move about so easily for work if they are living with parents?

Well no, I was comparing the whole cheap lending bubble coming to an end as a train coming off the track (I visualise it as a large Gravy Boat shaped waggon leaving the track, flying into the air then crashing down an embankment) but of course with demand and sales way down if you cant find a buyer you dont make ANY profit!