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!

Aw how sweet to hear what you dream about

Loads of people are celebrating the end of the cheap debt bubble, it was one of the silliest most damaging things to hit UK society in decades, the idea that property should be mega-expensive with decades worth of debt attached to live in a property is in itself one of the most absurd things ever (for ordinary people, not bankers of course)

Wow £220 sounds very cheap to me! Is it overpriced for the area?

www.rightmove.co.uk/properties/139155821

It's in Stoke on Trent, Staffordshire. Fairly cheap housing.

It's a lovely house but i think it's overpriced!! Tbh by a fair amount, maybe 30k or more given surrounding prices that sold at the peak.

I'm starting to sound like @CrashyTime

Just got to get the font sorted out & you could pass for him 😂

That's what we think. Would love to get it for under £200k.

Interested to find out more about it.

It's on for so much because to win the listing the EA overvalued and overpromised. The vendor has completely bought into their nonsense. There's a lot of it about at the moment and plenty of EAs admitting to it anonymously on sm.

Sounds like you will be paying the peak price and then spending 30+k on it, making it well out of kilter with the local market.
Can’t you find something already the right layout and save yourself all that grief?

Sold for 160k in 2019. Go slightly further back (2014, when rates were at about half a %) and it sold for 135k, the seller is dreaming here TBH.

https://www.bankofengland.co.uk/boeapps/database/Bank-Rate.asp

It looks to me like borrowing rates for mortgages could be about to start ticking up again. I think there is little possibility now for the BOE to cut rates in the near future, as some had started to expect. We could even see an increase - once the extra inflation being caused by the extra costs of skirting the red sea starts to show in the figures.

.Overall inflation unexpectedly increased to 4%
.Wage inflation still massively high
.Core inflation still over 5%
.Food inflation still four times over target

I see things getter tougher at the moment. House prices may continue to fall this year.

Don’t you think the BoE will reduce the base rate by summer 24 @DrySherry ?

I think they may do so by the Spring but definitely by the Summer.

It’s really not relevant what a property sold for in 2014 Crashy, that’s 10 years ago now.

It seems a very nice house if you can get it for 200k or less @BG2015 seems excellent value to me but I’m used to higher prices in the South. The important thing is how favourably it compares to comparable properties that have sold around your area in the last year. No house is perfect but is it the best one you have seen for the money?

I'm hesitant now to think they can reduce in the Spring. It did look possible, for the last few months, but my feeling at the moment is that we won't see any significant reduction in BOE rate this year. We might still see 0.25 a couple of times at best. We might see an unexpected increase. Its far from obvious what this year will bring. My feeling is nothing more than just that. So many variables are in play at the moment.

@BG2015 I think as said above sellers get told a higher price by agents trying to get it on the market. They then do their sums based on a high price and decide they need that to move as they look at selling prices and work from them rather than factoring in that people will most likely accept a lower offer as are aware people are expecting a discount due to the market. Also the one you are looking at has a garage and the one that sold last April didn’t so they may well be attaching some value to that.

@CrashyTime some buyers may have loved the high prices but mostly those who weren’t buying anything else, a lot of people buy and sell at the same time, There were so many threads on here about people having an offer but not being able to find anything and people dreading putting their house on the market as the market was really fast moving and people making numerous offers on places and not having any accepted.

I agree the moves are likely to be in 0.25% increments but over the course of 2024 I believe it’s generally expected that the BoE rate will reduce by about a point, so we could end the year at around 4.25%.

My feeling is only based on what most mainstream economists & financial experts are predicting and of course no one knows the future.

An entirely possible scenario, yes. Ask me again next month and I may have a more positive outlook.

That looks v overpriced relative to comparable which is presumably why it still on the market 5/6 months after listing.
Perhaps 190k would be reasonable. A lot of sellers and agents are massively over pricing at present.

I think it's v likely that the BOE will reduce the base rate at some point this year but exactly when is up in the air. Inflation may well be stickier than mainstream forecasters suggest. The rental rises are expected to feed through in the coming months so the figures could go higher plus there are the geopolitical problems. Shipping container prices have already risen very significantly, which may mean more inflation down the pipeline.

ONS. -2.1% YoY. Wonder if BBC will bother reporting this month?

https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/housepriceindex/november2023

Main points from November's House Price Index:

• Average UK house prices decreased by 2.1% in the 12 months to November 2023 (provisional estimate), down from a decrease of 1.3% (revised estimate) in the 12 months to October 2023.
• The average UK house price was £285,000 in November 2023, which was £6,000 lower than 12 months ago.
• Average house prices over the 12 months to November 2023 decreased in England to £302,000 (negative 2.9%), decreased in Wales to £213,000 (negative 2.4%), but increased in Scotland to £194,000 (2.2%).
• 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 English region that saw the smallest decrease in average house prices in the 12 months to November 2023 (negative 0.4%), while London saw the largest fall (negative 6.0%).
• These estimates are provisional and are subject to revision. All statistics are non-seasonally adjusted estimates, unless explicitly stated otherwise.

London -6%.

Desperate stuff from the BBC. ONS House Price Index news not reported because of bigger Eastenders and Hannah Waddingham stories.

Meanwhile, real news outlets do report it.

https://www.reuters.com/world/uk/uk-house-prices-fall-by-most-since-2011-ons-2024-01-17/

As XVGN points out the Office For National Statistics report is very worrying and some of the MSM seem to be burying it. This paragraph in the summary particularly, is worth reading twice. Aimee North, head of housing market indices at the ONS, said:

“The annual fall in house prices continues to accelerate , with the average cost of a home falling at its fastest rate for over 12 years."

Add to this the bad news on increasing inflation and things are not looking good for a recovery in prices at the moment. Quite the opposite imo.