What’s the market doing/ going to do?

[OneDayIWillLearn]

I’m so confused about what the market is doing/ likely to do this year and what it means for what we should do!!

So we’ve been looking to move for about a year now. No immediate pressure to do it but we will need to have moved by late spring 2025 for work reasons so our window is narrowing. We do have a few specific criteria but prepared to do substantial work and we have a wide search area so it’s not the case of waiting for a unicorn!!

But my sense is the market has been pretty slow all this last year - we’ve viewed about 15 properties - one we really wanted (which did sell, annoyingly to someone else!) - but most stuff hasn’t sold and has either gone off market and come back on or just stayed around not selling. Most of these are houses coming out of probate or things where the seller hasn’t really had much choice about timing. So I feel like there must be a lot of people sitting on their hands but not sure if this is true!

We had our own house on the market briefly in the autumn (when we were trying to buy somewhere specific) but though we had lots of viewings no one was coming back for second viewings and we took it off as we thought there was no point marketing in a slow market/ bad time of year/ once we lost the one we wanted. Our idea was to re-list in spring. We listed at what the agent recommended but my feeling is we would have to list lower to sell at the moment.

I’m looking every day but still not finding much new stuff is coming on - and what there is often overpriced. And I’m also not seeing much coming on or selling in our current area. This despite apparently the spring being when lots more new stuff would start coming on (surely it’s the spring now??).

So what’s going on? Are people waiting for interest rates to actually come down to get serious about buying and selling again? Are there any likely tipping points on the horizon? Our estate agent said he thinks it will all slow down in the second half of the year when there is a general election in the offing (I’m like, what even slower??!).

thinkiny about it all day every day and it’s driving me a bit crazy!

I'm in rented, looking to buy, no rush.

Here are my thoughts.

I think the market is in a painfully slow drawdown. Transactions are slow and piecing a chain together tricky. In most areas. Expensive houses are being discounted quite a lot, but a bit of a log jam in the mid-market 3 bed-semis and similar, so they are holding up (sadly for me). Some regional variation - more price drops in London and SE where there's more debt. Desirable stuff still flies off the shelf at asking.

You're right that lots of people sitting on hands. Waiting for interest r8 drops, but (and I speculate) they'll only inch down and maybe only come down a per/cent or maybe 1.5 by end of 2025. That doesn't change things when they've been raised by 5%.

Asking prices are still sky high, and only those needing to sell are doing so. They're taking a financial hit or finding credulous buyers. Those who are kite flying or doing a 'nice to have' move are being stunned by the lack of interest and losing taste for it and staying put. Need more transactions to see where the re-pricing has really landed, and given Land Registry moves glacially, getting reliable data is hard.

Sounds like you're in a good position by not having too many 'die for' criteria. If you keep looking I'm sure you'll find something nice at a decent price, but you'll have the same pressures for your sale transaction (unless you find a credulous buyer!). Putting together a buy and sell chain may take forever if you do it in one go through.

Where I am looking in (expensive part of) SE, the prices are coming down very slowly by my estimation, all the while I'm earning 5% on the deposit funds.

Good luck!

We listed ours as we saw a property we loved, but it got bought by someone else. Estate agent priced ours too high in my opinion, but we did get second viewings and people were keen to make an offer but needed to sell their owns houses first, which were taking a while. The stuff we're looking at buying all seems to be overpriced, languishing on the market, or making very small cuts. So we took ours off the market and decided to sit and wait to see if the market/estate agents all start to price differently once the realisation that the current interest rates are probably here to stay. So, think we will wait until after the election then list next spring. We're in a good position in that we're just looking for an upgrade in garden and outdoor space (currently in a terrace), have the house almost paid off so happy to get a fair price for it, not a specific price, as long as the house we buy is also fairly priced, and we will be borrowing well within our affordability so 4-5% interest rate is fine (as would 8% if it went up further). So, watching and waiting.

Thanks this is really helpful. It’s about chicken and egg isn’t it….if I knew we were paying less on a purchase we could definitely accept less! But until we’ve found somewhere and know how much they might accept, we can’t know what we need. Definitely making me think it would be worth seeing if we can do the move without having to be in a chain (it might be possible).

Thanks for the reply, that’s very helpful. I guess that’s what we’ve been doing too (watching and waiting) but I guess I’m getting nervous about how much longer we can do that. Two years seemed ages for a move when we started looking in early 2023 but now a year has passed I’m thinking it’s not so long!

Yeah I think if we had a deadline like yours I would probably just crack on and realise it was going to be a painful process (reading the 'anyone had viewings today?' thread is a good reflection of what's going on at the mo, and then the buyers/sellers thread for all the flakey buyers who pull out after searches etc), but how to be sure you're not overpaying is a difficult one. I don't get a feeling that things will improve anytime soon, as it seems you need a hot market to keep the chains moving and to cut out the time wasters. Everyone is worried about overpaying, which is fair enough, but I also showed around some FTBers who'd viewed over 50 houses. Usually they'd get filtered out by the EA but not anymore around here.

I honestly think people are too nervous to move at the moment, a general election is looming and there a sense of not knowing what that might mean. Plus potential sellers see properties not selling which puts them off trying, and of course cost of living crisis.
I suspect it won’t change until we have a new Government and people’s nerves settle a bit.

I would say if you have a deadline (even if it is a while off) then get on with it. Sales are taking months and months at the moment, people getting cold feet left and right and pulling out and having to start over, mortgage rates changing and people deciding they want something else. It's not a good time to buy or sell right now but it's not going to get any easier before Spring next year, is my opinion- if you have to move then just move.

We are going to see a falling market this year imo, its already pretty evident. I don't expect it to be overly dramatic though, small falls for most regions. Having said that a small fall, say 5%, on a 600k house is the equivalent of a house loosing 30k. On top of all the ongoing increases in COL that's pretty unpleasant :(

The housing market is pretty stagnant in my opinion and seems to have been that way for the last couple of years. There are a few mainstream media articles reporting today that house prices fell in March for the first time in 6 months.

For example the Guardian reported that house prices fell by 1%, or £2,908, in March compared with February, according to Halifax’s house price index. The average property now costs £288,430. Compared with the same month last year, property prices were up 0.3%.

The Halifax index showed similar trends to that reported by Nationwide, which said this week that the average price of a home fell 0.2% from February to March, to £261,142, after a seasonal adjustment to the figures.

Kim Kinnaird, the director of Halifax mortgages, said the market had shown “surprising resilience” despite higher borrowing costs. She said that prices had not changed much over the past couple of years and were still almost £50,000 above pre-pandemic levels but added that, with only a modest improvement in affordability on the horizon, “this will likely limit the scope for significant house price increases this year”.

https://www.theguardian.com/business/2024/apr/05/uk-house-prices-fall-for-first-time-in-six-months-amid-more-costly-mortgages

So in a stagnant market @OneDayIWillLearn you can generally expect most properties to hang around on the market for longer with it not being easy to buy or sell.

Apart from the best properties in any particular price bracket which will continue to sell quickly if priced realistically because they will be the ones that everyone wants.

Where we live, prices haven't dropped too much but things are taking a long time to sell. When they do sell, they tend to go for only very slightly under asking (which is again slightly below 2022 prices)

There are a real lack of buyers around at the moment in our bracket (3 bed semi in an expensive area). I don't blame them- our house with a 10% deposit would cost around £17-1900 in mortgage and I wouldn't pay that much for our house!

But the drop we'd have to take on price to bring it into a reasonable monthly payment for them (say, £1500 or so) just isn't one we can afford.

This is the key point, if interest rates don't come down as much as hoped - then it will be a slower recovery but eventually wage inflation will help balance affordability again.

Where we are there seem to be lots of nice (out of my budget) houses going on to rightmove, but not a lot of less nice (in my budget) big flats/small houses coming on to the market.

I'm guessing people in 'starter houses' are staying put, whereas maybe others are downsizing a bit early with interest rates going up.

Definitely depends where you live and at what price point. Where we are the market is very flat and nothing is really moving. DS is looking to buy in Buckinghamshire, the market at his price point is insane (2/3 bed terrace/semi). Nothing on the market in the town he really likes since everything sold there in the last month, even stuff that had been hanging around since the autumn. Every house he's seen has sold for at least asking price.

Because things are stagnant, I think the picture is likely to be localised and property specific. Last year we sold at asking and we t into rented (but we weren’t toppy in our asking price). We’re currently buying somewhere that could definitely go for more in a more buoyant market. It all feels quite sober, which works for us as we are trading up - though as you say, there are a lack of properties. To be honest, I think my view is that even if it drops a bit we’re in it for the long haul and I can’t be bothered to hang around - selling and renting has been drawn out as it is!