Is the market really on a downturn!?

[PoppyP19]

I keep hearing that the market is on a downturn and everyone should be cautious about the property they are purchasing at the moment but I’m struggling to find anything!

Properties in the area I am looking at are snapped up within days. I am viewing a property on the weekend which was booked 3 weeks ago, EA too busy to give us a viewing before now!

What is everyone else’s experience?

We have struggled so much trying to find something that we haven’t put our house on the market yet. Our neighbours sold at first viewing and my cousin has sold their house but still not found a property to move into so all seems a bit of a mess!

Plus stamp duty is hugely prohibitive and many aren't making that on a property they are selling. A 1.7m property is 117k stamp duty!!!

How frustrating for you @kirinm. I think you must be in a particular hot spot which people moving from even more expensive areas have settled on as 'affordable'. In general, most of London seems to have fallen, especially the super prime areas and flats.

The tax is crazy and a major reason why many people choose to save up and take out a huge loan rather than doing interim stages nowadays. It's a risky strategy but understandable.

I think people also forget inflation, I heard on the radio that if you bought a 1m property in 2020 you need to sell for 1.25m to keep pace with inflation. Crazy times!

I think if you can afford £1.7m then you can probably find the stamp duty.

I think our area is possibly different because it’s very small. You’ve got downsizes trying to buy the smaller houses but stay in the area and then the people coming from Hackney and Clapham buying the mega houses.

we did make some money on our flat but it wasn’t enough to move into a house. Getting a much better paid job and having paid a lot of our mortgage off is the reason! I cannot see how it can continue like this price wise but I’ve been saying that for a while.

@rainingsnoring I have family and younger colleagues who have skipped the flat stage and just gone for a house a bit further out as FTBs. Makes sense to me.

I cannot see how it can continue like this price wise but I’ve been saying that for a while.

SW London has definitely taken a hit. There is property for sale near my parents (Wandsworth) that has been on since last year &/or is on for what people paid a few years ago. Without huge equity gains it's not possible for everyone in London to be buying multi million houses from salary alone.

And interestingly (?) some only sold 2 years ago and are back on the market.

SW coast here. Things seem to be selling quickly, but the houses for let take ages for the agent's sign to come down, so perhaps that market is slower.

I think if you can afford £1.7m then you can probably find the stamp duty.

You'll be surprised I know 2 people who bought houses at those prices and both have 1m interest only mortgages. They bought before things went mad, one is thinking of selling.

Houses are flying off the market here. Many are going to sealed bids.

I'm not convinced that everyone buying at the 1.7 mill level can easily afford to find well over 100k for SDLT. A lot of these people will have considerable equity from previous properties or have been given large gifts of ££ from their parents. Those with v high incomes have historically tended to borrow a lot and they have probably had the incomes where they could save this amount. However, this could be changing as some white collar sectors are already not doing well.

Whereabouts are you approximately @Livingbytheocean? NE seems to be holding up compared to many areas.

Interest only! 😬

Was that some time ago @strappyshoe? That's a crazy risk, although it is one that would have likely paid off if they bought a few decades ago.

just pre covid, in the days of near zero interest rates it makes some sense. The thinking was still have good LTV and it's a way of getting the house you want but can't really afford or afford alongside the other lifestyle things you want. Theory was you will gain because property always increases exponentially. Not proving quite so true at the moment.

and it's a lot more £££ now.

A 1m interest only mortgage would be 1.4k a month on 1.5%. At 4.5% its 3.7k

South coast, I think anything well priced is selling. We sold after 5 viewings over 4 weeks, we had two offers. Took us 2 months to find the house we wanted, we offered immediately before anyone else had a chance to view. A lot of properties are taking 3-6 months to sell though. I think price is the main reason. In my postcode area there is very little available to rent, hardly any stock which is making it even more expensive to rent.

I also think sentiment has changed or it certainly has for me and friends I have. We want to move again in the next few years but I have lowered my budget. I just don't want to be servicing so much debt, it's a waste in my eyes.

The monthly figure triples so it's not such a clever move now. The opposite!

'Theory was you will gain because property always increases exponentially. Not proving quite so true at the moment.'
This doesn't work too well either, as you say.

I also agree that sentiment is starting to shift and that many have realised that property isn't a sure way to make £££ anymore.

Our mortgage is only £640k (‘only’ 🙄) but the repayments are £3.6k. Well I say our mortgage but we are 5 weeks into the sale with absolutely nothing happening so we may not need that mortgage.

Ah sorry, missed that was interest only. I honestly didn’t know those sorts of mortgages still exist! You’d have thought there had been some lessons learned.

Another big issue impacting London is the falling birth rates and the subsequent impact on schools due to the funding model. The actual numbers are quite shocking tbh.

Schools are a big attraction property wise, Lambeth is the worst affected I believe although some outer boroughs are bucking the trend. Unless you are going private you really need to be quite strategic now as I expect the excellent schools will become even more desirable & maintain numbers whereas the ones that are 2nd/3rd & good will start to decline as numbers reduce. The government could change the funding model but unlikely.

www.bbc.co.uk/news/articles/cvgpg73yqddo.amp

@kirinm I think they are still pretty popular with higher earners but harder to get nowadays. Good luck!

It’s mostly location dependent…. Also taking into account a good splash of realistic pricing. Previously houses in our village have come on the market rarely and are usually snapped up BUT there are currently 6 available….but they’re all overpriced by £100-150k so blatantly aren’t selling🤷🏼‍♀️.