Why is nobody selling their houses?

[Bakewellbits]

Is it just me and my area, or are other people struggling to find a new place because there are very few houses going on the market at the moment?

We had a house purchase fall through in October and we've been looking for something else ever since, but nothing much seems to be coming on the market? We have what I thought was a decent 700k budget for a small 3 bed semi in north east Surrey - looking at Tadworth, Banstead, Coulsdon areas. Our number 1 requirement is no main road noise - we want quiet, preferably a cul-de-sac, surrounded by some greenery. Eg. We like parts of Banstead/Chipstead that feel semi-rural, so quiet and good for dog walks and cycling.

I don't think it's a case of budget and needing to adjust our expectations because a slightly higher budget takes us into 4 bed territory, and we don't need a 4 bed. It's just us and our dog, and potentially 1 future child.

For me, it's because l have realised that there is such a minefield of problems with buying another house, that l have decided not to sell and stay here .
The main problem is that you can never really be sure that the house you buy will not need a huge amount of work done to it even with a surveyors report .
The cost of these repairs , the having to put up with workmen and the mess. It just seems hopeless .

I'd go further regarding SDLT replacement. Council Tax is also a "bananas" tax where homes are banded on what they may have been worth in 1991 and the upper level gets curtailed so that people in country mansions pay as much as some with modest family homes in London.

Scrap SDLT and Council Tax. Replace with an annual home value tax (HVT) and a poll tax (PT). Homeowners pay both (including on any additional homes). Landlords pay the HVT only. Tenants pay the PT only. The PT would NOT be the same amount as current Council Tax and would be a more reasonable reflection of the costs of local services used by each inhabitant.

The total tax take should be little more than current but more progressive based on wealth.

We’ve just been chatting about this! About to put our house on the market - budgeting around £650k for our next move but absolutely nothing around - and the ones that are have been languishing for months - and that includes the fairly priced ones. We’re looking in south cambs. Panicking in case we do actually sell quickly, we’ll be stuck.

Because people are asking silly prices . The bubble has burst . The market has stagnated.

We are in the process of buying at the moment, house came.on in Feb, but it's been very quiet until the end of this week when suddenly about 5 came on in the area we have been focusing on. So it might be that people have been waiting for better weather etc

Luckily still prefer our house to the new ones!

@XVGN people won't vote for that though. I would but so much of the housing market wealth is owed by the older voter.

I normally keep an eye on Rightmove sold prices to see what the local market is doing.
Not many houses for sale locally. I used to do a tally of for sale / sstc on Rightmove as a general idea within 1/4 mile of my postcode.

Yep. It'd be a hard sell because people hate change. They'd worry that their bills would increase - even though they'd fall for half the people. They'd negatively assume that this version of the poll tax was the same as the nuts poll tax proposed by Thatcher.

You'd need to paint pictures of how much fairer and more sensible the new regime would be. For example, a pair of semis - one owned by a widow and the other rented by a family of 4 adults. Under the new regime, the widow pays HVT and 1PT, and her neighbours pay 4PT but no HVT. Their LL pays the HVT.

Immediately, without SDLT, it becomes more viable for the widow to downsize if she wishes. Workers can more cheaply relocate to where the work is. Etc. Runaway house price inflation would be mitigated by runaway HVT. We'd be able to more easily tax foreign purchasers buying homes in UK for investment purposes. Millionaires can up and leave the UK if they must but they can't take their homes and land with them.

It’s the opposite where I live. Loads on the market, some for over a year, and very few buying

@TimeForATerf

"I don’t know what estate agents are thinking"

Their commission I would suspect?

Possibly, but surely only EA's are stupid enough to only be paid for half the work they do (they only get paid when a sale completes and only 50% of houses an EA lists actually sell thru them).

@XVGNso according to your model, I would have to pay PT on all members of my family and then pay a HVT on my home even though I’ve already paid a fortune in SD…? I don’t plan to move until I die. My home is high value because it’s in London but my husband and I don’t earn a fortune.

Sounds a bonkers plan where lots of people would have to pay twice.

Yes I think so too, I think it's creating a stagnant market because there are tons of overpriced houses in my area that simply aren't shifting.
We did find one house we liked recently. It was listed at 700k, which was £50k more than a practically identical house 4 doors down that sold in August last year, which is insanity. We offered 25k under, as it also needed a new roof and boiler. But we were told the owners were basically offended, "didn't want to negotiate further with time wasters," and were only entertaining offers above asking price! Madness.

Yes, people with wealth are going to be reticent. Life is seldom fair. But don't forget that you will no longer pay Council Tax and it will be cheaper to rightsize your property.

I would propose giving a good 5 year's notice on the HVT so that people can do the the sums and those who feel they must move get an opportunity to do so.

it becomes more viable for the widow to downsize if she wishes.

I don't really understand the resistance to downsizing and paying SD. So many of my older relatives say they don't want to pay it, I don't either when upsizing but I haven't made a fortune on my property bought decades ok!

Runaway house price inflation would be mitigated by runaway HVT.

Except it wouldn't because it's a local tax and there are other factors that influence how much local councils have to collect from residents. So a flat in London would pay far less than a house of lower value in the NE because it's about how many business/people there are in an area and what their needs are. So the lowest council tax in the country is paid in Wandsworth and Westminster because they can collect revenue in other ways (mainly business rates and parking charges) and so need less via the council tax. The areas with the highest council taxes are Rutland and Nottinham, where the council tax is nearly three times the amount people in Westminster and Wandsworth pay. That won't change unless the formula for how much they need to raise from council tax or poll tax or whatever other tax is changed.

Absolutely. The mechanism would have to be devised by the government to collect HVT nationwide and distribute sums (not all) appropriately to the local councils. I would imagine that such a mechanism and implementation will gradually reduce the differential in home prices across regions. For example, many will sell in the SE and move NW (say). That'll reduce prices in the SE and increase them in the NW - hence runaway HPI immediately mitigated by runaway HVT.

Remember. I'm not looking to raise more tax. I'm only looking to raise existing tax levels more fairly and progressively, and getting some added benefits such as improved mobility.

Also, what is 'rightsizing'? How are you determining how much space is the 'correct' amount per person? If someone can afford to live in a 3 bed 1930s semi as a widow (which is not a large house by any stretch of the imagination) then why should they move from their home?

Wealth should be taxed by IHT and Stamp Duty. Nobody likes that but if someone is living in the same house they've lived in for 40 years and it has gone up in value on paper they've not seen any of that. It's only real money when it's sold and that's when it should be taxed.

Rather than thinking single people should only be living in one bedroomed properties maybe think about all the 100s of thousands of empty houses in this country that should be encouraged back onto the market. But that (like the increase in mortgage rates and CoL) will slow down house price rises and stagnate the market, just like the high interest rates stagnated house prices in the 90s. Everyone wants the low prices of the 90s but they also don't want the high interest rates and repossessions that led to the low prices.

For example, many will sell in the SE and move NW (say)

But higher house prices haven't really done that so I'm not sure higher tax would?

There are plenty in our part of South Wales, mainly from elderly people vacating them.

Some of the prices are eye watering though. They’re lovely houses in a lovely area but generally all need a lot of modernising. They’re priced as I would expect if all the work had been done.

Wealth should be taxed by IHT and Stamp Duty. Nobody likes that but if someone is living in the same house they've lived in for 40 years and it has gone up in value on paper they've not seen any of that. It's only real money when it's sold and that's when it should be taxed.

So you think stamp duty should be higher? What would you increase IHT too?

Everyone wants the low prices of the 90s but they also don't want the high interest rates and repossessions that led to the low prices.

The 6% rates we saw recently aren't that different to the high %s of the 90s because it's a %. A high % of a lower fig isn't necessarily different to low % of a high figure.

It's unlikely that there would be many repossessions as in the past because a large % are mortgage free, many have small mortgages & lending criteria tightened up so you can't easily inflate your earnings & get a 95% LTV interest only mortgage.

Rightsizing (and right-locating) is a personal choice. No one is suggesting that people will be forced to sell their old family homes and get moved to new build prison cells.

If our widow can afford to continue living in her 4 bed family home, and wants to, then it's perfectly fine. On the other hand, if she wants to move to somewhere smaller, cheaper and easier to maintain, then she won't face the friction caused by SDLT.

I haven't checked but I'd wager that many countries assess annual home value taxes. It's not radical.

As for empty homes, the HVT will encourage many more to be brought to market.

We’d like to downsize now that the older kids are gone and move to a nearby city, but it’s too expensive to move. We work in a public sector that is downsizing, so short term we’re not taking any risks.

I think house prices have stagnated or dropped in some places and people who bought fairly recently, at the peak, are holding onto houses in the hope of getting their money back.

I haven't checked but I'd wager that many countries assess annual home value taxes. It's not radical.

I think you are correct