Properties on for £800k+ not selling? Why?

[MuckyBrass]

Near me, there are loads of houses on Rightmove for around £800k, £900k, even up to £1m ish which have sat on the market for a year or two. I've long been desperate to move to a bigger house so I check Rightmove all the time, but my budget is more like £600k so I've never viewed any of them, and really I'm just being nosy. They are all lovely houses, I'd buy any of them in a heartbeat if they were on for £600k. I don't understand. Are they really for sale? Or are they just sitting on Rightmove as pretty houses to make the estate agents's rosters look good? Some of them have had their prices reduced by £100k or even more at various points, but they're still evidently not selling at the £800k plus mark.

I'm in a small (but fairly naice) market town with no train station, not an easy commute to any major city, so I actually struggle to think who would be earning enough or have the cash around here to be the actual buyers for houses in that price bracket anyway. We're not talking loads of land, either. These are normal town houses, period properties mostly, small gardens, 4-6 bedrooms.

Hey I thought had made it with a small 3 bed semi and that’s a lot bigger than my first home

there have been very few years when a single salary would buy a 2 bed terrace over most of the country never mind a 3 bed semi

People forget that even in previous generations not everyone was a homeowner. The examples you have given wouldn't have owned property then either. Nothing wrong with that then or now.
I am referring to those who have the prospect of home ownership. It still involves sacrifice and effort.

Things have changed and it's much harder for young people now than it used to be. Surely nobody can be denying that?

I agree with that. I do think that work ethic is declining meaning increasing numbers are not suited to home ownership. Both statements can be true.

How is work ethic declining though? I disagree with this and wonder what evidence you're basing it on. Working hours are long, some are on zero hours contracts which is rubbish for them, more mums are working FT than ever surely.

With the essentials of daily life increasingly out of reach for those on average wages, combined with rising inequality it's no surprise that some prefer to drop out/'lie flat'.
Why work hard when all the wealth gets pumped up to those at the top?

Increase in part time workers. Work life balance expected in first job, whilst previously that happened as you approached retirement. Changing attitudes within the workplace.

People have higher expectations without the achievement/effort.

'not suited to home ownership'
The underclass should be grateful for a moldy flat rented at an extortionate rate by a Rachman style landlord.

@Masqueradingatmidnight I completely agree, I’m a millennial and I’m a right lazy cow AND I had the cheek to go to university! Honestly, it’s laughable to think I should be so entitled to expect affordable housing when I only work one full time professional job and one part time job. Bring back the good old days of hard work, that’s what I say! Stop drinking Starbucks and get on the night shifts! Who needs sleep and regular rest breaks? Not us!

And dont forget to stick a broom up your arse & sweep the floor while you're at it!

Looks like home ownership is about where it was in the 1970s

Mould was prevalent in rentals and owned properties decades ago due to poor central heating. Probably the same now to some degree.

'Not suited' as in not someone's best option. I certainly don't think tenants are an underclass, that appears to be your view. I have never criticised renters.

Many of us have to put in much less graft to pay the mortgage than we would to afford private rental in an equivalent property.

The new looming Mansion Tax could be an issue.

This is incorrect.

My sister has a very well paid job and bought her home for 850k. She is not near 50 😂.

I live in a house I bought in a property slump that has almost doubled in value. Only to 520k now though and by my own admission I wouldn’t be able to afford my own home today.

My sister is not unique and there are may people who can afford this. My point being just because you don’t know them you can’t make the sweeping generalisation that “no one under 50” can.

There are 5x 800k houses for sale in our village. They are all lovely. All owned by people who want to downsize, but they have no time pressures, all being on the point of retiring. None have mortgages. They can all afford to sit tight until the market improves.
More worrying, there are 36 x 3 and 4 bed new houses, all in the £600k - £750k bracket. None of them have sold either.

Few have the money or job security at the moment.

I ‘feel’ that there is a major house price correction coming.

Having said this, London prices have been flat since about 2018. When you factor in high inflation, that is a drop (or a crash) of 30pc. Already. Quietly. Insidiously.

What normally happens is that no one wants their house to go for less than Susie’s did at number 27, so they demand pricing along those lines. No buyer bites. The sellers eventually reduce a little or say quietly that they might accept offers. They get an offer decently under the AP and accept it. The deal takes ages to complete. It then takes three months for the pricing to appear at the Land Registry. Only then does everyone know what the house went for. Shock. It was less than Susie’s.

Mrs Miggins now knows she will only get Susie’s price minus a chunk for her house. She reluctantly puts it on at that lower level. No one bites. And so it continues. If sellers realise quickly, they might panic and then a full crash, negative equity etc disaster develops.

I think we are at the stagnating point where the seller still really really wants Susie’s price but would definitely and reluctantly consider an offer.

Hmmm yeah the 3 beds are probably the bigger deal.

According to his cartoon-strip book about his parents, writer and illustrator Raymond Briggs (The Snowman) revealed in his book about them [Ethel and Ernest) that some years before WW2 they bought a 3 bed house in Wimbledon - on one milkman’s salary - for £850.

Dh is from the area and was able to identify the road. Such houses now sell for around £1m.

I live in a nice area of London where house prices have been static or falling (and if you factor in inflation, plummeting) for a good few years now. There are no BTL investors left in the market, the top end has been wiped out for foreign investors, stamp duty is putting everyone off moving. We'd have gone up a bit in size in last few years, but there is no way I'm spaffing 300k on stamp duty for an extra bedroom. This ripples down through the whole price range and eventually whole market.
Not that this is a bad thing, when I bought my first flat, it was in zone 2, and a 3 bedroom flat was 4x my sole salary as a 25 yr old.
If property returned to those price levels, it would certainly help out the affordability crisis.

Where I live there are lots of 700-800k houses but not many over that. My house was 535k 12 years ago and now worth about 750k, a few in my street have sold recently.
I’m guessing to people with a fair amount of equity.

We're the lucky people here. The last time we moved, almost 30 years ago now, it was after the early 1990s recession and property prices were on the floor. We bought a Band E house not long after the valuation levels were set, and allowing for inflation, it remains a fairly accurate local measure for most houses, although there are always some exceptions. In between, we've had and raised our family, and done some major upgrades and regular maintenance. And now the DC have left home we'd rather like to move area to be closer to family and friends further north. It's a bit cheaper on average than the area we are leaving, but not a huge difference.

But as we, one highly paid professional and a person with a small modestly successful enterprise, could not afford the house we now want to sell, who could? There are not many buyers in our area looking for properties like ours, which suggests we shall have to scale back what we have to spend on the next house. I think this is probably for the best for all in the long term but it's frightening for old people in the here and now if you are facing care home fees of £60k pa as a self-funder. It doesn't take long to burn through the proceeds of a family home.

Just been looking at Right Move; it seems to be the same here.
I’m wondering whether this will ultimately mean a push down on the lower prices too.

Possibly, especially if a main driver for moving is the downsizing that MN has been banging on about for years. Our motivation is a bit of downsize and relocation to be north of the M4/5 interchange.

Downsizing whilst families can't staircase is putting enormous pressure on the middle tiers of the market.

What was happening 5-15 years ago was developers were building first time buyer properties because there was so much noise over this and large executive houses because the big houses were where the biggest profits were.

I started saying this was a problem a while back because the demand for the middle tier has shot up whilst supply just hasn't matched and planning strategies for this completely missed the issue with wage to house price ratios and the demographic of an aging older generation who no longer had need for huge properties. It was entirely predictable.

This means the market is massively distorted and prices worked out by square metres only working to a certain point before the price per square metre in terms of demand is no longer linear but valuations can't be done without reflecting size accurately either.

Going back to the above mentioned graph. What's really noticeable is the decline in cheap social rents and a rise in expensive private rents at the same time as a decline in mortgages.

In terms of financial issues there is a known generational issue on housing that occurs in 2007/8.

If you owned property before the crash you are substantially better off than anyone who didn't. This roughly equates to a divide between anyone currently either side of 43 - 47. DH and I fall slap bang in the middle of this and have friends either side. The contrast in life is really stark between the two groups. We have friends locally who are on the older side and when they've seen our financials have been stunned. They simply wouldn't have been able to move to the area and had the life they have.

The schools are feeling it. Two classes per year locally have been axed out of six. There are no longer parents able to help in school with trips and activities because everyone works.

There's super well off only children, massively squeezed middle class kids who have parents who don't qualify for any benefits and pretty much survive pay check to paycheck as they've been caught out by rising costs they didn't anticipate when they moved here and then council estate kids who are often financially almost as well off as some of the middle class kids (as they've low rents and benefits) but have hugely disengaged parents.

It's a massive change in just five or six years really. The COVID house price rise coupled with a huge number of Hong Kong Chinese moving to the area and paying silly money for unseen houses has added to the existing market weaknesses and distortions.

It's crazy.

It's not unique to the area - the same trend is playing out in multiple places across the country.