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.

People forget that even in previous generations not everyone was a homeowner

People forgot there was a lot more social housing for some previous generations…..

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

I work p/t because f/t would take me over the threshold for higher tax so what’s the point? With dc I have a better work life balance. Tax often makes working more less desirable

Stamp duty is my guess. Its 5% over £500k, 10% over £925k.

Very few houses are selling at the moment. It's the result of insecurity due to Rachel Reeves and the Labour government in general. We moved from the over-crowded and expensive South East to the North West coast when houses prices are much less but the market is just as stagnant up here too. It happened under previous Labour governments as I remember

I really dislike the lazy trope of council house parents being disengaged. Sure some will be, same as some “middle and upper class” parents but just because you live in council housing doesn’t mean you don’t care about your kids education and future.

@RedToothBrush agree with you re age thing, it makes such a difference. Some of my friends have older siblings & the contrast is stark. One girl disappointed her family by going straight to work after her A-levels. She got a basic admin job at the council & was able to buy a flat in Hackney. She moved up the ladder & with her partner they have a house worth 1.2m ish with a tiny mortgage. Her first property was under 100k & she got one of those 95% interest only mortgages initially (the lending rules are much stricter now). She moved into the civil service & also got into the final salary scheme before they closed it. She is in one of the best positions of everyone I know & my friends are doctors, teachers, lawyers etc. And of my friends the ones who had parental help are generally in the better position. Our families gave us a 6 fig sum to help us onto the ladder, we would have been priced out otherwise. It means I can work p/t so life is less stressful.

Oh & she also got a degree later, paid for by the civil service.

This is true, I know one family who managed to buy their expensive council flat discounted & got their daughter into a private school on a big bursary as their income is low.

You can dislike it.

It reflects whats happening here. These are families who have lived here for generations and take the local school for granted just cos its the local school and have much lower aspirations generally. The families that moved here, moved for primarily for the schools and they are almost all professional with very few who didn't go to university. So you do have a marked difference in terms of how much education is valued on the whole. You don't move here with a family if you don't value education - theres other better and cheaper places. The selling point for families here IS the schools. I actually think the area is more starkly extreme compared to other areas in this respect because of how the community developed, the nature of the local schools and where changes in house prices have fallen in time.

I personally wish it wasn't what I was seeing with my own eyes. It really bloody depressing on multiple levels and not just because it fits with a negative stereotype.

I totally agree that there are disengaged middle and upper class parents around but they value education in a different way. You tend to see emotional disengagement from them which I find way worse tbh.

The stamp duty puts many off buying very expensive homes.

Some posters on here don’t like to hear it as they are property stalwarts, landlords and estate agents.

Many were led to believe that ‘Starmer would fix the economy’ left by those nasty Tories.

Unfortunately as I explained before interest rates and house prices have nothing to do with politics but with monetary policy.

The following reasons of why house prices have peaked (for this cycle)

1. house to earning ratios are historically higher than for decades. Tax bases are frozen so the more you earn the higher the tax and loss of personal allowances. That including studnet loans is crippling. You need to earn £130k to be better off than £99k for example.

2. government has enabled salary growth suppression, giving big tax breaks to companies with hiring part time staff and keeping wages artificially low (state sponsored instead via universal credit)

3. younger generation has more higher interest student loan debt and high rents that make saving impossible except government schemes like help to buy and new build flats (Majority of whom have spiraling service charges and are in negative equity)

4. we at the new normal in interest rates (look at Japan yields still rising) remember the ZIRP rates after 2008 were the anomaly. You’ll never see sub 2% interest rates again, in fact they’ll have to increase once more when inflation ramps up once they start money printing to try and get out of stagflation.

5. Boomers have caused generation rent by using their gained assets and capital accrued from a high growth period to leverage assets out of the reach of the younger generation. Who’s going to want 4/5 bed properties when they can’t afford kids?

Boomer demographic is dying out. Government is making it extremely untenable for private landlords (should never of been allowed from the beginning) causing further grief putting up rent to pay their increased debt.
Government incentives to turn them into HMOs and sell to corporate landlords funds and banks.

So in a nutshell, earning ratios are way out of whack, low wages have become the norm because of reliance on the state, higher interest mortgages for the foreseeable, young demographic decline priced out dealing with spiraling rental/service charge costs in negative equity new build flats and not having families of their own. Finally excess of larger properties that no one’s going to be able to afford or want with cost of living/bills.

End of the ponzi

People that don't need the money or some issues with probate/Will possibly/family squabbling possibly.
It's criminal, IMHO when housing is so unaffordable to this generation.

Coat of buildingwork has really shot up in the last few years, both labour and materials. Houses are still being priced at a level where it would also have been financially possible to undertakes change/renovate a few years ago, but now the cost of tha work is now vastly more and the pricing hasn’t caught up.

Also just the maintenance costs of a larger house have gone up, it’s not just the size of the mortgage it’s the cost of ongoing things that need to be replaced/repaired etc even if you’re not doing a major upgrade. So larger properties are less affordable Ina number of ways.

Also the market is softening generally for a few reasons. Lots of baby boomers’ houses now on the market. Gen Z is much smaller than than the millennial generation so there aren’t the same
number of younger buyers at the lower end of the market coming though just based on that, never mind the affordability of houses compared to wages.

Also lots of landlords selling up due to changes in regulations.

So it's not just this price bracket that is suffering a slump in values. A leading indicator that I watch indicating that housing prices going into reverse - is what's happening with the big new build developers. They never reduce the cash price unless things get serious. They often offer incentives to shift the last few plots - like upgraded kitchen, carpeting, garden work and so on. But they ALWAYS keep the headline price.
Bellway homes and Ashberry homes have suddenly started offering significant cash discounts in many developments ! For example, just in my local area, four of the large sites have just reduced the price by a whopping 25k (they call it cash back but we all know thats only to prevent legal action from those already sucked in). This discount is for basic shoe box 2 to 4 bed developments, not higher end housing. This never happens unless it gets bad. Hold on to your hats for this year, it's not going to go well for sellers across the board. If your selling at the moment I suggest getting competitive with your asking price ASAP - that's assuming you really want or need to move. If your a buyer that can, for goodness sake wait another 6 months at least, probably a year. You will get much more for your money end of 2026.

Surely the sales and purchase price will balance each other out though? If we sell for significantly less we buy for significantly less?

Exactly, it's a win for first time buyers as they pay less. Its a win for people trading up too as they pay less. Its only a loss if you exit or downsize - so yes it balances across the market. Its also what needs to happen really to allow new entrants and to free up the stall and allow people to move again.

People will just delay and delay selling. Ultimately if prices fall for many years then yes they will sell but it will be a ling wait for the prospective buyers.

Our house is in that bracket and the ones around us get snapped up - our neighbour sold her 950,000 house quite quickly so I think it’s area dependent as well?

Many will yes, but the values will adjust anyway from the forced sales coming from deaths, divorces and debt problems (job losses etc). It only takes a couple of sales in an area at a lower price to bring down the expectations both for sellers and buyers. People who don't need to move won't, but values will still change.

The OP specifically asked why these 800k houses were left to languish on the market for ages. I suspect the reasons are:

1. sellers not needing to sell so they are happy to wait and see if someone falls in love with the house.
2. Probate - trying to establish the value?
3. new rules on evicting tenants? If you are selling, you can give them notice. So put it on the market, albeit at an excessive price?
4. Human greed/ego
5. insufficient equity to pay stamp duty on the next place unless they sell around 800. Therefore the next place needs to come down in price too… and it will…

Yes agree with all those, I think number 5 particularly. Not just in terms of stamp duty but in terms of all the other moving costs too. Plus nearly everyone wants to do something to make a property right for them even if it's just changing decor, and everything has become so expensive.

I’ve checked in my area on rightmove to see which type of houses have sat on the market for longer than others
Having moved here just 5 years ago I know from previous searches the average wait for them to sell

those around £800k ( detached 4/5beds ) at the lower end and then going up to £2mill ish for larger and more historical buildings most are STC now that went up for sale from April last year.
Some, not all, have had a small price reduction
One has been up for sale for 2 years but tbh Theyve put a terrible extension on the front of an old building and it looks hideous.

For the £800k plus properties that wait is not unusual.

The wait on smaller properties is probably being affected by all the new housing going up saturating the market.

We are London commutable in mid Kent

Anything over 500k is taking 1-2 years around my part of the north west. In fact, most properties are hanging around a long time unless they are a gem. I'm going to put mine on soon, I have no qualms selling for less than I SSTC for 2 years ago as long as I can pass that up the chain. Prices and costs of moving are ridiculous.

Where I live (mid-size fairly affluent town) there are three new houses being built on a plot of land by a very busy road. One 4-bedroom detached and two 3-bed semis. They are already being advertised for sale, and the detached one is priced at £1,100,000, the semis at £750,000. I walk past there regularly and honestly they are not that big, and the gardens at the back are not going to be particularly big either, and who wants to sit in a garden with huge lorries and buses thundering past all the time? They look very luxurious inside from the artists' impression, if a little sterile, but I struggle to imagine who is going to pay that kind of money for them.

I see in our area small but new build properties overpriced imo too
New build 3/4 beds detached or semis tiny garden and squashed in going for the same as 5 beds with large gardens, larger m2 and mature large gardens.

Generally they are all priced well over the average £/m2

I wonder how many of these £800k houses are really £600k houses that have been over-extended and very expensively renovated - e.g. bathrooms with very expensive fittings or bespoke kitchens that are to the sellers' taste?

Many buyers would rather pay £600k for a perfectly habitable house and then update to their own taste and budget. Also a house with a vast kitchen taking up too much of the garden isn't always what a family want.
It sounds as though houses in @MuckyBrass's area have been bought by amateur developers out to make a quick buck without thinking things through.