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.

@rainingsnoring the problem is funding is based on head counts so you want a full school.

And Brexit is one reason dc are no longer in the London state system as many families left the UK

Disagreeing with your statement that I quoted. I thought I made that clear above already.

That poster is a teacher in London talking about falling rolls in London schools. She obviously knows what she is talking about from her professional experience and so will know more than most other people about this.

Thanks. One of my DC worked in a school for a while (not London) and they were deliberately taking on more children with SEN as they attract more funding.
I know from the DC being in different schools that the funding to their schools was gradually cut because of austerity politics despite full rolls. Recently, I've seen several teachers and TAs be made redundant despite full rolls. I don't think the funding has been enough to account for the rising salary costs and the cost of heating and upkeep of the buildings.

Which one in particular?

Mhmm and I work in property so..

I actually said both, but it’s true that it’s not just in my area that detached property prices are rising. Which you could see from your link.

I did look at the data - it’s not area specific unless you’re confusing outward codes with areas. And in fact price patterns can differ road by road.

I have never denied prices have fallen, indeed I’ve discussed the stagnation in the market. Their fall is not limited to foreign investment patterns.

The one that I have already quoted!

'That’s certainly not true in London. Properties here in the £1 to 5 million bracket sell quickly. Even in the recent slowdown detached property prices are still rising.'.

The Otta data does divide by broad areas. The majority of the broad areas show large falls, not stagnation.
I've no idea what you mean by 'outward codes'

I agree that the fall is not limited to foreign investment patterns. The main reason why more expensive properties are generally not selling well and have fallen more than other types (see OP) is because of falling affordability, as has already been mentioned by multiple posters. Demographics, also mentioned by multiple posters is another significant factor. If immigration falls (may be starting to happen), that would be another potential factor. The one that I think will be a major one in the shorter term is a likely recession and job losses.

@rainingsnoring Which I have just replied to above. As I pointed out you could have looked at your own link to see the rise of detached property prices in multiple areas.

An outward code is the start of the postcode SW/NW. These are too broad as they contain many different areas with different pricepoints and pricing dynamics.

The whole market has stagnated across all pricepoints this is the point. And what you regard as expensive is subjective and depends on the area. The prices quoted in the OP are not expensive for London and the SE.

Finally, the buyers of what I would call expensive properties are often insulated from economic downturn by high salaries and high levels of existing equity. The lower end of the market can be more price sensitive, buyers are more affected by economic downturn, inflation & higher mortgage rates etc.

as an architect working in the built environment with an eye on the market for the past 30years you are
Quite right

Exactly, China for example seems to be having a massive property crash, investors there are busy trying to minimise losses (good luck with that) not thinking about buying London flats they have never actually seen, higher interest rates are global, that affects all property buyers everywhere. It was a cheap debt casino, time has been called, those who bought too many chips now need to pay the piper.

"Finally, the buyers of what I would call expensive properties are often insulated from economic downturn by high salaries and high levels of existing equity."

But high end properties have been selling at massive losses for years, the media concentrate on the pop stars and footballers, but it has been a trend for a while, many of the people you think are wealthy are not so wealthy when the cost of their debt goes up or they lose the job, smart truly rich people don"t overpay for property, one of the most illiquid asset classes of them all.

Maybe. But we've just sold our third house in London (over 15 years) and even now there was no shortage of cash buyers. I do think flats and new builds are pretty stagnant and people are quite rightly wary of leaseholds, although I wonder if the capping of ground rents will help a bit.

Fair enough, there are still people with money who will stretch for their ideal house or just a good postcode, my point is that a lot of people relying on "equity" and debt need a buyer and a willing banker to realise their dreams.

100%, who wants a new build with a greedy managing company attached and to pay 5-6K in service charges in no time?
I'd love to buy a new build, but don't want to become a hostage there - they become simply unsellable after service charges reach a certain point. Capping ground rent will help with mortgages, but honestly this is not their biggest problem.

New-build sales in London are down about 60% which is stunning really, don"t developers understand how their own market works?

The capping ground rent thing isn't law yet though, meant to be coming in 2028. not something I would rely on at this point.

I've never bought a new build, but I think unless there's something particularly special about them, don't they generally lose value? An awful lot of the ones in London are pretty uninspiring.

I'm sure that's true, but there is definitely still plenty of willing money in London. One thing I have noticed is people selling up in the prime post codes (SW3, W8) and moving into a slightly less prime postcode.

I cannot imagine wasting money buying a new build house unless it was a self build. Why on earth would you buy from a developer?

Because some builders make good quality homes that are very cheap to heat and run and formatted around modern living with decent sized kitchen and driveways and storage … and ours has increased in value over the last 5 years

it’s builder dependent I guess - like any other home ? I do find the anti new build brigade slightly amusing

edit to add - no service charge here

I'm not sure what bit of data you are looking at.
If you look at the 'raw data' for London, and tick 'detached', the falls are very clear. They also extend across most, but not all of the country. I have already agreed that the data can't account for every road but generally, in London and the South in particular, especially for more expensive properties, the trend is obviously down. What you say about expensive varying according to area is obvious to everyone. There is life outside London and SE you know!

You are wrong that those with high salaries and equity are necessarily insulated from economic downturns. In fact, a lot of white collar workers have already started to lose their jobs. That is likely to worsen. Perhaps you don't follow economic news much but there are several useful links on here, especially from @KeepPumping. As I have already said, the super prime market has fallen the most, a lot of that being due to a lack foreign buyers/ a reduction in money laundering. But I guess you know that if you actually work in property.

Yes, China has had a big crash. As you say, the Chinese are therefore buying up London less than before. My Chinese friend told me that the UK Universities have become less popular in China too. Previously, a lot of these wealthy Chinese who have made a mint on their own property market were buying up London flats for cash for their student offspring.

I think they have realised, which is why building has dried up!