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.

I wouldn't be paying that outside of London unless it was a lovely Cotswolds Grade 2.

Have you looked at the housing market and what things actually sell for?

Yeah see this is insane. Estate agents should know and understand the competition from new builds and be realistic with owners of properties that need significant work in their asking prices, especially taking into account tax breaks. The stamp duty levy is a significant outlay that eats into your renovation budget.

Why is it sad? It is entirely up to the sellers how long they are happy to wait for buyer who likes the property enough to pay the price.

The cost of renovation is also going up and up. Our roofer was by fixing a tile and said the cost of reroofing is over 3x what it was pre covid. Told us it’s now much more economical to repair than replace.
Something is only worth what someone will pay for it.

I suspect many family homes haven't been renovated for a good 30 years. They're told not to bother updating as they have a desirable property, or they don't see the need because the house is perfectly fine for them. Or maybe they don't want the hassle. But what is often forgotten is the price of renovations. It could easily be over £100k, plus all the inconvenience. Even if they can afford it, what family wants to move into a renovation project? Especially as both parents generally work full time no, so no one home to manage the renovation.

My sense is that estate agents ARE realistic, but sellers aren't. This was a few years ago but I was a bit surprised that a house on our road wasn't selling. We live in a slightly less nice road in a much nicer area so the houses tend to be cheaper than the rest of the area, with the added bonus of being in the sweet spot for multiple schools and very close to a train station. As a rule, houses on our street tend to move fast when on the market - good location and way cheaper than houses just a block away.

I know the estate agent a bit socially and happened to see her out so I asked her about it as I was wondering if the market was turning. She sighed heavily and told me that basically, the house needed even more work than was obvious from the pics (a lot of the houses on this road have had the same owner - who bought from the council 40 years ago- so need modernisation. That's pretty standard. We did a lot to modernise ours and it wasn't in the worst shape comparitively) - including requiring an entirely new heating system, and, astonishingly, new doors as there was no direct access to the back garden(!?). But the owners were refusing to accept that as a result, they could not get the same price as the people next door to us who had sold quickly and easily at a good price even though it also needed a lot of modernisation (but more cosmetic).

And this was when property was still buoyant and a sellers market. It is 10x worse now.

30 years ago, in another country, a similar thing impacted my parents but it actually worked out for them. They sold their ridiculously large house in a nice area for a price way way lower than they had anticipated. But they bought a very nice sized house in a very very nice area for way way lower than they'd ever thought they'd be able to afford. They saw it as a good trade off - they still had a bit of difference between the old house and the new house, and they upgraded the area and convenience significantly. And the new house was sold 20 years later for an excellent price which allowed them to downsize to a smaller house in an equally expensive and nice area which was also priced at a ridiculous level. So their view was always that when prices were down, they benefited, and when prices were up they benefited as they were able to benefit from the correlation in prices as they were buying/selling.

I agree with this completely. I was horrified to discover some minor work to my friend's kitchen (some new units, tiling on one wall) was going to cost her the same as what we spent for a complete overhaul and replacement of our kitchen 10 years ago. I know inflation is a thing, but the difference was STARTLING.

I know people who've done renovations on our road in the last 5 years. Some of those properties are slightly under that £800k band but the renovation has cost over £100k and they haven't done a huge amount. They are 60s/70s properties. A new roof and a new kitchen bam thats most of your budget gone before you've even blinked and thought about a tin of paint anywhere else. No new extension. Just renovation after the original owner of the house has died.

Also, the ther thing about renovation etc, is that so many people are doing it now that not only is it expensive, it's hard to find people to do it. Construction companies are literally able to pick and choose what they want to do a lot of the time. x1000 for the sort of smaller projects. We needed new windows in two rooms - I couldn't get anyone to even bother coming out to quote.

I think the huge increase in renovation costs is a factor too. If you're looking at a house that hasn't had work done to it in a long time, you now also have to factor in those higher renovation costs, meaning most people are looking for properties which are either already renovated or require very little to be done to them.

Oh, sorry. I didn't RTFT and see others have already made this point.

I agree

If they genuinely have been on the market for that long you may as well view them and make an offer. You have nothing to lose, a fed up seller may accept (particularly if it is an estate sale).

Lots of properties in my area on at £1-2m. It has always been the case that they take a few years to sell. In part this is because there really aren’t many buyers in that group [and vanishingly so since Labour voted in and people started leaving the UK] but also because the trend used to be buying a do-er upper, spend £200k and then sell on at a further £200k profit.

10-20 years on, people are now being presented with a market of beautiful, renovated homes where they will only gain (or lose) value according to the vagaries of the economy, housing market and Rachel Reeves’ increasing taxes. One road near me was exclusively bungalows when we moved here 20 years ago, now there are only 3 left that have not been enlarged and renovated. All of the finished properties sat for as long as 2 years before being sold.

Our new neighbours bought a house when it was run down at just over £1m. They thought they could spend £200k doing it up and then sell it on for £1.5m in 5 years. However, the costs of labour and materials means that they had to revise their planning app to a smaller project, which will still cost them around £350k to do, and with the slump in the market they will now be lucky to break even when they come to sell.

Our own property has, on paper, lost £100-150k in value between April and December last year. Not that we care as we’re not planning to sell for a good 5-10 years and have lived here for 20 years [today, I’ve just realised].

People are obsessed with buying property as investments, rather than as ‘homes’ where you break even vis a vis the rent you could have been paying. When you get into spending £800k plus, that colours the market. I think it was way overdue for the market to slow down and prices to stop inflating - the big issue is whether there is a trickle down effect that means than owners/buyers for the under £800k will be impacted - they are less hedged and will be more seriously impacted if they cannot move when needed. I worry about that group as it will include my kids in a few years.

I think high interest rates (so expensive mortgages) coupled with high stamp duty make that bracket really tricky. Out of reach for first time buyers, but not enough of an upgrade to attract those who've outgrown starter homes.

We're seeing exactly that round here. We bought our first house, a modest 3 bed mid-terrace almost 10 years ago for just over £500k. At the time the bracket above (3/4 bed Victorian semis) was about £700k+. We couldn't stretch to that even though we knew it would probably last us a bit longer.

Now, after two DC and our jobs still having a big WFH element we really need an extra room, but that £700k bracket is more like £900k-£1.2m and we just can't justify the expense for what would only be a minor upgrade in living space. Meanwhile, decent (detached) family homes are on for about £1.5m+, which I doubt will ever be comfortably in reach.

It's so stupid because the longer a house sits unoccupied, the more issues will arise and the less likely they'll get the price. We just viewed a property, at least 50k (10%) overvalued which had been empty for a year. No heating so now there is mould in a few places. Estate agent says the owner is in a home and the kids won't budge in price.

@MuckyBrass

But why are estate agents continuing to value properties so highly if there clearly just aren't the buyers for them?

Occasionally, one will sell at a silly inflated price. They don't expect them all to sell at silly inflated prices!

But there is no science in house prices. However much of an "expert" an estate agent claims to be, all they can do is compare what else is in the market, compare against sold house prices etc. It's much harder at higher price points as there are relatively fewer houses on the market and which have been sold. It's not like bog standard 3 bed semis where they can be pretty accurate because there's a lot of reference points they can compare with simply due to huge numbers of similar houses being sold in similar locations. When there are relatively few houses of £750k or more having been sold, some "rogue" sales will really change the averages etc.

When it comes to the highest value ones, most will be owned by older people who may not be desperate to move, so will be "happy" to wait for what the EA has told them is a realistic selling price, so a year or two of waiting won't bother them.

Another aspect is the mental aspect as once you've been told your house is "worth" £750k, when someone offers £650k or the EA advises reducing it to £650k, you feel you've "lost" £100k, when in reality, you never had it in the first place. But that mentality means they may be unwilling to "lose" £100k, and so will only reduce by something like £25k as that's the kind of "loss" they can bare, but of course, probably still won't sell, so another year or two of waiting! We had a neighbour who did exactly that. He's convinced that he can't "lose" any more money after already reducing the asking price by a couple of hundred thousand, so simply refuses to reduce further and is actively refusing any offers less than £10k or so under his current asking price! 6 years later and he's still constantly talking about "all the money he's lost" and now whingeing that no one is even viewing anymore! Meanwhile, he's getting older and more infirm and has probably forgotten what he was wanting to do with all the money he thought he was going to make!

Would be interesting to see what they would go for in an auction and not what they’re being considered ‘worth’ when they’re not selling.
I have a friend whose brother won’t budge on the asking price for their inherited house. Was on at 675 and now offers over 650. Very dated house which needs everything doing to it.
She‘s spending her weekends maintaining the house and garden and paying huge amounts on basic utilities and council tax too. Two years now…

My friends uncle wanted to hold out for an high price for his parents house, the other siblings were happy to sell, the kitchen got full of damp and the extension roof collapsed.

Oh don’t. Currently there is a house sitting empty in my family following a death. The person doing the admin (I did offer to help but knew he wouldn’t ask me for water if his ears were on fire, and so it has proved) has so far taken 10 months to not achieve probate. I can’t bear to think how much the estate is already spending on council tax etc and how much value and condition the house is losing every month. A house in the same cup de sac has gone on the market at 900k and I bet my relative is going to try and achieve the same, which won’t happen, plus he will be a nightmare vendor. I guess I should be grateful he doesn’t want my help, doing it with him would be worse.

This is what I don’t understand - it’s costing them more money to run/keep than they would have lost if they’d sold sooner. Sometime people really need to sit down with a spread sheet and work out how much it will cost them over 6m, 12m, and then consider the offers on that basis. Especially if the property is beginning to develop problems through lack of occupancy like damp, blocked drains etc.

Yet so many people do this, though, hold out thinking buyers will get the message they won’t budge. They’ll lose a large chunk of in inheritance tax so it really isn’t worth hanging on for £50k with all that stress!

It’s sad because it’s not about not liking the property enough, it’s about a stagnant economy. Hardly anyone can afford those houses at that price, despite many families crammed into small “starter homes” or rentals and unable to move on. So we get the situation that one PP had, where she can’t go and stay with her children to spend time with her grandchildren because their house is just too small. Meanwhile, people are trying to sell big houses, but they put them on the market for far more than they’re worth, nobody can afford to buy them, and nothing changes.

This thread has made me think it might be worth a punt!

They do sell but they take longer. Quite a few around us have sold recently. Some immaculate ones were nearer £2 million. You know, when you have a more expensive property, that it’s going to take a bit longer. Some were up for over a year, but they still sold in the end.