Houses wildly overpriced near me and NOTHING is shifting

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My parents are house-hunting at the moment in the area close to me, and it's so frustrating. They've sold, but literally every "downsizable" house in my area is on for genuinely I would reckon about 200,000 more than they're worth. I think 2022 was about the peak in my area, but these prices look as if prices had carried on tracking up for the last four years. We're in an area that boomed during WFH, but is not going to do so well as people are ordered back to the office - which is certainly not reflected in the pricing. Nothing is shifting at all, and it's only going to get worse with Iran. Houses are going off the market and coming back on for sometimes, insanely more. It feels like people got their houses valued in 2022 and are just never going to accept that the market isn't there any more. I'm irrationally annoyed with one local estate agent who tells everyone their house is worth X when it's just clearly not the case. My parents accepted less than they would probably have got in 2022, because they figure that is what their house is worth now - and they can rent for a bit and they'd rather not be in a chain. GRRRRR.

Is It madness to sell and move to a more expensive area using savings, to be closer to children and grandchildren in retirement?

Not all decisions have to be purely financial @Honestyboxy. We've just inherited a house after being in rented accomodation for the last 20 years, but we know we absolutely won't be happy living in it, even though financially it would benefit us to do so. We're going to sell it and buy somewhere we can be happy for the last 15 or so years of life we have left.

@LittleJustice ”I think incentives offered for downsizing might help as someone suggested upthread“

Like a bedroom tax? Two occupants, three bedrooms, pay a under occupancy tax?

How do you define over occupancy? Why jump to taxing people? It seems really unfair to tax someone on a house they’ve bought and paid for just because someone decides they have too much space! They’re already paying higher council tax.

Both my parents and my in-laws have downsized from a large family homes into smaller 3 beds, is that small enough for your tastes, or should they move out of that too or face being taxed more out of their fixed incomes too?

Yeah I was thinking more of a waiver for stamp Duty really not a tax 🤔 🙄

My other thought, as we have a completely self-contained annex in fact which was made for my Dad when he had Parkinson's Disease was to host a foreign student - apparently you can earn up to 7,500 a year tax-free on top of your own income under the rent a room scheme.

If you wave SD for downsizers, they'll be taking homes from FTBs.
There's plenty of modern leasehold properties on the market that would potentially suit both of them, but are not popular due to crazy service charges.

Well, the (stamp duty) tax they are trying to avoid could be put as a charge on the new property, so it would never be paid by the person downsizing.
Obviously it would have to accrue interest.

The other big incentive would be a Land Value Tax.

Yes, there may not be much point if you only want to drop one bedroom but keep the same stairs, garden and square footage. As I said, a longer term plan would be more sensible.

A LVT would be the fair way. There certainly should not be large tax cuts specifically for those who were already advantaged by being able to buy cheap homes decades ago. All that does is disadvantage everyone else who is funding it yet again.

We are going to buy some nice house, at about the same price we will sell at, but in a new area that's better for our family. Closer, mainly, but we'll involve the next generation in the choice, so we downsize while DC acquires a family house.

Current LVT is based on unused land

How exactly does this translate to property
Anyone could use all rooms for whatever purposes. Hobbies. Office space etc
How about a couple who buy a three bed
Will they be taxed on two bedrooms because it seems yhis LVT idea suggests they would
How about a person who buys a large 4X4 or a family with two kids with a people carrier. Assume they would be taxed too.

The bedroom tax was a tax on council tenants in council owned property.
You can’t start taxing people because they own something some random person deems you aren’t allowed to own based

We started at the bottom buying run down uninhabitable properties and working our way towards a property that fitted our needs
We pay council tax and for those of us in Listed buildings huge sums in maintenance to care for them

These random suggestions to tax anyone that has worked hard to get what they want are ………. words fail me and I don’t want to be rude

Most new houses that are being built are 4 beds. There’s plenty to go around
and not a strangers responsibility to give up their property
So
No need for more and more taxes

@BrownTroutBluesAgain the question was raised because (old) people don’t want to pay the same, or even any, tax when the buy/downsize as people trying to move up the ladder for a growing family etc.

Probable the fairest tax would be GCT at point of sale. The government could introduce a yearly flat tax free allowance on gains to match the CPi.

350k is a basic house in many areas, nearly 2k a month mortgage payment is a lot for many people, but lots of people stretched to pay more, and rates under 5% must be hard to get now?

'These random suggestions to tax anyone that has worked hard to get what they want are ………. words fail me and I don’t want to be rude'

I also don't want to be rude but this kind of comment shuts down any possibility of sensible discussion.
Some of those who believe they 'worked hard to get what they want' apparently want those who currently work hard but get much less because of house price inflation to also pay their taxes instead of paying them themselves. The older generation is certainly used to having policy arranged very much in their favour but this demonstrates a shocking level of entitlement.

Will it be Sky-News?

I doubt it’s just old people that think the cost of moving is excessive
Unless it’s just old people that have worked that out
In which case maybe we should listen to them more

Ive read most of the thread, not all, but I haven’t noticed old people saying they don’t want to pay anything to move.

The issue with cgtax for home owners puts them in a worse situation than developers. Developers are allowed to offset costs, how would that work for homeowners. The gain by the tax man would be offset by the paperwork involved in homeowners costs. They can’t ignore those costs because as I noted it would put homeowners in a worse situation.

I have no idea either why cgtax on a homeowners property when they sell would encourage them to move . In fact it would obviously stop people moving altogether plunging many industries, businesses and the tax man into financial loss.
It is therefore more just another random tax

@rainingsnoring

Firstly there’s nothing entitled about speaking up for others on here

Im still working to get what I want. At the moment a kitchen would be nice
Remember older people today had little in the way of benefits and top ups. No free childcare etc etc etc. I won’t bore everyone with the list as I’m assuming everyone knows this

Each generation always thinks they have it worse in terms of costs. Thats not necessarily the case. These days it’s housing for example
but

food costs are currently about 16% of an average salary in the 50s it was 33% dropping to 25% by the mid 70s

Mortgage rates late 70s were at 17% and late 80s 15%

Plus if you couldn’t pay no one stepped in yoy were just repossesed

There was no minimum wage either until recently and no compulsory employer pension contributions until 2018

It’s clear looking at the past it wasnt all financial roses and there are many things that are better today.

The main issue discussed here is house prices but there should be no expectation that others should be responsible to pay more or less tax than anyone else to buy a home

No one paid the 33% food bill or the 17% mortgage everyone just had to cut back and save
It’s presumably what most of our parents did. Mine were in their mid 30s when they were able to afford a tiny terrace in need of a lot of work. They both started work at age 14.

House prices are stagnating on the market because there’s a slow down. It happens. There was a surge in property sales in the pandemic. Lots of people have recently moved and so it’s not surprising things are slow
The market will start moving again as it always does but if costs to move keep increasing people won’t move as much. In my parents friend group you bought once and stayed and perhaps because of the expense more people may do this. As is their right

the housing market is moving in my area and I think others have said similar on this thread.
I also posted an article on page 4 by Forbes that says much the same.

For all of the above I will disagree that
Any fault lies with older people
I will disagree that taxes should be raised for home owners
I do believe the cost of buying and selling is too steep if we want people to upsize, downsize or just buy in the first place.

Finally Raining you said
.’.Some of those who believe they 'worked hard to get what they want' apparently want those who currently work hard but get much less because of house price inflation to also pay their taxes instead of paying them themselves’.
I didn’t say anything about selective taxes I suggested if there was a problem with housing stagnating then it could be down to the cost of moving and one way to get things moving is to reduce those costs.
Just like the stamp holiday which was available for all
At no point did I say only some people should enjoy reduced taxes as that attitude is ageist and I do not discriminate.

The record low rates were because the BofE dropped the base rate to 1% because of the pandemic
Its not a typical scenario

When mortgages were at 17 & 15% house prices still went up nominally and those rates are far far higher than today’s.

At the same time the market slowed, the rate of growth slowed and affordability was stretched.

All a little like now.

Remember older people today had little in the way of benefits and top ups. No free childcare etc etc etc. I won’t bore everyone with the list as I’m assuming everyone knows this

The equivalent to child benefit was universal & there was far more social housing available..,,

Dont forget MIRAS

There was no minimum wage either until recently and no compulsory employer pension contributions until 2018

There also wasn’t years of wage stagnation & despite auto enrolment pension schemes were far more generous for today’s pensioners due to more DB & final salary schemes.

Mortgage rates late 70s were at 17% and late 80s 15%

But that higher % was on a much lower price so it really isn’t dissimilar to today.

Its nonsense to pretend the landscape hasn’t completely changed for younger people & that they just need to work harder & lower expectations.

I agree, it wouldn't be right to tax under occupancy - unless the problem was a shortage of homes. If that were the case then yes it would be hard to argue against.

The actual problem is that prices are too high now compared to incomes. I think as long as there isn't any government interference and borrowing rates are allowed to remain higher - that will sort itself out over the next year or two. Prices will adjust downward.

The population has soared and there’s are no new houses to match the increase or extra longevity

It doesn’t take 4 years for the market to correct so I’d suggest that your analysis of your local market may be lacking something. We put our house on the market in early 2024 at a price in the mid-range of what various agents told us. We dropped the price twice (£200k drop in total) and exchanged a year later. People who really want or need to sell their house will not just keep it at the same price indefinitely in a market with no buyers at that price.

Low rates started in 2009 bc people didn't have money to spend, inflation was low, but BoE wanted people to borrow so that banks could earn at least something.
So we are observing both high house prices and high interest rates for the 1st time since 2009. Market will have to correct itself.

When mortgages were 17%, house price to average income ratio was like 3:1 and working class families on a single income could afford them.

We bought in 2022 for £435k as a project, spent more than £75k (new doors, windows, flooring, heating, partial rewire, kitchen, garden office) and can’t sell for £450k.

It’s only for sale because of divorce but can’t sell for less as needs to house us both. We will have to sit until the market improves as there’s no way we can sell at a bigger loss.

There’s 3 downsize houses for me
locally that are very well priced and they haven’t sold either. It might be area dependent but here I don’t think anyone is moving regardless of price. The market has flatlined.

A probate house has gone from £650k-£450k (in increments) and unsold. That’s absolutely insane as next door sold for £725k 18 months ago.

@JustAlice also, from Gemini: ‘
’While 17% sounds terrifying by today’s standards, it is worth noting that in 1979, the average house price in the UK was roughly £20,000, meaning the total debt being taxed at that 17% rate was significantly smaller relative to wages than it is today.’