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.

We can see that affordability changed a lot after BoE dropped interest rates in 2009 and kept them low for 12 years.
Also landlords had a lot of financial advantages in comparison to regular buyers back then - in our area more than 30% of housing stock belongs to landlords. Now they are trying to get rid of it.

This is the tale of the tape:

https://www.cladco.co.uk/blog/post/history-of-uk-house-prices?srsltid=AfmBOopK0H-5_Ep0kxk8CD_2yRjeTt0fTfrIL42_8TMtPiLi0XTadair

Between 1995 and 2008 (GFC), house prices more than doubled in REAL terms due to some very poor and dodgy financial dealings (watch the Big Short). Homeowners didn't "earn" that increase through hard work. You were lucky if you were on the ladder at the start of that period. After the GFC people were shielded from the necessary correction by massive government intervention. The real prices have stabilised but they need to be brought back down 50% to get us back to where we should be. Until then , new families - our children - are suffering. The volume of housing transaction post GFC is still only around 60% (subject to check) of those before GFC. That confirms that things still need to be fixed.

The salaries haven't been growing at the same pace as house prices though. A lot of families in their 30th now sit in rentals waiting for inheritance to even start thinking about buying.

It’s the same in Cardiff. Houses on the higher end are wildly overpriced and just setting there with no one able to afford them.

Exactly. That's why they are suffering while existing homeowners rail against measures that might correct the situation - like new property value taxes.

The government is deluded. We don't need more housing at current prices. We need current rices reduced to historical levels.

I would prefer govt to not intervene in property market other than review service charges and replace stamp duty with property tax, both of those never happening because it would be too logical.
All their interventions - incentivising landlords to buy in 1990th -2000th, lowering interest rates in 2009-2021, removing SD during Covid- only made housing less affordable for people without inheritance.

Not everyone must move, people are trying to get the best deal, perhaps it’s a case of downsizing but happy to stay put until they get the price they want. My old neighbours where I used to live were on the market when I viewed that house (I viewed theirs but bought next door) and still selling 14 years later!!! Same agent though it had been off the market at some points and price jacked up.

@hahabahbag yes not all properties are there to be sold

Yes, it's exactly the same where I am, people sticking to the 2022 prices. Only the ones that are realistic are selling.

On my road there are several 4-5 bedroom houses for sale at the moment. The one that reduced to £425k sold within a week. The others are priced at £500-600k and are just sticking around. One has been on the market for 3 years and he says he's 'not selling for stupid money'. He bought it for £430k in 2018 and has done nothing to it and wants £600k minimum.

I'm selling my buy to let at the moment and despite being realistically priced nothing is happening so it's not just price though

It's always price. The market determines what is realistically priced - not the vendor.

If you were to offer your home for £100 there would be a queue of buyers a mile long. So clearly there is a price where it will sell.

This way of thinking fascinates me because I can’t get my head round people putting their homes up for sale when they don’t have to move. Why bother with the hassle of the admin and viewings if you don’t have to? And don’t you have to pay ongoing marketing costs to the EA?

The market will correct itself eventually, it just won’t happen overnight. I gave my example of the property bubble in Northern Ireland that burst in 2007, it took at least 5 years for the market to start moving. I’ve yet to see a government intervention that does anything but artificially increase prices.

I wouldn’t say existing home owners are railing against doing anything, the majority are just doing what best suits their personal circumstances. It will also be people who bought in the last 10 years who have more to lose than those who bought 30 years ago, so careful what you wish for.

What costs? In England at least you only pay when you sell at a percentage of the sale price (less a couple of hundred for photos and EPC at listing). No ongoing costs.

Yes this is true and around here certainly houses are still very popular we do have the grammar schools though so I think that keeps people coming here.

I think I'm doing what's called testing the market privately so an estate agent is going to hold an open house viewing one day this week and he has a full day of people who are interested booked in at 20 minute intervals. I haven't signed anything with him or had photos taken yet this is very very early stages.

I had three valuations and each of the estate agents thought there would be absolutely no problem my selling my house but the problem would be finding the one step down at a reasonable price.

Actually it's quite exciting and my son and I have spent the week decluttering and bringing the house up to scratch so even if we decide not to move we have really improved our living environment.

I had it in my head you pay a monthly fee to be on their books, but I’m happy to have been corrected (never sold a house before).

@BrownTroutBluesAgain, I see that @dinbin and @XVGN have already answered your post effectively.

It is very entitled to expect special, lower rates of tax for one age group. I don't think it was who mentioned it but it was mentioned by a couple of posters. I don't have time to check back but I think you have expressed that it was something that you agreed with. I imagine, from what you post, that you are in the older age group and no longer have a mortgage.

The key point with all these discussions about how tough things were for the boomer/silent generation is that things are far harder financially (and in many other ways, imo) for younger people and have got progressively worse. House prices have risen exponentially relative to incomes, even when a second income is generally added nowadays. That is an economically and socially destructive thing. Policies should not be designed to siphon even more £££ from the young towards the older generation but to do the opposite and rebalance things a bit.

A depressing thought.

I'm really sorry about your situation but I wouldn't rely on the market improving. There is nothing that I can see which suggests it will improve. The opposite seems to be the case.

@rainingsnoring you never know what government will do next to gain votes. That's the only thing I'm scared of.

It is the price in the current market. The market has had a big confidence and financial shock because of the war and the rises in interest rates. It may be that the ME situation can be resolved soon (I pray this happens), but it doesn't look likely at present. If it does happen and the central banks pump lots of $$$ in at the same time as lowering rates, there may be a brief period of improvement. I don't think it will last though and it may not happen.

Agreed. I think there will be some attempt at bail outs because there always are nowdays. It's what people expect, it's certainly what the financial sector expects. Will it work this time? I don't know.

Latest sentiment / market analysis per Nationwide.

https://www.bbc.co.uk/news/articles/ckgwe7k49d7o

I sigh when I see the excited verbs like prices "jumped". They actually fell around 1-2% in real terms. Only another 48% to go!

I have checked back on when the tax relief for downsizing was mentioned
It looks like it wasn't a person wishing to downsize so presumably not an ‘old’ person but by someone looking at ways to free up the market.
It wasn’t something I agreed with as I have already said because I do not discriminate. I do agree however that the cost of moving is expensive and as it stands
many people won’t bother because of that.

I am late 50s and first bought when I married and was 34 my dh 40 moving well out of London to make it affordable and buying an old rental in a state. Pebble dashed ceilings for example would you believe. It still astounds me as we are both architects that we just couldn’t afford something liveable at the time. We are near the end of paying off our 25 year mortgage made possible by moving further away from London again to a cheaper property now, albeit larger to accommodate our family but once again an old building with scaffolding still in place and holes in a chimney and a ceiling on the floor meaning, we still have no kitchen and one bathroom for 5 of us. We had to take a mortgage holiday as my dh had a life threatening illness and couldn’t work. Thankfully he was one of the 5% that survive it. As such our 25 year mortgage has had to extend.

I have never denied that property prices are higher now relative to median salaries. I am just tired of the boomer bashing on these threads
All generations have their financial woes. Whether it’s recessions and mass redundancies, much higher taxes of the past, the wage divide or now house and rental prices.
We can’t blame one generation for the policies of Governments of the past. We can blame the Governments for making situations worse however
Recent hikes in landlord costs have resulted in higher rents. Surely Governments knew this would happen? This then results in less money saved for a house deposit. Then of course paying off student loans and the increases from 1% to now 9%. I’m sure Blair at the time promised that wouldn’t happen.

Policies should be designed to suit the nation and its people equally.
They should be thought through to avoid pitfalls. Again look at Thatchers right to but scheme. Great for those council tenants who could afford to buy but disastrous long term.
If successive Governments stopped putting their traditional voters first and viewed everyone equally we wouldn't be in the mess we are in today in many respects

Proportional representation might go some way to stop this

@BrownTroutBluesAgain agree the 'boomer' bashing is tiresome, there is definitely a cohort of people who seem to be under the impression that houses were just handed out to previous generation, and it does nothing but undermine the conversation about the current housing market.

For the vast majority of people buying a house has meant that they need to work hard, cutback to save up the deposit and stretch themselves financially. The high cost of housing, wage stagnation, and economic uncertainty will make it harder now, but just because it was easier in the past, doesn't mean it was easy.

I totally agree! Governments should let market forces work. They also need to reduce stamp duty or remove it.