What if there just isn't another property boom coming? Everything frozen where I am

[livelaughlambada]

I know it's not possible, but I sort of wish all house sellers would collectively agree to knock 10% (or whatever it would take) off their asking price. It feels like loads of people know their houses aren't worth what they're asking, but won't drop because the house they want won't drop either. Feels like the whole market where we are (south west) has frozen solid. Also round us, there are SO many older people trying to downsize who've been told that their houses are worth X when there just aren't that many people with X to spend! And lots of these houses have been on for a year, and in some cases you can see the deteriorations, but they just won't accept the prices have dropped. I do think it's really interesting in that the 65+ generation have seen so many booms and busts that I don't think they can process that there may not be another boom coming -- as in I just don't think there are enough 30 and 40 something with X to spend. It all just feels a bit weird right now.

Even the young people who haven't stretched themselves, they saved a 10% deposit, they can afford the monthly payments with some wriggle room. If the property prices go down by say 30%, they're going to get stuck when they need to remortgage because they owe now far more than the property is worth
The owns who have high % equity will be largely not impacted because the house they'll be moving to will also drop in value and stamp duty on the next purchase would reduce, so they might not end up that worse off in the end
I don't think house prices are likely to plummet and if there is a drop in values, I think it will be fairly small and last a few years, I think it's unlikely to be a large drop that is sustained

Yes, I think that's broadly true. Those with less equity would be worse affected. I don't think the downsizers will be unaffected though because large, more expensive properties have already fallen in price far more than smaller, less expensive places. If there are large falls, which is very possible, falls will likely continue to be much worse for the former type of homes. On the flip side though, if there are larger falls/long term stagnation, over some time, it is possible that the current GenZ/Y might be able to afford a home some years from now. The current system has many losers already, which people often seem to forget.

We’re in the South East. Our home has been on the market for 7 weeks, so not long. It’s low/mid range-500k, we reduced so it is now under that bracket - 490k. We’ve had viewings, but no offers. We won’t reduce further at this stage, we want to move but we don’t have to move. It’s frustrating though, and we see the same houses sitting on the market for ages and we see not much coming on in the areas we’re interested in.

I do wonder if when we sell, if we should rent for a while and see if the market does experience a correction?

We still have a mortgage, albeit a small one but the difference in cost when our current fix ends is quite an eye opener! Surely this cannot continue? High prices, much higher rates, (I accept they’ve been far higher, but prices were much, much lower).

If you go into rented you will be rolling the dice. Prices and/or mortgage interest rates may come down but they may not. So you'd need to accept they could go up or down and you'd need to be comfortable with either scenario

see if the market does experience a correction?
Prices are dropping, that is the market correction.

A more dramatic correction. What we see is people holding on to the set price. There is a hse we love, sold in 2021 for 560k, they’ve done absolutely nothing to it, maybe a lick of paint- on for 670k, it’s been that process since March. Is a 110k rise realistic?

I doubt it's realistic now that the cost of money is so much higher, unemployement is already rising and the geopolitical situation is terrible. As you say, there are lots of people holding out for unrealistic prices. Renting could be a good option. Prices are highly unlikely to go up signficantly (far more likely to fall) and, if they do, you can easily give notice. With a decent amount of money to invest, it may cover the rent or a good proportion of it.

@rainingsnoring we met and married later in life and I was a very old mum, so DC is mid-20s. We're shedding assets while we still expect another seven years.

@imnothavingagoodtime It wouldn't be realistic near me. Prices have dropped 5-8% p a, since 2024.

But you are doing the same. You’ve reduced your price (slightly?) but say you won’t reduce further so surely you can see why others feel the same, and this continues to prevent a dramatic fall as people just don’t move and the market stagnates.

I must admit the psychology fascinates me as people are utterly convinced there’s going to be a “dramatic correction” but it won’t affect their own property as it’s highly desirable and they’ll be able to sell it just in time.

I would actually be completely fine with taking a 25% drop on my house providing that the next Person ladder is prepared to take 25% drop on there but quite Simply they aren’t so who’s gonna blink first

Dont do this. We did this in 2008. The market did not correct at all. The person who bought ours flipped it for an additional £65,000 almost 1/3 of what they paid for ours. Sickening

Tbh I'm not expecting big crashes.

The demand is too high and theres an underlying value to every property for that reason.

A small dip and stagnation generally is much more likely, with a pancaking of prices - so there will be bigger drops at the top of the market and small rises at the middle of the market where demand is highest.

But the overall issue is that house prices have probably hit an absolute ceiling in terms of wage ratio to mortgage price. There's only so many times over the average wage that an average house in an area can cost. The market is ultimately limited by how much younger people can afford in rent/mortgage.

There will be a lot less movement at this point too, because you have someone pretty much maxed out at the bottom to give a chain fluidity.

This is what happened in after the big crash in 2008 where we bought. We had bought in 2007 anticipating a crash, and understanding we'd likely end up in negative equity which we were ok with (it was no worse than renting and we thought the market would come back round). Thats precisely why we ensured we put down a deposit and over paid to try and stop ourselves getting too stuck. In the end when we sold 12 years later, we sold at just over for what we bought at. This makes it difficult to staircase up the market, which everyone has got used to, because we made no big gain on the value of the property, we only gained equity from repayments.

I think this is much more of a likely scenario. Over the last few years where we are now is largely being fuelled by people moving north who had more equity. Thats now starting to almost run out in terms of how many people can do that.

Its all about wage to house price ratios. We can't escape this - whether as a homeowner without a mortgage, someone with a mortgage, as a landlord or a renter. Its the thing that limits everything like the laws of physics for housing.

This is only broken by a significant increase in housing shock availability or a big uptick in wages from the economy doing well.

We are in an era of stagnation and potential gradual decline and this is terrifying to politicians more than a bust - a boom bust cycle is something familiar, a stagnation one is thats not really understood.

We should also look at Japan for other parallels and trend. There is an issue with empty houses in some rural areas, with houses becoming utterly worthless due to the population aging and declining in these areas where there is no work nor community left, whilst young people how moved to the city for work where housing is extortionate. This isn't exactly the same as the uk as our population is still increasing but we definitely have areas which are in permanent decline which its hard to see them recovering from.

Our property is realistically priced in comparison to the area, similar houses in the market & the work we’ve done on the house. We dropped so that we’d appear in more searches.

But it’s not that realistically priced or it would have sold. Everybody thinks their property is realistically priced and other people’s aren’t.

In the old days of boom and bust, it was possible to go into negative equity when the market stalled. Unless you needed to sell people just stayed where they were. The boom came when wages caught up with affordability and prices then started to increase. Now it is taking longer for wages to rise so we have a stagnant market. Houses have never been worth what they sell for.

That isn’t what the “property ladder” was originally. It was more that you would accumulate equity by paying off a mortgage and at the same time your salary would rise as your career progressed meaning as you started a family, had more kids, wanted more space you’d move to a bigger house, a semi in suburbia from your little city flat and so on. House prices rising exponentially was not a feature of the property ladder.

You just have no idea of reality! People whose income is limited, have no way of moving without the funds from their house sale, even when it means moving from a spacious property and affording nothing but a cramped little hovel - which inevitably means losing half of the things they have cherished in their lives. THAT is reality. Just hope you have enough of a grasp on reality later in your life to realise being older and leaving a house you have invested your life in not all sunshine and roses. Of course it might also be a case of younger people thinking older people should stand aside so they can have what they want at a price that they want!

But you don’t mind an entire families living in cramped little hovels, you just gave yourself away there.
Half of them locally don’t know what day it is. Never mind whether there’s stuff that they’ve accumulated throughout their life is with them or not.

In an ideal world, we'd all downsize while we're still working so we have a spare year's income to pay the SDLT @Idintlikefridays but back on Planet Earth, us aged relics might still have had DC at home at 60.

No one wants to see families in cramped accommodation but it's not the duty of older people to hand over their homes for a pittance either! And your casual ageism is wildly offensive.

This is such an awful thing to say and clearly you’ve never watched a relative die, while alive which is what dementia feels like. Shame on you.

The elderly aren’t obliged to vacant their family homes so that others can buy them, your levels of entitlement are astonishing. The issue is people are living longer and no government has planned for this - It’s not just housing, it’s also pensions and healthcare. Also, with houses, most people can’t afford these houses because prices are ridiculous and that’s not the fault of the owners.

At the moment I think a combination of high prices, high mortgage rates (relative to income), general cost of living and job uncertainty for everyone. Blaming older people is as poor as blaming immigrants for taking your job!

The facts are if you’ve got adult children at home in your 60s then you are providing accommodation for them. You’re not the target audience.
The target audience is the 80-year-olds who don’t know what day it is being found wandering around with no shoes on and then you find out she used to run a high school with 1500 pupils. It is sad. It’s awful and it’s not benefiting them either so some tough decisions need to be made by the families if the individuals can’t or won’t make them themselves.

If you’re keeping somebody in unsafe conditions just to protect the market value that you claim the property is worth for your own interests, that’s abusive.
Make sure your hands are clean before you start slinging mud around at other people

That makes more sense now on the first point and total sense on the second too.

The market correct by an average of 20% in 2008 but some areas were more and presumably your area was less.

I've literally stated what is reality. You just don't like it.

Obviously, most people need to sell their property in order to pay for the next one. This is not a problem unique to the elderly.
Why are you full of sympathy for an older person leaving a comfortable, spacious home that they have enjoyed living in for decades? That's just normal life which is a cycle. Why do you express absolutely no sympathy for the young who cannot afford the current prices and are being forced to live with their parents into their 30s or pay through the nose for small rentals?

If the elderly (or anyone else) can't sell their properties at above market prices for months and years, as has been happening frequently, it is they that are being entitled and unrealistic, not the younger people.