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.

The ones who inherit from the boomer generation though will be able to either live in the houses or use the sale to purchase another house
So it will hold house prices to some extent because the transfer of wealth will mean if they were renting they can now become the next generation to own.
If wages continue to stagnate though there will be more of a discrepancy in the younger generations of owners because they inherited wealth and renters who didn't. Rather than those who were able to save a deposit or not. To an extent that's already playing out with some parents being able to gift their children deposits from savings/pension pots and drawing down equity from their own houses
But it doesn't mean necessarily that house prices will fall if there's no drop in population and lack of new affordable housing being built and enough people are inheriting. If enough people can afford to pay for the houses there won't be a significant drop

I think governments will come for that housing wealth in some form as there is no where else to tap up

I am guessing if i can stay in a 2 bed flat with my son and dh, the older people can eke it out in their 4 bed detached. I dont want to move area (drastically) as i am committing qto church attendance at a specific church for 2 years to get into a school. To move to a larger flat without taking on an extra 200k in debt i would need to sell at a higher price. I can't so i have to stay put. Staying put also means i have more time to pay it down..

Bearing in mind its probably going to be a 2 bed and box room flat at the most so not a significant upgrade.

@Cherriesandapples1 but why will there be enough people to buy the houses?

There are already more over 65 yr olds than under 20s

Plenty who inherit a house have no choice but to sell because there are multiple dc, location to think about it, tax to pay, etc.

Housing is pretty much already an inheritocracy

I’m not sure why the conversation is focused so much on it being older people who must reduce

Housing stock to buy is it an 11 yr high fuelled by both landlords exiting the market and older homeowners who want to downsize.

Who knows but possibly although there are less under 20s than over ,65 year olds, many people live into their 90s now. Birth rates have gone down, life expectancy is up, depends also on what the immigration situation does over time to what the overall population situation does, but as long as there is a demand and enough people have access to the money, then house prices won't crash.
Those who do inherit may inherit wealth from multiple sources as people are having less children than previous generations. So you may end up with situations where there's only 1 or 2 grandchildren inheriting from multiple grandparents and parents etc. those who do inherit in those situations may well end up fairly wealthy independent of earning potential. They could then rent out houses or sell multiple houses to buy the one they want.
It will mean there will probably be a more significant split in those that inherit and those who don't. If you look at the generations before the elderly generation we have now, there was probably less wealth to pass down, less home ownership and more children and grandchildren to split that wealth over. When this generation of elderly people die, they are a generation with more properties and pensions than any that came before them and the generations below are smaller, so wealth may well become more concentrated

@Cherriesandapples1 I think you misunderstood, I never said prices would crash…

That’s irrelevant. It doesn’t matter how much housing stock is or isn’t available. If people aren’t motivated to sell then they won’t sell. For older people who are looking to downsize, it may not be worth it if they don’t get the price they want.

@MidnightMeltdown

We know more homes are on the market that haven’t been sold for 20 yrs plus.

We know housing sale stock is high

We know some of that stock is overpriced

We know a number of sales are going through with price reductions.

Now I think all the above is relevant to a OP about a sluggish property market and older people not pricing to sell.

it may not be worth it if they don’t get the price they want.

Which may indeed be the case but completely irrelevant to my previous points.

😆😆

It’s more complex than them being unrealistic and naive. They will likely have bought with small deposits and very long mortgages. Their salaries will have been eroded by inflation and CoL, savings minimal, probably paying service charges on top. They won’t have built up sufficient equity or savings to move on after 5 or so years, especially if they take a hit on their selling price. Hence stagnation. FTBs are the plankton on the housing market. Once they’re unable to make a first purchase or move on to a subsequent one everything grinds to a halt.

Yes but where are all the people going to come from that can afford the prices as they stand, to buy the houses of those that have passed.

It is no more complex than it was in the housing crash in the late 80s, early 90s, nor than it was in 2008. Both times house prices dropped by around 20% and many home owners, including FTB, got caught out.

People always think prices are going to down but the fact is that over hundreds of years it can be observed that property holds its value relative to inflation.

I bought in the early 00s. My sibling waited for prices to come down. They are still waiting. They could have paid off a mortgage by now.

I’m so glad a didn’t listen to my confident friend with his economics degree and rising star career in banking, who firmly told me not to buy in the early noughties as house prices would be falling soon where we lived 😂

I also never thought I’d say it, but I’m also glad to be in my 50s. I bought my first tiny starter flat just as house prices were starting to go mad. And the price did seem mad at the time for a tiny flat. But I could afford it on my £16k salary. I later sold it for more than double when me and my partner bought our first flat. I was speaking to a man recently who at 45, despite now earning a decent salary, could not afford to buy. And it made me realise that if I had been looking to buy eight years later than I did, I would have been priced out too as prices had doubled by then.

Completely different ballgame now with much stronger protection for mortgage holders from repossession so you just won’t see large amounts of repossessed homes being sold for cheap prices, driving a downward trend in the market.

Do we have “stronger protection for mortgage holders from repossession”? How? Genuine question.

As someone in a similar situation, I’ll accept it when there’s a correction in the market I want to buy in. The problem is currently if I accept too low an offer, I won’t be able to buy something that meets my needs, and so I feel I may as well stay where I am and at least avoid the cost and hassle of moving.

https://www.bbc.co.uk/news/articles/cj0e0jjz88ro

And the numbers will keep on rising as the economy worsens.

Fixed rate mortgages so you lock in at interest rates for years, my 10 year deal meant I still haven't had the hit of rising interest rates
I think payment holidays being an option is a fairly recent development
Stress testing your affordability so they know if your interest rate goes up by 5% or whatever above your current interest rate, you could theoretically still afford to pay your mortgage without defaulting
I think quite a lot of banks will also let you switch to an interest only mortgage for a while if you're struggling so you don't completely default

There's definitely still a long tail of people on very low interest long fix mortgages and that's made a difference to general experiece of the credit crunch. I'm not sure how much use stress testing is though, ours never factored in everything else increasing loads as well as an interest rate rise!

I really feel for people trapped in flats, effectively. Unable to move up the ladder. Because, generally speaking, they’re so unsellable. There’s tons up for sale at the moment, a disproportionate amount.

I blame the estate agents. They need to tell these people to get real or just refuse to market them at an unrealistic price.

In our area it’s only the realistic agents that get things moving.

There was an article I read a couple of days ago about this.
It was suggesting that in the next few years, swathes of money will be handed down to younger people to avoid inheritance tax or from people dying.

It will split the population. Some suddenly inheriting hundreds of thousands and keeping the prices high, while others get nothing and can’t afford to buy.

From their own parents/grandparents estates.

Yes, much stronger, the FCA have introduced new expectations that lenders offer various payment arrangements and that repossession is an absolute last resort.

They almost always go for a managed sale (I.e. the owner lists as normal with estate agent, not sold very quickly for a low price), if the repayments are really unaffordable in the long term and there’s no foreseeable way to get back on track.

Most lenders have signed the mortgage charter which says they won’t start repossession action until there have been 12 months of missed payments. None of this was the case pre-2008.