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.

Yes regular payments from income specifically can get around the inheritance 7 year rule but it can't come from savings so you could give them £2000 a month for example if you have more than that in pension income but you couldn't just syphon from a savings pot each month.

It's just as well that those rules apply because we, not quite retired at 70, are paying our DC's rent so they can do an apprenticeship in the SE. The wage paid is enough to live on, but not to pay £1000 monthly in rent. Which is the going rate.

Ah that’s an absolutely scam.
I was looking at the nearby resale prices for McCarthy and Stone and the sellers ie the next of kin of the deceased are having trouble selling the property even with massive reductions because of the very high service charges.
And those service charges are still due from the estate/ next of kin until the property is sold.

We just have to live another seven years before it falls out of the HMRC frame.

Its also on a sliding scale so not so bad once past 5 years

DC has £330k, from two sets of grandparents' estates, plus money (that we are unlikely to need) from our lifetime pension saving plan. It's not going to do anything more than buy a modest 2 up 2 down Victorian cottage in a pleasant small city centre

But 330k is a pretty decent deposit for a house, they don’t have to buy outright surely

Not the first time I’ve read those McCarthy and stone flats are an issue.

I actually don’t think I have heard anything positive about them.

And the central banks also dropped rates to zero and unleashed billions in QE, which was lent, given to the population in furlough payments/grants, etc. There was also fraud going on.
I think some people thought that rates would remain at zero and that they would be WFH forever.

There is therefore no longer a premium for those properties needing renovation. There is no money in them now so why would anyone bother to put in the ££ and effort unless they are priced much lower?

Good points.
I think the main reason why the lovely, large houses with period features, big gardens, etc are falling in price is price related but also, two incomes are generally needed nowadays to have any hope of buying them. That means that people are busier and have less time for gardening, DIY and unnecessary stress in general. The cost of running these properties is also far higher than a compact, newer property. The CT, bills and maintenance could easily be hundreds a month higher, which is a stretch too far if you have already stretched on the mortgage.

But not a flat and most 20 somethings can't afford a house, although, it does depend on the area, of course.

I agree. I love living by the sea but it is undoubtedly true that the majority of seaside towns in the UK have fallen into rather deprived places without the ££ for the necessary upkeep in the past 40-50 years. The salaries in these areas are often low too for the £££ house prices. Yes, there are still some very upmarket ones; Salcombe in Devon is called Little Chelsea, for example, but most are not.

Then he is one of the very fortunate minority in receiving inheritances from both sets of grandparents and a large gift from his parents, who appear to only have one DC. A lot of younger people receive some financial help but a small fraction of that and so clearly still need a mortgage.

It also depends on how much was knocked off the price you paid due to the work that was needed.

You are right and wrong on that. In a healthy market its correct yes, but in a market that has become over valued and is correcting, your wrong. So it depends on timing - and we could be in a slump for sometime. It will recover and rebound as it always does - but my guess is the mad market highs of around 2022 will not be achievable again for several years. If you also factor general inflation into profit it could be a decade to get your money back.
There are much more productive investments than housing, at least for the foreseeable.

Gosh, how patronising. Do you think I and other people don’t consider all those things too?

You have to realise older people may be asset rich but cash poor so the whole cost of moving has to come from the sale price of their property. It has nothing to do do with greed or malice but pure economic reality.

Some are in this situation for sure but I think what @livelaughlambada is suggesting is that many of the elderly downsizers and not accepting economic reality themselves. They probably can't sell their homes for the amounts they would like to. That's the reality!

This is a lesson though, don't invest everything into your house, have assets that are cash generating and are easier than property to liquidate.

Some of those people are just old. Bought a house when they were younger which has appreciated in value and otherwise they’ve lived pretty ordinary lives. The Boomer fallacy is that all elderly people are on triple lock pensions and living a life of luxury in their large houses. The reality is often that they had ordinary jobs, not much savings and the only asset they have in real terms is the family home which they don’t want to lose at they might feel that’s the only reason that family still visit.

Yes the costs are high, estate agent, solicitor, stamp duty, removal people. I dread to think what it must add up to. I last moved 30 years ago.

And that is exactly what makes buying their houses so unappealing for the generations below them.

The cost of maintenance and repairs have spiraled. A lot of that generation have everything tied up in equity. So without equity release, they've been putting bandaids on these houses for the last 5-10 years since materials and trades have had to keep upping their prices.

The small jobs have become big jobs and buyers are aware that

A. Fixer uppers are money pits now
B. Buying from that generation now means fixer-upper due to the maintenance they have had to let slide as maintenance and repair costs have spiralled out of their means

I do think it's been made very hard for older people to downsize. I remember reading for work a report about the 'top of the property ladder' 10+ years ago which concluded there were just not enough suitable properties for older downsizers.

When you think about it, a lot of new build now is flats by major roads, no or little parking, not that near amenities, minimal storage. It might work for young people with no kids if there's decent public transport, but it's not much good for many people, including older people.

Older people need accessible flats next to amenities and with storage (because, let's face it many of their kids aren't in a position to take their parents' furniture and posessions - some may still be flat sharing). My retirement ideal is a ground floor flat round the corner from a high street!

sorry which boomers are NOT protected by triple lock and how is that a 'Boomer fallacy'? in 2023 the UK state pension increased by 10.1%. The median annual full time salary for UK employees increased by circa 5.8%. That was an extreme example but the government is obliged to increase pensions by average increase in wages or inflation or 2.5% whichever is higher. I thought all pensioners benefitted from this as long as have sufficient contributions? I think people could live very ordinary lives in past and accumulate massive asset wealth.

Yes this does make me laugh. I am helping my mother downsize and she hasnt got a pot to piss in except her house and her state penison. House bought for 200K 30 years ago, sold for 500K, yes, great, shes made £££ 'unearned wealth'. But she needs to live somewhere for the last 10y of her life! If you can find me a 2 bed ground floor flat for less than 300K i.e the entire profit near me in the SE then please let me know! Many boomers are like everyone else, just balancing and surviving. After moving costs, refurbishment cost, stamp duty, estate agency fees, conveyancing fees she'll be lucky if she has 10K to leave each of her grandkids.

But she needs to live somewhere for the last 10y of her life! If you can find me a 2 bed ground floor flat for less than 300K i.e the entire profit near me in the SE then please let me know

Did she not pay any mortgage of in 30 years?

200k for a flat in the 90s was expensive.