Why sellers blame “market” instead of affordability?

[JustAlice]

Just it really, why sellers are surprised properties are not selling, when their buyers’ mortgage will be double or triple of what they’ve been paying, and blame the “market”?
Yesterday I was looking at a very average 3-bedroom terraced on Rightmove (it was priced around 700K) and R suggested our monthly mortgage payment will be 4.3K with 10% deposit and 6.1% mortgage rate. Renting similar property will be 3K, better property in a better location - 3.5K tops.
For most families it’s not even a choice, they simply can’t afford new interest rates and stamp duty combined with old prices. The ones that still can afford to buy, will pick either the best value or the best price.
My rant is over 😁

A lot of sellers didn’t pay what their house is selling for so are unaware what a mortgage would now cost. Plus people are very used to houses always going up in value & being a safe investment.

House prices have to drop with current interest rates or salaries have to become turbo charged

The entire housing market, renting, buying and selling are all insane right now. I was having this discussion earlier at work, because the ones in their 20s are feeling completely beaten by this current market and we were talking about when things changed. My grandparents married young and bought a house in London. My grandad was a postman and nan was a SAHM. I don't think there is anywhere in the country a low-mid earner could buy a house and support a spouse and family nowadays.
A 3 bed rental in my area of the South West is now around £1400 a month and to buy around £250k. The only jobs we really have here are care, retail and catering, all incredibly low wages. I don't know how this market can possibly carry on.

It always makes me laugh when sellers and estate agents say ‘it’s not the price it’s the market.’

You can’t separate the two things. The market determines the price that people will pay. If it’s not selling then the price is too high compared to what the market judges the price should be.

Renting is a different issue - a lot of rentals are paid for by benefits, so it’s an artificially created demand again thanks to the govmt.
Limit housing benefits and suddenly demand sinks, prices go down and working people are finally able to pay rent and save for deposit at the same time. Landlords will start to sell even more thus increasing supply and lowering prices.

By the way Andy mentioned new help to buy scheme for new builds - it defs is not going to increase demand for older homes.

I've seen so many comments like this.
It's not the price because nothing is selling where I live.
It's not price, there are just no buyers.
It's not the price, people are just worried that interest rates might go up.

Those things are all the price!
As others have said, the maths just doesn't maths anymore. Prices in some areas for some house have been slowly correcting for a few years but I think we will see much more substantial falls going forwards. It will be in combination with a large deterioration in the economy though.

"By the way Andy mentioned new help to buy scheme for new builds - it defs is not going to increase demand for older homes."

Its going to further reduce the values of flats and 2nd hand leashold houses surely ?

Why would a young person, who can only afford leashold, not want 20% of their deposit provided by the tax payer ? Surely this will, initialy at least, suck out first time buyers from the used market. At least until the time that used prices have fallen far enough to be a comparable bargain.

Its a blatant help the lenders lend, and help the builders sell scheme. The net result for those who buy into it being that they overpay even more.... creating a whole new wave of mortgage prisoners.

Can't say Im suprised by this though. Allowing young people to buy decent homes at sensible pricing just cant be allowed. Awful.

Most people in my central London workplace commute for this reason: Norfolk, Suffolk, Kent, Hertfordshire, Essex.. it's a very rare person who lives closer in. I can think of one in Wimbledon.

I was lucky enough to buy a house very young just before the market went bonkers in the late 90’s. We bought a tiny 1.5bed terrace for £48k with a great aunty inheritance of £5k for the deposit, on an endowment mortgage so it was cheaper per month than the flat we rented. We scrimped like mad and used offset mortgage setups to clear the debt. That more than doubled in value giving us a great deposit for a 3 bed semi in a nicer area 10 years later. That doubled in value over the 20 years we lived there giving us enough for a 4 bed detached now.

We are presumably among the last to see such ridiculous increases and we could never buy even the 3 bed semi comfortably on our wages now. It’s the house price inflation on the previous ones that bump us into the next bracket. I am never moving again as it has been a hideous year trying to buy a place with two separate sellers changing their mind after we coughed up for a survey.

We sat it out in the three bed waiting for prices to stabilise and ideally drop for about 10 years before biting the bullet and moving this year.

The whole situation is completely bonkers. I can see the impact it is having with people in their 20’s and 30’s and beyond who are living at home with parents or renting. They are not having children because they can’t afford to. These are people in good jobs with decent pay but they just can’t afford to get on the housing ladder. They rightly don’t want to buy a highrise box in a shared ownership scheme or pay a mortgages on overpriced properties and have nothing to live on. We have a ageing population and a falling birth rate. That is a huge problem coming down the line that needs to be addressed now.

Wont most people buying a 700k mortgage be on their 2nd or 3rd home by then, so wont only have a 10% deposit, it would be something like 40% deposit. I wouldnt have thought this is first time buyer territory.

But people aren’t building the equity like they used to on the first & second rungs because prices are stagnating.

This comes up time and time again, there are tons of areas in the NW, NE and midlands where property is affordable to people on NMW.

plus interest rates/cost of living makes it hard to clear the debt faster

It’s a Ponzi scheme and people in Ponzi schemes never admit it! They just carry on believing that people below them will continue fuelling their gains.

But they’re not where people want to live, usually have poor local employment opportunities, often poor public transport, not near family/friends/support.

I live in a run down area. The only people moving here are asylum seekers, newly released prisoners, etc., into boarding houses converted into HMOs. There are nicer areas close by in rural locations, but the people moving there are typically newly retired or WFH moving up from London, so again not working locally.

Theres a reason why homes are cheap in some places!

I live in a pretty affordable area. My friend sold her house 7 or so years ago. It's back on the market with some cosmetic changes to the buyers' taste but for £80,000 / 33% more. So even saving £1k per month for 7 YEARS, someone has only kept up with the price inflation. It's ridiculous.

Our house has (according to Rightmove) gone up by about 25% in value since 2021 when we bought it, so a similar calculation. It is unsustainable and I feel really sorry for those 10/15 years younger than us.

@likelysuspectThere are places where property is more affordable but if the jobs are hundreds of miles away, it does not solve the problem. It is simply not possible to decentralise everything to far corners of the country. Naturally more jobs will be created near larger towns and cities and workers will want to live in a commutable distance.

Someone is likley to realise that she can put her house on the market for any price that they like - but it doesn't mean that anyone will pay it. Times have changed, they might be lucky and get a buyer quickly, but equally, they might end up either chasing the market down reducing it slowly - or simply just withdraw it once reality hits...

In our area, 530K is a 2-bedroom flat and 650K is a starter 2-bedroom family home. 700K can buy a tiny 3rd bedroom. I wouldn’t expect people in their 30th, who are supposed to be target audience, accumulate 250-300K in equity, even if they started their career in 2016 🤔
especially after coughing up 23K for a stamp duty.

My DB and his wife bought their first house 18 months ago after selling their London flat. My DB has contracts as he works in film/tv and also works for someone who builds playgrounds. They could only get a mortgage with her salary, plus her parents very generously gifted them £100K to buy and my mum £50K. They still pay out £5K a month which includes nursery fees. They barely go out eg for meals as they can’t afford it.

Their neighbours, he bought their house young at a good price and they have 3 DC, youngest is 2. It’s not worth the wife going back to work right now due to nursery fees and also school drop off pick up issues.

They certainly don’t live in an affluent area (Catford/Hither Green) either. My DB and his wife searched for a year to find a suitable affordable house to buy.

And what % was their deposit to house price in the end?

What you have said also comes up again and again, generally from older posters who were able to buy their first home cheaply.

It may well be the case that there are some areas of the UK that are still affordable for FTB on average incomes but that is of no help to everyone else in the other 95% of the country. Those areas tend to be affordable because the job opportunities there are poor. It is obvious that most people cannot live there.

Well you make your choices then dont you

I live in the south east, OH has to commute to London, sometimes its a 6 hour round trip, he has to drive as the train cost is through the roof

Our house is a 3 bed semi, nothing fancy, probably worth about 280 if that.

2 bed flats are around 130 - 200 depending on the style.

The midlands though are not the far corners of the country, property is affordable there. I wish we had thought of this when moving out of London years ago, couldnt afford to stay in London due to the housing costs so we went south but I wish we had gone north. The travel to London is actually quicker the further north you go.