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 😁

Agree. At my level, I could find a local job anywhere, but my husband is not of a self-sacrificing type for a commute like that.

Saw something recently that said present mortgage rates mean most houses would need to take 30% off the price to sell, is that accurate?

With immigration going into reverse demand for renting is falling anyway, they won"t be able to bail the landlords (themselves and their mates) for much longer either.

Going to be some very quiet dinner parties going forward?

No, 30% is not going to happen if mortgage rate stays at 5%, as median salary also increases each year.

My calculation (using co-pilot):
If median mortgage loan in London is/was 360K,

• Borrowing at 2%: £360,000
• Equivalent borrowing at 5%: ~£261,000
• Reduction: ~£99,000 (about 27.5% less)

So on one hand, at 5% people can borrow 27% less in comparison to 2% loans.

On the other hand, according to co-pilot median salary in London increased for at least 25% since Covid, so borrowing power catches up with increasing mortgage rates.

It seems that average sellers who bought during Covid peak will unlikely sell with profit.

Not fully convinced by that, the drop in sales has been most pronounced in London, the average of a few well paid jobs in London doesn"t translate to the rest of the country, or even the rest of London, leasehold goes some way to explain the drop in flat sales but new-build sales have also collapsed and it is much harder to sell the other types of home, terraces for example? There have been very little meaningful wage rises in the UK for 25 years (Ok minimum wage was a recent biggie) and any we did get certainly didn"t match the explosion in house price inflation caused by cheap debt and any wage rises the averages are throwing out now are surely offset by the rise in youth/graduate unemployment?

Sorry but a 6 hour round commute is completely unworkable if you both work and have DC, even with a non working partner it's crazy. Do you have DC? Do you not work too?

Yes me too so Im the lucky one. He isnt. Hes very likely dyslexic and ASD so went for countless interviews when we moved but just doesnt have the skills to be successful in the modern world. Luckily he moved his way up in local government despite no qualifications and is highly regarded although not that well paid and will stay now until retirement. We moved 17 years ago and he only has a few years to go until retirement now so just seeing it out.

6 hour commute! What a waste of time & money

Very wise of him. It would be an unmanageable thing to do, particularly as I think you are nowhere near close to retiring and may have or want a family. Could a complete career change by an option?!

It’s one and the same thing. The mortgage rates, CoL, political climate etc. IS ‘the market’.

Redo the quote with the market rate and it’ll be much lower. You shouldn’t be paying that high a rate, even now

My last gig was a 5 hour commute.
I will not take another job in the same part of London (city).
I have a heavy heart when the headhunters call because the commute matters to me now on top of a ten hour day. I'm too old. Nowt wong with my brain but the body is not willing!
To buy my house a buyer needed a £150k+ salary or a huge amount of equity.

Fair point, someone else said similar (or was it you? upthread) but you can"t ignore that the "market" was manipulated by low interests rates/QE/Yield curve control etc. etc. for many years allowing the property bubble to keep growing when it should have popped by the normal laws of economics, so people buying in that manipulated market period were always taking the risk of big losses when a real "normal" returned, i.e obeying the signals from the bond markets instead of trying to override them or control them.