House Prices

[Yel]

If you've already got a house it's not a bad idea at all to move now, if they do fall 10% by the end of next year it doesn't make that much of a difference.

But if you're taking on a huge amount of debt way better to wait while things seem bubbly.

I think the economy is going to be a long downward spiral, it'll really start to bite when the office workers at home start to lose their jobs as they're either replaced by an algorithm or an offshore worker. Not saying all will be, but even 10% over the coming years would have monumental repercussions.

 

[Kim Mild]

Thing is if people end up in negative equity they won’t move unless they have to do that’ll mean less available housing on the market so more people staying in rented and those prices rising….it’s a mad situation right now

And used cars are absolute madness….we got offered £14k for ours a few months back. It’s now over £20k so we can potentially make £6k on what’s owed on the finance….no cars to swap it for unfortunately, can’t even test drive the one we want as they've sold all the stock of the particular model in the Uk and nothing coming in until March next year

Used cars are crazy prices. I used to buy cars about 8 years old for about 2 grand . Now it's about 5 grand for a 8 - 10 year old car. I changed cars recently and they gave me near 2k in part ex. When I got that car a couple of years ago they were reluctant to take my previous car in part ex cos it was only worth scrap value.

There have been fewer new cars registered in the UK per year since the credit crunch, but still it's crazy. And people pay it cos they need to change cars as their situations change.

 

[Clairer86]

Oh my love no no no, ex council stock is SO MUCH better made as building standards for council were so much higher back then! You’re in a brilliant solid house!

New builds are awful, I know they look crisp and fresh but a few months in they’re grubby af, all the fittings are cheap and nasty, you pay a premium to buy them but everything needs ripping out and replacing in 2-3 years. I lived in a new build flat and the kitchen was literally disintegrating before us, despite the fact we barely cooked in it - probably 3 dinners a week? And then there’s the issue of re selling them, I’ve heard a lot of people have ended up making a loss, and then you’ve got the cladding scandal, sorry writing this out frantically like a mad woman but you couldn’t give me a new build for free tbh. I know it’s shit to live in the chaos but take the time to ~renovate~ your house and it’ll be a lot higher spec than a new build and worth a lot more too x

Oh my god, thats exactly what my partner says about council houses! I just thought he was trying to put me off newbuilds!

 

[Sickofinstacrap]

The market has started to slow down now the last few weeks. Stamp duty holiday finishes end of June.
I’m concerned about inflation with all that money that has been pumped into the economy. How many billions?
I know I’ve always said there are too many vested interests from high up wanting property to stay ridiculously expensive but can you imagine if interest rates go up what then?
Most people won’t remember 15% interest rate but so many people lost their homes handed back keys to banks and building societies and never ever recovered or got back on the ladder.
I don’t expect it to go back to that level but would most people with a mortgage be able to cope with say a rate of 6%.
Any thoughts folks.

I wish it was slowing where we are looking to buy! Can’t even manage to get a viewing they sell before they even make Rightmove!

 

[Bronx]

I got messaged by the agent that one were interested in had its priced dropped by 15k they also wanted me to make some sort of commitment to it after only having a virtual tour .

Don’t do it. You need to look at it in person to check circuit boards and boilers and cracks, that you won’t see in a virtual tour.

 

[Pixipoppy]

I am in Devon, and you can buy a not very good three bed in not very good area for around £200k. That’s what we had to buy, and what all our friends had to buy, and none of us could have done it without the help from our parents. The ones who don’t have help from their parents are still renting and they think that they will never be able to afford to buy, because with renting they can’t save for a deposit.

Same here, I don’t know anyone my own age (late 20s to early 30s) who didn’t have either money off their parents or inheritance. The only other option is to live with parents rent free and save for a number of years but that just isn’t practical in a lot of cases. I’ve been saving £200 a month for 4 years and am only just now getting enough for a 10% deposit on a very cheap flat. Fortunately my parents are gifting me the same again as what I’ve saved, but even with that very generous contribution I’m still going to struggle to find something I can afford. £200k used to get you a small 2 or 3 bed terrace where I live, but now even those seem to be few and far between.

 

[Yel]

I’ve found a lot of your financial insights across different threads really helpful. Obviously this isn’t a place for official advice but what are your thoughts for FTB? We’re currently trying to reduce our outgoings for affordability reasons while saving as much as we can, but it feels impossible a lot of the time

Ah thanks, some say I'm pretty pessimistic but I'd say realistic

Sounds like you're doing the right thing, building up as much cash as possible.

As for first time buyers I'd not get too worried about the current situation and wait to see what happens in the spring.

Looking at this

And you can see how much they fell in the 90s and 2008.

So it seems wishful thinking that they'll carry on going up throughout a recession that's wildly accepted to be far far worse than either of those

Worth remembering in 2008 they manipulated the market so much and those tools are now spent as we never recovered from then. So there's limited intervention they can do going forward.

Even before covid prices looked about to fall:

Anyway don't get too disheartened, it can't carry on with house prices being so out of sync with wages. How it all unravels is anyone's guess - inflation, deflation, stagflation, hyperinflation

 

[idk2]

Are house prices rising? Or is it just my area? A 2 bed terraced house that usually would go for about £200k max seem to be going up for £230/240. Honestly this just feels like I’m running through a tunnel and the exit is just getting further and further away! Plus the new build we were told would be released under £300k has just been released for over meaning we can’t use HTB. I feel like we’ve gone from having a few options to just resigning myself to renting for another couple of years which I really don’t want to do.

Surely a recession will mean a drop in prices?

I'm no expert but yeah, I believe they'll be a significant drop in housing prices by early 2021. They had their fun overinflating prices these last few months but it'll come crashing down. A lot of experts have said its a good time to sell rn but not a good time to buy, we were told to hold out until next year as we are first time buyers and do not want to a new build or to use HTB.

My area has been significantly over valued for the longest time. Estate agents are also putting bidders against each others, dont get dragged in to bidding wars. If someone else wants to offer over asking price, go for it but it could never be me especially if the house isnt worth it. 3 bedroom houses going for 400k is ridiculous.

 

[Mrs McCarthy]

Don’t understand this at all. For tenants claiming Universal Credit etc, are they not still receiving money from to pay their rent with? If why is rent not being paid? Is there not a rule as to who must continue to pay rent? As in if your income had not been affected in any way why the hell are your bills in particular rent, not being paid anyway? Seriously maybe I’ve missed something on the rules of this one??

Basically, although some people say here that tenants rights are awful in this country, they really are not that bad.
It has become more and more difficult to evict a tenant if they are not paying rent for whatever reason. You would need to go to court most times, then may need to get a bailiff just to kick them out, and after all that you may be rent-less for all the time the tenant hasn’t payed, and have all the court and legal fees on top.

 

[Tublet83]

I have seen prices in my area go up 40k in the last year alone. Regarding house prices and the recession, I think they may stay the same or drop in London, but outside of London I don’t think they will drop due to other factors to consider.

1. COVID-19 allowing people to work from home, therefore not needing to live in London and not needing to commute. Therefore wanting to buy places with more space and land.

2. Stamp duty being cancelled, therefore making people who have been wanting to buy do it sooner to make the most of the saving. Also it makes buying more property v attractive to people who already have property, but want more for buy to let / property portfolios.

3. Lack of good quality housing stock. There are new build estates popping up all over the place, but majority arn’t built to last. Demand outweighs the supply for quality housing.

I’m no estate agent or expert, but that is just my two pence!

Working from home – how it has impacted the property market

Over half the population’s working circumstances have changed with around 34% of people being told they will continue to work solely from home and a further 22% being told that they will continue to work partly from home and partly from the office. How will this shift in working circumstances...

www.guildproperty.co.uk

Exactly what this report says...more people happy to commute, and less London centric (which isn’t a bad thing for the country at all!)

 

[heretoreaditall2019]

We get them all the time, apparently they always have someone lined up! Houses in our road are sought after but people don’t tend to move out often.

We’re in the same situation, the only way a house becomes available is if someone dies. Which is why we tend to never get these leaflets, we get stupid retirement based scams instead so equity release or moving to one of those communities?

I hope this isn’t inconsiderate but I do wonder why some elderly stay in these houses when they could move out to a smaller flat or one of those over priced communities and have a much better quality of life? A house a few doors down has a really overgrown front garden, her adult kids barely visit beyond the mandatory “stay in your will” trip once every few months, and the whole house could just do with an overhaul. What’s the point in staying? You’re living in an expensive house but are so cash poor you can’t get a gardener round…? It’s bizarre to me. Obviously very dependent on circumstances, my OAP friend is like a socialite and has kids, grand kids, great grandkids visiting all the while and maintains a decent QoL even as a pensioner.

 

[hnoz]

Yes but most FTB can't afford a £300K property anyway?!

300k sounds crazy high but the reality is that it isn't if you are near London or in the South. Raising it to 500k isn't really a FTB policy but before the rise to 300k it absolutely was an additional road block to buying in the south. I think our stamp duty was due to be about 6k for a one bedroom flat, while my friends buying 4 bedroom houses up north didn't have to pay anything.

 

[Yel]

Thank you I’ll take a little pessimism with reality over the opposite every time. I don’t want anyone to lose money if they sell, but making loads of profit while others struggle to get the deposit together isn’t right either.

The problem is the balance has been totally missing as for years the news headlines celebrate houses going up 10% / 15% / 20% but that actually benefits few in society and causes lots of problems.

Now even a 10% fall that just takes us back to prices from 2 years ago seems unthinkable.

Houses really need to not be seen as investments, but as something essential. Any rises above inflation should not be celebrated but warned and action taken. Then you get in to the whole issue of the London property market being used by the worlds worst people to invest and launder their money and it was ignored (encouraged even) by successive governments because it bought in money, while at the same time disadvantaging residents.

I think next year house prices will change between either +2% or -20%, impossible to tell what direction!

 

[Kmacg]

That may change as there’s a strong rumour that HS2 will never make it past Birmingham, so hang in there

Fingers crossed the pandemic put a stop to it now most folk are remote working

 

[Moe]

Sadly there was a history of giving people large mortgages with next to no deposit who couldn't afford them, hence the crash. Banks don't give out mortgages to help people, its all to make money and if you default it is worse for them so its easier not to grant it, along with the next legislation which means they can't.

Are you talking about the early nineties crash? That one was more to do with interest rates going through the roof.

 

[Yel]

The thing is house prices are largely linked to how easy it is to get credit / the money supply. High LTV mortgages aren't your friend as they push up the prices.

I'd rather have a house for 150k with an 80% mortgage than the same house costing 300k with a 95% mortgage.

 

[Giggling Squid]

we had our heart set on a new build property 5 mins from where we live now. read all the planning permission documents on our council website and they estimated to sell the homes for £180k before covid, they’ve just gone on the market for between £216k and £230k!! How can they do this?? a three bed semi with a drive up north! It’s ridiculous

Still a bargain, compared to down here in the Home Counties! We own a large new build 2 bed semi which cost over £300k!

house prices are just insane

 

[Consumerism_fatigue]

It looks like my flat purchase is about to fall through I offered to split the difference so I put in an extra £15k and asked that she reduced by £15k. Her first reaction is stubbornness, which is frustrating. The facts are there; lenders don’t think her property is worth that much and I am willing to immediately go £15k into negative equity to secure it. She is thinking about it though, so fingers crossed.

Anyway, c’est la vie! My broker shared that not only are many properties now coming in undervalued by the lenders, they’re also changing their lending criteria for people who already have a mortgage in principle. He said as many as 60% are being denied their mortgage when they try to move forward with the transaction.

I expect this is the beginning swell of a much larger wave that will go through the property market.

Houses around me are still selling within a week of going on the market. Everything that was left on from just before lockdown has now sold.

The only thing I’d say about that is let’s see where they’re at in 6 weeks time. They may have had an offer accepted, but that doesn’t mean they’ve completed. My offer was accepted back at the start of the year and it’s just been a mess since then

 

[Boutros-Boutros Ghali]

Oh no don't think you're an estate agents, but that's classic estate agent speach - it gets repeated alot as it's popularist.

Sold means nothing untill it's exchanged, estate agents around here are putting on houses and changing to sstc a few hours later. Presumably it's a trick to make it look like they're busy?

Nationwide have withdrawn all 95% LTV and their minimum is now 85%, factoring in the falling prices I assume. Also just because a product exists doesn't mean someone will get it, they will possibly be much more strict on who qualifies.

https://www.archive.is/oldest/https...ples-minimum-deposit-for-uk-first-time-buyers

We had an offer on our flat which we accepted, within an hour they had changed the website and board, that was a Friday afternoon. They’d pulled out by Monday after thinking about it over the weekend. They’re definitely keen to get as many showing that as possible. Ours was still on their website 3 months after the sale was completed (showing as sold) again am guessing to make them look better

 

[tagliatelle]

I stayed with some family a couple if weeks ago and the man of the house, a totally insufferable boomer of the worst kind, frequently told me how "the house is our pension" and even tried to tell me that occupational pensions aren't worth having (he lost that argument seeing as I work in pensions so had a come back for every one of his pathetic little arguements).

I suppose it’s because defined benefit pensions have had such a bad press after the Arcadia, and other, scandals that now these people are using it to cover their historic inability to save money. I worry about my pension - I’m not paid enough to make chunky contributions!