House Prices

[Kim Mild]

We looked at a house that was offers over a certain price. So we ,and another buyer offer the asking price .Agent says buyer wants more like 10k above the asking price. 2nd viewing and agent is saying she these offers are too low . We offered above the asking price and they favoured another offer. The agent wouldn't tell us what it sold for (although we'll eventually find out because the sold prices end up online ).

I just don't understand why they didn't just have a higher asking price in the first place , if they wanted more . Perhaps the agents realised they'd undervalued it , or didn't anticipate the demand for houses in that price bracket. Feel a bit disheartened and wonder if we should have offered more. We will probably end up paying more for a house we like less .

 

[purplepixie_3]

Small local agents are much better to deal with. The corporate estate agents where they are entirely driven by targets are awful

The majority of estate agents will lie and stir up trouble constantly between buyers and sellers. They can however be a great tool provided it isn’t your side of the transaction holding things up.

I also disagree with how much an agent charges in comparison to a solicitor. Solicitors fees can be around £700 whereas an agent charges £2,500

 

[orange club biscuit]

Prices where we live have gone absolutely nuts. There is no way on earth we could afford our house now, we paid £380k in 2015 and they are selling on our street for £600k +

Such a pity that my daughter and her boyfriend will never be able to afford here, you can't even find a 2 bed flat for less than £250k. This is in the North by the way.

Both us and her boyfriends parents have always said never rent. Stay at home and save. They are 22 and just about to finish Uni, so it will be hard for them to adjust to full time at home after having found independence but at least they can split their time between houses. We've also given her the biggest bedroom in the attic and had the en-suite done up, plus I've made one section of the basement into a second living room for them to use if they want to be away from us. With rent prices around here it's the only way they'll be able to get a deposit together, and even then there will be help from the bank of Mum and Dad.

It is really hard and really shit for young people at the moment, I really feel for those in their early 20s at the moment. You sound like a very sensible and supportive parent btw!

 

[Yel]

What do you guys think of this?

New lender Perenna looks to offer 95% lending

Start-up mortgage lender Perenna has announced that it intends to lend at up to 95 per cent LTV. As well as offering products for first-time buyers it

www.mortgagestrategy.co.uk

A puff piece, they "intend" to do something long before they've got FCA clearance.

It all sounds very wE'Ve gOt aN ApP based on hot air, who wants an app for their mortgage? It changes so infrequently a yearly statement is quite enough.

Back to the economy I do wonder what state it will be in come next spring. I know lots are celebrating not going into the office again and thinking screw pret, but I already know one person in a tech company where they've all been given a 20% pay cut. Once a lot less money is sloshing around these "unaffected" people will very much become affected. It was very apparent not long into covid that the Swedish approach was the best.

What is the future of the south east if people will forever work from home?

 

[Sickofinstacrap]

My mortgage advisor told me today more and more 90% mortgages are becoming available in the past week and by January the tougher restrictions on them should be loosened, he said that banks were waiting on a brexit deal, which obviously hasn’t happened yet, and a covid vaccine to see how the market goes before they start offering 10% deposit mortgages again. In saying this I checked Barclays mortgage calculator earlier and before it would only calculate with 20% deposit now it is allowing 15% deposit. So I’m holding out hope that in the new year first time buyers will be coming back on the market so that we can try to sell again! With or without stamp duty at this point I’m just ready to move

 

[Yel]

The bank of England were expecting things to get back to normal by April 2021 with the v shaped recovery, and now they think the end of 2021.

I know they have to be very optimistic to give good sentiment. But it's ridiculously wishful thinking that it would ever be a V shape when the economy was on life support even before forced shut downs. No doubt they'll revise it down again come next year and things don't bounce back to normal.

They're also saying most furlough workers will return to their job. Very wishful imo.

Maybe they're factoring in very high inflation in getting back to normal? They were always fudging the inflation figures when it was high.

 

[JoeBloggs]

This could be 'deliberate deprivation of assets' and they can reverse it or back charge, even to the person who now 'owns' the property. I would need to be done well in advance of any care being required.
If the house is gifted or sold and the money gifted it would be part of the estate for inheritance tax purposes (if applicable) but it'd probably be cheaper than paying for care. Again though if it's done just before care is needed it could be investigated and reversed.

Or it could of all be done within the rules.

My aunt and uncle have had a lot of money in their lifetime. At one point my uncles tax bill alone was £300,000 for the years and that was years ago! They have now got next to nothing. They are selling their £1.5m home in England to move to Scotland to get free care in their later years.

My parents in the other hand have been very careful with their cash, saved and would be expected to fund their care just because they’ve not spent it like my aunt and uncle. Oh the other hand, my uncles paid a lot more in tax than most.

Personally I think everything should be a level playing field, stamp duty, tax, care, inheritance tax. But I think that’s another debate.

 

[heretoreaditall2019]

Shared ownership is a massive scam

I can’t understand why anyone does it. I honestly think the scheme was a way to acceptably sell off old council stock, I don’t think they expected anyone to fall for it (ETA - I think they thought it’d go to developers or investment landlords rather than owner occupiers living in hell holes).

Obvs entirely anecdotal but I know someone who’s in one in Belfast, the house “sold” for £100k and they own half. The house needs about £20k worth of work doing to it….. the council don’t pay half of that, when you sell it you don’t recoup your investment into the house before splitting the profits, plus they’re limited term leases so you’ve not even got anything to leave the kids? I can’t wrap my head around why anyone would do it. If anyone has had a good experience I’d love to hear as I may be entirely wrong?

 

[heretoreaditall2019]

And who are 'luxury flats' even aimed at anyway?

Investors 100%. This isn’t me being snobby but the reality of the housing situation is that these flats are the cheapest available option so end up being overfilled with poor families, rather than the single or couple yuppy the developers and landlords are expecting.

I lived in a development like this and our neighbour had four kids in a one bed flat that I felt was too small for me and now husband. You’d see it every day in the lifts, 2-5(!!) kids and you’d even have elders in the same flat. I looked at the census data (cos post Grenfell I wrote to our management company about concerns for realistic fire provisions for the actual head count in the building, not what the developers believe it to be based upon 1/2 per flat) and the average flat had 2 adults and 2 kids. They need to build more family homes for low income Londoners else they end up crammed into flats which isn’t fair on them or other people in the block. Developers know the landlords are scared of this so they big up the yuppy shit in marketing and make out like anyone wants to live in a heat box in zone 4/5/6 when you could get a gorgeous more central room for far cheaper. You get the odd sucker being bought a flat by parents who’ve got no idea about London so end up stuck owning them though. I know one who bought at £600k (this was around 2016/7/8?) and was in major negative equity and couldn’t get rid of hers, she was lovely I felt bad for her tbh.

 

[Yel]

I think estate agents are overvaluing houses right now so that when people low ball offers, they will still meet their actual target or not far off. Can they do this?

Of course they can, Estate agents is just a sales job with a low barrier of entry so attracts cowboys looking for a quick buck.

It's happening lots around here, buyers demand 10% off so they are overvaluing by 10%. Any pent up demand will soon be over (if it isn't already) as no one would realistically take on a huge debt when there's no chance prices will increase and the current reductions in house prices are likely to keep happening for the next few months.

 

[Boutros-Boutros Ghali]

The market is still nuts here in Nottingham. We have HS2 coming () and thats part of the sales drive as folk are buying up for the London commute. Our area is massively student accommodation, so rent is high on the few family properties, but they are building loads of purpose places do hopefully thatll all settle down. Weve set out to save another 5k by July next year and will start looking then, hopefully we dont blow our whole £23k budget on a property alone, but Im not being naive about it!

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

 

[Yel]

I agree remote working is unlikely to take off hugely, any companies it works well for probably were doing it before.

The big issue in coming years is all the white collar jobs being replaced by algorithms. It's been creeping in and slashing the amount of people needed per department. A recession will really kick start it.

High house prices is so damaging for an economy, it ties up so much money in unproductive bricks rather than investing into businesses and innovation. It's like a ponzi scheme. I'm not from the UK, but I find the obsession with house prices weird. Headlines everytime "good news for homeowners" everytime there's an increase even though it's just paper gains and long term the whole of society suffers.

There has to be some rebalancing, the current crop of youngsters will no doubt never retire but it would be beneficial if there was some relationship between earnings and house prices. I don't hold my breath though, the economy is largely based on house prices and many MPs are big into buy to let. I'll stop now before I get onto that

 

[JoeBloggs]

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.

This is what the 2014 MMA regulations were for, the general rate of ‘stress testing’ is an increase of 7%. While it’s a massive change in your day to day spending the banks do analysis this within your first 5 years of any product. So while many could afford more (we could have easily afforded to double ours or more) we were not granted more and actually got less than we wanted.

 

[Yel]

Very interesting! They are very cynical on Mumsnet lol.

Most of them have bought buy to lets and think they're savvy investors..

Its comparing apples to orangest though, those other dates were market recessions. 2020 was a government shut down essentially, the stock market stopped, housing market stopped, all in person retail was closed, manufacturing all but stopped. It wasn't because house prices fell or confidence in markets was rocked.

Agree it's not the same at all. But with all the knock on affects it's very likely to be a deep recession.

It will bounce back alot, but still not enough to make the fall less severe than other recessions imo. But who knows. It's unlike anything before we've had in our globalised world.

 

[Yel]

I doubt the interest rates will increase much if at all because of the economy tanking.

They maybe forced to rise with inflation running very high. When the us starts to raise others maybe forced into it.

Economists predict at least two US interest rate rises by end of 2023

Inaugural FT-IGM survey of academics points to messaging challenge for Federal Reserve
Elevated inflation will compel the Federal Reserve to raise US interest rates at least twice by the end of 2023, according to a new poll of leading academic economists for the Financial Times.

 

[Lanavalentine]

Just received a flyer in the post saying how sellers are disappointed nothing is on the market and have we considered selling our house….. what a compelling argument for uprooting our lives and spending thousands and thousands of pounds, thanks hun x

Yeah we get these. It’s insane. I mentioned it earlier in the thread but a local estate agent tried to organise a “street valuation party”, whatever that’s supposed to be. I don’t think anyone signed up

 

[Boutros-Boutros Ghali]

Agree completely. Even worse is seeing people pay over the odds for dives so they’re taking out huge loans on top of the mortgage I know it’s only negative equity when you realise it eg go to sell but wonder what happens when it comes to remortgage time…? We’ve not remortgaged yet so I don’t know the process but I’d imagined we’d get another independent valuation done which would inform our LTV calculation therefore products available, with the idea the lower the LTV the better the products. What are people going to do when they’re in a WORSE LTV? Will there be FTBs who find themselves being told it’s gone down and they’ve gone from starting at a 90% LTV to now being in a 95% or 105%?! And what happens re affordability checks for people that maxed out the mortgage and then got loans out on top when they’ve only got a tiny % of equity in the property?

They’ll be stuck on their current lenders SVR and there’ll be lots of sad face articles in the Daily Mail about how they’re trapped paying over the odds for a mortgage and have no quality of life etc….the banks can be brutal.

 

[Lanavalentine]

Agreed. Anyway, genuinely good luck to all landlords on Tattle.

Personally I think the next year or so is going to be enough just keeping track of my own household costs and mortgage; I absolutely wouldn’t want the extra stress of worrying about the finances and employment status of tenants as well, nor the general fluctuations of the housing market.

 

[Yel]

Really interesting thread. I’m hoping to move back to the UK in December after several years abroad and hoping purchasing my first house early next year.. I really hope house prices drop (sorry for anyone who might be selling) but it’s just so damn difficult to try and buy a decent house in a nice area. UK salaries just don’t equate with house prices at all! It’s insane.

Falling prices will hit a very small amount of people that have bought in the last year or so, and even they won't be affected that much if they can keep servicing the debt for a few years compared to renting. The constant rising prices outstripping wage inflation has been causing misery.

Prices won’t drop. The best thing is to buy straight away. They are expecting the economy to recover quick and also VAT will be slashed. It is difficult to predict housinf crashes and if everybody waited then you’d never end up buying anything. Rather pull the trigger on a house you love

Are you stuck in a time warp?

The wishful thinking 3 months ago of a V shaped recession and prices not falling is dead in the water. Even the most biased opinions are predicting a deep recession and double digit falling prices this year.

 

[Italy2]

Also I have noticed that house prices are priced slightly higher than pre covid at the minute so if the potential buyer suggests a lower figure, it would probably be around the actual house value and hence avoid the sale at a lower price. I think this is only a strategy that estate agents are probably trying to help sellers sell their houses without any losses but we will have to see if it actually works

I definitely agree that furlough is only masking unemployment and there would be many redundancies after it ends. Sadly alot of people don't realise this right now.