House Prices #3 Property market, buying and selling

[Yel]

I think it’s unfair and crazy to be laugh at peoples downfall because some people had no choice but to take on a lot of debt just to get something suitable.

I haven't seen anyone here laugh? It's a sorry situation all round for anyone facing hardship.

But this falling prices won't help first time buyers myth has been done many times on the thread.

 

[OnlyHereForTheLolz]

I haven't seen anyone here laugh? It's a sorry situation all round for anyone facing hardship.

But this falling prices won't help first time buyers myth has been done many times on the thread.

People don;t have common sense anymore. I wish they would explain simple economics so they understood it better. Saying they HAD to take on more debt for something suitable is just ridiculous

 

[Notworthy]

People don;t have common sense anymore. I wish they would explain simple economics so they understood it better. Saying they HAD to take on more debt for something suitable is just ridiculous

I don't think it's commonsense that's lacking just a huge sense of entitlement and a complete inability to compromise. When I bought my flat I literally had a table, 2 shitty chairs that were donated, a rug for in front of the fire, a bed and a cot. I wasn't about to max out a credit card to go with my maxed out mortgage. no sofa, no TV, no car, no phone.
ETA This was late 90's

 

[Yel]

People don;t have common sense anymore. I wish they would explain simple economics so they understood it better. Saying they HAD to take on more debt for something suitable is just ridiculous

This is where regulation should have come in, it was obviously a system on the edge waiting to fall down.

It's caused untold missery for many years and renters have had to put up with mortgage owners boasting about how much their bricks have gone up and the media celebrating "good news houses have risen 15% this year!" And calling anyone a failure that hasn't taken on debt. It's been beyond toxic.

The pandemic has created this expectation that the government will swoop in and sort out anything. But seeing as the government did nothing and let them rise 15% a year, year after year despite that fucking over many. Why should they come to help people now? It's tedious, so many want capitalism only when they're winning. I'd love to go gamble at the casino and everything I win is mine, everything I loose tax payers should suck up. The government "help" has helped Stoke inflation.

 

[OnlyHereForTheLolz]

I don't think it's commonsense that's lacking just a huge sense of entitlement and a complete inability to compromise. When I bought my flat I literally had a table, 2 shitty chairs that were donated, a rug for in front of the fire, a bed and a cot. I wasn't about to max out a credit card to go with my maxed out mortgage. no sofa, no TV, no car, no phone.
ETA This was late 90's

Oh, I 100% agree people have an extreme sense of entitlement. But I also think most people lack the basic economic skills to understand how the housing market, or just really any market, work

 

[Bubblebee94]

Not everyone has maxed themselves out though (personally I purposely didn’t) but with the increase in cost of living (that was unforeseen) a lot of people will struggle. Not everyone who owns a home is entitled thinking they deserve a 4 bed detached house, but is it entitlement to be an ‘average earner’ wanting an ‘average house’? (Which unfortunately the prices for are crazy!!) I certainly don’t think so.

On the other hand, I do agree that the government shouldn’t step in and help mortgage holders because honestly you take that risk and it’s down to you to make it work.

 

[Meg78]

I'm glad I came across this thread I'm normally lurking on the celeb gossip page!, I was talking about mortgages with my friend last weekend and I didn't realise that she has an interest only mortgage (no endowment), she is starting to fret about the mortgage and wants to change it from an interest only one to a better one for her but if I'm honest she seems to be a bit scared of doing this, I think she has this idea that she won't be able to change it and be stuck with it. Her mortgage is £45K and in her name only though she is married, she said her credit rating is very good but her husbands isn't, she earns around £28K per annum. I don't really know a great deal about mortgages so advised her to get in touch with an independent financial advisor or mortgage advisor but having come across this forum I was just wondering if anyone else had been in this situation ? Just to add my friend and her husband are late 40's.

I don’t have enough information to give you an exact answer on what your friend should do, it all depends on how long she has left on the mortgage, what interest rate it’s tied to and for how long, as at the end of the mortgage term they’ll be expected to pay the full debt back on the spot (just like a balloon payment when you finance a car) However, they may not be aware that they can overpay above the monthly amount to reduce the actual mortgage debt, and not just pay the interest. This is important as if they still have 15-20 years left they could pay the entire thing off by increasing their monthly payment above the minimum, and keep their current fix which undoubtedly would be below the current rates. If there’s not much time left then sadly they would need to rearrange another mortgage and change to a “repayment” type, which will be a higher amount each month, but save them from the final balloon payment.

The husbands credit score might not be an issue, there are specialist lenders these days that can help with all sorts of situations, a broker would be able to give the best advice on this. Also, as they’re not planning to move they have time to improve and increase his score, the free app ClearScore is great for showing what can be improved!

I hope this made sense!

 

[Notworthy]

Not everyone has maxed themselves out though (personally I purposely didn’t) but with the increase in cost of living (that was unforeseen) a lot of people will struggle. Not everyone who owns a home is entitled thinking they deserve a 4 bed detached house, but is it entitlement to be an ‘average earner’ wanting an ‘average house’? (Which unfortunately the prices for are crazy!!) I certainly don’t think so.

On the other hand, I do agree that the government shouldn’t step in and help mortgage holders because honestly you take that risk and it’s down to you to make it work.

I think our expectation years ago was to have our own roof over our head and anythng else was a bonus. Most of my friends have been in negative equity and taken 2nd jobs to see them through

 

[jaymie]

I have noticed that the houses that came to the market in my area after the mini budget is announced are actually more expensive than before.

Say they know their house worth 400k, they will market it at 450k because they know is a buyer market. People are likely to submit below asking. So either way, the seller is still going to achieve the realistic sale price of 400k. I hope I make sense here.

Is just my observations

 

[Folkevermore]

I have noticed that the houses that came to the market in my area after the mini budget is announced are actually more expensive than before.

Say they know their house worth 400k, they will market it at 450k because they know is a buyer market. People are likely to submit below asking. So either way, the seller is still going to achieve the realistic sale price of 400k. I hope I make sense here.

Is just my observations

It’s a dumb game really; everyone I know who’s bought a house recently has had it massively downvalued, resulting in the seller having to reduce the price or risk a broken chain.
Sellers can do what they like but if the banks won’t cough up the cash they’re screwed unless they find a cash buyer

 

[Anne1448]

People don;t have common sense anymore. I wish they would explain simple economics so they understood it better. Saying they HAD to take on more debt for something suitable is just ridiculous

I'm with you on that

It's pure common sense to not buy at the very end of your budget. It's literally economics 101. Especially when 2008 and its disaster is still fresh in everyone's memory.

 

[Yel]

It’s a dumb game really; everyone I know who’s bought a house recently has had it massively downvalued, resulting in the seller having to reduce the price or risk a broken chain.
Sellers can do what they like but if the banks won’t cough up the cash they’re screwed unless they find a cash buyer

It's silly, I think people are trying their luck as land registry data is always 3 months out of date.

As you say when it comes to being valued by the bank they won't agree to ludicrous prices so either it will fall through or will only proceed if the buyer has loads of cash to put in to pay the price that the bank says is it isn't worth.

 

[Koalabear]

Our mortgage offer has the actual % on it and then a bit underneath that says something like: the interest rates have historically risen to 10% (or 11% I don't exactly recall) and if that happened, your repayments would be £xxxx. It's definitely not the government's responsibility to save people, the information is there when they took out the mortgage. Also as a standard the banks do a stress test at 5%.

 

[Anne1448]

Even without the mention on the mortgage offer EVERYONE knows that these mortgage rates were abnormal.

Banks repeated it, the news kept talking about it and it is mostly why everyone and their mother tried to buy quickly. Also, if you have Internet, you can literally Google mortgage rate and you'll see.

A lot of people willingly chose to buy at the very end of their budget. It's like pinching yourself and wondering why it hurts.

 

[Folkevermore]

Even without the mention on the mortgage offer EVERYONE knows that these mortgage rates were abnormal.

Banks repeated it, the news kept talking about it and it is mostly why everyone and their mother tried to buy quickly. Also, if you have Internet, you can literally Google mortgage rate and you'll see.

A lot of people willingly chose to buy at the very end of their budget. It's like pinching yourself and wondering why it hurts.

To be fair though, in a lot of the U.K. a one bed flat can be at the end of a normal earners budget. I earn 45k and live in the East Midlands; if I was buying alone I’d have to buy at the top end of my budget or spend just as much on rent

 

[Koalabear]

To be fair though, in a lot of the U.K. a one bed flat can be at the end of a normal earners budget. I earn 45k and live in the East Midlands; if I was buying alone I’d have to buy at the top end of my budget or spend just as much on rent

That's definitely true but a lot of people are stretching themselves because there is a certain status desired. For example if you have very young kids you don't need a 5 bedroom house. You can do with a 2-3 bed for now, and buy bigger once they're older and (usually) your earning potential increased and you're not paying hundreds of pounds for childcare each month. Like I get people don't want to move, but a starter family home didn't use to be a 4 bed detached that everyone seems to want these days.

 

[judgejohndeed]

Really your purchase is never secure until you've paid off the mortgage. We've treated buying like we treat a stocks and shares ISA basically - might go up, might go down, have to be prepared to lose money just as you're prepared to make it. We made money on our first property and we've lost on our second. It's always in the back of my mind that we might one day have to sell and rent, until the mortgage is paid off and we own it nothing is certain. At the end of the day it's still a loan.

 

[Folkevermore]

That's definitely true but a lot of people are stretching themselves because there is a certain status desired. For example if you have very young kids you don't need a 5 bedroom house. You can do with a 2-3 bed for now, and buy bigger once they're older and (usually) your earning potential increased and you're not paying hundreds of pounds for childcare each month. Like I get people don't want to move, but a starter family home didn't use to be a 4 bed detached that everyone seems to want these days.

Maybe is a locational difference compared to you, but I don’t know anyone with young kids buying four or five bed houses. They’d easily cost half a million where I live.
Where I live it would be a flex to have a three before you’re 35.
I think your perception isn’t an accurate one of the whole country, so I think you shouldn’t judge as harshly about people over stretching. In a lot of areas it’s the only option

 

[HoGi]

I think the point is very few couples buy a flat as their first property. They all want a house minimum 3 bed etc. And will stretch themselves to the max to get that.

All my friends bought 3 beds as their first houses. The cheapest being 250k and the most expensive being nearly 500k. All in the same county but some areas are more desirable than others.

The mortgages are huge on some of them and they don't know how they will afford them if rates continue going up especially as a lot of them have help to buy equity loans to pay back too.

They could have bought a flat or a much smaller house for a lot less but they wanted a 3 bed house and now being stretched might bite them on the arse.

 

[Anne1448]

To be fair though, in a lot of the U.K. a one bed flat can be at the end of a normal earners budget. I earn 45k and live in the East Midlands; if I was buying alone I’d have to buy at the top end of my budget or spend just as much on rent

I live in Ireland and it's the same story here. However, these homes will keep being high as long as people will pay for it.

Since August, buyers stopped makingoffers on these shitty homes and took a step back. You know what happened? Homes went down by 15% within 3 months.

I'd rather keep paying over 10k in rent instead of ruining myself financially for a home that I cannot afford.