House Prices #3 Property market, buying and selling

[jaymie]

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.

I think is a combination of many things. Low IR, Lockdown, gifting of deposit..

Many FTB that I know in London bought a 2-3 bed house instead of a flat.

 

[Folkevermore]

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.

Most people I know who buy their first house are in their mid 30s with kids, and work from home a good chunk of the time. It’s completely understandable that they’d stretch to a three bed (well they’re two beds with a study) because it’s not going to work out otherwise.

in terms of buying flats; they an absolute scam. Service charges and groundrent often make it the same price as a two bed starter home

 

[Notworthy]

Most people I know who buy their first house are in their mid 30s with kids, and work from home a good chunk of the time. It’s completely understandable that they’d stretch to a three bed (well they’re two beds with a study) because it’s not going to work out otherwise.

in terms of buying flats; they an absolute scam. Service charges and groundrent often make it the same price as a two bed starter home

That's for newbuilds, I have an ex council flat in a good location, 2 dbl beds, large, private, SW facing garden (I could sunbathe nude if I was so inclined), off road parking for 2 cars and ground rent of £10 a year. If I bought a new 2 bed house now, it would be smaller, with a tiny bit of outside space and parking for 1 car

 

[Folkevermore]

That's for newbuilds, I have an ex council flat in a good location, 2 dbl beds, large, private, SW facing garden (I could sunbathe nude if I was so inclined), off road parking for 2 cars and ground rent of £10 a year. If I bought a new 2 bed house now, it would be smaller, with a tiny bit of outside space and parking for 1 car

Older flats have service charges too, and no flats where I live have gardens. Just because you managed to find something like that, it doesn’t mean it’s the standard.
15year old flat I looked at last week had £200 a month service charge

 

[Anne1448]

Apartments are really practical. Especially for the proximity to businesses and public transportations.

But my God, the service fees in the last couple of years are out of control!

 

[Folkevermore]

Apartments are really practical. Especially for the proximity to businesses and public transportations.

But my God, the service fees in the last couple of years are out of control!

Not to mention the cladding issues so many of them seem to have!

 

[Anne1448]

Not to mention the cladding issues so many of them seem to have!

Yep, some people bought apartments in the last couple of years and had to fork up to 60k to being it up to code.

Mind you, it is 60k per property owner in the whole building.

 

[judgejohndeed]

Just because you managed to find something like that, it doesn’t mean it’s the standard.

Nor is £200 a month though. The flat I live in now in one city doesn't have a high service charge or ground rent and nor does the one I'm going into in another. There were plenty available both times that didn't have high charges, I just didn't view the ones that did. It's even more favourable if you get one with a share of the freehold. Buying both these flats was cheaper per month than renting one, I'd hardly call it a scam - not more so than paying off a landlord's mortgage + profit anyway

Cladding can be an issue but I'm sure we also all know someone who moved into a house without getting the full structural survey done and had thousands of pounds of work to do. That's the risk you take tbh.

 

[Princesst]

However, these homes will keep being high as long as people will pay for it.

I think this is a really key point. From my horrendous experience of trying to upsize over the past couple of years and failing miserably. The house price boom caused by covid was mostly driven by people WANTING to move and had silly money (a lot cash buyers) to throw at the situation. Every time we offered on a house it went to a cash buyer who would pay more. Many moved from more expensive houses to cheaper houses (for them) in rural areas but had more space. It used to always be people with cash paid less as it’s a perk! Sure there were situations were people we desperate and had to buy overpriced with no choice. But many were paying way over asking because they wanted it blindly and clearly had the money to do so. Everyone we came up against lost their minds and threw ridiculous money at things and created insane bidding wars on property that was never worth it. The big problem is though now people in similar property have it in their heads that their house is worth X amount and that’s it they won’t budge unless absolutely desperate to. Or if they’ve only moved in since covid they’re not going to take a loss unless forced. I think many people will just hunker down. Which in turn leads to still a supply/demand issue. It’s going to take a lot of pressure for prices to actually drop I think and we’re nowhere near there from what I’ve seen.

 

[Meg78]

Just for fun, would you rather live in:

the largest house in a rough area

or

the smallest house in a posh area?

 

[Koalabear]

Smallest house in posh area.

 

[OnlyHereForTheLolz]

Just for fun, would you rather live in:

the largest house in a rough area

or

the smallest house in a posh area?

The old adage of buying the worst house in a good estate rather than the best house in a shit estate

 

[margaretta]

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.

I’m not sure that they are doing this because of status. It might have something to do with how damn expensive it is to move now. £20k for lawyer, surveyor, stamp duty, estate agents fees, removal company…
having to find that money again 3-4 years down the line as you’ve outgrown your home makes moving prohibitive.

 

[Princesst]

I think there’s lots of reasons people tend to want bigger houses. Some of it future proofing, some because everyone has so much stuff now that takes up loads of room. Kids toys are pretty big. Some people like my husband are forced to WFH now as his company sold his office building thanks to covid. so his work space really can’t be near other household noise which is really tricky. Don’t think it helps either that the influencer/social media culture is forced down our throats with people who have huge houses. Playroom, gym, craft room, shoe room, wardrobe rooms etc is just the norm for instagram & youtube . Also a problem with the UK is houses normally are really expensive for what you actually get. Small rooms. When you compare it like for like what you could get in some states in America for example our square footage is so tiny. We could swap our house for something huge there with less cost. But again YouTube etc allows you to see what other people have constantly, how the other half live and a lot of people want what others have when they see it’s just the “norm” to them.

 

[Notworthy]

Just for fun, would you rather live in:

the largest house in a rough area

or

the smallest house in a posh area?

I think it would depend on how badly I needed the space and which one had the off road parking and South facing, private garden. (my 2 absolute redlines)

I think there’s lots of reasons people tend to want bigger houses. Some of it future proofing, some because everyone has so much stuff now that takes up loads of room. Kids toys are pretty big. Some people like my husband are forced to WFH now as his company sold his office building thanks to covid. so his work space really can’t be near other household noise which is really tricky. Don’t think it helps either that the influencer/social media culture is forced down our throats with people who have huge houses. Playroom, gym, craft room, shoe room, wardrobe rooms etc is just the norm for instagram & youtube . Also a problem with the UK is houses normally are really expensive for what you actually get. Small rooms. When you compare it like for like what you could get in some states in America for example our square footage is so tiny. We could swap our house for something huge there with less cost. But again YouTube etc allows you to see what other people have constantly, how the other half live and a lot of people want what others have when they see it’s just the “norm” to them.

Property tax in the US can be extortionate, surprises a lot of Brits to find out how much they have to pay yearly

 

[Anne1448]

I'd pick the smallest house in an expensive neighbourhood.

The place is probably safer, full of amenities, public services and I don't have to worry about anything. As a person who grew up in a rough neighbourhood, I wouldn't recommend it to anyone. It takes a toll on your mental health.

 

[Koalabear]

I’m not sure that they are doing this because of status. It might have something to do with how damn expensive it is to move now. £20k for lawyer, surveyor, stamp duty, estate agents fees, removal company…
having to find that money again 3-4 years down the line as you’ve outgrown your home makes moving prohibitive.

It's really not that much unless you're buying a very expensive property.

Solicitor fees are about £1000 per transaction so x 2
Survey is about £700
Estate agents you can get free or cheaper online ones for less than £1000
Removal company you don't necessarily need, you can do it yourself (we did) for about £500

So total just over £4k, not including stamp duty.

Which I totally get is a lot of money, but sometimes it would be cheaper to pay £4k to move than overpay mortgage payments for years for a house with empty bedrooms.

 

[margaretta]

It's really not that much unless you're buying a very expensive property.

Solicitor fees are about £1000 per transaction so x 2
Survey is about £700
Estate agents you can get free or cheaper online ones for less than £1000
Removal company you don't necessarily need, you can do it yourself (we did) for about £500

So total just over £4k, not including stamp duty.

Which I totally get is a lot of money, but sometimes it would be cheaper to pay £4k to move than overpay mortgage payments for years for a house with empty bedrooms.

I’m really pleased for you that you managed to do it so cheaply, but you are an exception.

I’m guessing it depends where you live and how much stuff you have and what the property market is like too. This was for a property around £350,000.

Friends have used cheap/no estate agents and had nothing but issues, so bit the bullet and went to a proper agent in the end.

Solicitors in London around £1300-£2000 per transaction. You can shop around but you get what you pay for. Any issues and cheap solicitors soon add on extra fees.

Surveyor about right.

Removal costs… again friends tried to do this on their own and regretted it. Said they’d even go as far as getting them to pack for them too!

Also factor in other niggling costs like settling up electricity/gas bills in full, any costs associated with new broadband or other contracts, any immediate repairs or redecoration, any new furniture you need, all of which you need a cash float for.

 

[judgejohndeed]

It's really not that much unless you're buying a very expensive property.

Solicitor fees are about £1000 per transaction so x 2
Survey is about £700
Estate agents you can get free or cheaper online ones for less than £1000
Removal company you don't necessarily need, you can do it yourself (we did) for about £500

So total just over £4k, not including stamp duty.

Which I totally get is a lot of money, but sometimes it would be cheaper to pay £4k to move than overpay mortgage payments for years for a house with empty bedrooms.

I agree. The claims on this thread are getting daft tbh. It does not cost £20k to move. The survey I’ve just booked was £275 + VAT which I was surprised by, even though I’m in London I’m using solicitors from my old city which are vastly cheaper and really reliable, and the government has just removed stamp duty on a lot of properties too.

 

[Yel]

Halifax figures showing prices fell 0.4% last month

The average house price fell by 0.4% in October, figures just released by the Halifax building society shows. That’s the sharpest fall on Halifax’s index since February 2021, following a 0.1% drop in September.

That pulls the annual rate of house price inflation down to 8.3% from 9.8%, and means the typical UK property now costs £292,598, down from £293,664 last month.