House Prices #3 Property market, buying and selling

[instasham13]

Honestly the properties in my area of Scotland just aren't selling especially those over 250k. A niche few of the more expensive ones in great areas where someone has to die for a property to come on have sold but everything else is just sitting there getting reduced 2/3x and still not shifting. These are decent properties in nice areas that should be flying off the shelf.

I suspect interest rates and uncertainty is the main reason?

 

[btw]

Honestly the properties in my area of Scotland just aren't selling especially those over 250k. A niche few of the more expensive ones in great areas where someone has to die for a property to come on have sold but everything else is just sitting there getting reduced 2/3x and still not shifting. These are decent properties in nice areas that should be flying off the shelf.

I suspect interest rates and uncertainty is the main reason?

I don’t work in the property industry but I would happily guess a huge reason is interest rates added in with the rising cost of living. I’m hoping to move out of my mums now she’s downsizing so I’ve been researching mortgage options for the past 6 months to get an idea of a goal for my deposit.
6 months ago when the interest rates were lower the mortgage repayments on my type of budget would of been around £450, now with current interest rates the repayment would be around £600. Factoring in for rising costs of food shopping, energy bills and general living costs means, outgoings are probably at least £200+ extra a month. This will mainly affect lower income households + the middle earners so more than likely people will choose to not climb up the property ladder which means less people will sell and the demand will slow down so prices will eventually drop.

I don’t think the interest rates will lower much, the only way people will continue to buy properties are if house prices drop.

 

[Anne1448]

As long as prices will be disconnected from wages people won't buy. You can always wait for a lower interest rate but the agreed price on the property will determine everything else.

I don't mind having a 15% interest rate as long as the agree price on my property is close to my wage like in the previous decades.

 

[Yel]

A lot of Airbnbs are now for rent as well especially in the countryside. The rents are still twice the mortgage tho which is insane.

I can only assume that less people are booking holiday homes and are tightening their belts during this inflation.

I'm noticing people are putting their holiday rentals up for a short term rental. Still charging sky high prices and say you have to be out at april, presumably that's when they start to have their busy period for holiday lets. Can't be many people that would want to overpay for somewhere they knew they couldn't be in for long. Trying their luck I guess, if they get someone to cover the quiet period then they'll cancel any bookings.

Also park homes are just crazy. 390k for this near me, it's near the sea but doesn't even have any sea views. Looks pretty grim sat inside it. And it comes with loads of dogy fees and stuff as it's a parkhome.

 

[Yel]

Halifax showing prices fell 2.3% last month. Not a huge surprise. The crazy covid rises will soon be wiped out, plus another 10-20% then some stability can be restored with realistic prices.

Where's all the people saying might as well buy now as they'll rise again now prices are falling £7'000 a month?

 

[Anne1448]

The places where WFH employees moved to are facing insane price reduction at the moment

I am really hoping that it will keep going down to 2019 price rates.

 

[Yel]

2019 seems very possible, sharp falls are locked in and once it bottoms out I don't think it'll recover quickly like they did last time.

It's interesting that NI prices have still not recovered from 2008 falls, meanwhile in the rest of the UK they did.

Does this mean this time around greater falls in England, Wales and Scotland? Who knows. It's so different to 2008

 

[jaymie]

The places where WFH employees moved to are facing insane price reduction at the moment

I am really hoping that it will keep going down to 2019 price rates.

Yeah so many naive people never think about their career prospects when they made the move during the pandemic

 

[Holidaybobs]

Just wanted to add a bit of hope for anyone. My friend has just purchased a house in our home town (in Manchester). It was up for £240k but, fell through. They then put it in for £210k and the estate agent told my friend the sellers want a quick sale so offer £180k. She’s ended up getting it for £186k, when it was £240k around 3 months ago. So things are definitely changing

 

[Yel]

I'm seeing lots of these reductions where I am. I think they might need to reduce a bit more than 10% - after all experts were predicting 5% drops and they've been falling 4%+ in a month.

 

[instasham13]

I'm seeing lots of these reductions where I am. I think they might need to reduce a bit more than 10% - after all experts were predicting 5% drops and they've been falling 4%+ in a month.


View attachment 1804099 q

Wow. OK this is a genuine question. I live in central Scotland where a house like that would cost around 150k. I'm paying a 250k mortgage over 28 years and that was with a 47.5k deposit making our payment around the 750 per month mark. What sort of monthly payments are normal/average families looking at on a house like that because it looks like a normal family home to me. I understand deposit amount, length or term and interest will vary wildly but I'd would kill me having to pay that money for a house like that.

I don't mean that in a bad way to anyone at all. I just think we are spoiled with house prices here.

 

[Yel]

What sort of monthly payments are normal/average families looking at on a house like that because it looks like a normal family home to me.

It's very much how long is a piece of string.

Only a tiny tiny number of people have bought their properties at the post covid 2022 peak prices and even then the mortgage payments vary about 300% depending on if they bought at the start of the year before interest rates ramped vs now.

A very normal house in the SE is around half a million, the average wage is nowhere near enough to support this now interest rates aren't at their artificially low rates.

 

[Folkevermore]

Okay for some context (although I can’t afford that property listed) my partner and I have a combined income of 70k and are currently working through the process of getting a mortgage. So this is roughly the prices you’d be looking to pay right now.

the maximum we can afford (with a 10% deposit) is about £340,000. At least according to the banks. With a five year fix and a 35 year mortgage rate, we would pay about £1650 a month.

to afford the 470k property with a 10% deposit you’d need a combined income of around £95k minimum.With a five year fix and a 35 year mortgage rate, you would pay about £2275 a month.

 

[instasham13]

Okay for some context (although I can’t afford that property listed) my partner and I have a combined income of 70k and are currently working through the process of getting a mortgage. So this is roughly the prices you’d be looking to pay right now.

the maximum we can afford (with a 10% deposit) is about £340,000. At least according to the banks. With a five year fix and a 35 year mortgage rate, we would pay about £1650 a month.

to afford the 470k property with a 10% deposit you’d need a combined income of around £95k minimum.With a five year fix and a 35 year mortgage rate, you would pay about £2275 a month.

Wow thanks for giving me an insight. The monthly mortgage figure you quoted terrifies me but I totally accept that housing prices are so different down south than what I'm used to.

 

[Meg78]

Wow thanks for giving me an insight. The monthly mortgage figure you quoted terrifies me but I totally accept that housing prices are so different down south than what I'm used to.

I’m north west and house prices are worse here

 

[epl000]

to afford the 470k property with a 10% deposit you’d need a combined income of around £95k minimum.With a five year fix and a 35 year mortgage rate, you would pay about £2275 a month.

This is just so crazy, its so divorced from reality. We're very fortunate in both having good jobs, that probably on paper the banks would lend us that sort of money (and I'm very grateful for that). But the thought of being saddled with all that debt is just terrifying. Plus with energy bills going up too that is a lot of monthly outgoings just on somewhere to live...

 

[Yel]

Land registry data is out, showing a 0.3% monthly increase but worth noting it's 3 months out of date. So shows what was happening at the end of the summer, rather than what is happening over the last few months.

Headline statistics for October 2022
The average price of a property in the UK was£296,422
The annual price change for a property in the UK was12.6%
The monthly price change for a property in the UK was0.3%
The monthly index figure (January 2015 = 100) for the UK was155.5

UK House Price Index summary: October 2022

www.gov.uk

 

[Tove_drew]

I hope this downturn trend will translate to the Irish market. I’m currently in London expecting to move back to Ireland and buy either in a year or two. The quality of houses I’m seeing when I compare houses in the two countries is shocking. To be fair that might be because I’m not looking at Dublin.

 

[Yel]

Dublin alone could do with it's own thread. Most out of sync place in Europe, or it was - I haven't kept up to date.

 

[Anne1448]

I hope this downturn trend will translate to the Irish market. I’m currently in London expecting to move back to Ireland and buy either in a year or two. The quality of houses I’m seeing when I compare houses in the two countries is shocking. To be fair that might be because I’m not looking at Dublin.

Don't come back to Ireland. The housing situation is batshit crazy.

I moved from France to Ireland a few years ago and homes that were sold for 150k have now doubled if not tripled. Worse, most homeowners refuse to allow new units in fear that their overpriced homes would be cheaper.

I visited dozens of houses last year in the South (Kerry, Cork, Tip) and the North (Longford, sligo Roscommon, Mayo) and the quality is shocking. Majority are D rated and below. 70% need at 100k yo bring them back to spec.

Unless your parents have 200-300k to give to you, you are better off in England.