House Prices #3 Property market, buying and selling

[Anne1448]

I fully agree with @Notworthy. The interest rates means nothing in comparison to the cost of the home.

Whether you have a 10% interest rate or a 3% interest rate, the most important thing is the purchasing price. This will determine everything else. Which is why it is advised to always buy at the lower end of your budget.

 

[Nnrr46]

I fully agree with @Notworthy. The interest rates means nothing in comparison to the cost of the home.

Whether you have a 10% interest rate or a 3% interest rate, the most important thing is the purchasing price. This will determine everything else. Which is why it is advised to always buy at the lower end of your budget.

So really this could be the best thing for first time buyers if prices come down. Because in a year or so time we will have saved bigger deposits and house prices will have hopefully dropped but if they dont drop.. were fcked haha

My colleague told us yesterday that her son had been unsuccessful in buying a flat in Glasgow. They'd offered £30k over the home report but they were 7th in the list of buyers!!!

30yrs ago, these flats sold for £25k - now they're selling for £130k!!!

They're nice enough flats but have very small kitchens and bathrooms.

Surely at some point the market will crash and people will be left in negative equity like in the 1980s and 90s???

Im praying they go down, prices have quadrupled in the last 20 years. Tiny 2 bed houses worth average £300k today cant be worth over a million in 20 years surely there needs to be some kind of correction

 

[Former_Antelopee]

Do you guys think it may be worth putting my name and number through the door of the overly priced bungalow for sale in my village? The owner has passed away but it looks as if family are maintaining the house, it’s 200k overpriced compared to its neighbours and I know they’ll never agree to just lower the price that much, but is it worth leaving my details in case there’s ever a day they want to discuss it? It’s a very small village and everyone knows everyone, I don’t want to be offensive offering so low, but I think the estate agent has been leading them to believe they can command the prices of the much larger houses on the next street, and it’s half the size and in need of full renovation

Could you leave an email (one without your name in or just your first name). You could say on your note that you have noticed that the house is a lot higher than the neighbours and ask why that is? And that you’d be interested if it was a similar price to the neighbours?

 

[Princess of Scots]

My colleague told us yesterday that her son had been unsuccessful in buying a flat in Glasgow. They'd offered £30k over the home report but they were 7th in the list of buyers!!!

30yrs ago, these flats sold for £25k - now they're selling for £130k!!!

West of Scotland housing market is insane. I'm just outside Glasgow, in a commuter town. Saw a house offers over £120k, sell for £162k. Another one they viewed was also over 120k,needed a fair bit of work done. We found out it sold for 151k. It's absolutely madness around here and it's been like this way for a good year and a half

 

[hydeist]

West of Scotland housing market is insane. I'm just outside Glasgow, in a commuter town. Saw a house offers over £120k, sell for £162k. Another one they viewed was also over 120k,needed a fair bit of work done. We found out it sold for 151k. It's absolutely madness around here and it's been like this way for a good year and a half

We've just bought recently in the same sort of area, but we were only able to buy because we bought a bit of a nightmare shitehole that hadn't been decorated since before I was born We were massively outbid on anything that was even slightly nicer - hopefully things are starting to cool down a bit soon for you!

 

[mcfeez]

Our fixed rate is literally due to end in December, dreading to see some of the options. What sort of offers have people had recently when moving products? With everything going on we recently did a lump sum overpayment just to get the balance down before potentially much higher interest rates kick in

 

[Notworthy]

Our fixed rate is literally due to end in December, dreading to see some of the options. What sort of offers have people had recently when moving products? With everything going on we recently did a lump sum overpayment just to get the balance down before potentially much higher interest rates kick in

Depending on your financial situation it might be better to just stay on your lenders variable rate for a few months. I was very close to moving to a fixed rate a number of years ago but the paperwork was such a headache I thought fuck it, I'll stick with what I have, (BoE +.49%) after a hairy 6 months to a year, interest rates started to drop and I ended up paying less than 1% interest for years.

 

[Yel]

Presumably they're expecting them to fall a lot more than 10% if that's the official line they're putting out now?

 

[Anne1448]

Prices are definitely going down by 5-15% where I live.

I've even seen a lot of properties back on the market. Which indicates that people realised how high the prices were OR they completely pulled back.

 

[Yel]

I'm not surprised if chains are breaking. Today's prices just don't stand up now fixed interest rates are around 6%, for those that meet the even stringer checks.

The post covid insanity carried on as interest rates started falling.

I think estate agents are saying just a 10% fall so that people still buy at the current price with a small reduction. Rather than everything grinding to a halt while people wait it out. These things always over correct and this seems much worse than 2008 as interest rates were at 6% and this is when they were slashed to near zero to stop prices falling more than 15%. Totally different to today's scenario.

 

[Anne1448]

At least people were able to find houses in 2008. Now, there are no houses and they are almost 3 times more expensive.

 

[Bobbleowl90]

Literally how do they expect anybody to buy a house now who isn’t in a chain or is a first time buyer? I’m speechless. We are living with parents after selling 12 months ago!!! Priced out of everything and now it looks like we will be here so much longer. I’m so scared.

 

[SpindleWhorl]

No one wins in a house market crash apart from cash buyers/investors

 

[Yel]

No one wins in a house market crash apart from cash buyers/investors

Nah. Once things settle down with lower prices the whole of society benefits from having houses with some correlation to earnings and more money to spend in the economy. House prices going out of control have caused so much damage.

More like no one benefits from house price bubbles apart from a tiny minority.

The sooner they bottom out the better.

 

[SpindleWhorl]

Nah. Once things settle down with lower prices the whole of society benefits from having houses with some correlation to earnings and more money to spend in the economy. House prices going out of control have caused so much damage.

More like no one benefits from house price bubbles apart from a tiny minority.

The sooner they bottom out the better.

If the housing market crashes banks will tighten their lending criteria out of reach of nearly all FTB, houses snapped up by cash buyers at the bottom of the market, then before you know it prices start shooting up again due to the chronic shortage of housing

 

[Yel]

Once prices stabilize FTB will get funding

There's not that many cash buyers and it's very tricky picking a bottom. Also in recent years housing has been hit with more taxes. Labour look likely to get in within a couple of years and something illiquid like housing is at the top of their list to start with wealth taxes. That could put off the tiny amount that have the cash. Most borrow to speculate in housing.

I disagree but time will tell. They only shot back up after 2008 because they had the stimulus to lower rates, keep printing money and all that. It was totally predictable it would cause an asset bubble. They don't have those tools anymore.

 

[Anne1448]

Nah. Once things settle down with lower prices the whole of society benefits from having houses with some correlation to earnings and more money to spend in the economy. House prices going out of control have caused so much damage.

More like no one benefits from house price bubbles apart from a tiny minority.

The sooner they bottom out the better.

I fully agree with you.

More affordable homes means more disposable income which creates more profit for companies and increases hiring. The higher the price of houses the bigger the inequalities and the higher the chances of homelessness occurring.

If your house takes a lot of disposable income you will have next to nothing left in terms of discretionary spending. We need affordable housing for an economy to run healthily in the long run.

 

[Notworthy]

No one wins in a house market crash apart from cash buyers/investors

Not true

 

[Yel]

Kwasi is meeting with the banks today . I don't think it's within their power to stop prices from falling without collapsing the currency and the whole country.

But I think they'll try to not make the whole housing market collapse. Extending terms, switching to interest only for a period, longer before repo'ing.

That said a fall of 20% would only take it back to pre covid levels, I'd call that a correction but apparently that would be a crash.

 

[Folkevermore]

I spoke to my mortgage advisor today to get up to date figures for what interest rate I would pay now with all of the changes. If I went with Halifax who I have my agreement in principle with, I’ve been quoted the following based on the interest rates available today

5% deposit -4.8% interest rate
10% deposit - 4.37% interest rate

judging by the way people online have been talking, I assumed 6% was the standard rate now, but apparently it’s not. For a first time buyer this is only 0.5% higher than the interest rate I was quoted in August. It’s an increase but it’s not the huge increase that people are discussing online (like that girl who mentioned her new offer was 10%).

I hope this provides some reassurance to anyone who is planning on buying or remortgaging soon; it’s not amazing but nowhere near as bad as it’s made out in the media