How Far Will House Prices Fall? [Volume 6]
Discussion
brickwall said:
I think there is a big difference between even October 22 and now.
Something completing in October means it was marketed and went under offer well before Truss. In June you could still get a 5-year fix for under 3%, and that mortgage will have been valid until the end of the year.
Up until Jan/Feb there were still some buyers rushing to complete before a cheap mortgage expired - for them they might have know they would be ‘overpaying’ slightly, but it still made sense to do so if it meant getting a much cheaper mortgage.
Worth a reminder and I was in this exact situation when selling. Purchaser had a six month mortgage offer that they had brought forward from a previous perspective purchase that fell through. We needed to complete by mid October as a result otherwise game over and far higher mortgage payments. Something completing in October means it was marketed and went under offer well before Truss. In June you could still get a 5-year fix for under 3%, and that mortgage will have been valid until the end of the year.
Up until Jan/Feb there were still some buyers rushing to complete before a cheap mortgage expired - for them they might have know they would be ‘overpaying’ slightly, but it still made sense to do so if it meant getting a much cheaper mortgage.
The relevant date is really six months ago.
https://www.google.com/amp/s/www.mirror.co.uk/news...
Boris Johnson sells his London house for 200k under asking price.
Boris Johnson sells his London house for 200k under asking price.
JagLover said:
brickwall said:
I think there is a big difference between even October 22 and now.
Something completing in October means it was marketed and went under offer well before Truss. In June you could still get a 5-year fix for under 3%, and that mortgage will have been valid until the end of the year.
Up until Jan/Feb there were still some buyers rushing to complete before a cheap mortgage expired - for them they might have know they would be ‘overpaying’ slightly, but it still made sense to do so if it meant getting a much cheaper mortgage.
Worth a reminder and I was in this exact situation when selling. Purchaser had a six month mortgage offer that they had brought forward from a previous perspective purchase that fell through. We needed to complete by mid October as a result otherwise game over and far higher mortgage payments. Something completing in October means it was marketed and went under offer well before Truss. In June you could still get a 5-year fix for under 3%, and that mortgage will have been valid until the end of the year.
Up until Jan/Feb there were still some buyers rushing to complete before a cheap mortgage expired - for them they might have know they would be ‘overpaying’ slightly, but it still made sense to do so if it meant getting a much cheaper mortgage.
The relevant date is really six months ago.
I'm far from convinced that will happen.
skwdenyer said:
For a great many purchasers, prices will have to drop by fully 10% to achieve the same £ level of monthlies they could enjoy on at the pre-crisis interest rates.
I'm far from convinced that will happen.
Sort of.I'm far from convinced that will happen.
That's true if the same person was looking to buy the same house both pre and post crisis.
In reality a different buyer will come along and buy it. One who factors in the new rates.
It also depends on the property and whether somebody needs any/only a small mortgage to buy it. It's always easy in these types of threads to project your own and/or familiar circumstances to the wider market.
I mentioned on a related thread we completed on three houses on Friday and sold four by Saturday lunchtime. We then only had two visitors on Sunday/Mothers Day.
What I will say is it's completely unpredictable!
skwdenyer said:
For a great many purchasers, prices will have to drop by fully 10% to achieve the same £ level of monthlies they could enjoy on at the pre-crisis interest rates.
I'm far from convinced that will happen.
Doesn't look like it will need to - No house price crash in 2023?I'm far from convinced that will happen.
https://uk.finance.yahoo.com/news/uk-house-prices-...
Rick1.8t said:
Doesn't look like it will need to - No house price crash in 2023?
https://uk.finance.yahoo.com/news/uk-house-prices-...
Asking prices not achieved prices and there seems a strong element of seasonality with asking prices usually going up in March. Things may be stabilising but to early to tell. https://uk.finance.yahoo.com/news/uk-house-prices-...
skwdenyer said:
JagLover said:
brickwall said:
I think there is a big difference between even October 22 and now.
Something completing in October means it was marketed and went under offer well before Truss. In June you could still get a 5-year fix for under 3%, and that mortgage will have been valid until the end of the year.
Up until Jan/Feb there were still some buyers rushing to complete before a cheap mortgage expired - for them they might have know they would be ‘overpaying’ slightly, but it still made sense to do so if it meant getting a much cheaper mortgage.
Worth a reminder and I was in this exact situation when selling. Purchaser had a six month mortgage offer that they had brought forward from a previous perspective purchase that fell through. We needed to complete by mid October as a result otherwise game over and far higher mortgage payments. Something completing in October means it was marketed and went under offer well before Truss. In June you could still get a 5-year fix for under 3%, and that mortgage will have been valid until the end of the year.
Up until Jan/Feb there were still some buyers rushing to complete before a cheap mortgage expired - for them they might have know they would be ‘overpaying’ slightly, but it still made sense to do so if it meant getting a much cheaper mortgage.
The relevant date is really six months ago.
I'm far from convinced that will happen.
On that basis I’m reasonably confident we could see 10-15% nominal drops peak-to-trough, though it will take a while before it shows up in the stats. Add in a further 10-15% inflation over the period and that’s 25-30% in real terms.
No doubt it’ll be highly localised and differ in terms of property types/market price points.
brickwall said:
From where I’m looking the only houses that are actually going under offer are those priced at 10-15% below peak; anything priced in line with 2022 peak values sits around unsold.
I have a property alert on Rightmove for a 1/2mile radius area, as I wait to get back in, and I see a number of flats/maisonettes going on at peak or over and lots of reductions later too. Edited by JagLover on Monday 20th March 16:40
I’ve seen reductions and then SSTC, but yet to see any decent volume actually exchange and complete.
My area is low volume and stuff that’s hung around is now going. Likely desperate buyers buying any old stuff even still at daft prices.
But that also caused a decade long price doldrums around here last time.
So people maybe hoping for prices to rise before they move on might be waiting a loooong time.
Last time with low interest rates and low inflation that worked out ok, but this time it might not.
My area is low volume and stuff that’s hung around is now going. Likely desperate buyers buying any old stuff even still at daft prices.
But that also caused a decade long price doldrums around here last time.
So people maybe hoping for prices to rise before they move on might be waiting a loooong time.
Last time with low interest rates and low inflation that worked out ok, but this time it might not.
A family member is buying right now, their offer was accepted around 5% below asking.
They are first time buyers being advised to go for a 5yr fixed right now - I am not sure if 2 would be a better bet with discussion around rate cuts to help deal with the unfolding banking trouble.
Anyone with a better understanding than me want to chime in on what they would do with their term if they were to mortgage / remortgage right now?
They are first time buyers being advised to go for a 5yr fixed right now - I am not sure if 2 would be a better bet with discussion around rate cuts to help deal with the unfolding banking trouble.
Anyone with a better understanding than me want to chime in on what they would do with their term if they were to mortgage / remortgage right now?
brickwall said:
From where I’m looking the only houses that are actually going under offer are those priced at 10-15% below peak; anything priced in line with 2022 peak values sits around unsold.
On that basis I’m reasonably confident we could see 10-15% nominal drops peak-to-trough, though it will take a while before it shows up in the stats. Add in a further 10-15% inflation over the period and that’s 25-30% in real terms.
No doubt it’ll be highly localised and differ in terms of property types/market price points.
I would 90% agree, that's mostly what I am seeing, very very little is selling and what does go is normally at the 10-15% below peak type values you mentioned. Oddly even those at that kind of discount level are also not shifting but equally more the 3-4 bed detached or semi detached house - sub £1.1m type hom. Whilst there are less of the reasonably priced £1.3-1.7m 4-5 bed detached homes, but those that are at their peak value and even at 10-15% below are staying unsold.On that basis I’m reasonably confident we could see 10-15% nominal drops peak-to-trough, though it will take a while before it shows up in the stats. Add in a further 10-15% inflation over the period and that’s 25-30% in real terms.
No doubt it’ll be highly localised and differ in terms of property types/market price points.
The 10% exception, I have spotted the odd 1 or 2 SSTC properties that seemed high to me/not particularly desirable (but are in the £2-2.5m market, maybe they had something, or a development opportunity I didn't consider that makes them worth more than face value, or simply it's just the value range where finance isn't a constraint for the buyer, but there were arguably much more attractive properties in that range around here. All I can say is "odd".
Again this is just my area of interest, not a nationwide comment.
Agents looked last week all very similar prices and about what I anticipated. Very surprised by the spread on fees. Large but still family owned agency selected. Pictures next week and should be listed by the end of the week. 40 miles north east of London with great train service. Let's see what happens.
Rick1.8t said:
A family member is buying right now, their offer was accepted around 5% below asking.
They are first time buyers being advised to go for a 5yr fixed right now - I am not sure if 2 would be a better bet with discussion around rate cuts to help deal with the unfolding banking trouble.
Anyone with a better understanding than me want to chime in on what they would do with their term if they were to mortgage / remortgage right now?
Definitely go for 2 years, or even 1 year fix if availableThey are first time buyers being advised to go for a 5yr fixed right now - I am not sure if 2 would be a better bet with discussion around rate cuts to help deal with the unfolding banking trouble.
Anyone with a better understanding than me want to chime in on what they would do with their term if they were to mortgage / remortgage right now?
Leicester Loyal said:
Seeing loads of reductions on RightMove in the past couple of weeks.
I think I commented on here that last year I thought I'd somehow selected "show only SSTC" on Rightmove as almost everything locally had sold.It's very different now, vast majority of new listings are just sitting there. 75% of the properties in the Rightmove alerts I get are reductions.
People are listing properties at £550K now where similar properties sold instantly at £450K last year. You just look at them and think "no way". To be fair, I've thought the same about a lot of property over the last couple of years only for them to sell.
There's a few reduced refurb'd properties listed now - either it costs a lot less to do this work than I think, or people have caught a cold buying at the top of the market and the market now won't stand the adder they were looking to make.
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