When/Will house prices cool down?
Discussion
Being reported on front page of Telegraph today that mortgage affordability criteria may be relaxed.
Link to online article here: https://www.telegraph.co.uk/business/2021/12/05/ba...
If there is a relaxation, it becomes harder to see prices falling in the short term.
Link to online article here: https://www.telegraph.co.uk/business/2021/12/05/ba...
If there is a relaxation, it becomes harder to see prices falling in the short term.
I have said it before, but housing is a totally rigged game this is what the HousePriceCrashers still don't get. Yes, all of their graphs and theories sound right, but ultimately the government will never allow prices to fall. As soon as prices look shaky some new incentive will be created out of thin air.
You either buy the best house you can afford, forget about it and get on with life or you end up posting on HousePriceCrash for 15 years moaning about it.
You either buy the best house you can afford, forget about it and get on with life or you end up posting on HousePriceCrash for 15 years moaning about it.
Well the rate rise today whilst small will impact affordability.
Next is the mood of the public with covid changing - moving isn’t the top of peoples list so supply is tiny (this certainly is the case in my area and being a bit OCD I open up my search a number of times a week ).
Next is actually too few big houses are being built so that those wanting to move up either can simply not afford the massive step & then the crippling stamp duty - rather they extend what they have and in turn remove that property from the current step for future buyers.
Next is the mood of the public with covid changing - moving isn’t the top of peoples list so supply is tiny (this certainly is the case in my area and being a bit OCD I open up my search a number of times a week ).
Next is actually too few big houses are being built so that those wanting to move up either can simply not afford the massive step & then the crippling stamp duty - rather they extend what they have and in turn remove that property from the current step for future buyers.
fesuvious said:
The issue at the top is too many elderly in massive houses. Often cash rich, they can afford the gardener, the cleaner and afford to leave 80% of the house unused.
There's nowhere for them to go
I met a lady in her eighties last month and she was remarkedly candid.
'i'm very wealthy, I don't need this house with all the land but there's nowhere to go. Old folks homes terrify me, they're like prisons. At this time if life while I have all my functions I want luxury. There's nowhere that can give me that.'
She's not wrong. And that's why she spent 20years longer than needed in a £2m house on her own.
Fortunately we don’t have rules dictating where you can and cannot live. There's nowhere for them to go
I met a lady in her eighties last month and she was remarkedly candid.
'i'm very wealthy, I don't need this house with all the land but there's nowhere to go. Old folks homes terrify me, they're like prisons. At this time if life while I have all my functions I want luxury. There's nowhere that can give me that.'
She's not wrong. And that's why she spent 20years longer than needed in a £2m house on her own.
Similar to my in laws. They live in a prime spot in their area with no mortgage, and a pension which afford them multiple holidays a year and some nice cars. They looked at downsizing and releasing equity but their options would be a soulless bread bungalows in a beige 1980s estate. I wouldn’t be moving!
fesuvious said:
The issue at the top is too many elderly in massive houses. Often cash rich, they can afford the gardener, the cleaner and afford to leave 80% of the house unused.
There's nowhere for them to go
I met a lady in her eighties last month and she was remarkedly candid.
'i'm very wealthy, I don't need this house with all the land but there's nowhere to go. Old folks homes terrify me, they're like prisons. At this time if life while I have all my functions I want luxury. There's nowhere that can give me that.'
She's not wrong. And that's why she spent 20years longer than needed in a £2m house on her own.
There's quite a smart retirement "village" near us - but a 2 bed apartment is the same sort of price as a 5 bed detached house in the local area.There's nowhere for them to go
I met a lady in her eighties last month and she was remarkedly candid.
'i'm very wealthy, I don't need this house with all the land but there's nowhere to go. Old folks homes terrify me, they're like prisons. At this time if life while I have all my functions I want luxury. There's nowhere that can give me that.'
She's not wrong. And that's why she spent 20years longer than needed in a £2m house on her own.
Sheepshanks said:
There's quite a smart retirement "village" near us - but a 2 bed apartment is the same sort of price as a 5 bed detached house in the local area.
It probably comes with a service charge attached that would cost more than maintaining the larger house as well.It just doesn't make it palatable to move to something like that. The traditional reasons for downsizing - the garden being too big, too much maintenance etc. are largely invalidated in a lot of areas by high house price growth.
Unless people really need to free up money, why pull it out of an investment that is performing well to put it into a bank account paying next to nothing or an overpriced retirement flat that is more likely to fall in value?
The cost of employing gardeners and handymen to maintain the larger property can be insignificant compared to the capital growth.
kingston12 said:
It probably comes with a service charge attached that would cost more than maintaining the larger house as well.
It just doesn't make it palatable to move to something like that. The traditional reasons for downsizing - the garden being too big, too much maintenance etc. are largely invalidated in a lot of areas by high house price growth.
Unless people really need to free up money, why pull it out of an investment that is performing well to put it into a bank account paying next to nothing or an overpriced retirement flat that is more likely to fall in value?
The cost of employing gardeners and handymen to maintain the larger property can be insignificant compared to the capital growth.
Well, like fesuvious said, a lot of these people have so much money it really doesn't matter.It just doesn't make it palatable to move to something like that. The traditional reasons for downsizing - the garden being too big, too much maintenance etc. are largely invalidated in a lot of areas by high house price growth.
Unless people really need to free up money, why pull it out of an investment that is performing well to put it into a bank account paying next to nothing or an overpriced retirement flat that is more likely to fall in value?
The cost of employing gardeners and handymen to maintain the larger property can be insignificant compared to the capital growth.
I've been involved in looking after the finances of three elderly people, none of whom you'd describe as well off, but the biggest issue was stopping money building up - once they get to a certain age they just can't spend it fast enough.
devnull said:
Similar to my in laws. They live in a prime spot in their area with no mortgage, and a pension which afford them multiple holidays a year and some nice cars. They looked at downsizing and releasing equity but their options would be a soulless bread bungalows in a beige 1980s estate. I wouldn’t be moving!
Not gona lie, living in an 80's bungalow is a fate worse than death.A few years ago a development was done in my area that was aimed squarely at this segment. Their big point was that most downsizers want fewer bedrooms and a more manageable garden but don't want to give up the larger kitchens and entertaining spaces that you get with a big house. So they built two/three bed properties with oversized rooms.
I thought they were being geniuses but they took over 5 years to sell under 100 properties so apparently not.
In truth I think a lot of people may like the idea of downsizing but when it actually comes to it they are not willing to take a perceived backwards step. Humans are always very bad at losing something they already have, more so than they are appreciative of gaining something they don't.
I thought they were being geniuses but they took over 5 years to sell under 100 properties so apparently not.
In truth I think a lot of people may like the idea of downsizing but when it actually comes to it they are not willing to take a perceived backwards step. Humans are always very bad at losing something they already have, more so than they are appreciative of gaining something they don't.
Whistle said:
McCarthy & Stone have a new development just up the road from my house, should be finished late summer.
My god they know how to charge, and the service charges are something else.
And the properties they sell are about the only ones in the whole of the housing market that often depreciate after their initial sale from new, significantly so in some cases.My god they know how to charge, and the service charges are something else.
Whistle said:
McCarthy & Stone have a new development just up the road from my house, should be finished late summer.
My god they know how to charge, and the service charges are something else.
Myself and my Dad looked into one of these for my late Nan. The term wouldn’t touch one with a barge pole sprang to mind!. Charged heavily on the way in, trousers pulled down on the way out. These places are really really a bad idea financially. My god they know how to charge, and the service charges are something else.
Average house price hits record high of £255,000 https://www.bbc.co.uk/news/business-59826341
Will be interesting to see what 2022 brings…
Will be interesting to see what 2022 brings…
Matt p said:
Myself and my Dad looked into one of these for my late Nan. The term wouldn’t touch one with a barge pole sprang to mind!. Charged heavily on the way in, trousers pulled down on the way out. These places are really really a bad idea financially.
To be fair whilst you are right my grandad actually bizarrely made money on his Mccarthy and stone flat. I think he paid 255 for it in q2 2014 and the estate sold it on his demise for 335 or 340 something like that in 2019
Had a 7k service charge on it iirc. But cheaper than a nursing home.
Gassing Station | Finance | Top of Page | What's New | My Stuff