Housing market

[paulfromcamden]

The fact is, many tradespeople have increased prices far more than inflation. Have you tried shopping around for a trade recently and haggling on price?

Our flat is shared freehold. We now have major repairs that were shelved pre-covid coming in at substantially more.

Looking at the number of skips in the neighbourhood there's no shortage of work for trades so I guess it's partly supply and demand.

 

[Snufkin]

Interestingly a tradesmen I have been using recently said, in a slightly worried voice, he has had less calls over the last few months. One Swallow and all that but let’s hope it’s the start of the long overdue ‘correction’ in the housing market. I keep trying to be optimistic that this madness will come to an end with a gentle slide downwards for a decade rather than a major crash. Either way it would be good to see a substantial fall in house prices.

 

[paulfromcamden]

Either way it would be good to see a substantial fall in house prices.

Not for millions of people who would find themselves in negative equity.

 

[LecsonQuad]

There won't be a substantial fall in house prices. There may be a 10-15% correction or a period without any change in house prices generally [there will always be local variations] but if the change were more than that then sellers won't/can't sell. The only way to depress house prices is to build more houses where people want to live and no political party has that at the top of their agenda.

 

[Ponty]

Not for millions of people who would find themselves in negative equity.

Problem is, if there’s no downside risk, prices will continually rise as it simply doesn’t matter how much you borrow.

 

[Mike Reed]

Not for millions of people who would find themselves in negative equity.

As happened in around1990/91. however, this would be an opportunity for buyers to buy at a discount. Everything goes in cycles (said a spokesman).

My eldest daughter, 45 just 2 days ago, desperately wants to buy a property, prob. with her son who is earning/saving (and me, of course). It's not a good time to buy, I feel, because so many kinds of shit will be hitting the fan come the end of the year that it would be a strange miracle if property was unaffected. At least, interest rates are at last going up to (hopefully) realistic levels, heralding the demise of the protracted cheap money era. Sod's Law, of course, that she'll have to service a higher mortgage and she's on a sub £20K salary (that's council education departments for you).

 

[Ponty]

The only way to depress house prices is to build more houses where people want to live and no political party has that at the top of their agenda.

Ending ZIRP and forbearance will also bring prices back down to earth.

 

[paulfromcamden]

Problem is, if there’s no downside risk, prices will continually rise as it simply doesn’t matter how much you borrow.

Of course. Just making the point that the often wished for price crash would be catastrophic for a lot of people who've simply bought a home within their means.

And based on past crashes it's the bottom of the market that drops out and inflicts damage on the people who can least afford it. The £4m+ mansions round here might take longer to shift but they're not going to suffer the same damage as a studio flat in Harlesden.

None of that is to deny the hardship experienced by folk who are currently priced out of the market.

 

[Seeker_UK]

Not for millions of people who would find themselves in negative equity.

That's only an issue if you are looking to move or remortgage.

 

[Ponty]

Our flat is shared freehold. We now have major repairs that were shelved pre-covid coming in at substantially more.

Looking at the number of skips in the neighbourhood there's no shortage of work for trades so I guess it's partly supply and demand.

Yep, plus of course massive materials cost increases. Added to hefty day rate rises and it’s easy to see substantial maintenance cost inflation.

 

[Michael J]

Of course. Just making the point that the often wished for price crash would be catastrophic for a lot of people who've simply bought a home within their means.

If it was within their means then they should still be ok (although their means might get stretched some very soon) because they do still have a home. They will at least still have the security of that, even if it is in negative equity on paper.

 

[Chops54]

Rubbish.
You can choose who does that and shop around.
In those properties if they want a 25% increase you have to cough up.

Or you can do it yourself like I do

 

[davidsrsb]

I wonder what the baby boomers starting to die off in significant numbers or going into care will do to the market

 

[Ponty]

I wonder what the baby boomers starting to die off in significant numbers or going into care will do to the market

If there’s anything left after paying for care, inheritance to pay off mortgages and pump back into housing I’d have thought. I know people whose financial plan includes a hefty inheritance to pay off a mortgage at some point. A very dangerous strategy IMHO.

 

[davidsrsb]

Care costs will cut many inheritances, lifespan has increased far faster than the healthy lifespan

 

[Brian]

Interestingly a tradesmen I have been using recently said, in a slightly worried voice, he has had less calls over the last few months. One Swallow and all that but let’s hope it’s the start of the long overdue ‘correction’ in the housing market. I keep trying to be optimistic that this madness will come to an end with a gentle slide downwards for a decade rather than a major crash. Either way it would be good to see a substantial fall in house prices.

Agree, though whatever may happen I would worry about folk going into negative equity. Of course, that’s not a problem if you are able to pay the mortgage.

I’ll post again that we bought a property in 1988 valued in the early 90’s at ~30% lower than we paid, and not only couldn’t we sell it, we didn’t get any views. We took it off the market at that time and it eventually sold in 1998 for something like 10% less than we paid, if I recall correctly. The fall in values didn’t cause us lasting problems, where we eventually moved to had also fallen compared to earlier times.

Edit: Just checked. It sold in 1998 for 13.6% less than we paid in 1988.

 

[clivem2]

The other thing that happens when market prices drop is that only the really desperate end up selling, so although prices drop not many are able move or enter the market.

 

[Mike Reed]

Or you can do it yourself like I do

Or be content with a 'did it myself once'.

 

[Tony Lockhart]

Some people are taking advantage of the overheating market by overpricing their houses. There's one such on my street, it's probably 10-15% heavy. If it works, good for them. However there is the risk of having it hang around and interest wanes. This happened to the people who sold me this house, it was overpriced by 20-25%. I'd seen it and dismissed it, then it was reduced and reduced again. I placed an offer and after some haggling we did a deal. I'm very sure that if they'd advertised it lower in the first place it would have sold sooner and for more. Not to me, of course, so I'm rather glad they did what they did and do consider myself fortunate.

Same as it ever was, really.

 

[Tony Lockhart]

I can only see house prices dropping if rentals drop too. Even if houses lose 30% of value, the deposit required for a first time buyer would still be scarily high. And of course, Help to Buy Schemes are for new builds only, with almost no parking, no storage, no public transport.