House Market Quiet

westernpromise

The trouble is that when you want to move, you can't. A 500% transaction tax sends a very clear signal. The state does not want any houses sold.

Reducing your selling price makes this worse, not better. If that were the solution people would do so in order to sell.

And if people in £1.5 million houses can't move nor can anyone lower down the price scale, ultimately including FTBs.

michaels

Thrugelmir wrote: »

Unless people have a reason to ( job, relationship, death, etc) why would you move often?

Historically you bought when you were settled and could afford to, a flat if you were single or a 2 bed terrace if a couple. Then after the first kid came along you would move to a 3 bed terrace near a primary school and just before secondary school time to a 3 or 4 bed detached near a good school. Then on retirement downsize to a bungalow by the sea.

Even just the rise in average prices makes this a lot more expensive in stamp duty terms than historically because of the stepped rates.

Thrugelmir

michaels wrote: »

Historically you bought when you were settled and could afford to, a flat if you were single or a 2 bed terrace if a couple. Then after the first kid came along you would move to a 3 bed terrace near a primary school and just before secondary school time to a 3 or 4 bed detached near a good school. Then on retirement downsize to a bungalow by the sea.

Or like many people. Simply stay put.

Windofchange

For many many reasons the housing market is broken. Layer after layer of interference both on the house buying and selling side and certainly in the SE a situation where it is just too expensive for large swathes of the population to buy in or sell up.

A lot of this boils down to the mentality of the public at large. You can never lose with housing. They have been right for the past two decades. I have been watching the moving up the property ladder series that is on at the moment, and pensioners etc with no idea what they are doing have brought places and made a profit. Should the tide turn and prices fall then it'll be interesting to see what happens. Everyone holding onto grannies old house who sees prices coming down might get the jitters. People with now unprofitable BTL houses. It's going to take a prolonged period of falls to change the view on houses, but it has happened before - spitting image and the housing slump of the 80's.

https://www.youtube.com/watch?v=azxNL-T3IFQ

It has all ground to a halt. At some point something has to give. Who's gonna blink first.

Tiners

You can dissect all the technicalities around sdlt, cgt, transaction costs, etc etc for ever, but I think the deathly quiet housing market is much more simply down to sentiment.

Vendors/potential vendors are refusing to accept that their houses aren't worth quite as much as they'd like to think they're worth and buyers can't or won't pay the current, mostly kite flying, asking prices... stalemate.

westernpromise

Tiners wrote: »

You can dissect all the technicalities around sdlt, cgt, transaction costs, etc etc for ever, but I think the deathly quiet housing market is much more simply down to sentiment.

Vendors/potential vendors are refusing to accept that their houses aren't worth quite as much as they'd like to think they're worth and buyers can't or won't pay the current, mostly kite flying, asking prices... stalemate.

The implied ideas that people cheerily pay 6-figure sums of money to move sideways, or move house and cheerily pay an extra £30k because their non-simultaneous buy and sell mean they are treated as second home owners, are the stuff of La La Land, quite honestly.

You don't get into owning multi-million pound properties by not caring where the odd 2 or 3 hundred grand goes.

Moving house is savagely taxed. The target has noticed this and has altered its behaviour to avoid the tax. Hence extensions, loft conversions, and so on.

Aside from builders, landlords, and probate sellers, almost everyone who sells a property buys another to replace it. There is a lot of guff spouted about how the market relies on Bambi-eyed FTBs but the fact is that the adorable little creatures have to buy off a former FTB who's trading up by buying from someone else who's trading up, etc. If you make this sell+buy impossible or unacceptably risky for any participant anywhere along the typical chain, you make it impossible for everyone.

chucknorris

westernpromise wrote: »

Moving house is savagely taxed. The target has noticed this and has altered its behaviour to avoid the tax. Hence extensions, loft conversions, and so on.

We are viewing a house later this morning, but we are in a bit of a dilemma, over whether to move or extend. Moving would cost us about £55k in fees/taxes, we would prefer to move rather than extend, but we don't like throwing that much away on fees and taxes. So we are trying to keep an open mind and see what our options are.

westernpromise

chucknorris wrote: »

We are viewing a house later this morning, but we are in a bit of a dilemma, over whether to move or extend. Moving would cost us about £55k in fees/taxes, we would prefer to move rather than extend, but we don't like throwing that much away on fees and taxes. So we are trying to keep an open mind and see what our options are.

And it is indeed throwing it away - as you'll have noticed, you get absolutely literally nothing for it.

Spending money on stuff, such as yachts, is not wholly wasted cash, because a second-hand yacht is worth at least some money. Drink is wasted money because there's no way to see the money again, but you could never drink a fortune away, and if you buy and stash wine, that's got residual value too.

There are three definite ways, however, in which you can completely destroy your personal wealth for no benefit whatsoever and without hope of seeing any of it again. These ways are drugs, gambling, and tax and personally I regard all three with equal loathing.

chucknorris

sann420 wrote: »

I agree its quiet. I am trying to sell a flat in zone 2 and it has been quite difficult.

I'm also trying to sell a 2 bed flat in zone 2, it went under offer in the first week (for the asking price) in mid December, but they dropped out 5 weeks later, it has been viewed about 6 or 7 times (and some booked for this weekend) since it came back onto the market. One party is definitely interested, and they are waiting on their parents for a second viewing (who are currently out of the country).

My wife has sold a 4 bed house in Hackney, we are waiting to exchange, which hopefully will happen soon.

Windofchange

westernpromise wrote: »

You don't get into owning multi-million pound properties by not caring where the odd 2 or 3 hundred grand goes.

Except of course someone who brought in 1996 and has seen a return from £241k of 1.7 million. I could find you plenty more examples I'm sure.

http://www.rightmove.co.uk/house-prices/detailMatching.html?prop=45213372&sale=89128431&country=england

(Above link not working - search 11 Coleherne Mews, London, Greater London SW10 9DZ from the landing page.)

Without BOMAD and government props, first time buyers certainly in the South East would be like hens teeth. I think you yourself were saying on another thread about how you have 700k of equity waiting for your daughters when they come of age?

Where we brought has pretty much doubled in price since 2012 based on next doors recent sale, and this is supposedly under the watchful eye of a government who have learned their lesson from the 2007 financial crisis. We're well and truly stuck. Can't afford 1.5 million for the next rung up, and the Mrs won't move out of London (much to my chagrin).

As you allude to, it is stalling because people cannot pay to move up and are therefore staying put / extending. Some of this will be down to taxes and costs of moving, but a lot of it in my view is down to the insane price inflation that we have seen - certainly in the S.E at least.

Sentiment has blown this thing up, and it will bring it down. I'd quite happily lose my 400k equity if it meant the house we want lost 800k!