House Market Quiet

lisyloo

Or like many people. Simply stay put.

When you get elderly that may not be possible.
Both my husbands parents and my parents have moved to bungalows when they couldn't get up the stairs (and at least one of them can't use a stair lift).


There does come a time when you need the facilities that "retirement" properties offer like on-site care, pull cords, warden, cafeteria etc.


For my mother this was 64 and mother-in-law 74, so it's not extremely elderly for everyone.

chucknorris

Windofchange wrote: »

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.

It isn't necessarily that they 'cannot', it is also a question of value. We just looked at this house this morning:

http://www.rightmove.co.uk/property-for-sale/property-64618616.html

My wife declared that that she wants a house with a larger lounge and kitchen (I was 50/50 on the size of the lounge, not ideal but I could have lived with it). So we would have to go for something larger, and we'd be lucky to get that for less than £1m, which would result in a cost of £60k for fees and taxes.

We can easily afford that, but it isn't affordability, it is 'value' which is the stumbling block for us. I think that we could extend our home and achieve what we want (maybe even exceed) for about £150k, add that to our existing value of about £650k, and the difference between staying put and moving is about £260k!

So unless we see a 'must have' house, we are going to further explore extending our current home.

westernpromise

Windofchange wrote: »

I'd quite happily lose my 400k equity if it meant the house we want lost 800k!

Except you (or if not you, others like you) would then need a 100% mortgage. In a market where prices have been falling, lenders want bigger deposits against lower salary multiples, as in the early 1990s.

If what you think you want actually happened, you'd be stuck worse than you are now.

Abolition of stamp duty, in contrast, would save you £100k on the price of buying somewhere meaning you could sell your own place for £100k less and still afford the move. Your buyer would save more than that, because as well as the £100k discount, he's saving stamp duty too. The whole market could then gratefully unclog, like a constipated bowel under a tsunami of prune juice. At the moment it is behaving as though it has had a concrete enema.

Windofchange

chucknorris wrote: »

It isn't necessarily that they 'cannot', it is also a question of value. We just looked at this house this morning:

http://www.rightmove.co.uk/property-for-sale/property-64618616.html

Nice looking house. Kent is where I want to head, although more Tunbridge / Sevenoaks way. Asking price is a shade more expensive than what our 2.5 bed London flat is 'worth'. I'd get a garden to boot and a garage to play around with my motorbikes - one can but dream...

I think it is increasingly a question of they cannot. I am paid pretty well, even by London standards, certainly well above the average. If I were on my own looking to get a starter flat I couldn't. I could probably scrape a studio somewhere but I'm not paying what they're asking. This is I suppose an example of your value point, but actually if you look at the London average of around 30k per annum, you need 250k for a studio, so even with a 30k deposit that is some 7 and a bit times earnings. The only reason I can think of that youngsters on modest London wages are able to afford these places is help to buy (and other such schemes) or BOMAD / BOGAG. Problem comes when these youngsters want to have a family - trying to sell a studio in a (hypothetical) housing bust anyone?

Windofchange

westernpromise wrote: »

Except you (or if not you, others like you) would then need a 100% mortgage. In a market where prices have been falling, lenders want bigger deposits against lower salary multiples, as in the early 1990s.

Well no because we have nearly cleared the mortgage. We'd take our 450k equity post hypothetical crash back to 2012 numbers and take out another 400k or so mortgage for the 1.5 million pound house that is now worth 800k. It'd work very very nicely for us I think.

The only people needing a 100% mortgage would be those new comers who had no equity from a previous property or savings / BOMAD. I would say that a 3 - 4 bedroom house in Zone 2 isn't going to be a first time buyer purchase, so the people buying this will always have equity from a previous property, or are filthy rich trust fund kids.

Your point about abolition of stamp duty doesn't add up. If it were abolished it wouldn't affect our ability to afford a 1.5 million pound house. It wouldn't allow someone with a 1 bed flat they'd sold up the road for 400k to buy our 2.5 bed for 850k - not unless they'd won the lottery or what have you. The rungs certainly in this neck of the woods have become spaced so far apart that you can't jump up to the next level. There will always be a multitude of reasons why people don't move, but affordability is always going to be number 1 in my view. Well off middle classes such as myself just can't afford the next level up and so are staying put. Stamp duty would not be a serious consideration for us in the context of another 700k of debt.

westernpromise

Windofchange wrote: »

Well no because we have nearly cleared the mortgage. We'd take our 450k equity post hypothetical crash back to 2012 numbers and take out another 400k or so mortgage for the 1.5 million pound house that is now worth 800k. It'd work very very nicely for us I think.

But it would also have to work for your seller and your buyer. That's the problem.

economic

chucknorris wrote: »

It isn't necessarily that they 'cannot', it is also a question of value. We just looked at this house this morning:

http://www.rightmove.co.uk/property-for-sale/property-64618616.html

My wife declared that that she wants a house with a larger lounge and kitchen (I was 50/50 on the size of the lounge, not ideal but I could have lived with it). So we would have to go for something larger, and we'd be lucky to get that for less than £1m, which would result in a cost of £60k for fees and taxes.

We can easily afford that, but it isn't affordability, it is 'value' which is the stumbling block for us. I think that we could extend our home and achieve what we want (maybe even exceed) for about £150k, add that to our existing value of about £650k, and the difference between staying put and moving is about £260k!

So unless we see a 'must have' house, we are going to further explore extending our current home.

you should also think about the time effort and inconvincence in extending, unless you really enjoy it. perhaps its wiser to overpay for something to avoid the inconvinience of extending? especially when you have a large nest egg as yourself and at your age.

chucknorris

economic wrote: »

you should also think about the time effort and inconvincence in extending, unless you really enjoy it. perhaps its wiser to overpay for something to avoid the inconvinience of extending? especially when you have a large nest egg as yourself and at your age.

I've almost devoted the the last year of my life thinking about the time, and inconvenience, that's why we were reluctant to do it. In fact, I spent about an hour this morning trying to convince my wife that we should move into one of our investment properties while the work is carried out, the advantages would be:

- avoid the distribution
- claiming partial PRR on that property, we would extend iour stay up to a year
- Can claim letting relief (x2) on that property

We couldn't really pretend to be able to claim our personal allowance against CGT, as we usually use that up against share dealing anyway.

GreatApe

chucknorris wrote: »

It isn't necessarily that they 'cannot', it is also a question of value. We just looked at this house this morning:

http://www.rightmove.co.uk/property-for-sale/property-64618616.html

My wife declared that that she wants a house with a larger lounge and kitchen (I was 50/50 on the size of the lounge, not ideal but I could have lived with it). So we would have to go for something larger, and we'd be lucky to get that for less than £1m, which would result in a cost of £60k for fees and taxes.

We can easily afford that, but it isn't affordability, it is 'value' which is the stumbling block for us. I think that we could extend our home and achieve what we want (maybe even exceed) for about £150k, add that to our existing value of about £650k, and the difference between staying put and moving is about £260k!

So unless we see a 'must have' house, we are going to further explore extending our current home.

It shouldn't feature highly but I would take the following into some consideration too. Spending £100k extending a house adds more value to the economy and housing stock than does a sideward movement costing £100k

Part of the reason I tend to buy new cars (extending your house) is the value added to the economy/jobs and the additional taxes the government receives vs buying used (moving house)

GreatApe

Windofchange wrote: »

Nice looking house. Kent is where I want to head, although more Tunbridge / Sevenoaks way. Asking price is a shade more expensive than what our 2.5 bed London flat is 'worth'. I'd get a garden to boot and a garage to play around with my motorbikes - one can but dream...

I think it is increasingly a question of they cannot. I am paid pretty well, even by London standards, certainly well above the average. If I were on my own looking to get a starter flat I couldn't. I could probably scrape a studio somewhere but I'm not paying what they're asking. This is I suppose an example of your value point, but actually if you look at the London average of around 30k per annum, you need 250k for a studio, so even with a 30k deposit that is some 7 and a bit times earnings. The only reason I can think of that youngsters on modest London wages are able to afford these places is help to buy (and other such schemes) or BOMAD / BOGAG. Problem comes when these youngsters want to have a family - trying to sell a studio in a (hypothetical) housing bust anyone?

Income is only but a fraction of the wealth of a nation and its people especially a nation as rich as the UK

>80% of all the homes in this country were already in existence in 1990 they have all effectively been fully paid for. This means about 80% of the housing stock is just cycled from generation to generation at almost no cost

You don't need every youngster to buy one house with one income. You don't even need every youngster to buy half of one house and get married to someone who also has half of one house to make one full house. You only need youngsters to buy half of one house and then pass that down dozens of generations and only if they were u lucky enough yo be the first in their bloodline who bought a house without having a portion of a house gifted to them

I can fully accept and understand that maybe a third of people won't get anything but the majority have a bite of the £10 trillion wealth pie in this country. Life for them is not all that hard