Has the market crashed?

GAMBITv5

All depends on the market you’re positioned in.

We sold in the aftermath of the mini budget, was on Rightmove less than 24hrs. Sold to FTBs for the £375k ask.

estate agents here are not reporting the shock and awe elsewhere on the country

Exodi

GAMBITv5 said:

All depends on the market you’re positioned in.

We sold in the aftermath of the mini budget, was on Rightmove less than 24hrs. Sold to FTBs for the £375k ask.

estate agents here are not reporting the shock and awe elsewhere on the country

Obviously anecdotal. This thread is a clear example to the contrary.

There's no telling if your house was undervalued, whether it was unique property, whether it was very sought after, etc. There is no doubt that some houses have been sold since the mini budget/mortgage rate hikes.

However, regardless of what market you sit in (aka - location or house type), it is indisputable that every new buyer will now see their borrowing costs dramatically increase.

Sellers can't just stick their fingers in their ears and ignore this fact. ~£500 a month extra is not a paltry amount.

lookstraightahead said:

I absolutely agree, sellers and recent buyers will find it hard to acknowledge this. It's ok if you've recently bought on a low fixed rate and you're staying put for a while, but the recent rise in prices in addition to high interest rates won't sit well with most. There could be fewer properties coming to market and that's keeping some prices up, but this won't mean people can afford them. Sellers have also been quite rigid about their timescales and expect buyers to fit in with their plans while they've had the upper hand, and won't change their expectations yet.

not forgetting the all important factor of lender valuations.

Absolutely, I've seen countless threads on this forum over this year where sellers start with something along the lines of "the buyer has requested something that is of minor inconvenience to me" and the general responses have been "lol find another buyer". That works where you have buyers tripping over each other to offer higher and higher over asking price, but that doesn't wash now if you're struggling to even find a buyer to begin with.

Current sellers are in for a rude awakening.

lookstraightahead

GAMBITv5 said:

All depends on the market you’re positioned in.

We sold in the aftermath of the mini budget, was on Rightmove less than 24hrs. Sold to FTBs for the £375k ask.

estate agents here are not reporting the shock and awe elsewhere on the country

I don't think any estate agent will acknowledge it as it affects their business. And sold prices won't have come through as data yet. Also some still have low interest rates in place, meaning time is of the essence for them still.

What I don't understand is sellers who have a buyer now expecting buyers to wait.

simon_or

Local variations aside, it has slowed but hasn't crashed.

Mortgage costs have gone up and that will filter through to house prices slowly.

I doubt there'll be a noticeable nominal drop in prices year on year, but with inflation as it is, there'll definitely be a real-terms drop over the next few years if mortgage rates stay around 5%.

Exodi

lookstraightahead said:

GAMBITv5 said:

All depends on the market you’re positioned in.

We sold in the aftermath of the mini budget, was on Rightmove less than 24hrs. Sold to FTBs for the £375k ask.

estate agents here are not reporting the shock and awe elsewhere on the country

I don't think any estate agent will acknowledge it as it affects their business. And sold prices won't have come through as data yet. Also some still have low interest rates in place, meaning time is of the essence for them still.

What I don't understand is sellers who have a buyer now expecting buyers to wait.

Indeed, there is a bit of a stampede to complete transactions to lock in the old mortgage offers - buyers are understandably desperate not to reapply.

My sisters partners brother has just 'completed' on a new build property - but the property isn't even ready yet and he can't move in. He reached an agreement to complete on the house on this basis so he didn't lose his original mortgage rate.

I'd usually heavily advise against doing something this reckless, but he has said that this is about a £400 p/m saving... can't blame him to be honest.

Woolsery

lookstraightahead said:

GAMBITv5 said:

All depends on the market you’re positioned in.

We sold in the aftermath of the mini budget, was on Rightmove less than 24hrs. Sold to FTBs for the £375k ask.

estate agents here are not reporting the shock and awe elsewhere on the country

  And sold prices won't have come through as data yet.

The delays at the Land Registry seem very convenient.

There are two houses on the market near me that sold in the spring. Neither has any sold price data on Rightmove.

Noneforit999

Exodi said:

[Deleted User] said:

As someone who would like to buy I'm holding off for now.

I think many will be doing the same.

You have many sellers, who have seen there houses absolutely balloon in value over the past couple of years (using my house as example I bought for £300k in mid 2019, and have seen similar houses for sale during this summer up for sale between £400k - £500k)... absolutely madness.

You have to wait for these sellers to come back to Earth which is not going to be quick. Take the OP - "it doesnt feel over priced compared to recent sales in the summer". This will be a common theme amongst current sellers, and if they're not willing to come back to Earth, they'll see demand disappear.

People just can not afford high energy bills, soaring food prices, increased fuel prices, with pay-rises that in most cases are real terms pay cuts, on top of ~£500 extra on a mortgage to buy someones now overpriced house.

I wouldn't dream of buying in the next few months.

What is going to be different in six months time though? Even if house prices drop say 10% in that time, unless you are a FTB then your existing house will have likely dropped a similar amount so you have less equity to roll onto a new house and unless mortgage rates drop substantially, its going to make little difference.

If you put moving off for several years then things may change (perhaps) but I don't see how 6-12 months is going to look much different from now.

Exodi

Noneforit999 said:

If you put moving off for several years then things may change (perhaps) but I don't see how 6-12 months is going to look much different from now.

It's not just first time buyers... though obviously we shouldn't understate the impact of cutting out first time buyers.

Anyone looking to upsize will now be paying a lot more on a mortgage as well. This is a double whammy as if we assume house prices remain relative to each other - if I sold by £300k house to move into a £500k house, I'd need to take out a £200k mortgage. If both of the house prices dropped 10%, I'd only need to take out a £180k mortgage. So obviously reduced house prices also help those changing houses.

The only people it doesn't effect are those buying and selling houses of the same value with no mortgage or those selling houses without an onward purchase.

It's supply and demand and if less people are willing to buy, house prices will naturally reduce (as presumably people listing their houses for sale want to actually sell them).

I'd be very suprised if in 6-12 months house prices are still where they are now, I'd expect a noticeable correction.

GDB2222

We’re going to have to see what happens in a few months time, when the old mortgage offers run out. I feel sorry for people who previously bought on the basis of 1.5%-2% interest rates, but only locked in their rates for a couple of years. 

aoleks

Sarah1Mitty2 said:

housebuyer143 said:

I wouldn't say it's collapsed. Just gone back to how it was pre covid. Never before, did houses get snapped up in days over asking price. A return to normality is probably welcome.

Interest rates pre -Covid were at historical lows, that was nothing like normal, we are nowhere near going back there.

you'll be surprised what happens when inflation goes back down in 1-2 years...