Mortgage Rate Rises

[Felon]

Hardly anyone is getting what they are putting their houses on the market for. Most are simply dreaming.

Yeah, it's sort of turning into a buyers market, my best mate has just had an offer accepted. Asking price was £200k, he went in at £183k - they countered at £185k and he accepted.

It's the more expensive end which is interesting, houses which are valued at between £400-700k are interesting because people who buy them, mostly work and have mortgages - but you now have to have a household income of £200k+ to afford a £600k house, so it's knocked so many potential buyers who were previously able to afford that - right out of that price range.

Someone I know is currently trying to sell a £675k house around here (Lincoln) it's a nice house in a nice area, it's been up 2 months - not a single enquiry, not one. They've just knocked £25k off it, I think it'll only start getting serious attention when it's south of £500k but we'll see.

 

[Jono8]

Yeah, it's sort of turning into a buyers market, my best mate has just had an offer accepted. Asking price was £200k, he went in at £183k - they countered at £185k and he accepted.

It's the more expensive end which is interesting, houses which are valued at between £400-700k are interesting because people who buy them, mostly work and have mortgages - but you now have to have a household income of £200k+ to afford a £600k house, so it's knocked so many potential buyers who were previously able to afford that - right out of that price range.

Someone I know is currently trying to sell a £675k house around here (Lincoln) it's a nice house in a nice area, it's been up 2 months - not a single enquiry, not one. They've just knocked £25k off it, I think it'll only start getting serious attention when it's south of £500k but we'll see.

Yes, that sort of price range will be the hardest hit, as rich people will be looking for something better, and the average person can no longer afford the mortgage on it because of interest rates.

 

[GordyR]

I spoke to my neighbours who said they can't accept any less on thier house than asking.
I think they need it for the new house.

Apparently it's an inherited house. So I'm assuming they have to pay off a sibling for thier share?

I think its very optimistic. Ie, if it sells for that our house will be worth similar! And more than I'd expect.

I suspect that they will end up chasing the market down; reducing multiple times before finally capitulating months down the line; and ultimately end up with a far lower price than if they had simply priced it realistically to begin with.

I'm seeing this story play out all over the place with the type of houses i've been very closely watching.

In my opinion, by far the best way to sell in this market is to price fairly aggressively low, primarily in order to quickly generate significant interest so as to get multiple competing offers that end up putting upwards pressure on the final transaction price.

We're not even close to the bottom, so time isn't on their side.

 

[happy_2008]

Last time I looked 5-6pc?

I'd be happy if it came down to 3 when I have to remortgage

When is yours due for renewal?

 

[Jono8]

I suspect that they will end up chasing the market down; reducing multiple times before finally capitulating months down the line; and ultimately end up with a far lower price than if they had simply priced it realistically to begin with.

I'm seeing this story play out all over the place with the range of houses i've been very closely watching.

In my opinion, by far the best way to sell in this market is to price fairly aggressively low, primarily in order to quickly generate significant interest in order to get multiple competing offers that ends up putting upwards pressure on the final transaction price.

We're not even close to bottom so time isn't on their side.

This. I think the house price drops/stagnation will be going on for a good while yet (well into next year at the very least). I certainly cant see them rising again in the short term.

 

[fez]

Its pretty simple. If people could afford house prices to stay at current prices and also pay what for a lot of people would be twice the mortgage payment then house prices would already be a lot higher.

The house we would have been wanting to move into would have been a ~£3000/month mortgage but now its closer to £5000. I think when I did the maths it was effectively pricing a £1m house at around £1.3m if you worked out what a £5k/month mortgage would have bought us at ~2% instead of ~6%.

People need to readjust their prices if they want to move or they need to hope that someone is stupid enough or rich enough not to care.

 

[Raymond Lin]

4 would be 'ok' it would probably leave me with the same monthly payment at remortgage as before.
3 would be nice. But as you say, inflation would have to drop so far!

I am at 3.53%, caught it just before it spiked up, 16 months left.

(Before someone else asks...why so short a fix? It only has like 18 months left total)

 

[413x]

When is yours due for renewal?

2027

 

[gazref]

5.4% currently available.. no one can time the market but people will be trying to.

As soon as it looks likely interest rates have peaked and start falling to sub 5 that will have an impact on prices and things will start moving. I don't think negative equity is going to be a major issue for most moving soon as long as you can commit to the place for the immediate term 18months ?

 

[Jono8]

5.4% currently available.. no one can time the market but people will be trying to.

As soon as it looks likely interest rates have peaked and start falling to sub 5 that will have an impact on prices and things will start moving. I don't think negative equity is going to be a major issue for most moving soon as long as you can commit to the place for the immediate term 18months ?

I wonder when they will actually start to drop rates. I don't think they will until well into next year.

 

[gazref]

I'm paying 8.25% interest only so moving will feel like a money saver. Lots of new builds and OAP houses. New builds have no plot size the older properties have but the older properties haven't been touched since the 70s and they're not priced to reflect. Any listings with the "offers over" insert peak price here do not make the shortlist

 

[gazref]

I wonder when they will actually start to drop rates. I don't think they will until well into next year.

I'd wager General election time. New gov will announce some policies that get the ball rolling, houses prices start going up, people feel richer and gov get an early bounce in public opinion

 

[Jono8]

I'd wager General election time. New gov will announce some policies that get the ball rolling, houses prices start going up, people feel richer and gov get an early bounce in public opinion

Depressingly, you are probably right. : /

 

[neocon]

The trouble is that as the market becomes dysfunctional you really have no idea how much your house is worth. 20% lower than the 2022 highs?

People that need to sell are totally and utterly screwed right now.

 

[Jono8]

The trouble is that as the market becomes dysfunctional you really have no idea how much your house is worth. 20% lower than the 2022 highs?

People that need to sell are totally and utterly screwed right now.

Houses are still selling, that's for sure. No, they haven't dropped 20%.

The recent figures from the banks of a 5% drop from last year seem pretty accurate though.

 

[fez]

I'd wager General election time. New gov will announce some policies that get the ball rolling, houses prices start going up, people feel richer and gov get an early bounce in public opinion

General election time the Tories will be desperately doing whatever it takes to prop up the housing market to buy some votes. Screw the future. All about that short-termism.

 

[413x]

Like the horrendous stamp duty break.
Who knows m they might try something like that again. Doubt it. It was one of the worst covid actions IMO

 

[grudas]

Like the horrendous stamp duty break.
Who knows m they might try something like that again. Doubt it. It was one of the worst covid actions IMO

Prices went stupid in our area with that. Most people I knew who were on the ladder started upgrading.

 

[Junglist]

We went house hunting last week. More out of curiosity because we've outgrown our 2 bed and want a family 4 bed. Saw a lovely house and can afford it but my lord the mortgage rates at the moment are horrendous.

Decided we'd wait and see. We've got 25 months left at 1.7%. Really hope they're at least <5% soon because the best our advisor could see was 5.2% for 5 years.

 

[ci_newman]

Like the horrendous stamp duty break.
Who knows m they might try something like that again. Doubt it. It was one of the worst covid actions IMO

Poorly regulated furlough and Eat out to help out were much worse IMO.

Both contributed to our current inflation cycle, unlike the stamp duty holiday (house prices are excluded from inflation figures)