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scottbeard

"only Downsizers, No-One Is Trading Up"

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A friend is marketing their 4 bedroom detached house. They had 10 or so viewings (which have now dried up).

ALL TEN were people downsizing from even bigger properties - no-one was trying to go "up the ladder" from eg a 3 bed or semi.

Without FTBs and those climbing the property ladder, surely the top end prices must come down? Those at the top are trying to "release equity" but they can't, because the only buyers are other "top rung" people trying to do the same.

In the end they'll have to recognise that not all that equity is there, won't they?

(My friend is not a HPCer, but is switched on enough to know that property prices are going nowhere fast. They may drop the price, or just not move for a few more years.)

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I have been saying this for a while now... I think the larger houses in the UK are going to be increasingly unaffordable due to the initial asking price, due to the stamp duty due on them and, increasingly, due to the running costs.

I havve noticed in the area where I live in Swansea that when the big 4 and 5 bedroom jobs get sold nowadays they are mostly to Asian families with 2 or 3 generations then moving into them.

I think more and more people will opt instead for smaller houses simply due to the cost of running them and I suspect, in my area of Swansean and the Gower, there are now many hundreds of houses which are simply unsellable at the current asking prices. They will have to drop by 20 or 30 percent IMPO just to get people interested.

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This is happening to my area too, which caused some rather interesting situation.

5 beds price are being reduced to close 4 beds price, 4 beds price are being reduced to close 3 beds price, 3 beds price are being reduced to close 2 beds price and so on.

This is definitely accelerating the crash.

People at the top of the market can usually afford to take the loss, I am seem those properties taking 20% hit. This will have a knock on effect on the rest of the market.

Basically, we are see the equivalnt of controlled demolition of housng market. You see the foundation (FTB, cheap credits) get blew up first, then roof caves in, and then eveything dissapear in a huge smoke.

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This is happening to my area too, which caused some rather interesting situation.

5 beds price are being reduced to close 4 beds price, 4 beds price are being reduced to close 3 beds price, 3 beds price are being reduced to close 2 beds price and so on.

This is definitely accelerating the crash.

People at the top of the market can usually afford to take the loss, I am seem those properties taking 20% hit. This will have a knock on effect on the rest of the market.

Basically, we are see the equivalnt of controlled demolition of housng market. You see the foundation (FTB, cheap credits) get blew up first, then roof caves in, and then eveything dissapear in a huge smoke.

Nice way of explaining it.

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A friend is marketing their 4 bedroom detached house. They had 10 or so viewings (which have now dried up).

ALL TEN were people downsizing from even bigger properties - no-one was trying to go "up the ladder" from eg a 3 bed or semi.

Without FTBs and those climbing the property ladder, surely the top end prices must come down? Those at the top are trying to "release equity" but they can't, because the only buyers are other "top rung" people trying to do the same.

In the end they'll have to recognise that not all that equity is there, won't they?

(My friend is not a HPCer, but is switched on enough to know that property prices are going nowhere fast. They may drop the price, or just not move for a few more years.)

I think so. many will say no, they will stay up, because they are worth it.

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For a move to a home that is detached, close enough to town, with a garden I would have to borrow another 140k + Agent and moving fees. More than our original mortgage, by definition this was the limit of our comfort zone for repayment with space to overpay. With employment down the crapper 70k is my comfort zone :D. In the good times that first mortgage should have been replayed within 10 years. If the jobs returned and you bought that detached home you are looking at 15 years of slog. Plus you would have to find an extra 50% overpayment. Sadly with the way things are now it’s more like 25 years.

Or stay put and actually enjoy life, without becoming a voluntary slave, choices choices.

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It makes sense when some people don't make use of the space they have. All you need nowadays is a small box in a nice area that is walking distance from public transport links to get to work. I think as the digital world gets more prominent in people's lives, they will care less about their surroundings.

My current semi-detached rental has a massive lawn that serves no purpose, a massive loft that I haven't put a thing in, a massive driveway for which I only have one car, I'm only utilising half the lounge etc. The landlords are renting it out and living in a 2 bed flat.

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It makes sense when some people don't make use of the space they have. All you need nowadays is a small box in a nice area that is walking distance from public transport links to get to work. I think as the digital world gets more prominent in people's lives, they will care less about their surroundings.

My current semi-detached rental has a massive lawn that serves no purpose, a massive loft that I haven't put a thing in, a massive driveway for which I only have one car, I'm only utilising half the lounge etc. The landlords are renting it out and living in a 2 bed flat.

You have got a great point that the real world surroundings are mattering less to people, as the digital world takes over. How much does it really matter if you are reading this post in a small apartment or in a big house in a nice neighbourhood. In many ways the small apartment has advantages as it takes less time and energy to maintain.

In the long run imo the digital world has absolute advantages over the real world so will take a growing percentage of the average person's life. That seemed a pretty science fiction thought say 10 years ago, but with facebook, mmorpgs, blogging, etc.. it is blatantly obvious that people are spending more time in digital worlds.

Fast forward 15 years to 2025 and our lives will likely be that much further online.

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Welcome to the future.

The UK demographic profile more or less makes this inevitable as the boomer generation approaches retirement. It is not just the supply of houses that determines price but the rate of household formation. A major factor which drove house prices in each cycle from the 1970s has gone into reverse.

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You have got a great point that the real world surroundings are mattering less to people, as the digital world takes over. How much does it really matter if you are reading this post in a small apartment or in a big house in a nice neighbourhood. In many ways the small apartment has advantages as it takes less time and energy to maintain.

In the long run imo the digital world has absolute advantages over the real world so will take a growing percentage of the average person's life. That seemed a pretty science fiction thought say 10 years ago, but with facebook, mmorpgs, blogging, etc.. it is blatantly obvious that people are spending more time in digital worlds.

Fast forward 15 years to 2025 and our lives will likely be that much further online.

As adults, I agree you can make do with basic accommodation. With kids, slightly different. Especially having a defensible outside area rather than relying on civil amenities for somewhere to run around.

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As adults, I agree you can make do with basic accommodation. With kids, slightly different. Especially having a defensible outside area rather than relying on civil amenities for somewhere to run around.

Exactly, you may not need] much space but it certainly helps when you;re trying to achieve certain things. No amount of go to the park, or trudge to the allotment makes up for the convenience of having the space and facilities on your doorstep. However I've still not been coerced into signing my life away to get just that.

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You have got a great point that the real world surroundings are mattering less to people, as the digital world takes over. How much does it really matter if you are reading this post in a small apartment or in a big house in a nice neighbourhood. In many ways the small apartment has advantages as it takes less time and energy to maintain.

In the long run imo the digital world has absolute advantages over the real world so will take a growing percentage of the average person's life. That seemed a pretty science fiction thought say 10 years ago, but with facebook, mmorpgs, blogging, etc.. it is blatantly obvious that people are spending more time in digital worlds.

Fast forward 15 years to 2025 and our lives will likely be that much further online.

Okay how many times do you look back at those truly happy moments when you were blogging, gaming? Every time I go out cycling, dancing to live bands, in a pub with mates, my brain experiences contentment, happiness, and laughter all the way. I can not same for the internet, I do remember shouting a few times, 'ffs get out of the way, im ONLINE playing a GAME'. That is the point where I stopped playing fps, mmo's seriously.

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This is happening to my area too, which caused some rather interesting situation.

5 beds price are being reduced to close 4 beds price, 4 beds price are being reduced to close 3 beds price, 3 beds price are being reduced to close 2 beds price and so on.

This is definitely accelerating the crash.

People at the top of the market can usually afford to take the loss, I am seem those properties taking 20% hit. This will have a knock on effect on the rest of the market.

Basically, we are see the equivalnt of controlled demolition of housng market. You see the foundation (FTB, cheap credits) get blew up first, then roof caves in, and then eveything dissapear in a huge smoke.

Exactly the same here (SE England). Couple of 5 beds locally selling for £500-550k peak, now 2 listed at £425 and £450 - not selling. The lower numbers being those for 4 bed houses at the peak. So anyone staying out at present is accumulating bedrooms...

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I havve noticed in the area where I live in Swansea that when the big 4 and 5 bedroom jobs get sold nowadays they are mostly to Asian families with 2 or 3 generations then moving into them.

We brits should work out that either our parents houses get sold and the money gets spent on sub standard care for them or we start to pool our money and buy a bigger house where we can look after each other ourselves, giving them some family life back might be the best preventative for dementia as well. Still it seems a sensible way to protect our parents and our inheritance.

The cultural difference might be an issue though, in asian families the older people are still respected as the head of the family, to a large extent, no matter how doddery they get. Not sure many brits could make it work as the old people don't want to be dictated to by the up themselves younger generation who assume they are thick once they become a bit slow. Tricky one.

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It makes sense when some people don't make use of the space they have. All you need nowadays is a small box in a nice area that is walking distance from public transport links to get to work. I think as the digital world gets more prominent in people's lives, they will care less about their surroundings.

My current semi-detached rental has a massive lawn that serves no purpose, a massive loft that I haven't put a thing in, a massive driveway for which I only have one car, I'm only utilising half the lounge etc. The landlords are renting it out and living in a 2 bed flat.

With an unused lawn and an empty loft, clearly you don't have kids!

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It makes sense when some people don't make use of the space they have. All you need nowadays is a small box in a nice area that is walking distance from public transport links to get to work. I think as the digital world gets more prominent in people's lives, they will care less about their surroundings.

My current semi-detached rental has a massive lawn that serves no purpose, a massive loft that I haven't put a thing in, a massive driveway for which I only have one car, I'm only utilising half the lounge etc. The landlords are renting it out and living in a 2 bed flat.

and here we have a total wage slave....live not worth living if you have work.

Sad

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and here we have a total wage slave....live not worth living if you have work.

Sad

I probably wouldn't put it that bluntly, but yes.

I live in a 3-bed semi, just the two of us, and we make use of virtually all the space, bar perhaps the front lawn (which is still nice in a decorative sense of a way). Driveway has a car. Garage has many two-wheeled vehicles in it. Shed has tons of stuff in it. Back garden is wonderful in the summer, have had so many parties with different people round all the time and enjoying the company of family and friends. Spare bedrooms in use all the time by visitors etc etc.

We don't need any of the stuff. But to live life in a slavebox and trudge to work, trudge back to work and sit in one of those "open space but tiny kitchen/diner/lounge places" would be depressing.

Edit: To go back ot, yes, I believe people should bloody downsize. Still seeing many couples approaching retirement and struggling on to maintain their 4 bed house but cannot / will not see the light.

Edited by Cash with Nowhere to Go

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People at the top of the market can usually afford to take the loss, I am seem those properties taking 20% hit. This will have a knock on effect on the rest of the market.

Basically, we are see the equivalnt of controlled demolition of housng market. You see the foundation (FTB, cheap credits) get blew up first, then roof caves in, and then eveything dissapear in a huge smoke.

+1

I'm seeing this too: aggressive price slashing at the top-end of the market because the vendor wants to sell and can afford to take the hit because they accumulated so much equity during the boom (an economy-crippling 300% house price increase to be exact).

The interesting thing is, when a £600k property is slashed to £500k, what happens then to the one that entered the market at £500k? ... and £400k... and £300k...

The government and the banks might well be supporting the bottom tier of the housing pyramid but many at the top can afford a HPC it would seem. Market conditions might eventually overcome government interference after all.

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Large houses cost way more to run. I think the posters are right. We'll see a shift to smaller places especially as gas and elec increase substantially (and forever). Taxes too.

It's happened in the car market. I've bought large cars second hand for the last 10 years, because they were cheaper than mid range vehicles! Seriously. People like smaller cars, cheaper insurance, economical etc.

What will be really interesting is where will the downsizers go? They aren't going to be buying the FTB shoe boxes, expectations are greater than that. Will they really want to move in next door to a rave party every night or a city centre trendy apartment? Unlikely, but that's where the spare capacity is at the moment.

I wonder if the mid market will be squeezed by this and therefore FTBers unable to buy their second home?

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I wonder if the mid market will be squeezed by this and therefore FTBers unable to buy their second home?

may depend on location - FTBrs will outbid in locations commutable to work, elderly downsizers will outbid in better retirement locations, beauty spots etc

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may depend on location - FTBrs will outbid in locations commutable to work, elderly downsizers will outbid in better retirement locations, beauty spots etc

Only people with money can bid more.

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Only people with money can bid more.

but for how long are they going to have this money until their house prices start to suffer too much?

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  • 276 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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