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It’S Tough To Get A Mortgage – So Why Aren’T House Prices Falling?

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I thought they were. Certainly 1 is 3 listing outside London are price drops, South of Birmingham to be frank, looks like the market has dropped off a cliff

Edited by TheCountOfNowhere

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I just looked briefly but they are in their 40s (also do you reckon Dominic Frisby's friends told him everything? How does he know their salaries, credit histories, spending habits, what they said at the bank?). I think as there aren't many properties on the market, there may be enough buyers late 30s or younger to keep prices high.

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One of them is self-employed. Isn't it already common knowledge that self-employed people who don't have a long history of earnings are treated differently to salaried employees?

It's tough to get a job, especially a high-paying one. But if you have a job and reasonable credit surely you can a mortgage.

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....basically house prices can do whatever they damned well like......when not looking at them, or have no interest whatsoever in wanting or buying one.

....there are other ways in creating growth and capital apart from land and buildings......when that has been mastered all number of homes will then be open to you....but still won't want one. ;)

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.....but it is not tough to get a mortgage.....got a property worth £500k buy five homes £100k down on each one......it is tough to get a mortgage when no savings or gifted help.

But many more would prefer the £500k liquidity banked, no debt,freedom and security, than five leveraged comitments...plus a wish and a prayer.

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Seems strange if he is on near 60k that he can only get a 100k mortgage. Could be clearing 200k on his wage alone. The numbers are still ridiculous for what is likely to be a poxy flat but hardly the best example of unaffordablility.

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I just looked briefly but they are in their 40s (also do you reckon Dominic Frisby's friends told him everything? How does he know their salaries, credit histories, spending habits, what they said at the bank?). I think as there aren't many properties on the market, there may be enough buyers late 30s or younger to keep prices high.

Why don't you ask him later when he posts in this thread?

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Getting back to the question in the title... House prices aren't dropping because although there aren't many buyers there also aren't many sellers, I'm sure I heard somewhere recently that numbers of properties on the market are at their lowest levels for 38 years?

As I've said previously, I think there is now a general acceptance amongst people that their houses aren't worth what they'd like to think they're worth... unfortunately the bad news is their way of dealing with this reality is to just spit their dummies out and withdraw their property from the market or not even attempt to sell it in the first place.

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Getting back to the question in the title... House prices aren't dropping because although there aren't many buyers there also aren't many sellers, I'm sure I heard somewhere recently that numbers of properties on the market are at their lowest levels for 38 years?

As I've said previously, I think there is now a general acceptance amongst people that their houses aren't worth what they'd like to think they're worth... unfortunately the bad news is their way of dealing with this reality is to just spit their dummies out and withdraw their property from the market or not even attempt to sell it in the first place.

Oh, there's load of sellers. Round my way, they just sit.

There's nothing driving them fast enough to lower prices.

House goes for sale, they sit, they die, kids get house to sell.

Kick off a RM search on my local town, 5 mile radius - over 1000 houses for sale, almost 500 flats, 300 bungalows.

This is in a town of ~50K.

Assuming a normalish number of 3 people per household, thats a chunky percentage of the total houses for sale at the moment.

Bear in mind that an equal number have been up for sale and are 'taking a rest from RM for mo' and you are talking about 50% of the housing stock.

If I was a seller operating in a very slow market - and most of the UK has been for the last 10 years now - I would be very 'incentivised' to take a low offer. A lot of places have 10 years of stock kicking around. As soon as the interest rates changes, even a small uptick, there's the risk that a lot of sellerswill be trying to exit through a very small liquidity window.

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I read this article yesterday, the numbers made no sense unless both are self employed. Worst however is dominics 100k in moving Costs? I'm mobile at the moment but I'm going to look up just how much you would have to be spending on a house for these costs to be true!

Getting back to the question in the title... House prices aren't dropping because although there aren't many buyers there also aren't many sellers, I'm sure I heard somewhere recently that numbers of properties on the market are at their lowest levels for 38 years?

As I've said previously, I think there is now a general acceptance amongst people that their houses aren't worth what they'd like to think they're worth... unfortunately the bad news is their way of dealing with this reality is to just spit their dummies out and withdraw their property from the market or not even attempt to sell it in the first place.

Not in the south east!

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Oh, there's load of sellers. Round my way, they just sit.

There's nothing driving them fast enough to lower prices.

House goes for sale, they sit, they die, kids get house to sell.

Kick off a RM search on my local town, 5 mile radius - over 1000 houses for sale, almost 500 flats, 300 bungalows.

This is in a town of ~50K.

Assuming a normalish number of 3 people per household, thats a chunky percentage of the total houses for sale at the moment.

Bear in mind that an equal number have been up for sale and are 'taking a rest from RM for mo' and you are talking about 50% of the housing stock.

If I was a seller operating in a very slow market - and most of the UK has been for the last 10 years now - I would be very 'incentivised' to take a low offer. A lot of places have 10 years of stock kicking around. As soon as the interest rates changes, even a small uptick, there's the risk that a lot of sellerswill be trying to exit through a very small liquidity window.

Years ago a pensioner would need to downsize in order to have a more comfortable retirement

Now pensioners are so molly coddled by frankly over generous state welfare, they don't need to

And besides where would they keep all their tat

Edited by Si1

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When is the lack of sellers going to start having some serious effects on the professions mentioned in the article - EA's, surveyors etc?

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As I've said previously, I think there is now a general acceptance amongst people that their houses aren't worth what they'd like to think they're worth... unfortunately the bad news is their way of dealing with this reality is to just spit their dummies out and withdraw their property from the market or not even attempt to sell it in the first place.

...and buyers who can buy.....won't buy, because we long ago reached a point where house prices past the "not worth it in a millions years" point and quietly left the market altogether.

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Years ago a pensioner would need to downsize in order to have a more comfortable retirement

Now pensioners are so molly coddled by frankly over generous state welfare, they don't need to

And besides where would they keep all their tat

I think there's a few reasons - and I speak as someone who's Dad now lives alone in a 5 bedder at the age of 78:

1. Moving is a massive pain the backside so the default position is not to bother.

2. There is no compelling financial incentive to move, with mortgages paid off and no land tax or equivalent.

3. If you sell and downsize then any liberated cash can be used to means test any benefits you might be receiving.

4. The family home is now/will shortly be privileged with respect to IHT, so it's more tax efficient to hold on to it.

5. General (broadly correct so far) opinion of most pensioners that housing is a good investment.

6. Total lack of other income generating investments to store any cash freed up by downsizing.

It's little wonder that pensioners are staying put.

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I think there's a few reasons - and I speak as someone who's Dad now lives alone in a 5 bedder at the age of 78:

1. Moving is a massive pain the backside so the default position is not to bother.

2. There is no compelling financial incentive to move, with mortgages paid off and no land tax or equivalent.

3. If you sell and downsize then any liberated cash can be used to means test any benefits you might be receiving.

4. The family home is now/will shortly be privileged with respect to IHT, so it's more tax efficient to hold on to it.

5. General (broadly correct so far) opinion of most pensioners that housing is a good investment.

6. Total lack of other income generating investments to store any cash freed up by downsizing.

It's little wonder that pensioners are staying put.

Yes to all of these. Very good post.

And one more reason why this crash will take another decade minimum

Turning Japanese

Edited by Si1

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Also loads in London or where the good jobs are, are renting the spare rooms out to their kids....other places a holiday or short term b&b.

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I read this article yesterday, the numbers made no sense unless both are self employed. Worst however is dominics 100k in moving Costs? I'm mobile at the moment but I'm going to look up just how much you would have to be spending on a house for these costs to be true!

Not in the south east!

The amounts are too high. However the costs are lot higher than there were. If (I didn't sadly) I had bought my home outright in a London suburb in 92 it would have cost me £620 in tax (it was worth £62k). Now assuming this lucky person was to get a job in a different equally priced London suburb and wanted to move there - it would cost £10K in stamp duty. For my parents if there were to do the same it would cost them £30,000.00 just in stamp duty for a house a day labourer could afford in the 1950s!

The solution of course is simple abolish stamp duty and put up council tax to pay for it.

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Nationwide calculator has just offered me £215k ... which is 5 times joint salary!

You might find that the figure in a real mortgage application is lower. The online calculator suggested £320K for us but in reality the limit was £180K (mainly because of childcare costs).

I think I read that the MMR affordability check may not be required for fixed rate mortgages over 5 years though.

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I have noticed falling prices on Property Bee, but only for houses that are outside the London-mania areas; eg, small towns on the south coast that have poor transport links to London (no motorway or express trains) seem to be on the market for about three months, during which the price drops by about 5%, in increments of 1 or 2 %, accompanied by one or two changes of agents.

London mania areas (London and anywhere within 1 hour's commuting distance by car or train) doesn't seem to show many drops.

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I have noticed falling prices on Property Bee, but only for houses that are outside the London-mania areas; eg, small towns on the south coast that have poor transport links to London (no motorway or express trains) seem to be on the market for about three months, during which the price drops by about 5%, in increments of 1 or 2 %, accompanied by one or two changes of agents.

London mania areas (London and anywhere within 1 hour's commuting distance by car or train) doesn't seem to show many drops.

Look to the west, W9, NW6 and believe you me....you will see most of the stock has drops. Generally in the £25-50k mark, some as high as £120k on a £620k property.

However that could just be representative of the stupidity of the original asking prices. Some of the original £500k properties I were tracking dropped to £480k in W9, some have simply dropped off rightmove due to no sale after 4+months. Although presumably rented.

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