Meaningful Reductions in my Area

[Smith]

If I was minded to buy a house in my area now (which I'm not) then I'd get a much better one for my budget than I would have done six months ago:

Firstly, I'm already seeing some meaningful reductions in asking prices. Case in point, I didn't get to view a 2-bed flat last summer which was listed at £175k because it sold immediately. An identical flat in the same street has just been listed for £160k.

Secondly, sellers are much more likely to accept a low offer now.

The combined effect means, in my estimation, that my budget of £200k would now buy me a 3-bed house, whereas six months ago I was looking at 2-beds.

This is meaningful, already.

Edited January 2, 2023 by Smith

[shlomo]

3 hours ago, Smith said:

If I was minded to buy a house in my area now (which I'm not) then I'd get a much better one for my budget than I would have done six months ago:

Firstly, I'm already seeing some meaningful reductions in asking prices. Case in point, I didn't get to view a 2-bed flat last summer which was listed at £175k because it sold immediately. An identical flat in the same street has just been listed for £160k.

Secondly, sellers are much more likely to accept a low offer now.

The combined effect means, in my estimation, that my budget of £200k would now buy me a 3-bed house, whereas six months ago I was looking at 2-beds.

This is meaningful, already.

where are you in the country?

[Freki]

It only works if you are buying cash.

For those that need a mortgage the reductions don't compensate yet the increase in interest 

[Smith]

10 minutes ago, shlomo said:

where are you in the country?

I'm looking in a fairly cheap part of Hampshire.

[Smith]

That's true, apologies for not mentioning that. I was fortunate enough to have paid off the mortgage when I sold my last house. I didn't sell because I was predicting prices falling, just had to move for a new job. But looks like I may have been lucky with timing.

[MerchantNavy]

16 minutes ago, Freki said:

It only works if you are buying cash.

For those that need a mortgage the reductions don't compensate yet the increase in interest 

Can confirm, seen some big reductions, around 20k.

Mortgage repayment has gone up though due to interests though I'm personally not in too bad a position as I don't intend on maxing out. 

[LetsBuild]

1 hour ago, Freki said:

It only works if you are buying cash.

For those that need a mortgage the reductions don't compensate yet the increase in interest 

Not quite true, the scale has moved towards the 100% deposit, yes definitely, but there are a some of those still needing a mortgage of some sort are also better off with increased rates but reduced prices overall.

[TerryBoi]

4 hours ago, Freki said:

It only works if you are buying cash.

For those that need a mortgage the reductions don't compensate yet the increase in interest 

 

2 hours ago, LetsBuild said:

Not quite true, the scale has moved towards the 100% deposit, yes definitely, but there are a some of those still needing a mortgage of some sort are also better off with increased rates but reduced prices overall.

Don't know what the situation is like in the UK, but in the US no one buys 100% cash. Max people have in terms of deposit is 20% and even then the mortgage at 6% is a killer. Many people just have 3% as a deposit.

I know what OP is saying in that the reductions are already meaningful, but the reality is if you can't get a mortgage it doesn't matter. Basically 40% of Americans have currently been knocked out of the real-estate until prices fall MUCH further (and we're already down 10 - 15% in most area's).

[mynamehere]

8 minutes ago, TerryBoi said:

 

Don't know what the situation is like in the UK, but in the US no one buys 100% cash. Max people have in terms of deposit is 20% and even then the mortgage at 6% is a killer. Many people just have 3% as a deposit.

I know what OP is saying in that the reductions are already meaningful, but the reality is if you can't get a mortgage it doesn't matter. Basically 40% of Americans have currently been knocked out of the real-estate until prices fall MUCH further (and we're already down 10 - 15% in most area's).

 

I think long term average of 100% cash sales in UK, is about 35% of all transactions are pure cash.

[anonguest]

On 02/01/2023 at 09:32, Smith said:

I'm looking in a fairly cheap part of Hampshire.

Does such a thing exist?!

You must have a different interpretation of the word 'cheap' compared with me 😉

[Sour Mash]

On 02/01/2023 at 11:20, LetsBuild said:

Not quite true, the scale has moved towards the 100% deposit, yes definitely, but there are a some of those still needing a mortgage of some sort are also better off with increased rates but reduced prices overall.

 

Since a mortgage is likely to last around 25 years, most will be better off with reduced prices and higher rates when they take one out as rates will go up and down over the years but the principal is lower.  Thus you can really benefit when rates fall at some point over the following 2 1/2 decades.