wickywackywoo Posted April 8, 2008 Share Posted April 8, 2008 I've been thinking for a while now that the exhorbitant levels of council tax and the high and ever increasing costs of fuel are likely to make people think twice about buying that larger house. Council tax has doubled in the last ten years and gas/electric isn't far behind. Another expensive factor is the level of stamp duty payable on a large house. I reckon these things haven't been a factor while the economy has been healthy but could rapidly become one as people get poorer in the coming recession. I used to live in a big five bed house before I STRed a few years ago. It was expensive to heat then but would be crippling now. Although I would love to buy a similar size house again, I don't think I will because of the afore-mentioned reasons. If I'm thinking like this then I would guess other people are as well. Could the price of larger houses collapse? Quote Link to comment Share on other sites More sharing options...
chichi Posted April 8, 2008 Share Posted April 8, 2008 Perhaps. But there's always the option for having lodgers, family move in and share the bills that way. Quote Link to comment Share on other sites More sharing options...
munimula Posted April 8, 2008 Share Posted April 8, 2008 I've been thinking for a while now that the exhorbitant levels of council tax and the high and ever increasing costs of fuel are likely to make people think twice about buying that larger house. Council tax has doubled in the last ten years and gas/electric isn't far behind. Another expensive factor is the level of stamp duty payable on a large house.I reckon these things haven't been a factor while the economy has been healthy but could rapidly become one as people get poorer in the coming recession. I used to live in a big five bed house before I STRed a few years ago. It was expensive to heat then but would be crippling now. Although I would love to buy a similar size house again, I don't think I will because of the afore-mentioned reasons. If I'm thinking like this then I would guess other people are as well. Could the price of larger houses collapse? I have good evidence of this too. My parents have always lived in large (by today's standards) 4 and 5 bed detache dwellings. Now they are STR they know they will only be able to buy a much smaller place because they don't have the income to support living in a larger place anymore. They would like to buy a similar dwelling again but reality is they can't afford the costs. Although my dad is finding this fact hard to accept my mum is being realistic about securing their longterm financial security. Quote Link to comment Share on other sites More sharing options...
Mikhail Liebenstein Posted April 8, 2008 Share Posted April 8, 2008 (edited) Could the price of larger houses collapse? I think they already are. I have spent a lot of time observing the £1m+ bracket in Surrey and SW London. There are an awful lot of homes in this bracket on the market, 1500 in all, typically 2700 Square feet plus. Many have been stuck for month after month after month. Whilst the sale of the odd £3m, £5m, £10m home will artificially keep certain house price indexes in the SE up, the reality is that the values across the board have fallen on the homes not yet sold. Eventually these sellers will capitulate and drag everything else down with them and I suspect we could get a really nasty qtr on qtr drop at some point. Possibily 8-10%. Most high end agents are now telling sellers to drop their prices by at least 10%, so expect this to start filtering through. Edited April 8, 2008 by mikelivingstone Quote Link to comment Share on other sites More sharing options...
johnycoldears Posted April 8, 2008 Share Posted April 8, 2008 I seem to remember as a kid in the early 1970s that the largest houses in our village always used to sell cheaply compared to the cosy cottage type houses. My Dad always used to tell me that it was because people simply couldn't afford the upkeep on these houses ( although to be fair some of them needed a fair bit throwing at them in restoration costs as well). If, as people are speculating here, the economy does go into a deep recession with high inflation to boot, I can see the 1970s being replicated and the value of some of these country piles could well suffer more seriously than most suspect as a result. Quote Link to comment Share on other sites More sharing options...
bugged bunny Posted April 8, 2008 Share Posted April 8, 2008 Another reason for demand for bigger houses falling is ever decreasing family size - and increasing numbers of non-immigrants/non-chavs not having children. Also, in the trade off between increased space and location, the premium paid for convenience and economic viability of location is going to increase, IMO. The added value of a home being close to better than average employment opportunities, state schools and public transport will continue to increase. Underutilised rooms will increasingly come to be regarded as a liability as opposed to being a status symbol worth the extra cost. Quote Link to comment Share on other sites More sharing options...
TheCountOfNowhere Posted April 8, 2008 Share Posted April 8, 2008 I used to live in a big five bed house before I STRed a few years ago. It was expensive to heat then but would be crippling now. Although I would love to buy a similar size house again, I don't think I will because of the afore-mentioned reasons. If I'm thinking like this then I would guess other people are as well. Me too, I lived in a 5 bed town house and the price of bills/council tax was getting ridiculous. Ive viewed lots of 5 bed houses since i sold and a couple of people have said openly that they are skint and need to downsize as they can no longer afford the house !!! Quote Link to comment Share on other sites More sharing options...
cells Posted April 8, 2008 Share Posted April 8, 2008 generally speaking, people who can buy these larger homes (5bed detached) will be paying 500k plus somehow i dont think the price of heating it comes into their calculation when buying also, electricity would be roughly the same in a 3bed as a 5bed. heating would be more, but you can offset that by heating only the rooms you use when you use them ect Quote Link to comment Share on other sites More sharing options...
wickywackywoo Posted April 8, 2008 Author Share Posted April 8, 2008 Me too, I lived in a 5 bed town house and the price of bills/council tax was getting ridiculous. Ive viewed lots of 5 bed houses since i sold and a couple of people have said openly that they are skint and need to downsize as they can no longer afford the house !!! Of course the flipside is that the price difference between a three bed semi and a five bed detached may narrow so much so that the extra expense can be justified. Be interesting to see if three bed semi's hold up a lot better than the larger houses. I suspect they might although I still expect them to take a big hit. Quote Link to comment Share on other sites More sharing options...
wickywackywoo Posted April 8, 2008 Author Share Posted April 8, 2008 generally speaking, people who can buy these larger homes (5bed detached) will be paying 500k plussomehow i dont think the price of heating it comes into their calculation when buying also, electricity would be roughly the same in a 3bed as a 5bed. heating would be more, but you can offset that by heating only the rooms you use when you use them ect I'd disagree, having lived in both. I currently live in a three bed semi and I'm fairly certain it costs considerably less to heat than my STR would now. Council tax is considerably more in my old house. You say heating doesn't come into it, but it does. Just because somebody can afford to spend a lot of money on a house doesn't mean they want the burden of massive bills to go with it. All of these things affect the desirability and hence price to some extent. Quote Link to comment Share on other sites More sharing options...
Country solicitor Posted April 8, 2008 Share Posted April 8, 2008 Whether or not heating and council tax are factors that will bear on those able to afford these properties, what will I believe have a major impact in a falling market is stamp duty at 3 or 4%. Forking out tens of thousands to our beloved government is one thing when that amount will be "recouped" within months in a rapidly rising market, quite another when its goodbye to it for good for the pleasure of buying a depreciating asset. Quote Link to comment Share on other sites More sharing options...
wickywackywoo Posted April 8, 2008 Author Share Posted April 8, 2008 Whether or not heating and council tax are factors that will bear on those able to afford these properties, what will I believe have a major impact in a falling market is stamp duty at 3 or 4%. Forking out tens of thousands to our beloved government is one thing when that amount will be "recouped" within months in a rapidly rising market, quite another when its goodbye to it for good for the pleasure of buying a depreciating asset. Completely agree. When prices are falling and money is tight people will try and stick to the 250k limit. It could become exceedingly difficult to sell a house that comes with a tax bill of tens of thousands and a whopping great council tax bill every month. In fact, the more I ponder it, the more I think that large houses may become as undesirable as large cars with gas guzzler engines are becoming/set to become. Quote Link to comment Share on other sites More sharing options...
SMAC67 Posted April 8, 2008 Share Posted April 8, 2008 It is an interesting question. I suspect much like large cars, large houses will be difficult to sell and almost impossible to afford. The only solution would be for multiple family occupancy. Running costs will continue to spiral out of control so I suspect that demand in the future will be for small, energy efficient homes, with good public transport links. People who have large houses usually cannot afford them. Quote Link to comment Share on other sites More sharing options...
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