Help Me Understand The Market
Discussion
I built a couple of houses and marketed them for sale last in July last year.
The first sold within a month £950k and they were moved in by the October. All good i thought! The second property (exactly the same as the first but with a slightly bigger garden) then didnt get any viewings for a while. It was on the market at £25k more than the first. So we dropped that down to the same value. Still didn't achieve much interest. Then in March this year we reduced the property further to £900k, this had no impact on viewings. Then at the end of July i decided to put it back up to the £950k, strangely this generated quite a few viewings but didn't manage to sell.
At this point i was worried that the semi rural location was putting people off and i was going to struggle to find the right buyer.
Once it go to October and the property had been on the market for over a year i got fed up so advertised it to be let at £3500pcm. To my surprise within 24 hours we had 9 applicants, picked one and they now live in it. It seems so strange to me that a property can struggle to sell but be let so easily. Especially at that kind of rental amount?
Any thoughts? What am I missing?
The first sold within a month £950k and they were moved in by the October. All good i thought! The second property (exactly the same as the first but with a slightly bigger garden) then didnt get any viewings for a while. It was on the market at £25k more than the first. So we dropped that down to the same value. Still didn't achieve much interest. Then in March this year we reduced the property further to £900k, this had no impact on viewings. Then at the end of July i decided to put it back up to the £950k, strangely this generated quite a few viewings but didn't manage to sell.
At this point i was worried that the semi rural location was putting people off and i was going to struggle to find the right buyer.
Once it go to October and the property had been on the market for over a year i got fed up so advertised it to be let at £3500pcm. To my surprise within 24 hours we had 9 applicants, picked one and they now live in it. It seems so strange to me that a property can struggle to sell but be let so easily. Especially at that kind of rental amount?
Any thoughts? What am I missing?
I guess it's a similar market to flashy cars - there are many who are in no position to buy an expensive asset but might well have the cash flow available to rent it.
Obviously mortgages are a form of credit but you generally still need a hefty deposit and need to pass credit checks beyond what would be needed to rent.
There are also those who don't want to commit to buying somewhere for various reasons.
Obviously mortgages are a form of credit but you generally still need a hefty deposit and need to pass credit checks beyond what would be needed to rent.
There are also those who don't want to commit to buying somewhere for various reasons.
How much interest did you get on the first house you sold? Just the one buyer? Sometimes maybe you just catch the right buyer at the right time.
In terms of rental vs sale, renters tend to be less discerning on the property type and its attributes since it isn't going to be their forever home - so with a tight rental market you are going to get more interest generally. More importantly though, at £600k borrowing (30% deposit roughly) you'll be paying around £3,500 per month in mortgage but you need around £385k in cash for deposit, stamp and moving fees. There's probably a good few people who can afford £3,500 per month rent but haven't got the savings to buy.
In terms of rental vs sale, renters tend to be less discerning on the property type and its attributes since it isn't going to be their forever home - so with a tight rental market you are going to get more interest generally. More importantly though, at £600k borrowing (30% deposit roughly) you'll be paying around £3,500 per month in mortgage but you need around £385k in cash for deposit, stamp and moving fees. There's probably a good few people who can afford £3,500 per month rent but haven't got the savings to buy.
Loads of bigger stuff in that price range near me hasn't sold and appears to rent later at very high rates.
But the rents are now dropping too, so assume in my area that the demand for those level rentals has been fulfilled.
I've just been on the phone to an EA for a house and he's almost been knocking the price down that I should offer, even though it says offers over.
I suppose that that is what is driving the rents. If people believe house prices are falling there is little to be lost in renting as it's 'free' if the houses you're looking at are falling by £50,000-£100,000 in 6-12mo.
But the rents are now dropping too, so assume in my area that the demand for those level rentals has been fulfilled.
I've just been on the phone to an EA for a house and he's almost been knocking the price down that I should offer, even though it says offers over.
I suppose that that is what is driving the rents. If people believe house prices are falling there is little to be lost in renting as it's 'free' if the houses you're looking at are falling by £50,000-£100,000 in 6-12mo.
Mr Whippy said:
Loads of bigger stuff in that price range near me hasn't sold and appears to rent later at very high rates.
But the rents are now dropping too, so assume in my area that the demand for those level rentals has been fulfilled.
I've just been on the phone to an EA for a house and he's almost been knocking the price down that I should offer, even though it says offers over.
I suppose that that is what is driving the rents. If people believe house prices are falling there is little to be lost in renting as it's 'free' if the houses you're looking at are falling by £50,000-£100,000 in 6-12mo.
Think that's pretty much my situation ^^^^ just sold my house (after two years waiting) and I can pay in rent pretty much the same as the mortgage interest would be for the new property, with no maintenance downside, and the possibility of house prices decreasing. But the rents are now dropping too, so assume in my area that the demand for those level rentals has been fulfilled.
I've just been on the phone to an EA for a house and he's almost been knocking the price down that I should offer, even though it says offers over.
I suppose that that is what is driving the rents. If people believe house prices are falling there is little to be lost in renting as it's 'free' if the houses you're looking at are falling by £50,000-£100,000 in 6-12mo.
Well there might be an economic miracle and prices go up but I'm betting against it.
A lot of people who might be keen to buy a £950k house might be struggling to sell a £750k house.
That's close to our situation right now.
Some corners of the market are not very 'liquid'.
There are a lot of houses on the market and few cash buyers.
I'm told that prices haven't dropped much for the houses which are selling.
There are a lot of new builds making it hard to sell used houses.
I feel some people have lost the confidence to upsize and take on more debt, and there is an increasing feeling that the economy is not in a good place.
Personally I think we will see either a fall in prices and market re-adjustment, or back to normal after xmas.
It wouldn't take too many additional buyers to free up the market.
Whereas there is a shortage of qualiy rental property in many areas.
But people like me are seriously put off renting out homes we can't sell by a toxic tax system, regulation, and previous experience of BTL.
In 'holiday' regions there are serious numbers of second homes on the market.
I've spoken to a lot of estate agents over the last 9 months, they don't offer much good news.
I suspect interest rates are going up before too long, Trump being elected has put pressure on the pound, gov't borrowing is costing more and people are realising Labour is a bag of trouble.
But if I was any good at predicting stuff, I'd be richer than I am.
I think lots of people have just 'parked the idea' of moving.
That's close to our situation right now.
Some corners of the market are not very 'liquid'.
There are a lot of houses on the market and few cash buyers.
I'm told that prices haven't dropped much for the houses which are selling.
There are a lot of new builds making it hard to sell used houses.
I feel some people have lost the confidence to upsize and take on more debt, and there is an increasing feeling that the economy is not in a good place.
Personally I think we will see either a fall in prices and market re-adjustment, or back to normal after xmas.
It wouldn't take too many additional buyers to free up the market.
Whereas there is a shortage of qualiy rental property in many areas.
But people like me are seriously put off renting out homes we can't sell by a toxic tax system, regulation, and previous experience of BTL.
In 'holiday' regions there are serious numbers of second homes on the market.
I've spoken to a lot of estate agents over the last 9 months, they don't offer much good news.
I suspect interest rates are going up before too long, Trump being elected has put pressure on the pound, gov't borrowing is costing more and people are realising Labour is a bag of trouble.
But if I was any good at predicting stuff, I'd be richer than I am.
I think lots of people have just 'parked the idea' of moving.
OutInTheShed said:
A lot of people who might be keen to buy a £950k house might be struggling to sell a £750k house.
That's close to our situation right now.
Some corners of the market are not very 'liquid'.
There are a lot of houses on the market and few cash buyers.
I'm told that prices haven't dropped much for the houses which are selling.
There are a lot of new builds making it hard to sell used houses.
I feel some people have lost the confidence to upsize and take on more debt, and there is an increasing feeling that the economy is not in a good place.
Personally I think we will see either a fall in prices and market re-adjustment, or back to normal after xmas.
It wouldn't take too many additional buyers to free up the market.
Whereas there is a shortage of qualiy rental property in many areas.
But people like me are seriously put off renting out homes we can't sell by a toxic tax system, regulation, and previous experience of BTL.
In 'holiday' regions there are serious numbers of second homes on the market.
I've spoken to a lot of estate agents over the last 9 months, they don't offer much good news.
I suspect interest rates are going up before too long, Trump being elected has put pressure on the pound, gov't borrowing is costing more and people are realising Labour is a bag of trouble.
But if I was any good at predicting stuff, I'd be richer than I am.
I think lots of people have just 'parked the idea' of moving.
Must be some truth in that as that pretty much describes me. Our house is no longer ideal for us but can't be arsed to go back to paying a mortgage at the moment. 6 or 7 holidays a year is more fun. That's close to our situation right now.
Some corners of the market are not very 'liquid'.
There are a lot of houses on the market and few cash buyers.
I'm told that prices haven't dropped much for the houses which are selling.
There are a lot of new builds making it hard to sell used houses.
I feel some people have lost the confidence to upsize and take on more debt, and there is an increasing feeling that the economy is not in a good place.
Personally I think we will see either a fall in prices and market re-adjustment, or back to normal after xmas.
It wouldn't take too many additional buyers to free up the market.
Whereas there is a shortage of qualiy rental property in many areas.
But people like me are seriously put off renting out homes we can't sell by a toxic tax system, regulation, and previous experience of BTL.
In 'holiday' regions there are serious numbers of second homes on the market.
I've spoken to a lot of estate agents over the last 9 months, they don't offer much good news.
I suspect interest rates are going up before too long, Trump being elected has put pressure on the pound, gov't borrowing is costing more and people are realising Labour is a bag of trouble.
But if I was any good at predicting stuff, I'd be richer than I am.
I think lots of people have just 'parked the idea' of moving.
The other point I'd make is what's the stamp duty on a £1m house? More than a year or two's rent I'd guess. It would make me think twice.
Had a house on the market since January. One of the very best in a SE wealthy/prestigious town. Agent was bullish at £2.5M so it was quietly marketed off portals but no takers. Hit the portals at £2.35M, had about 8 viewings, a couple of bids from chancers at £1.9M.
It’s ceiling price for the area but there are very few properties like it. Going to the rental market now at £5250 pcm, hope we get some interest.
It’s interest rates and then the uncertainty of the election, with the top end of the market unsure prior to the budget of stamp duty & tax changes.
Agent says if we’d been on the market in 2023 rather than 2024 we’d have been fighting them off with a s
tty stick. Agents talk crap of course but looking at sold prices from that period they were much higher.
Obviously my house is overpriced for the current market but we don’t need to sell so we’re not going to let it go for a relative song just because the market’s in a bit of a trough.
But I think that’s the answer, interest rates jumped massively in 2022/2023 and buyers have been hesitant to lock themselves into a higher mortgage rate even for a couple of years.
It’s ceiling price for the area but there are very few properties like it. Going to the rental market now at £5250 pcm, hope we get some interest.
It’s interest rates and then the uncertainty of the election, with the top end of the market unsure prior to the budget of stamp duty & tax changes.
Agent says if we’d been on the market in 2023 rather than 2024 we’d have been fighting them off with a s
tty stick. Agents talk crap of course but looking at sold prices from that period they were much higher.Obviously my house is overpriced for the current market but we don’t need to sell so we’re not going to let it go for a relative song just because the market’s in a bit of a trough.
But I think that’s the answer, interest rates jumped massively in 2022/2023 and buyers have been hesitant to lock themselves into a higher mortgage rate even for a couple of years.
I tried to rent something similar but gave up. There is a massive rental shortage and this also factors into insecurity of tenure. I'd be more confortable renting if there was backup for when we inevitably get kicked out
3.5k is 4.4%. about the same as mortgage rate. So ignoring capital growth, it's really about the same impact on your net worth whatever you do.
and i would imagine anyone with a budget of 900k would have at least part of invested in the markets up 30% or more this year.
But i'm not expecting house prices to fall much either. it seems to be volume that is mainly hit. You yourself are a statistic, you didn't consider dropping the price further did you? There is too much rental demand for one, which props up value
3.5k is 4.4%. about the same as mortgage rate. So ignoring capital growth, it's really about the same impact on your net worth whatever you do.
and i would imagine anyone with a budget of 900k would have at least part of invested in the markets up 30% or more this year.
But i'm not expecting house prices to fall much either. it seems to be volume that is mainly hit. You yourself are a statistic, you didn't consider dropping the price further did you? There is too much rental demand for one, which props up value
I think a lot of people are anticipating a bit of a house price correction.
We are overdue a recession. It is only the high level of immigration that has kept the pressure on the housing market.
I don't know of any government in the last 45 years that hasn't relied on the housing market to grow the economy. If houses are selling, then so are carpets, curtains and new furniture.
The budget offered nothing for the housing market. We might see some activity under £425k until 31st March and the FTB stamp duty holiday ends. But I think it will be a bit sticky for the next few years.
I guess some people have got out in the hope that prices stagnant or decline slightly. I have noticed that unsold properties are now being reduced.
We moved a few years ago. This is hopefully our last home and we sold first and moved into rented for a few months to make sure we got the right house. It also put us in an excellent position being cash, non dependent on sale.
We are overdue a recession. It is only the high level of immigration that has kept the pressure on the housing market.
I don't know of any government in the last 45 years that hasn't relied on the housing market to grow the economy. If houses are selling, then so are carpets, curtains and new furniture.
The budget offered nothing for the housing market. We might see some activity under £425k until 31st March and the FTB stamp duty holiday ends. But I think it will be a bit sticky for the next few years.
I guess some people have got out in the hope that prices stagnant or decline slightly. I have noticed that unsold properties are now being reduced.
We moved a few years ago. This is hopefully our last home and we sold first and moved into rented for a few months to make sure we got the right house. It also put us in an excellent position being cash, non dependent on sale.
itsallyellow said:
I built a couple of houses and marketed them for sale last in July last year.
The first sold within a month £950k and they were moved in by the October. All good i thought! The second property (exactly the same as the first but with a slightly bigger garden) then didnt get any viewings for a while. It was on the market at £25k more than the first. So we dropped that down to the same value. Still didn't achieve much interest. Then in March this year we reduced the property further to £900k, this had no impact on viewings. Then at the end of July i decided to put it back up to the £950k, strangely this generated quite a few viewings but didn't manage to sell.
At this point i was worried that the semi rural location was putting people off and i was going to struggle to find the right buyer.
Once it go to October and the property had been on the market for over a year i got fed up so advertised it to be let at £3500pcm. To my surprise within 24 hours we had 9 applicants, picked one and they now live in it. It seems so strange to me that a property can struggle to sell but be let so easily. Especially at that kind of rental amount?
Any thoughts? What am I missing?
Your periods of interest correlated with the last time in the year when people are looking to get moved for new school year and your re-pricing may have triggered a new listing? You might have got more interest if you'd listed/changed in May/June.The first sold within a month £950k and they were moved in by the October. All good i thought! The second property (exactly the same as the first but with a slightly bigger garden) then didnt get any viewings for a while. It was on the market at £25k more than the first. So we dropped that down to the same value. Still didn't achieve much interest. Then in March this year we reduced the property further to £900k, this had no impact on viewings. Then at the end of July i decided to put it back up to the £950k, strangely this generated quite a few viewings but didn't manage to sell.
At this point i was worried that the semi rural location was putting people off and i was going to struggle to find the right buyer.
Once it go to October and the property had been on the market for over a year i got fed up so advertised it to be let at £3500pcm. To my surprise within 24 hours we had 9 applicants, picked one and they now live in it. It seems so strange to me that a property can struggle to sell but be let so easily. Especially at that kind of rental amount?
Any thoughts? What am I missing?
Rentals shift quickly and easily due to paucity of supply especially 3-4 bed. We often get 30+ applicants inside 24hrs of listing.
£3500/mth is a 4.4% gross yield against valuation. That is cheap compared to buying and servicing a mortgage, especially for something that is presumably in mint condition.
You don't say where £950k sits relative to the market but watch out for sky high maintenance expectations if it is upper/top end... and of course the freshening up costs when the current tenant moves out (even fair wear and tear can quickly add up on an expensive property).
Thanks for all the replies. Makes sense what your all saying. Hopefully we will have 2-5 years trouble free rental income and then re-market as and when the market seems to be moving better.
Just to answer some questions:
Its a 4 bed detached house 2000 sq ft, Air source heat pump, UFH throughout with a decent garden garden in Kent.
The first house had about 10 viewings in the first few weeks and one of them bought it.
The price has never seemed to be an issue so didn't want to keep discounting. The original 950 actually feels cheap for the area.
Just to answer some questions:
Its a 4 bed detached house 2000 sq ft, Air source heat pump, UFH throughout with a decent garden garden in Kent.
The first house had about 10 viewings in the first few weeks and one of them bought it.
The price has never seemed to be an issue so didn't want to keep discounting. The original 950 actually feels cheap for the area.
On the original question, the threshold for renting is much lower than it is for buying. The level of commitment, both financial and emotional is far less.
The cost of renting the house for a year is not a great deal more than the amount of just stamp duty if you were buying it.
As already mentioned, there's many more people who can afford £3500 a month to rent a house, than can line up £1m all in to buy a house.
The cost of renting the house for a year is not a great deal more than the amount of just stamp duty if you were buying it.
As already mentioned, there's many more people who can afford £3500 a month to rent a house, than can line up £1m all in to buy a house.
itsallyellow said:
The price has never seemed to be an issue so didn't want to keep discounting. The original 950 actually feels cheap for the area.
Genuinely not meaning to be flippant, but the fact it's been on the market for a year and not selling suggests otherwise.Four months ago, people were telling me, the market is fine, across most of the UK, it's just Devon and Cornwall hit by exits from holiday homes and WFH going pearshaped.
There are also knock-on effects like the holiday home trade going pete tong has hit builders, decorators, cleaners and related services.
Now I'm hearing problems are more widespread.
It looks to me like the industry and media are reluctant to report this?
Media don't want to report Labour having Trussed the economy ?
Housing industry wants to keep the smile nailed to its face for as long as possible ?
I've had my eye on a couple of places which have gone to auction, not sure what to read into that.
There are also knock-on effects like the holiday home trade going pete tong has hit builders, decorators, cleaners and related services.
Now I'm hearing problems are more widespread.
It looks to me like the industry and media are reluctant to report this?
Media don't want to report Labour having Trussed the economy ?
Housing industry wants to keep the smile nailed to its face for as long as possible ?
I've had my eye on a couple of places which have gone to auction, not sure what to read into that.
There are simply too many variables but essentially, if you want to sell it faster, reduce the price
As with cars there are always rare cases where it sells after raising the price but if it was £100k it would sell tomorrow
If you reduce it by 25k every month, it will sell
It will sell faster if you do it by £50k a month
The last 2 I sold I reduced the price every month as I wanted to sell and get on with the next, I probably sold £20k and £50k too cheap
But it allowed me to buy the house I wanted, that I felt was £200k under priced
As with cars there are always rare cases where it sells after raising the price but if it was £100k it would sell tomorrow
If you reduce it by 25k every month, it will sell
It will sell faster if you do it by £50k a month
The last 2 I sold I reduced the price every month as I wanted to sell and get on with the next, I probably sold £20k and £50k too cheap
But it allowed me to buy the house I wanted, that I felt was £200k under priced
itsallyellow said:
Thanks for all the replies. Makes sense what your all saying. Hopefully we will have 2-5 years trouble free rental income and then re-market as and when the market seems to be moving better.
Just to answer some questions:
Its a 4 bed detached house 2000 sq ft, Air source heat pump, UFH throughout with a decent garden garden in Kent.
The first house had about 10 viewings in the first few weeks and one of them bought it.
The price has never seemed to be an issue so didn't want to keep discounting. The original 950 actually feels cheap for the area.
Eynsford?Just to answer some questions:
Its a 4 bed detached house 2000 sq ft, Air source heat pump, UFH throughout with a decent garden garden in Kent.
The first house had about 10 viewings in the first few weeks and one of them bought it.
The price has never seemed to be an issue so didn't want to keep discounting. The original 950 actually feels cheap for the area.
If so I recall looking at the details but we decided against Eynsford
KTMsm said:
There are simply too many variables but essentially, if you want to sell it faster, reduce the price
As with cars there are always rare cases where it sells after raising the price but if it was £100k it would sell tomorrow
If you reduce it by 25k every month, it will sell
It will sell faster if you do it by £50k a month
The last 2 I sold I reduced the price every month as I wanted to sell and get on with the next, I probably sold £20k and £50k too cheap
But it allowed me to buy the house I wanted, that I felt was £200k under priced
I think that's simplistic nonsense when it comes to houses.As with cars there are always rare cases where it sells after raising the price but if it was £100k it would sell tomorrow
If you reduce it by 25k every month, it will sell
It will sell faster if you do it by £50k a month
The last 2 I sold I reduced the price every month as I wanted to sell and get on with the next, I probably sold £20k and £50k too cheap
But it allowed me to buy the house I wanted, that I felt was £200k under priced
You can fire sale a house, but in a market with few committed buyers you won't get much for it and won't be able to buy an equivalent house for what you do get.
It's not like buying a tin of beans, a handful of BP shares or a Ford Mondeo.
OutInTheShed said:
I think that's simplistic nonsense when it comes to houses.
You can fire sale a house, but in a market with few committed buyers you won't get much for it and won't be able to buy an equivalent house for what you do get.
It's not like buying a tin of beans, a handful of BP shares or a Ford Mondeo.
It's exactly the same rules of supply and demand - you can decrease by less and take longer but the point remains the sameYou can fire sale a house, but in a market with few committed buyers you won't get much for it and won't be able to buy an equivalent house for what you do get.
It's not like buying a tin of beans, a handful of BP shares or a Ford Mondeo.
My father had his house valued and refused to reduce the price - it took 2 years to sell
I was happy to reduce mine to speed up a sale
Once a house is on Rightmove and we'll assume the OP isn't an idiot and leaving his underpants around the place or a bright pink kitchen... then the only thing you can change is the price !
KTMsm said:
OutInTheShed said:
I think that's simplistic nonsense when it comes to houses.
You can fire sale a house, but in a market with few committed buyers you won't get much for it and won't be able to buy an equivalent house for what you do get.
It's not like buying a tin of beans, a handful of BP shares or a Ford Mondeo.
It's exactly the same rules of supply and demand - you can decrease by less and take longer but the point remains the sameYou can fire sale a house, but in a market with few committed buyers you won't get much for it and won't be able to buy an equivalent house for what you do get.
It's not like buying a tin of beans, a handful of BP shares or a Ford Mondeo.
My father had his house valued and refused to reduce the price - it took 2 years to sell
I was happy to reduce mine to speed up a sale
Once a house is on Rightmove and we'll assume the OP isn't an idiot and leaving his underpants around the place or a bright pink kitchen... then the only thing you can change is the price !
The house market has a finite supply of buyers, you may have to wait.
It's like you can always sell a classic car tomorrow, to the scrap man.
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