> Property sellers are being forced to slash their asking prices in droves as the housing market struggles under the weight of surging borrowing costs.
>
> A third of all homes for sale in the fourth week of June were listed with discounts on their asking prices – up from 18pc in the same week a year earlier and even higher than during the Covid crisis, according to property website Rightmove.
>
> It came as separate data revealed that retail insolvencies had surged almost 60pc to the highest level for a decade as rising borrowing costs inflict a toll on the struggling high street.
>
> The jump in house price cuts corresponds directly with a doubling of mortgage rates, with the average two-year fix rising from 3.25pc in June 2022 to 6.39pc on Friday, according to Moneyfacts.
>
> This means that the monthly cost of a typical £200,000 loan has risen by £362 in the past year. Over the course of a two-year fix, this total extra cost amounts to nearly £9,000.
>
> The Rightmove data is likely to send a fresh chill through the market as agents and economists brace for a slump in activity and prices.
>
> The market is already suffering, with the average selling price down 3.5pc in the year to June at £262,239 according to Nationwide.
>
> Matt Johnson, of Johns&Co estate agents in London, said some vendors were being forced to cut asking prices by 10pc in order to secure a deal.
>
> His customers have cut prices on 160 properties in the past two months, up from 51 in the first two months of the year.
>
> Some buy-to-let investors are particularly motivated to make quick sales because mortgage rate rises have hit their profit margins, Mr Johnson added.
>
> He said: “We have seen more people take a bit of a hit on their price because their view now is that the investment doesn’t make as good sense as it has previously.”
>
> Meanwhile, analysis by the law firm RPC showed that 1,942 retail businesses have gone bust in the past 12 months, up 56pc from the previous year. Among the most high profile failures were Jules and Made.com, with both brands ultimately acquired by bigger rivals.
>
> The share of homes for sale with discounts is now higher than before the Covid pandemic began. In the same week in June 2019, 32pc of homes listed for sale had their prices reduced.
>
> Mike Staton, of Staton Mortgages, a broker in Nottinghamshire, said there is also a huge difference between advertised prices and those which sellers are actually able to achieve – even after a cut.
>
>
>
> Mr Staton blamed “ridiculous marketing valuations” for unrealistic prices that do not reflect the current state of the market.
>
> He said: “Many vendors still believe it’s 2018, whilst buyers think it’s 2008. We have seen a lot of down valuations.”
>
> In one case, a mortgage lender downgraded a property’s value by £38,000 compared to its agreed sale price, Mr Staton added.
>
> Simon Barry, of Harrods Estates, a London agent, said the worst of the blow from rate rises is still yet to hit, as homeowners come to the end of their fixed rate mortgage deals.
>
> He said: “It’s got to happen. [At the top of the market] I suspect we are going to see people shuffling assets around and paying their mortgages down.”
>
We sold our place in Bristol for £395,000 last summer.
Identical house next door has just gone on the market for £310,000. Mad!
I mean, something to bear in mind – is this house prices dropping, or house price premiums not being there anymore now it actually costs something to buy a house?
Of you are interested in buying a home you can see yourself living in long term, it might not be a bad time to buy. For those who might move on the future, fear of negative equity might put off buyers. First time buyers are also still struggling to find a deposit as rent prices increase. Then there is the fact that mortgages are stress-tested up to 7% right now, but interest rates could rise further than that.
This sounds good on the face of things, however I can also see career landlords and investment firms using this as an opportunity to expand further into the rental market.
I’m seeing some houses for from Asking From to a fixed rate which is promising
RIP any first time buyers that did the impossible to buy a tiny shithole in the last 3 or so years only to be destroyed by negative equity now.
Other side of the semi detached I’m in on rightmove dropped from 425 (listed 4 months ago) to 375. It’s happening.
To add to the rest of the anecdotes here, I check on Rightmove in my area every week or so just out of being a nosy bugger. RM bump properties to the top of their listing when they are reduced in asking price, as if they were a new property.
Since the latest rates rises around 10-15 (out of 25 per page) are currently reduced, usually I’d expect to see around 5-10.
Don’t get my hopes up but a total housing market collapse would be just… just great.
oh whats this?
The result of tripling mortgage interest has reduced the total value people are able to borrow?
Who would have predicted that vastly increasing the cost of borrowing money would lead to a vast reduction in the amount of money borrowed, it is harder than rocket science to be fair.
And given that UK property is propped up by debt, and the debt pile is about to collapse, the housing market will go with it.
But then
As house price collapse has been predicted many times before and failed to materialised, i wonder, how many increases in the base rate have house prices managed to dodge? none? ever? well shit.
Lovely, me and my partner are early 30’s and were feeling just about ready to have a kid, the recent economy has pushed us back into the no kids land.
Don’t buyers using mortgages kinda start with negative equity anyway? Since interest bumps up the cost of the borrowed ount against the actual value of the house?
13 comments
> Property sellers are being forced to slash their asking prices in droves as the housing market struggles under the weight of surging borrowing costs.
>
> A third of all homes for sale in the fourth week of June were listed with discounts on their asking prices – up from 18pc in the same week a year earlier and even higher than during the Covid crisis, according to property website Rightmove.
>
> It came as separate data revealed that retail insolvencies had surged almost 60pc to the highest level for a decade as rising borrowing costs inflict a toll on the struggling high street.
>
> The jump in house price cuts corresponds directly with a doubling of mortgage rates, with the average two-year fix rising from 3.25pc in June 2022 to 6.39pc on Friday, according to Moneyfacts.
>
> This means that the monthly cost of a typical £200,000 loan has risen by £362 in the past year. Over the course of a two-year fix, this total extra cost amounts to nearly £9,000.
>
> The Rightmove data is likely to send a fresh chill through the market as agents and economists brace for a slump in activity and prices.
>
> The market is already suffering, with the average selling price down 3.5pc in the year to June at £262,239 according to Nationwide.
>
> Matt Johnson, of Johns&Co estate agents in London, said some vendors were being forced to cut asking prices by 10pc in order to secure a deal.
>
> His customers have cut prices on 160 properties in the past two months, up from 51 in the first two months of the year.
>
> Some buy-to-let investors are particularly motivated to make quick sales because mortgage rate rises have hit their profit margins, Mr Johnson added.
>
> He said: “We have seen more people take a bit of a hit on their price because their view now is that the investment doesn’t make as good sense as it has previously.”
>
> Meanwhile, analysis by the law firm RPC showed that 1,942 retail businesses have gone bust in the past 12 months, up 56pc from the previous year. Among the most high profile failures were Jules and Made.com, with both brands ultimately acquired by bigger rivals.
>
> The share of homes for sale with discounts is now higher than before the Covid pandemic began. In the same week in June 2019, 32pc of homes listed for sale had their prices reduced.
>
> Mike Staton, of Staton Mortgages, a broker in Nottinghamshire, said there is also a huge difference between advertised prices and those which sellers are actually able to achieve – even after a cut.
>
>
>
> Mr Staton blamed “ridiculous marketing valuations” for unrealistic prices that do not reflect the current state of the market.
>
> He said: “Many vendors still believe it’s 2018, whilst buyers think it’s 2008. We have seen a lot of down valuations.”
>
> In one case, a mortgage lender downgraded a property’s value by £38,000 compared to its agreed sale price, Mr Staton added.
>
> Simon Barry, of Harrods Estates, a London agent, said the worst of the blow from rate rises is still yet to hit, as homeowners come to the end of their fixed rate mortgage deals.
>
> He said: “It’s got to happen. [At the top of the market] I suspect we are going to see people shuffling assets around and paying their mortgages down.”
>
We sold our place in Bristol for £395,000 last summer.
Identical house next door has just gone on the market for £310,000. Mad!
I mean, something to bear in mind – is this house prices dropping, or house price premiums not being there anymore now it actually costs something to buy a house?
Of you are interested in buying a home you can see yourself living in long term, it might not be a bad time to buy. For those who might move on the future, fear of negative equity might put off buyers. First time buyers are also still struggling to find a deposit as rent prices increase. Then there is the fact that mortgages are stress-tested up to 7% right now, but interest rates could rise further than that.
This sounds good on the face of things, however I can also see career landlords and investment firms using this as an opportunity to expand further into the rental market.
I’m seeing some houses for from Asking From to a fixed rate which is promising
RIP any first time buyers that did the impossible to buy a tiny shithole in the last 3 or so years only to be destroyed by negative equity now.
Other side of the semi detached I’m in on rightmove dropped from 425 (listed 4 months ago) to 375. It’s happening.
To add to the rest of the anecdotes here, I check on Rightmove in my area every week or so just out of being a nosy bugger. RM bump properties to the top of their listing when they are reduced in asking price, as if they were a new property.
Since the latest rates rises around 10-15 (out of 25 per page) are currently reduced, usually I’d expect to see around 5-10.
Don’t get my hopes up but a total housing market collapse would be just… just great.
oh whats this?
The result of tripling mortgage interest has reduced the total value people are able to borrow?
Who would have predicted that vastly increasing the cost of borrowing money would lead to a vast reduction in the amount of money borrowed, it is harder than rocket science to be fair.
And given that UK property is propped up by debt, and the debt pile is about to collapse, the housing market will go with it.
But then
As house price collapse has been predicted many times before and failed to materialised, i wonder, how many increases in the base rate have house prices managed to dodge? none? ever? well shit.
Lovely, me and my partner are early 30’s and were feeling just about ready to have a kid, the recent economy has pushed us back into the no kids land.
[It is time](https://tenor.com/view/and-here-we-go-joker-heath-ledger-dc-batman-gif-16272014)
Don’t buyers using mortgages kinda start with negative equity anyway? Since interest bumps up the cost of the borrowed ount against the actual value of the house?