Why is the housing market so f**ked?
My partner and I are in the highly fortunate position that we are looking to get on the property ladder. Normally, in the past, this wasn’t an unusual thing to do. You’d call an estate agent, view some houses, make a sensible offer and wahay! You’re now a proud homeowner.
Nowadays though, it could be the hardest thing in the world to do. We live in Newquay — a picturesque seaside town in north Cornwall. It’s a nice place, and with the mass adoption of remote working, I can see why lots of people want to relocate to the places they love. In my opinion, this makes Newquay a prime spot to buy property. Especially as it’s yet to receive the Padstow/St Ives treatment. (The yah-yahs and rah-rahs who appear for 2 weeks of the year to stay in their £1 million townhouses and drive around badly in their oversized range-rovers). I have nothing against these people, I just wish they d̶i̶d̶n̶’̶t̶ ̶h̶a̶v̶e̶ ̶s̶u̶c̶h̶ ̶s̶m̶a̶l̶l̶ ̶p̶*̶*̶*̶*̶*̶*̶ drove smaller cars.
The BBC actually ran an article 2 weeks ago saying “Rightmove says Cornwall’s Newquay is hottest UK property market”. When you delve a little deeper into this, the data suggests 85% of listed homes have sold since the beginning of this year alone. 85%. To put that into context, over the same period of time in Birmingham, it was 18%.
We started looking at flats this time last year, and eventually, we found one we liked and made an offer. It got accepted, but later down the line the sale fell through, so we continued looking. It feels like the 4-month delay we had on that first property was the nail in the coffin for trying to get on the ladder.
Stamp duty relief and COVID have flamed the housing market into a raging fire of extortionately high prices and mass relocation. Properties have been coming up for sale, and the NEXT day they’re sold. That’s not an exaggeration. When I spoke to an estate agent about this, they said on one particular flat — within 12 hours of it being up for sale, they had received over 5 offers above the asking price from people out of the county. Like, what? How do you even compete with that?
“Hi Mr Estate agent, sorry we can’t make the extra 20k, but we are willing to let the current owner take the bathroom and kitchen with them, will that help?”
Not only are we competing with people in Newquay for property, but we’re also having to look at paying over the odds to try and actually even be considered. In some cases, we haven’t even been allowed to view a property as we weren’t cash buyers.
As the market is so favourable to sellers, I now receive a couple of emails a week of new houses/flats for sale, and the premium being added is ludicrous. Sorry Rightmove, but I don’t think I can justify £275,000 for a 2-bed first floor flat with no outside space that sold for only £175,000 2 years ago. I’ll also pass on the “studio” flat up for sale at £100,000, where it’s actually impossible to wipe your ass without still being in the kitchen.
I can see why people are cashing in — both long term owners, but also in some cases people who only completed 6 months ago, but are now going back up for sale with a 10–15% (even 20%) extra asking price.
As first time buyers with nothing to sell, we’d probably usually be in an advantageous position over people stuck in a chain, but with the amount of cash flying around it’s become nigh on impossible. We’ve lost all our advantage and if anything, we now sit in a dangerous grey area.
In my opinion, the market can’t continue going this way. As more people cash in and properties are snapped up, where are people going to live? Yes, you’ve raised a chunk more capital by selling right now, but wherever you buy you’ll be paying higher anyway? But let’s imagine the market does keep going this way…What if in 2 years the remote working era is truly sticking around, so people are coming to live in the best places (no bias). If that’s the case, now is probably still the good time to buy as the demand will only keep going up.
If we do get on the ladder and the market then pulls back, if we put a 25% deposit down and our property loses 10–20% of its value in a crash, that’s our life savings gone. Kaput.
I don’t know. I’m not an expert, I’m just pissed off. I don’t even see how it can fix itself. Maybe we’ll just have to look at living the van-life again, which is definitely not a bad option.
In the meantime, if anyone wants to sell me a nice 2 bedroom flat at a reasonable rate, I’m all ears. Or an annexe. Or even maybe just a shed. As long as you’ve not already had 28 offers above the asking price.
