House prices are officially starting to drop in London

[alazuli]

www.theguardian.com/business/2016/aug/09/average-london-property-price-falls-30000-in-july-haart-brexit-vote

(YAY)

[Inthepalemoonlight]

They'd need to drop a lot more to give people who have not bought a home yet have any chance of getting one in London. It is nice to see them heading in the right direction.

[yougottheshining]

Good.

[lalalonglegs]

I'm not surprised. I'm on a Rightmove alert for three bedroom houses at less than £1 million in three postcodes: up to March, I got an alert once or twice a fortnight; up to June 23rd I was getting an alert every day more or less; post-Referendum I'm getting several a day, even in August. Auction results have also been poor since the vote - lots of unsold stock or prices very close to guide price which, for London, is very unusual. I think things are really going to slide when the shit hits the fans with several big developments such as Nine Elms that are due to complete in the next few months.I'm not convinced that people who reserved and exchanged on these over-priced apartments back in the way back when are going to be able to/want to complete now.

[panegyricS1]

Mixed feelings about this. I feel sorry for the families who'll be hit with negative equity, but not for the huge overseas investors. Prices were absurd though. Back in the mid 1990s, I got on the London property ladder (2 bed flat south of the river) with a salary of £30k and a deposit of £25k. No chance these days! I paid £138k for that flat - similar ones are on rightmove now for £425k.

[cherryplumbanana]

If prices go down and people have to hang on their properties whilst they are waiting for prices to go back up, good luck if you are renting and all the rental prices go up.

[Namehanger]

Trying to sell our house in the South East. Priced to sell in a very desirable street, with schools at either end. But very, very quiet......

[alazuli]

I just wonder if the prices drops will filter down to the cheap (but not cheap enough) FTB starter flats I'm looking at. At the moment the only reductions I can see are for studios or 1 beds in undesirable areas so there's still nothing I can buy. :(

I do think this is just the beginning though but it'll take maybe 6 months for prices to really drop across the board. Well, that's what I'm hoping anyway!

[YelloDraw]

Look, much as I want a little house price fall/stabilization - that is not an accurate headline.

Read the full report here

it should be noted that the month of July has recorded a
decrease in new seller asking prices in five years out of the last seven going back to 2010, as seasonal factors come
into play

[YelloDraw]

If prices go down and people have to hang on their properties whilst they are waiting for prices to go back up, good luck if you are renting and all the rental prices go up.

Tht isn't how it has happened in the past. Housing market slow downs and price falls generally lead to lower volume of sales stock but an increase in rental stock as people who wanted to sell decide to rent out instead. When house prices fall, rental rates also generally fall.

[yougottheshining]

Rents have already fallen as well according to that article.

[Queenbean]

Good

[EssentialHummus]

I'm on RightMove daily for my area (the "posh end" of Lewisham). Starter flats aren't shifting much in price so far - one identical to mine (large 2 bed, ex-council) sold for over the asking price in under a week. OTOH, more expensive houses and flats seem to be staying on the market longer and being reduced in price.

I would guess that a lot of people feel like I do - I'd buy our next home now if we could find something that ticked every box and that we could stay in long term, but I'm not going to compromise as much as I'd have done before Brexit, because I'm aware that prices may still have way to fall, and that if we need to move again in the medium term we will almost certainly not benefit from price rises.

[Ireallydontseewhy]

I'd agree there has been an increase in property coming onto the market in the areas i 'watch', since the referendum - presumably people were waiting and then decided they might as well get on with it because there's no longer any point in waiting.
Any fall in prices (and i agree one month isn't enough to know) may be due to brexit but i think also it's difficult to disentangle that from the effect of the btl tax changes. Given the relatively low real margins after ll has replaced the boiler, fixed the gutters etc, i think the change to interest tax deductibility may have a significant effect as people start to work out what the impact will be, and the implementation date approaches. It may turn out to have been quite an effective way of tipping the balance back to owner occupation. Yes there is still capital appreciation, but you can't live on unrealised capital gains.

[cherryplumbanana]

During and after the last "property crash" (was it 2008?), the rents have most definitely gone up! It might be different this time.

[TurquoiseDress]

Not read the article yet, but I personally welcome a drop in prices, as a FTB.

[TurquoiseDress]

EssentialHummus
Which is the posh end of Lewisham? (If that's not too revealing).



We moved here recently (well, last year) and have been looking at trying to buy a flat (2 or 3 bed) but prices are crazy!

Have gone out as far as Beckenham, which seems a lovely place, but again v slow market although can see many reductions being made on over-priced properties (IMO).

[Queenbean]

Turquoise and Hummous

[Whatthefoxgoingon]

I'd invest in property if prices really fall in London. Never bought BTL in London as I thought the prices were way too high. I'd need a massive crash though, not 10-15%.

Watching carefully now.

[EssentialHummus]

Turquoise - around Brockley and Telegraph Hill. It's "posh" rather than posh - estate agents keep mithering on about the local conservation areas and farmer's market

[kirinm]

Oooh essential, we are moving to Telegraph Hill next Friday!

I know everyone rejoices at the prospect of a price crash but as FTB we are fucked if a 30% drop happens and we lose £120k from the value of our flat as its not a forever home.

To be honest, I've been keeping an eye on what's coming on in our budget (as we didn't trust our vendor not to pull out) and it's pretty dead - other than what look like ex LA places.

[TurquoiseDress]

Ah yes Brockley- we have driven through and the houses there look amazing!

Kirinm you're right about the market being dead.

We've seen some ex-LA places come up- more over towards/in places like Beckenham, but not really sure if they are worth pursuing...all seem to have been on the market an awful long time, not sold despite being significantly cheaper than other things close by.

We are in the same situation too- looking to buy a flat as that's all we can afford- yet don't won't to be stuck there in a few years time due to negative equity etc.

Good luck with the move

[JeffreySadsacIsUnwell]

Exactly the same was reported last summer post-election. It also happened the previous year, though not to such an obvious extent. Everything goes dead in the summer anyway. Properties that were listed in early spring and haven't sold by the summer hols get reduced; not many people list their property for the first time in August... And the number of buyers looking appears to drop as people traditionally go on holiday in July/Aug.

We put our London house on the market last year just before the election, quickly realised our mistake (and that there was nothing to buy!) and pulled it off, but nothing around us that came on in the 2 or 3 weeks before or afterwards shifted at all and they either cut prices to sell over the summer or lingered until November when everything started moving again. We waited until January this year before relisting. Obviously if you need to move for whatever reason, you don't have the luxury of waiting and so cutting prices is your only option to sell quickly.

I'd take the articles with a pinch of salt and if I was looking to buy right now, I wouldn't assume that there were bargains to be had - I'd be looking very closely at how long the property had been on the market. I do think the market needs a small correction, certainly stabilisation at the very least, but I think that the fact that the Brexit vote was so recent we don't know full implications and the usual summer lull combine to make this too early to call a definite fall. If we get to next Easter and we have quarter-on-quarter drops in price and volume, that's significant, but I'd be sitting tight on a wad of cash right now - unless, of course, I saw somewhere I really wanted to live for a few years that I could afford.

[kirinm]

Turquoise - ours is capable of being made into a 2-bed and actually, we really do love it now. Our search took nearly a year in the end and in that time we've paid £21k in rent. If there is a huge drop we can wait it out for a bit but not forever.

We did think about pulling out but if the market stays dead, we'd just be stuck in rented going after the few places that do come on along with 100s of other FTB.

[kirinm]

Oh Turquoise, one thing to think about if you do buy ex LA is who the freeholder is. We've bought with a share in the freehold company but we walked away from places where the local borough council were freeholders. We'd heard v bad things about Southwark.

[EssentialHummus]

kirin - welcome to the 'hood!

I guess you'll know all this, but "ilovese4" on FB and BrockleyCentral blog are good for finding local stuff to do. And there's the Hill Station for great coffees, breakfasts and cakes.

I have Lewisham as a freeholder and (touch wood) they've been fine so far. I have a much larger flat than I'd have otherwise been able to buy as a result of going ex-council, and with very few exceptions we haven't felt any disadvantage to living here. It is an incredibly well-built, roomy flat, with tons of storage, and the solid construction means you hardly ever hear your neghbours. Some of my friends have been snobby about it, but that's not my look-out.

I would absolutely buy a larger ex-council house/flat as my next home. In north London there are lots and lots of 3/4 bed ex-council maisonettes of 130 sq. m+, but there are less round our way.