To think that big house price falls finally on the way?(989 Posts)
MNHQ have commented on this thread.
After years or price rises, in my area (edge of London), I'm finally seeing price falls of around 15% from peak.
Lots of evidence in recent months of house price falls starting and picking up in London/South East, and usually once they start here, price falls spread elsewhere.
House prices are down on average 17K since July 2017 in London. "The average price of a home for the capital as a whole was £471,986, down from a peak of £488,247 last July."
There is little the government can do to mitigate it this time round, as interest rates are already at record lows. All signs are currently pointing to the top of the market having been reached and prices about to crash.
There'll be a slight fall, but in our area prices never really fell and are still strong. Too many people have huge mortgages and the Government can't afford to have widespread negative equity.
I think I've read that there really isn't a national picture any more. We bought almost a year ago, and there's nothing now on the market of the same size for what we paid. We bought for just shy of 200k, we'd need 220-230k now I think. We're in North Yorkshire. Prices most definitely not falling round here!
I don't think the government can afford to do anything about t.
Also not sure that there is now the same electoral imperative to keep prices high.
The government knows that there are more votes to be gained from those priced out than votes lost from those who stand to lose out from house price falls.
BossWitch - agree that I wouldn't expect to see price falls in areas outside London and SE yet.
As I said, "Lots of evidence in recent months of house price falls starting and picking up in London/South East, and usually once they start here, price falls spread elsewhere."
Give it a couple of years for your area - unless your area is one that hasn't risen in the last decade, in which case you'll be fine.
Well a 2 bed flat for 600,000 rather than 615,000 is still unaffordable to most who are our priced so I don’t see it really effecting anything tbh.
And I really hope London house prices don’t crash or I’m fucked, seriously fucked.
Unless the population plummets, I can't see house prices falling any time soon. Demand massively outstrips supply ATM. The government would need to build millions of affordable homes for this to happen and I haven't seen a single affordable (under 100k) home being built anywhere in the country.
Agree that the Government can't afford to have loads of people in negative equity. Also when house values fall the market tends to stagnate as people refuse to sell for less and simply sit tight and wait for prices to rise again. The only reason they would sell their house cheaply is if they have to because there's also a recession that means they can't afford to keep paying their mortgage. If there are no forced sellers there will be no cheap houses. And if people are forced so sell they probably can't buy another house, so all that's happening is that home ownership is being transferred from one group of people to another - we still don't have a greater number of people owning homes.
LemonysSnicket - why do you assume the falls will stop at this point?
Usually, in crashes, it starts slow and then picks up speed.
I'd expect the falls to be more dramatic this time round because of the huge growth in BTL and Buy to Leave in recent years - if you only have property as an investment, you are much more likely to sell up if prices are falling than those who bought property to live in (who after all still need a roof over their head).
In my area, lots of properties currently advertised that are obviously former (or even current) BTL properties.
Just a reminder that in Spain house prices dropped by 27% and in Ireland by 55%, also in Ireland it took more than 4 years to reach the floor. it’s only starting folks!
If prices fall to with most peoples price range there'll be another surge in buying and prices will go up again.
LemonysSnicket - unless you bought very recently, you should be OK?
In most parts of London, house prices have risen enormous amounts in recent years. In my area, prices basically doubled in the years 2013-16. So even if prices fell 30%, say, people would still be quids in. eg a house that went up from 250K to 500K, if it goes down to 350K, the homeowner is still sitting on a cushion of 350K. They should be fine.
It's a small fluctuation. Things may settle down - they can't keep rising, but they won't crash. Too much demand and too little supply.
They’ve gone up in my area. Great news for me as we’ve just bought our first house
Murane - but house prices are set at the margins. People who decide not to sell don't affect house prices - they are set based on those who do.
eg if in a road there are 100 houses, which are priced at an average of 500K. Prices start to fall nationally, so everyone decides not to sell. BUT 1 person in the street HAS to sell - maybe they need to move into a nursing home, get divorced, die, need to downsize before retirement etc. Maybe they get repossessed. Whatever.
Now if that ONE HOUSE has to accept a price drop of 15% THEN EVERY OTHER HOUSE IN THE STREET is now valued at 15% less. Whether or not they're for sale. Anyone else looking to sell or remortgage in that street will suddenly find their house is now "worth" 425K instead of 500K.
That's how house prices work.
House prices will fall in London and the South because demand is falling. The reason being is that people are leaving London.
House prices by me are still growing (West/Wales)
Ansumpasty - are you in London or surrounds?
And did they go up just before you bought, or since? And if so, by how much?
I'd expect houses outside London and surrounds to continue rising for up to another 2 years. The falls will come after that, unless of course the area is still lower than it was a decade ago, in which case, you'll be fine.
MIL lives just outside London. Put hers on market on Monday, at 25% more than she had assumed it was worth, has 8 viewings this week already.
But friends in notting hill and the city have failed to sell in 6 months. So time will tell.
It wouldn't bother us personally as we are lucky enough not to have a mortgage and we'll be here for 20 years or so. But it wouldn't be good for the economy - or a sign of a good economy - as a whole, I think.
Bloody well hope not. Ours has just reached the price we bought it for in 2007.
Well-priced properties will still sell. Though viewings do not = sales.
Agree that it wouldn't be good for the economy, but then house prices as they are aren't good for the economy either - touu many young (and middle-aged) people can't afford to contribute to the economy as all money spent on rent.
We need to rebalance our economy towards more productive things than simply selling houses to each other at increasingly inflated prices.
Think of the savings to be made in housing benefit costs if prices fall.
BalloonFlowers - see my posts above.
You should be fine then.
Your house is unlikely to be affected if it's not risen much.
The ones at risk of falls are those which have risen by vast amounts in just a few years.
As attractive as house price decreasing sounds for first time buyers, it is not going to happen. It may happen in areas that were in a 'bubble' and where supply exceeds demand. Otherwise, there are simply not enough houses to go around and ths prices will not fall. Prices have stagnated here, I don't care, our mortgage is huge and we cannot afford to move anyway, so price fluctuations mean nothing to us. Long term, if we downsized for a pension (20+ years) we would hope for a considerable increase in prices.
I think you've got house prices and house values mixed up. They are two different things. Price is what the average initial asking price is. Value is how much it sells for. I think in London the drop is less than 1% in values ie what they actually sold for.
It's a misleading way to look at it and does confuse a lot of people, as they think they are one and the same thing. But they aren't. Asking price, which is what you refer to and all the articles you posted refer to, and sale price are two different things.
The likely hood is it will go the other way. Because people will be confused by the media reports and hold onto their properties, which reduces supply to an extent that demand will outstrip it turning it into a sellers market. When this happens values increase.
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