I have been househunting in South London for about 6 months.
I see lots of cases of asking prices being reduced multiple times, but that doesn’t tell us much – it could simply be that the initial expectations were unrealistic. The real question is how today’s prices compare to last year’s – and I mean actual transaction prices, not asking prices.
I must say this is the first time, in many many years in London, that I have seen a few (nice) properties on the market for less than they were bought over the last 12-24 months. I have seen 4 such cases (checking historical sale prices on rightmove), and the reductions corresponded to a 0.5 to 1.5% annualised reduction; not exactly a crash, but still a new phenomenon, which would have been unthinkable years ago.
My two cents is that:
Volumes have reduced and will continue to reduce (ie fewer properties on sale), mostly because lots of people would rather not sell at the current prices.
First-time buyers are in a good position compared to, say, 5 years ago: prices have finally stopped skyrocketing and there is less competition from buy-to-let “investors”. Yes, I know the house price to avg income multiples are still crazy, but at least double-digit annual increases in house prices are a thing of the past.
(This is all theoretical because I don’t have the dough) but it’s certainly not the time to “invest” in a BTL.
However, it can still make sense to buy: unless you expect dramatic house price crashes, buying can still be cheaper than renting even in moderate downturns. The details depend, of course, on the specifics of each case.
It’s pointless to read too much into the price of just a single property. Even during the housing boom, two very similar properties could easily sell for different prices, for lots of legitimate reasons: dumb luck (or lack thereof…), different agent, different people valuing different things, etc.