To think that big house price falls finally on the way?

[qwertyflirty]

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.

Such as:

www.theguardian.com/business/2018/apr/18/london-house-prices-fall-average-uk

www.thisismoney.co.uk/money/mortgageshome/article-5733321/Beware-red-danger-signs-house-prices-Young-buyers-borrow-record-sums.html

www.theguardian.com/money/2018/may/12/house-prices-are-on-the-slide-where-will-they-go-now

www.independent.co.uk/news/business/news/house-prices-fall-housing-market-rics-survey-april-a8343561.html

www.propertyweek.com/finance/house-price-falls-continue-in-london-and-spread-to-south-west/5096455.article

www.theguardian.com/commentisfree/2018/may/10/celebrate-house-prices-falling-britain-property-values

Where I am houses have been reduced by 200k & flats 100k in the last few months. Obviously they were overpriced in the first place. Anything “affordable” will be ok it’s the 500k market that will struggle I think.

New builds benefit from Help To Buy. Buyers can get 40% off the actual cost courtesy of the taxpayer.

Which neatly brings the houses I viewed on a new estate down to just "slightly overpriced".

If 2007 didn't cause a crash I doubt Brexit will. I was all set to buy everything in sight when the credit crash hit, but the reality is that the market cooled, sellers sat tight, nothing moved for a few years (during which time pent up demand built) and then when the market started moving, it went crazy. The fact that so many of us would like a crash illustrates why there won't be one.

And btw in Ireland prices have recovered from the 50% crash and are now worse than ever. And did I buy when they were low? I did not.

Do you think a 50% is going to happen? 10-15% drops aren’t going to make a huge impact on affordability.

A 50% crash will come with serious economic depression, so won’t be all roses and rainbows exactly. I’m a mortgage free homeowner, crash won’t affect me. But wishing a bloody great recession on others seems more than a little churlish.

freezerfoodyum

"I'm chilled, I don't think there is going to be a crash. I accept the market is stagnating, I accept there will probably be a small fall, but do I think my flat will suddenly only be worth half the price I paid for it? No, I don't think that."

It depends how much it rose.

Looking at Lewisham, there is a 2 bed flat for sale for 300K currently:

www.rightmove.co.uk/property-for-sale/property-52128804.html

Identical flats in the same block sold for as much as 345K in 2016. But clearly prices have fallen about 20% since then, as the owner of this one reduced the price and it's still not selling. Another identical flat in the block sold for 275K in Oct 2017, which is probably why no-one wants to pay over 300K for this one.

BUT identical flats could be had for only 159K in Dec 2013!

So in only 3 years, prices more than doubled. And you have no problem with that. Yet for some reason, you find it inconceivable that prices could then lose some of those unearned gains, and fall back down to 172K! Even though that would still be nearly 9% higher than it cost in 2013! So probably pretty close to how far wages have increased in that period.

Why do you think this scenario is impossible??

i sell them on a daily basis and have to get whole schemes valued by independsnt surveyors every 2 months to make sure they're still worth building .. if there was a genuine fear they would drop obviously we would all be out of jobs, so we have to be pretty sure we are right

House builders slow their completion rate as soon as prices start to stagnate/fall.

Analyst reports on the listed house builders and foxtons are worth a read if people are interested in the direction of travel of the housing market

I have one friend that help
to buy has been a good option for. Good income of 80k but accidental pregnancy & no family support for help with childcare or deposit. They’ve been able to get a house in Camberwell that will suit them for a long time & mortgage costs are now less than their rental was.

Shared ownership can be dodgy just seen one advertised in Wandsworth for a 25% share (120k) for £1300 a month, not worth it!

@qwertyflirty the 345 one has a new kitchen and bathroom so it’s not really apples with apples.

Againfaster

The FT disagrees with you about the future for housebuilders.

www.ft.com/content/eb240d84-f6e2-11e7-88f7-5465a6ce1a00

You've already stated your job would be on the line if prices fell, so excuse me if I don't think you give a totally objective viewpoint on this.

**House builders slow their completion rate as soon as prices start to stagnate/fall.

maybe the huge ones with their own build team can but not most. we pay a fixed price to get the thing built so sitting on unfinished properties paying rates, not getting the income and forfitting our permissions cant happen.

Furano

A new kitchen and bathroom do not cost 70K!

its odd that you start an AIBU topic to get told yeah you are and then argue so hard again it.

London is one of the most prominent international cities in the world, attracting attention from property investors all over. Global economy, exchange rate, political situations will all affect the London property market. In other regions it might be all about affordability but in London it is much more complex, hence in my opinion, unpredictable.

Those flats are a perfect example, because they really are identical, given a tiny bit of redecoration, which on a flat that size could add/subtract max 10K to the price.

The fact is that prices there in Lewisham have clearly fallen 20% from peak already.

I only picked a 2-bed flat in Lewisham because that's where freezer was saying she'd bought, so I don't know the area at all.

But it shows how widespread falls are already. And still not selling at the reduced price.

@qwertyflirty not £70k for sure but maybe £20k and another £5k premium for having presented the flat really well

Againfaster

Eh?

Lots of people have agreed with me. Some haven't - who totally coincidentally, either have jobs that rely on high house prices or recently bought an over-priced house with a high LTV mortgage.

Also Ex local authority flats are always the first to fall, and fall the furthest.

In 2016 I was looking to buy mainly at 2 bed ex-la flats - but in the end the inflated market worried me too much to pay and I went one zonefurther out to get something that was a bit more future proof.

OP. Tories with children can often let them live in one of their btls or give them a sizeable chunk to fund their house deposits, they wont vote for Corbyn anyway. You are being too simplistic again.

As to how the government will engineer it - lots of ways, starting with sticking plaster solutions that make them look like they are helping young people when they are not. And they are not increasing taxes for all landlords, merely driving out some of the amateurs.

Furano

Oh come off it - it's got a cheap as chips plain bathroom - and a tiny kitchen. No way anyone would pay an extra 25K for that over an identical flat.

The one currently on for 300K looks in perfectly OK condition.

Just because the asking price is lower doesnt mean the sale price will end up being so it's not that easy to just look at that flat and say its dropping.
can u see what the lease lengths were for each property sold as that can make thousands of pounds difference?
is the house going through probate and needs a quick sale etc etc there's still many variables.

alreadytaken

You hope.

OP your posts are really aggressive but tbh you’re not coming off as very knowledgable in this area (not sure what the constant links to newspaper articles are all about but they do seem to reenforce my view) as much as you’ll dismiss it, analysing the property market is my job and there is no reason for me to paint a positive spin on it. You won’t find any analysts who agree with your view that the London market will crash. Current predictions are a few % which is nothing and go no way towards making housing affordable.

Againfaster

You seriously think someone is going to pay over 300K for a flat when an identical one sold in the same block 6 months ago for 275K and prices are falling?

Why? Why would they do that?

@qwertyflirty I’m not saying they hadn’t dropped, I’m just saying you can’t infer a £70k drop from your examples.

Well presented flats sell quicker and sell for more, otherwise people wouldn’t bother...!

New kitchen and bathroom is attractive to people and there is some value attributable to that. Personally after having to replace my bathroom I’m not keen to do that on purchase again!