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

Well, you've already stated you think potential buyers aren't worthy as they just don't scrimp and save as hard as you did.

That's not anything like what I said and you know it.

I don't know anything about every first time buyers individual circumstances. I just know that we were able, luckily, to save 45k for a deposit and fees by renting in a cheap area in a shared house. I'm sorry if that doesn't fit the narrative of only being able to FTB in London if your parents help you, but that was my experience. Should I lie and say that it wasn't?!?!

Since you’re so keen on links, OP:

mobile.nytimes.com/2013/05/26/opinion/sunday/when-numbers-mislead.html

We’re never moving at this rate, unless it’s to downsize, as I’m so scared of a price crash and negative equity!

Which is the big reason why things aren't moving at the moment. It doesn't mean that prices will fall drastically long term though. It will just be a small blip until confidence is restored again.

Btw I disagree with you and I am a mortgage free homeowner who would welcome a 50% fall because it is the only way I will ever move to the property of my dreams!

But as I say, talk and argument counts for nothing - it's only when you look back that you can see whether you guessed right or wrong. I have been too bearish if anything.

I'm not wishing on any star, if my flat drops to 150k or something then I'll be annoyed but we'll just have to stay put. There are much worse things.

I opened this thread expecting someone to be looking for a discussion about house prices but OP you just sound like you desperately want to convince everyone for some reason.

Personally I think it will be a small correction of the market rather than big falls but as already said, none of us will know for several years!

We wanted to move but it would have likely been a short term move of 5 years max. As I have no idea what interest rates will be like in 5 years time & all the stamp duty costs etc we are doing the loft. We will stay put, save as childcare costs reducing soon & hopefully go straight for our forever home in a few years.

DragonflyInn

Bit tored of the cheap ad hominems.

We get you 'have a feeling in your waters' or something that prices won't fall, or not by much.

But strangely you have no evidence.

If you have some proof for your claims, please post.

But leave out the cheap ad hominems.

If you have some proof for your claims, please post.

Look the fact of the matter is no one has any proof for any claims because quite frankly, none of us can predict the future.

We can all make educated guesses, but you don't actually KNOW there's going to be a crash any more than anyone else knows that there isn't.

The flats similar to ours in our area of London had gone up in value, and were selling for £650-700,000, and very quickly too. We have noticed over the past year though, that these flats are either not selling at all, or are taking a very long time, and are subject to price reductions.

We were seriously considering the possibility of moving to a house in a cheaper area of London, but now we just simply cannot afford it if we can’t achieve £650-700,000 for our flat. We would still have needed to get a mortgage, as we haven’t paid off as much of the mortgage to be that helpful, but with them selling for less, we would need to borrow more, but we cannot.

Honestly I spent so much time analysing share prices, analyst reports, volume statistics before I bought in 2016.

I came to the conclusion I was buying at the peak but it didn’t really matter as I was in it for the long run and I can do the loft if I need additional space.

I’m paying off the capital on my mortgage faster than I could save and pay rent.

Prices might drop 50%. Who knows. Hard to predict isn’t it, even by people who’s job it is.

I'm in the northwest and they've gone up round here

I don't think the OP is being aggressive. She's challenging things others are saying in a robust fashion, but I don't think her tone is off. And her engagement is keeping the thread moving (and controversial enough to attract new posts). Up to this point, I don't think this has been one of the worst threads on this site for rancour

freezerfoodyum

"Well, you've already stated you think potential buyers aren't worthy as they just don't scrimp and save as hard as you did.

That's not anything like what I said and you know it. "

That is pretty much what you said.

"I accept that if you are earning 12k as a dishwasher or whatever then yes, you are stuck, but a professional couple earning 25k apiece, say, ought to be able to save. That's what we were on."

"Another case: a friend of mine who followed a fairly similar career path to me, started out as an administrator after university, become a PA and then an EA, now a head EA in a property business earning 40k, and she has just bought her first flat in South East London. A one bedroom ex council place for 300k.

No help from her parents, simply the result of scrimping and saving for the past ten years!"

"I have been brought up to scrimp and save though. My mother raised four children alone in a small flat. Maybe if you have grown up in nice Edwardian terrace or whatever then it's harder to take that you can't afford the equivalent yourself without making immense sacrifices."

Furano

Indeed.

Sounds like you'll be fine, whatever. :)

We can all make educated guesses, but you don't actually KNOW there's going to be a crash any more than anyone else knows that there isn't.

I think this just about sums the thread up.

OP but barring personal circumstances which stop you from saving, why don't you think that people ought to have to save to afford to purchase a home? That has been the way for decades.

OK, London is bananas, I agree with that, but the concept of saving for a deposit - is that really also bananas?!

Again, I'm sorry if my examples offended you, but these are my experiences, of people that I know. They may not be your experiences, of people you know, but that doesn't make them any less valid.

Argeles Yes that’s exactly what I’m seeing in SW London so what I don’t understand is how the market is expected to chug along without people getting stuck & with potential interest rate rises in the future.

Because links from the media are useless. Low brow, biased, and usually incorrect. You obviously dont have access to analyst data, which is not widely published.

I don’t understand why you think ie house builders have a vested interest in pretending house prices will rise when they won’t. Do you think they want to lose money? They need the data to inform their business plans which will be adjusted for market predictions. They may need to change product, or market, or location to escape falling markets. You think they’ll just stick their fingers in their ears and la la la pretend the whole thing isn’t happening?

They are paying a lot of money to very smart, very well informed people specifically to find out these predictions. It doesn’t work the way you seem to imagine.

We can all make educated guesses, but you don't actually KNOW there's going to be a crash any more than anyone else knows that there isn't.

I think there are a few indicators of some correction coming through.

Aprils downward trend was due to people not being able to afford rather than lack of supply.

That scenario wasn't happening after the 2008 crash as governments tried to keep it afloat with Help to Buy other can kicking exercises.

The governments have no wriggle room left

Take the example of my friend and her boyfriend, right, who earn 60k between them, amounting to approx £3500 a month after tax. Their rent is £1700 pcm, so half their income, because they choose to live in a very expensive area of London with nice bars and restaurants. There is absolutely NOTHING wrong with that - that's up to them.

When DP and I earned that, we really wanted to save up for a deposit, and due to my mental health issues I didn't really do the "going out for the evening" thing anyway, so what we chose to do was pay £600pcm (still CRAZY money, I know) for a room in a shared house, which we stayed in for seven years. Because of this, and because we were lucky enough not to suffer from any health issues which were severe enough to stop us from working, or any other financial problems such as debt (besides student debt), we were able to prioritise saving and we were able to raise our deposit plus a bit left over.

We chose to get less for our money because we chose to stay in London, but again I'm not blaming anyone for that - it was our choice and our choice alone.

I am extremely cautious financially - way over-cautious, many would probably say, but due to the way I grew up, it is because I am so acutely aware that most people are much closer to homelessness and financial ruin than they think. We could have taken on a larger mortgage. We chose not to because for me it would have been too big a risk. I know many, MANY people who say they cannot afford to buy, when what they really mean is they cannot afford to buy a house they want in an area they like.

That does not mean I am saying ANYONE is "not worthy" of owning a house because they haven't scrimped and saved to get one. If my friend inherited 500k tomorrow and could buy a house outright without saving I wouldn't give a shiny shit - good for her. I'm not the one with a chip on my shoulder about that on this thread, you are.

Bit tored of the cheap ad hominems.

I’m not sure you fully understand what an ad hominem actually is. Dragonfly was questioning your purposes not your character or person.

I usually get it wrong as I am one of London's worst property investors - sold the 2 buy to lets inthe 90s at 50% less than we paid for them, sold our last house at a loss, had an interest only mortgage based on currency trading where the loan increased not reduced. I suspect the best route to doing well in property is the opposite of what I ever do..... laughing as I type (although I do own one house albeit any equity from a rising market went to the lower earner husband on the divorce)..... that said my advice is if you want to buy and can it is best to get on with it as there is never an ideal time and if you wait for some massive drop it may not happen at exactly the point when you'[re ready. If you buy when there is a shortage of buyers and pay a bit more than you should then at least you haven't wasted loads of time and competed with other buyers and still not got the property so a software market can sometimes make things easier evne if you pay a bit over the odds. As as you are just buying a home I do not think it makes a huge difference trying to pick the perfect time.

howeve4r certainly prices are dropping in London and given how much talk there is about annual capital taxes mooted at 1.7% of properties worth over £600k which catches a fair few London flats anything that means those levels of taxes is avoided is good news. Bring on the price drops I say.

freezerfoodyum

Straw man.

Where did I say that people shouldn't have to save?

The problem is that prices now are such that no amount of saving makes it feasible.

Typical deposits in London now require couples to save for 10 years. But even that is not enough, as they then can't borrow enough because house prices are too high. No way you could hope to buy in Chelsea, where house prices cost 40 times local earnings. But even in the wider south east, you're looking at 10.3 times earnings. No bank will lend you anything near that.

www.bbc.co.uk/news/business-42565427

www.thisismoney.co.uk/money/mortgageshome/article-5660441/How-expensive-homes-near-map-house-prices-vs-wages.html

House prices are dropping where I am. And the estate agents are finding it harder to shift them. On right move, nearly everything that has been up for more than a month or two has had a price reduction. And they're still not shifting quickly.