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

Wowsers perhaps naively I didn’t realise people were so invested in prices particularly once they’ve been on the ladder for years.

Walkaboutwendy See we only decided not to sell as it would have been a short move. If a property that suits long term come on the market I will be for sale asap. Yes it might be for 100k less but I have equity & it’s much cheaper to move up the ladder when prices aren’t rising. Granted I’m taking about property 500k plus.

Walkaboutwendy - agree with you that lots of people who can afford to will just sit where they are and not sell.

But of course, as I posted on Page 1, prices are set at the margins.

All it needs is a single person in your road who HAS to sell for less, and wham bam! your house is worth less too. You don't have to do anything.

And nothing you can do can prevent it.

wherewithal - lol!

Fab bingo!

Lots of people still have to sell. Yes there will be less houses for sale, but there will be some. I have lived through big house price drops. So people die, need to move for work, divorce, emigrate, buy a bigger house - lots of these people will have to sell their house. And if you are buying a bigger house, it makes sense to do so in a house price dip.

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

Article yesterday.

"'Halifax knocked £12,000 off my flat': Beware danger signs for house prices, with valuations cut and a twist on 100% mortgages
Surge in down valuations is just one of a growing number of red warning signs
Prices are falling as buyers borrow record amounts for record lengths of time
Estate agents are struggling to shift homes for their asking price
Desperate lenders have started offering risky 100% mortgages again"

Don't say you were warned.

Xenia

That’s mental when you look at historical data & then 2009.

"Most experts say it's too early to know what will happen — and insist there is no need to panic.

Howard Archer, chief economic adviser of the forecasting group the EY Item Club, says: 'I don't think house prices will fall unless the economy takes a major downturn. I suspect it's more likely that prices will tread water for a while.

'The fundamentals of the economy aren't too bad. Employment is high and interest rates are low.'

From the same article you just posted a link to.

So I "won't say I was warned" - because I haven't been.

But what I don’t understand is if the economy is not too bad why didn’t they raise interest rates just a teeny bit even? What makes me anxious is that that longer they put it off will it be more rapid? Do we need a Brexit buffer?

I can see the way the wind is blowing by the letters my housing association keep sending, begging me to buy further shares in my shared ownership property at the current extortionate prices. Three letters in the past few months, all offering money off legal fees and the latest chirping that prices in London are set to rise by 7% in the next 5 years. Prices are going to drop.

We're in Essex and no drops around here, house on our street just sold for 40k more than they paid two years ago, they'd not done any work on it

The economic signs are not looking good. Yes high employment is usually a sign of a strong economy. But it is artificial because of zero hour contracts and people being self employed and earning below minimum wage but being supported by tax credits.
The fact that wages are falling in real terms shows that the high unemployment figure is not the true picture.

HateIsNotGood - you've quoted one bit in the article that supports your view but chosen to ignore all the other data/views expressed that disagree with you.

You quoted 6 lines out of an article that is probably a couple of hundred long.

I quoted the headline, which is a better summary of the contents of the article than your very selective snippet.

Wages just went up by 2.3% according to the Beeb.

FASH84 - that's interesting.

I think the areas that are still doing well are those to the east of London, traditionally cheaper areas, where prices are a bit more affordable than in the w/n.

A4710Rider - is that higher or lower than the (real) rate of inflation?

www.bbc.com/news/business-43482886

One person having to drop the price for a whatever reason does not automatically reduce the value of all the other houses on the street. Property valuations are based on quite a bit more of an educated assumption than that which is why professional valuation surveyors train for years to become qualified.

qwerty I just did what you did - quoted a small bit. I did read the whole article, stop being so patronizing little girl as you don't know as much as you think you do.

Frankly I find you amusing - any counter to view you bat away; I come back and look thread because I find it funny, well you funny anyway.

Keep up the good work - let's see if you can do it on a different topic. We'll leave Brexit out but I did see that in your great 'wisdom' "it's not going to happen". Hmm, shall we try - Buses - what's your view on wheelchair users vs prams for eg?

Yes looking at rates back to the 1930s is very interesting although you need to look at wage rises (or lack of them) in conjunction with it. The 6% I was paying in 2004 did not feel that high as I remembered paying 12% although that 12% was 12% of a much smaller loan so it's never straight forward and most of us have always had repayment mortgages so capital repayments are part of our monthly costs too.

I don't thikn it matters if you dont' plan to sell if prices go down in your street. In fact I've been trying to get my house as low in value as possible given all the talk about 1.7% a year capital taxes on £600k+ properties which would be a huge addition to my £3200 a year council tax which is already bad enough.

housing associations model their shared ownership homes bulding/selling appraisals on the assumption that people will be staircasing to full ownership within a set number of years. keeping S/O properties arent really profitable for associations and they will always want rid of them asap, hence encouraging you to do so - which they will regardless of what the market is doing.

That’s far too rational Again

@qwertyflirty we are on a mainline train start into London (about 40 minutes) and we paid £300k for our three bed three reception, large garden Edwardian semi in 2016. It needed a LOT of work, it's probably cost us around 15k (cousin in law is a plasterer, brother a plumber dad retired and his best friend was a painter and decorator so we got a lot of 'mates rates' or help and we've not done the kitchen yet, it's fine just not to my taste. Looking at similar properties it is probably now worth £360-£375k, we bought long term so it doesn't worry me if things dip, we bought for excellent local grammar schools and DC1 won't even be born until later this year, and because we like the area. But it's interesting to see things play out, our neighbours bought their similar but slightly smaller house in 2004 for 190k so there's been a reasonable increase here, but it's not the London bubble. I think things were just becoming ridiculous in London and need to settle but unless people are looking to buy and sell in a couple of years it'll never crash hard and for a long time. I think the buy to let tax changes have probably affected London more than other areas too.

I think the areas that are still doing well are those to the east of London, traditionally cheaper areas, where prices are a bit more affordable than in the w/n.

For now that is. I imagine, (total speculation here, but tbf, this thread has plenty of that already ), they will feel it badly in those areas if there is a big crash. I remember a comedian saying that the London property market has, for many years now, been based on people pretending that shit areas are nice! There are some very, very expensive flats for sale in areas which have never been nice or even pleasant. Some of them just can’t be improved. I can think of one area where a friend of mine rented a flat for silly money (expensive) and it’s just not a nice looking area. It’s nothing to do with the people who live there, it’s the way it’s been built up to fuck. Very high buildings and narrow streets and no green space to be seen. So, the whole place can be populated with hipsters, it can be full of cool bars, pop up shops and coffee shops and it still wouldn’t be considered nice by any objective person who didn’t know it was in London. Imo anyway. I’m tempted to name the place I mean but won’t, in case someone lives there!

Property in places like that are a risky prospect imo, as the moment the bubble bursts, people won’t want to touch it with a barge pole.

Obviously there are affordable areas which are nice too. I love Streatham and parts of Brixton, which used to be affordable.

1.7% a year capital taxes on £600k+ properties

Do you think this could definitely happen?

Interesting - not sure I agree either way, but I do have to take issue with the idea that one house in street sells cheap = all houses devalued. We bought ours for substantially cheaper than general price in street, because it needed lots of work. Other houses in the street are different types (terrace vs semi detached) and different floor plan. That said, I was fairly chipper when a house similar to ours recently sold for approx a third more than we paid.

The problem with house prices is that many people can’t weather a drop, probably more than the first time buyers priced out. There’s a growing generation of renters, perhaps we are in a shift away from home ownership