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

Sorry phone keeps crashing.

Only when pressed did you say that the 15% fall was in your area.
So you can see by saying 1 area has fallen 15% and the whole area has fallen only 3% then to get those figures it means some areas actually went up in value.

So what you are actually saying is some of London went down in price but some of London went up.
This is what I mean by using common sense and working things out for yourself.

Oliversmumsarmy

As to my gut feeling, I'm not sure how relevant it is, as I make no claims to being an expert, but I'm expecting continued falls in the absence of unforeseen political changes though I doubt they'll be as drastic as Sally's prediction here on page 26 that prices would return to 2005 levels in London.

I do think that areas like mine where prices doubled in about 3 years (which is lots of outer London), those gains were always unjustifiable based on the fundamentals so cannot last.

If your house went up from 250K to 500K, which lots did where I live, don't be shocked if they go back down to 350K, say. Or possibly even 250K.

Er, because you’re predicting a crash yet you latest quote suggests a 5% drop? It makes a mockery of everything you’ve posted

Sprinklesinmyelbow

Let me say this very slowly...when markets fall, they don't do it all in one go.

First they fall 5%.

Then another 5%.

etc.

Is that clear now?

Did you imagine you just woke up one morning and they'd dropped 40% or whatever?

I really can't agree or disagree because the articles are so badly written and the blanket statements are just that , blanket statements. I would have liked to see specifics.

Show me these flats that have been reduced in price by 50% etc and I will show you a flat that was over priced in the first place

Oliversmumsarmy

DO RTWT.

We've already discussed prices rising in cheaper/less desirable parts of London like E London/Essex as people are priced out of the nicer bits.

Oliversmumsarmy

Feel free to post "well written" articles that agree with you or links to London properties that are comparable and have sold.

Happy to discuss.

"Show me these flats that have been reduced in price by 50%"

Can you point out where anyone in the thread suggested flats have been reduced in price already by 50%, please?

From one of your articles that you linked

Which one? I don't recall an article that claimed anything like that kind of a fall.

Sprinklesinmyelbow - I shall no longer be replying to you.

I hope so. I look at house prices and I just cannot imagine that there are anything like enough buyers for some of the ridiculous prices you see - considering how many people are struggling, it’s surely not feasible that they stay the same?

No idea about the rest of the country or indeed different areas of London but there’s been a correction of 10-12% in Kensington.

I do not think there will be dramatic falls.

This is good news for those hoping to buy or move up the ladder:

www.homesandproperty.co.uk/property-news/london-house-price-reductions-at-record-high-as-86-per-cent-of-homes-sold-below-asking-price-a120031.html

"Already 2018 has become a record year for property price cutting according to newly published data citing a combination of some too-optimistic sellers and ultra-cautious buyers.

NAEA Propertymark, the national association of estate agents, found that almost nine out of 10 homes – or 86 per cent – sold for less than the asking price during March, the highest level since the association began recording sales in 2013 and 12 per cent up from February.

The market, in short, is firmly in the hands of the buyer."

Wow I can't believe this is still going with quite such fever.

I think most people expect there to be some sort of correction in the London/SE market. By how much, no one knows. Maybe 20%. Maybe 50%, maybe more (hope not).

I think mostpeople agree that London prices have become detached from the market fundamentals.

If the correction will be a minor blip or a wholesale crash that prices will never recover from... uncertain.

When exactly this will happen... uncertain.

IMO (and the opinion of most reasonable commentators) the absolute best thing for most people would be a very long period of stable house prices whereby house prices stay (no nominal loss but a reduction once you take inflation into account). Inflation and earnings increase affordability for the next generation, but homeowners don't get spooked into stopping all spending and staying put. No negative equity issues so people can still move and keep liquidity in the market.

The property industry likes to call stable house prices 'stagnation' and make it sound like a bad thing. But it isn't.

Massive drops won't happen in isolation from the rest of the economy - so a 'crash' will lead to all round bad times. If property values halve, people will be left with big negative equity and repossessions will go up, banks balance sheets suddenly look very shaky and there is a constriction in lending (not just against homes, but business lending too). Add to that massively reduced consumer confidence and spending, recession, loss of jobs etc.

Absolutely agree Furano

In my area in 2016 3 houses went up for sale(tiny area so won't be saying where because it would be too outing)

One was for £950,000 very large house an acre of garden but in need of work.

It sold straight away

The other 2 beautifully done but smaller , still detached went up for £1.2 million.

Should have been still just under the million also because of the stamp duty there was a ceiling price the area hadn't broken through.

Prices eventually reduced and houses were sold.

The papers would show this as a sign prices were falling by 20% not that the houses were over priced in the first place and that prices hadn't fallen or risen.

You don't really get newspapers selling with the headlines

Housed Sell for correct price

Did you imagine you just woke up one morning and they'd dropped 40% or whatever?

Sometimes they do.

1929 wall street crash.

2008 Global Financial Crisis - in a 2 month period the Dow Jones fell 3,600 points from the September 19, 2008, intraday high of 11,483 to the October 10, 2008, intraday low of 7,882.

Furano - "the absolute best thing for most people would be a very long period of stable house prices whereby house prices stay (no nominal loss but a reduction once you take inflation into account). Inflation and earnings increase affordability for the next generation, but homeowners don't get spooked into stopping all spending and staying put. No negative equity issues so people can still move and keep liquidity in the market. "

Agree with you that that would be best for the economy.

Not convinced it would be best for most people in other ways though - there are now more people priced out altogether living in overpriced and insecure rental accommodation than there are people with mortgages.

So actually more people would benefit from falling nominal as well as real prices than lose out from them.

For people who own outright but live in their homes falling prices matter little.

Furano - no way that could happen with housing! Housing, as you must surely know, is an illiquid asset, unlike shares.

It is literally impossible for property prices to drop overnight.

The only thing that could fall that suddenly is property trusts and that has indeed happened in recent years, though IIRC, only with commercial property?

Here you go:

www.telegraph.co.uk/investing/funds/has-happened-property-funds-since-brexit-forced-many-lock-investors/

Sorry, property funds, not trusts, to be specific.

Oliversmumsarmy - all houses sell for the correct price.

A house is only worth what someone will pay for it.