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

Can I ask can you use help to buy to buy non new build properties? As if not wouldn't this also help more FTB onto the market?

You can’t & it probably would but I think help to buy is largely aimed at helping the developers.

Ah ok I'm slightly clueless on all this

Can I ask can you use help to buy to buy non new build properties?

You used to be able to. The government ended the scheme and it is now only available on new build properties.

We should also perhaps do a better sales job on all those many areas with very cheap properties, near the sea, access to countryside, ability to work remotely etc as it's all that property just sitting there unused but just not in the place that person wants to live.

It's not a sales pitch that's needed but good broadband in those locations and a willingness by employers to do this.

Technically speaking DH could do that with his job, but he doesn't work from home too often as remote working just isn't as good as talking face to face. He's also had previous employers who have restricted how many days a week, staff are allowed to do this, as they found productivity dropped and lots of people were abusing it. Also it is more of a problem if you want two people in the house employed as it makes it even more difficult to arrange with employers.

Even then it still comes down to transport links. Most employers still require their remote staff to come into an office at some point. I know a good few people who work in London on a regular basis. This is only possible with good train connections locally (just over 2 hrs by train). If it takes you an hour to get to a regional station which you then have to change to get to the main line it's just not viable on a regular basis.

And there are declining rates of young people learning to drive which is another story, which combined with no public transport in regional areas makes it problematic too.

I don't disagree with you in principle, but again in practical terms the infrastructure isn't there and it's not always something employers want to do.

I do have one friend who has managed to persuade his employer to do it though. He now lives happily in the middle of nowhere. Whether he will stay there is another matter: there is no sixth form provision anywhere near by and his boys would face a very difficult challenge to get to one.

Again, it comes back to issues with services and infrastructure.

My DH works from home because he is in IT and can glue himself to a computer anywhere (if I let him). His employer has office locations in 4 different places in Scotland and he is in a team with people from all of them so he could live anywhere and choose any office if the broadband is good enough. When he asked to work from home 10 years ago it was unusual and he had to negotiate. Now that connections are so much better and his employer has worked out how much office space it saves they are actively encouraging it. No-one lost any productivity due to the snow which in Scotland is a bonus. If he tests the market at all he gets headhunting approaches to work remotely for London employers because he used to work there.

We have many neighbours in a similar position and lots of people use the school run for a walk / coffee break before going back to the home office. I definitely see this trend continuing.

We still live in the Central Belt, but within an hour's drive of the Highlands and the beach because of things like schools and the benefits of being near to the big City.

But I'm not really talking about the rural Northumberland I love and where I found the place with 10 acres off grid for not much more than the price of my son's Chesham house, but the property in the northern villages and towns, street after street of it with perfectly good broadband. I was talking to a relative I found via family tree research who is still in the relevant sea village near Sunderland. That is an ordinary Sunderland village which I assume has faster broadband speeds than I do and buses and shops and all the rest. In fact my bit of outer London seems to have fewer shops people take for granted than many a Northern place.

So how we do we persuade people into these places or employers to let them be there - some kind of let people go self employed grant if they agree to buy and rejuvenate a £50k Northern terraced house - perhaps allow them to earn £13k a year from a previous employer but on a self employed basis even if normally that would be regarded as still PAYE employee?

In theory market forces ultimately have that effect -housing so expensive people move to where it isn't expensive - BBC people have moved up to Salford etc.

BBC people have moved up to Salford etc.

BBC people have not moved to Salford.

They moved to leafy places like Wilmslow and bought a bunch of huge houses and pushed the house prices up there, because so many moved at the same time. Places that most people who live up here can't afford because they don't have that kind of equity and wages aren't that high.

Whilst there other firms moving up from London the BBC move had a particular local effect in certain areas in the commuter belt.

If you are a typical middle class BBC employee the chances are you still aren't going to live too close to the BBC site especially if you have kids.

You are going to live places you can get artisan cheese. (Don't ask. It was a real thing relating to the BBC move).

The BBC move and 'affordable housing' aren't really two things that belong in the same sentence tbh. I find the whole idea very amusing given the BBC staff I know.

People I know on very good wages who are FTB in Manchester who almost certainly will NEVER be able to afford the houses BBC employees who relocated up northern now live in.

Some if not many 'BBC people' chose to stay in London and commute to Salford, or changed departments to avoid the move.

Theirs absolutely no doubt we are in the midst of a crash in London. House prices have been massively inflated for the last decade. The only difference between now and 10 years ago is we have majority right wing press who will steadfast refuse to report on it to the same extent as 2007.

As northerner living in London for 14+ years and a property owner in both places, their is no question London prices are beyond insane and more worryingly illogical, driven by low interest rates, foreign investment money laundering.

The only problem is people are moving out of London and the demand for over priced London housing is eroding. Also rental yields are way to low to make any kind f economic sense.

The whole this is driven by greed with alarming parallels to late 1980s when the Tories presided over the last property crash of biblical proportions. The only differences is....nothing.

I think a lot of in-demand places in the SE will go down a little or stay static tbh. Places like Brighton, where even in 2008 there weren't massive falls because it's such a popular place to live.

So - house price news out today:

www.theguardian.com/money/2018/may/21/house-price-inflation-in-parts-of-wales-hits-10-while-london-falls

Data from Your Move is reporting striking price falls in London.

"In the City of London, which is mostly office towers but includes the Barbican residential complex, prices were “down a huge 31.4%”, pushing the average price down to £683,000 from £997,000.

Southwark, which stretches from the Thames south to Crystal Palace, saw the second steepest price falls, down 17.5% over the year and 6.1% in March alone.

In England and Wales overall prices were down 0.1% in March, the third month in a row of falling prices."

"Outside of London, the biggest price falls were in Windsor and Maidenhead, which may benefit anyone inspired to move there by Saturday’s royal wedding. Prices in the area fell 9.2% over the year. “Perhaps tellingly, the area also has the highest average house prices outside London, at £542,285,” Blake said. "

That index shows big rises in Wales this month due to a change in stamp duty laws and hence lots of people there buying just in advance of the change. Presumably that blip will be temporary.

Prices in London overall down 2.5% year on year according to this index.

In other news today, Rightmove is showing "the asking price of property coming to the market hit a new national record with a monthly increase of 0.8% (+£2,343) pushing the average up to £308,075."

BUT...it's not selling at these CF prices.

"Transaction activity is down significantly. The number of sales being agreed by estate agents so far in 2018 compared to the same period a year ago fell most in the south-east (-8.5%), the east of England (-7.8%), and Greater London (-6.9%). Nationally, sale agreed numbers are down by 5.4%."

More detail on the London market is here:

www.cityam.com/286093/risers-and-fallers-london-boroughs-ranked-house-price

BUT...it's not selling at these CF prices

^^Exactly what I’ve noticed; they’re still valuing properties at, and asking for, very high prices where I live, but the properties simply aren’t shifting!

Interesting article there too. In my dreams I’d love to buy in Windsor, but if property prices properly plummet where I live, then we’ll have to stay put regardless.

And here:

www.cityam.com/286065/house-prices-fall-london-and-south-east-despite-hitting

"House rices in London and the south east have continued to slump, despite hitting a record high across the UK as a whole.

Asking prices in London were down 0.2 per cent in May compared to the same month last year, according to Rightmove data published today.

In the rest of the south east, asking prices were down 0.1 per cent on the same measure.

Nationally, however, prices were 0.8 per cent higher, with increases above four per cent in both the midlands and Wales."

“The last time the south east recorded an annual price fall was in 2011, indicating that the softening in the London market is now spreading to its commuter belt, " said Rightmove director Miles Shipside.

Other surveys have pointed to a fall in house prices in the capital since the summer of 2016."

"Brian Murphy, head of lending for Mortgage Advice Bureau, added:
This latest report indicates a widening gulf between the expectations of vendors and the affordability of buyers.

Just because there are few properties on the market in any one conurbation, that doesn't necessarily mean that vendors are able to ambitiously price their property if they want to achieve an actual offer.
Going forwards, the savvy agents out there are likely to be pricing properties at more realistic levels in order to achieve a timely sale."

TL;DR:

House price falls now starting to ripple out from central London to wider Sout East.

Meanwhile, prices continue to rise in cheaper bits of the country especially Wales (due to one-off change to stamp duty there, meaning buyers are bringing purchases forward).

So oh look! exactly what I predicted on page 1 of this thread.

So 2.5% average drop in London is not going to make a massive differnce if a couple want to buy somewhere costing £400k but can only borrow enough to buy a £200k place. However it's a start.

(I am not sure why Wales want this different separate higher stamp duty though for bigger houses as it will just deter people who might earn quite a bit from moving with their money to Wales surely?)

Great news for all those businesses unable to attract workers in London/SE due to the high cost of housing mentioned upthread.

Great news for all those hoping to move up the ladder as the gaps get smaller.

A step in the right direction for all those currently priced out and dreaming of one day being able to afford a home.

Bad news for landlords...cry me a river.

This latest report indicates a widening gulf between the expectations of vendors and the affordability of buyers

No shit Brian Murphy! It is just ridiculous around London. Within London, even more so.

My Cambridge grad friend with a masters and a senior civil service job has only just managed to buy his first flat; a teeny, shared ownership, one bed box. He had to buy about 40% of it and rents the rest from the LA. If he was anywhere else in the country he’d have been able to buy a decent house. It’s madness.

Xenia - not a huge difference, but a step in the right direction.

For all those who've been trying to save a deposit but every time they saved a bit more, house price growth just inflated further away, finally they are finding that house prices are softening to meet them.

The big question is how the BTL landlords will react in the face of tax changes and falling house prices. If they decide to get ahead of the curve and take advantage of large capital rises over the last couple of decades, this could pick up speed.

Depends how leveraged they are and how much they can afford to sit out falls I suppose. Rental ceilings have surely been reached in London, especially with demand falling thanks to Brexit.

Bad news for landlords...cry me a river.

Have to confess to a little shadenfraude of my own here, as I also have limited sympathy for A LOT of (not all) landlords. I have been fucked by so many of them in the past with zero consequences for them. I have felt totally at their mercy (don’t get me started, but briefly, we had to endure very poor living conditions with a newborn baby and couldn’t really get away from it or any help - turned out, the landlord was just waiting till we moved till he did the necessary work to get rid of the mould and damp, the absolute twunt. And that’s just one of them). Anywho, I really hope the changes, S24 etc, will restrict some of them from seemingly having free reign to bump up rents for very poor accommodation.

TheFatkinsDiet - agreed. It is insane that even doctors can't afford to live in London now.

There simply aren't a sufficient supply of bankers and CEOs or even foreign klepocrats to keep London house prices afloat.

Today's news here will further impact on that:

www.theguardian.com/politics/2018/may/21/russian-dirty-money-is-damaging-uk-security-mps-say

"Conservative MP Tom Tugendhat, the committee chair, said: “We can no longer allow ‘business as usual’. The UK must be clear that the corruption stemming from the Kremlin is no longer welcome in our markets and we will act.

“The scale of damage that this ‘dirty money’ can do to UK foreign policy interests dwarfs the benefit of Russian transactions in the City. There is no excuse for the UK to turn a blind eye as President Putin’s kleptocrats and human rights abusers use money laundered through London to corrupt our friends, weaken our alliances, and erode faith in our institutions.”"

More on the influence of dodgy money here:

www.theguardian.com/uk-news/2018/mar/17/russian-elite-must-reveal-how-they-paid-for-uk-property-say-mps

www.theguardian.com/uk-news/2017/jan/14/corrupt-money-crept-britain-property-kleptocrats

www.independent.co.uk/voices/grenfell-tower-corruption-kensington-chelsea-council-foreign-buyers-housing-dirty-money-a7875516.html

Yeah I heard that on the radio this morning re Kremlin / Russian money. I can think of a few gated communities near London which attract a lot of Russian money. I don’t understand much about it tbh, (despite my politics degree ), but I wonder what will happen to some of those buyers and properties if there is a crack down.