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

999 replies

qwertyflirty · 16/05/2018 09:23

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

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qwertyflirty · 21/05/2018 13:24

Bluntness - lol.

"London will never change back to what it was 50 years or so ago."

Er...no. No-one has ever said it would!

Houses in London 50 years ago cost eg £4,000.

Somehow I don't think we're going to see large houses selling for less than the cost of a second-hand car!

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qwertyflirty · 21/05/2018 13:26

ILikeMyChickenFried- not true.

People involved with housebuilders also posted that prices were falling.

But you ignore them in your summary of this thread.

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Kamma89 · 21/05/2018 13:26

@DuchyDuke Grin Asian investors are not interested in 2nd hand UK stock and due to political movements and capital control have actually been investing less. That leaves UK buyers who are limited by affordability & if people want to sell prices will have to fall to meet that level

Xenia · 21/05/2018 13:26

Thanks to the link above to that article www.telegraph.co.uk/news/2016/06/07/i-was-an-angry-young-renter-who-railed-against-the-mortgage-indu/. His mistake is in expecting a 10% yield on just his family home. those of us who remember the 70s crash, suffered inthe 90s one, were paying high interest even after the 2006 credit crunch and remember our ancestors' tales about the 1929 market crash I think get a bit more perspective on it. Buy your home if you are able to afford one but don't think it's some kind of cash cow. It is somewhere you will live and possibly not move from for 50 years and die in (my parents literally died in their house , their one house they had owned for about 50 years) and don't see it as any kind of money making thing. Your area may go out of favour or in favour over the years and back out against but the bricks and mortar remain and it can give you stability and a sense of place and comfort. it may halve in value or double but it doesn't matter as you probably will never downsize and might well die in the place so if it's worh £100k or £1m it's pretty irrelevant to most house owners.

Kamma89 · 21/05/2018 13:29

@Bluntness Hmm You're patronising because of your choice of words and tone. I don't mind people having a different view but your point is weak if you have to rely on scorn to make it.

DuchyDuke · 21/05/2018 13:29

There are fewer property transactions this year, ie fewer properties being put on sale, because of the poor weather in Jan / feb which is when people traditionally start househunting, and so it appears that prices have ‘fallen’ if you look at the aggregate view since last year, but they haven’t. This trend is expected to reverse next year.

qwertyflirty · 21/05/2018 13:30

Kamma89 = yes, a lot of people here posting a lot of personal attacks in an attempt to shoot the messenger.

They are reduced to this because they can't produce a single piece of proof of their arguments eg a single example of any reputable source showing that house prices in London and the SE are rising as a whole.

Because there isn't any evidence.

Because it's not happening. Prices are falling. And they know this.

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Izzy24 · 21/05/2018 13:31

@howabout

I haven’t read the smallprint - so, as you say, helpful but not exactly 100% as I had thought.

As you were thread....😊

qwertyflirty · 21/05/2018 13:34

Xenia - well said.

Prices falling doesn't make any difference to people living in their forever homes, and is very helpful for those wishing to trade up and enter the market.

The only ones hurt are those who took on larger mortgages than they could afford recently (and the numbers here should be very small, since, asDuchyDuke points out, transaction levels have also fallen off a cliff) or landlords, who presumably decided to invest in property with their eyes open.

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Kamma89 · 21/05/2018 13:39

Fewer transactions historically precede a drop in prices.

qwertyflirty · 21/05/2018 13:42

"House prices across London are now in widespread decline, with drops in two out of three boroughs over the last year"

www.homesandproperty.co.uk/property-news/house-prices-drop-in-two-out-of-three-london-boroughs-in-temporary-market-slowdown-a120641.html

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qwertyflirty · 21/05/2018 13:46

Indeed,

A fall in house sales always precedes a fall in house prices.

Here's an article on just that from last year:

uk.businessinsider.com/portico-falling-house-price-falls-in-london-are-inevitable-2017-4

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qwertyflirty · 21/05/2018 13:47

@Kamma89

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GETTINGLIKEMYMOTHER · 21/05/2018 13:56

Whatever is or isn't happening, one thing I will invariably take with a couple of barrels of salt is any prediction from any so-called property expert, e.g. an estate agent - who has a vested interest in encouraging people to buy now/talking the market up/telling us where prices are going to be in 2 or five years.
They don't know, any more than anybody else.

howabout · 21/05/2018 13:58

The London market has been on shaky ground in terms of volumes for a while. In 2013 monthly transactions were around about 11,000 and they have been declining steadily to the current levels of around 6,000. If you plug London into Rightmove it suggests 55,000+ properties on the books.

I know London estate agents who, perhaps counter intuitively would like prices to fall quite a bit. If they can sell a couple of houses a month at £250k they make more commission than if they take 6 months to sell houses at £500k and there is much less angst involved.

The banks are also in no rush to stoke house prices as affordability is so stretched that no-one can afford to borrow and so mortgage books are shrinking relative to the market.

qwertyflirty · 23/05/2018 12:50

This news story today may have an interesting effect on house prices, particularly in London:

www.independent.co.uk/news/world/europe/roman-abramovich-uk-russia-visa-chelsea-kremlin-putin-a8364136.html

"Why is Russia so nervous about the visa status of Roman Abramovich?"

In the light of this:

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

"New estimates reveal that prominent Russian figures with ties to the Putin regime own British properties worth nearly £1.1bn, mostly in London, although the true value is likely to be far greater because buyers can take advantage of offshore secrecy loopholes left open under Theresa May."

So a billion quid looking to exit the (mainly) London property market quickly is likely to have an effect on prices...

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Xenia · 23/05/2018 13:00

Yet there are almost two markets in London - people buying rom £250k to about £600k and very rich people buying very expensive properties so I am not sure it will have a major impact. The extra 3% stamp duty on second homes and the 15% upper rate on enveloped dwellings and annual ATED tax on £500k properties in companies has I believe led to some foreign investors buying say 5 flats in Manchester at £400k each rather than London property which you would expect. if you can avoid ATED by buy exactly the same flat in Manchester as London but avoid ATED every year then that makes commercial sense.

RainbowFairiesHaveNoPlot · 23/05/2018 13:12

They're gently on the up around here - stuff's selling quickly when it hits the market unless it's stupidly priced. We're prime fodder for the buy to let vultures (low opinion of them - sorry - they're destroying our community by doing the shittest refurbs this side of Homes Under the Hammer) so anything fixer-upper gets nabbed by one of them fairly quickly for them to shove magnolia on (really bad refurb over the street is on to sell at a ridiculously optimistic price at the moment - that one's not being bitten on amusingly). We got in right at the bottom of the market in the middle of the financial shit previously so it'll take a hell of a lot for prices to fall below what we paid - hence I don't worry too much about house values.

qwertyflirty · 23/05/2018 13:49

Really, RainbowFairiesHaveNoPlot?

In our area, edge of London/Home Counties, it's clear the BTL vultures are leaving the market, as there are loads of obviously rented properties for sale but not going anywhere. In my area, these properties are still too expensive for FTBs who don't really want them as they're the mankier properties (BTL landlords don't care as they're not going to live in them personally) but BTLetters seem to have disappeared too.

So the cheap properties are just not selling. Meanwhile, nicer properties are still selling - I'm guessing people already in the market swapping houses!

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qwertyflirty · 23/05/2018 13:50

Overall sales volumes are massively down here...

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PropertyChecklists · 23/05/2018 14:43

Hi, I'm the property expert from This Morning and I am regularly on BBC, plus monthly LBC Property Hour call in programme and I thought this might help. Basically property prices will always rise and fall. Typically falls are caused by economic crashes or, as in the case of 2007/8 a lack of finance which then caused a crash for property and the economy. Consumer confidence is also key, so lots of talk of potential war, loss of jobs and the possibility of price falls tends to cause buyers/sellers to 'batten down the hatches' and do very little. Currently prices are rising, falling and stagnating across the country and have been since 2013. Of the 32 London Boroughs, prices have risen since the 2007/8 heights by 40-80% and in the last couple of years in SOME boroughs we have seen some of these rises drop back. Hometrack data suggests 58% of boroughs in London are still rising year on year, while the rest (typically inner London) are registering falls. BBC data showed last year that 58% of wards are registering property prices LOWER than they were 10 years ago - taking inflation into account. Currently the North East 'on average' is still registering HPs 8% lower than 10 years ago, Northern Ireland over 40% lower. Within every area I analyse prices for individual properties are going up, down and staying the same. it's really important to checkout sold property price data (free on portals) and talk to local agents to get an idea of what's happening in your local market for your property type eg two bed flat. Averages are extremely misleading and have been since the crash. From an affordability perspective, there is a some good news. The government ISA schemes offer a 25% uplift in raising a deposit (up to a limit), there is then Help to Buy on new builds and in addition, shared ownership, of which there is a lot coming to market over the coming years especially in London. For example, in Nottingham where I am from, the 'average' price is £135k for a property. However, there are lots of properties available for less than £70k. Just because some property prices are seeing falls, it doesn't mean they are going to crash, typically that takes a shock to the economy/finance or a huge loss in confidence. Sadly we haven't built enough homes in the UK to house the growing population. Then we have a situation whereby some people's wages have seen rapid growth, while others eg civil servants have had a 1% annual wage cap. This means in areas, like London, where high salaries are paid in the private sector and property for sale stock is short, then effectively the property goes to the highest bidder. Properties bizarrely aren't 'unaffordable' otherwise they wouldn't sell. They are affordable to some, but not to all. Currently there are no economic reasons for a HP crash, we are just seeing a correction - in some areas, not all. However, with recent news of BT loss of jobs and now M&S closing stores, this can lead to a loss of confidence and that tends to reduce demand, which can panic sellers into dropping prices. In areas where prices have risen such as London, they can fall, but in places like the North East and N. Ireland, this would be difficult as they are still so much lower than they were 10 years ago. So, don't worry about averages quoted in the press or what's happening nationally, just focus on your property type in your area.

qwertyflirty · 23/05/2018 14:50

"Hi, I'm the property expert from This Morning"

The Property Expert? From This Morning? What a truly prestigious programme.

Curious that they only have one 'property expert'. What makes you a 'Property Expert', then? Do you work for an estate agency or home builder or other party with a vested interest in prices rising, I wonder?

By the way, your post would be vastly improved by including paragraphs.

TL;DR appeared to be: prices won't fall by much and in some areas, prices are still low.

Your second point is one I have made repeatedly throughout this thread; your first point is one I disagree with you on and neither of us can claim to be an 'expert' on, as neither of us has a crystal ball.

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Bluntness100 · 23/05/2018 14:54

Ffs. Do you need to attack everyone you don't agree with qwerty? You're so unbelievably rude if someone posts something you don't want to hear.

qwertyflirty · 23/05/2018 14:54

Here are some facts about house prices in the London area, as opposed to random opinions:

www.theguardian.com/business/2018/may/23/uk-house-prices-fall-by-02-for-march-says-land-registry
"House prices in London tumbled in March, with the annualised rate of inflation dropping to minus 0.7%, the steepest fall since 2009, according to official Land Registry figures for March.

House prices across the UK fell by 0.2% in March, with prices dropping across much of the south of England.

Property experts in London said buyers are “sensing blood in the water”, with sellers forced to cut prices steeply to ensure a sale.

Jonathan Hopper of Garrington Property Finders said: “London is paying a painfully high price for its stellar run of price rises and a correction is now under way in several parts of the capital.

“Sellers are being forced to trim their expectations and astute buyers are increasingly sensing blood in the water.”"

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qwertyflirty · 23/05/2018 15:00

But there's more:

www.homesandproperty.co.uk/property-news/london-house-prices-experience-lowest-growth-since-financial-crisis-a120761.html

"The fall in the London property market has gathered pace with prices dropping 0.7 per cent in the year to March, official Land Registry figures reveal today.

The average home in the capital was valued at £471,944, down around £4,500 on a year previously.

It was the second consecutive month of declines and the biggest annual fall since September 2009, when the economy was still in the slump following the financial crisis.

Figures show prices are now in reverse in almost half of London’s local authority areas.

The biggest annual fall was in the City of London where the average price dropped 13.1 per cent to £742,490.

There were other substantial slides in Westminster (4.6 per cent), Tower Hamlets (4 per cent), Hounslow (3.5 per cent) and Richmond (3 per cent)."

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