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

example of changes that "may" prevent some dirty money purchases www.independent.co.uk/news/business/news/shell-companies-money-laundering-crackdown-prison-uk-property-market-a8269281.html

OP yes I've seen that before - but that is just London. And the housing market in London has never accurately reflected the rest of the UK.

I don’t think anyone wants anyone to lose but plenty of renters who have also “worked out” are in this position we no hope of ever owning

Yep. This.

extremely naive to think that more renters than owners = votes to be gained. I'd put the calculation like this

Tory government - we own lots of property, our supporters own property. Renters are young and less likely to vote. We need to keep our voters happy so no crash.

Labour - the young vote for us, the older vote conservative anyway. Price crash would be good for us.

Surely that's talking about just one generation though? The older, typical Tory voters (sorry for stereotyping!) Won't want their house value plummeting.

That being said I don't think the government will actually do anything as there's little to be done.

The ideal solution across much of the country would be for prices to stagnate.

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!

The government knows that there are more votes to be gained from those priced out than votes lost from those who stand to lose out from house price falls.

rubbish I'm afraid. the Governments biggest voters are comfortable home owners and as the banks interest rate is crap they are relying to the value of their homes.

The Government are worried about renters.

there is a relief that people who have been unable to buy and had to live in shitty, overpriced and insecure rental accommodation for years might possibly be able to afford a starter shoebox
And where will the people who currently live in the starter shoebox go? They'll probably be in negative equity so unable to buy another house. Someone has to lose their home for someone else to profit by buying it cheaply, so as a whole the situation is no better! (and I still say that there will be very few cheap houses unless there are also job losses and forced sellers who have to accept less than they paid)

The "value" of a house based on what others in the street have sold for is irrelevant. It's all theoretical unless the owner decides to actually sell for that price, which many won't (or can't).

Mainly old people and baby boomers vote Tory. They own their own homes. Of course the Tories aren't going to prioritise young families/professionals.

I don't think it's as simple as people just tightening their belts a bit harder to save up for a deposit. I was one of those people who really saved hard while living in London to buy my first house (in a shit area, not in London). Yes, it was hard work. However, when I was doing it my rent was considerably lower than rents are now as a proportion of my wage, which allowed me to save. The balance of rent/wages now is crackers. It is not undoable, but it is getting harder and harder to save. I also don't think the argument "It was hard for me, so it should be hard for everyone else too" is a good one. I would like future generations to be spared the pain I had to go through, not to have to replicate it to satisfy some kind of spiteful historical instinct to say "Haha, now you know how hard it is".

I would also point out freezer that plenty of people have two kids in a two bed flat. It might not be ideal, but it is possible. You can't dish out the whole 'lentil and pasta' story to one group, demanding that they suffer and strive, and not expect it to be dished straight back atcha when it comes to your own housing needs.

Gentle downwards correction of house prices, over time, is surely the best way forward for the greatest number of people?

alreadytaken

^extremely naive to think that more renters than owners = votes to be gained. I'd put the calculation like this

Tory government - we own lots of property, our supporters own property. Renters are young and less likely to vote. We need to keep our voters happy so no crash^

That sounds fine in theory, but how do you think the Tory government is going to engineer this? They can't pull the trick they tried last time, as there is nowhere to lower interest rates to - they are already at rock bottom, Help to Buy exists, so you can't invent it.

And secondly, I'd question whether that is what Tories want. If that was what they wanted, why would they have raised taxes for landlords? That points to the fact that even Tories see that house prices currently are ridiculous and the market needs bringing back to earth.

I think you forget the huge number of Tory voters who are parents who can now see their children cannot afford to buy. And they themselves are faced with having to take out huge amounts of equity if they want their children to have a secure roof over their head.

Only childless Tories cannot see a problem. That is a pretty small number of people.

I would also point out freezer that plenty of people have two kids in a two bed flat. It might not be ideal, but it is possible. You can't dish out the whole 'lentil and pasta' story to one group, demanding that they suffer and strive, and not expect it to be dished straight back atcha when it comes to your own housing needs.

Oh I know that, I know we are lucky, I am merely pointing out many of us who own at a younger age are not rich, and nor have we had any help from our parents. That seems to be the assumption. It's simply not true in all cases.

qwertyflirty you are very aggressive towards those who hold differing opinions to yourself.

Yes maybe you are right, maybe not - only time will tell. But historically house prices haven't tanked in London and the SE.

Nevertheless price corrections are happening - houses are staying on the market for much longer and I see reductions daily on Rightmove (I live in London). Whether this means supply will likely dry up and only those forced to sell will, I don't know, but overall if the bottom falls out of the London and SE housing market I think we all have much wider economic problems to worry about.

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.

I just don't like the narrative that it's completely impossible to buy in London for first timers. It isn't.

Murane

I'll repeat my post for you from page 1. It's irrelevant as far as house prices go what people who don't sell think about it or want to happen. The only ones who matter are those who do sell. And there will always be some who have to sell, even in a falling market, maybe they need to move into a nursing home, get divorced, die, need to downsize before retirement etc. Maybe they get repossessed. Whatever.

Now if that ONE HOUSE has to accept a price drop of 15% THEN EVERY OTHER HOUSE IN THE STREET is now valued at 15% less. Whether or not they're for sale. Anyone else looking to sell or remortgage in that street will suddenly find their house is now "worth" 425K instead of 500K.

That's how house prices work.

Here in the north east there’s still pockets that haven’t recovered from the first crash. My friend is still in negative equity and unable to move to start a family.
The house I’m in has gone up a lot since we bought it 5 years ago but it’s still not reached the price the people we bought it off got it for 3 years earlier.

I don’t think anyone wants anyone to lose but plenty of renters who have also “worked out” are in this position we no hope of ever owning.

Why, though? Neither of us were on massive salaries. Neither of us had help from family.

Oh not this again! I can counteract your anecdotes with the fact not one of my circle (which includes surgeons, barristers, teachers, analysts) have got on the ladder without parental help be that in the form of deposit, guarantor or living at home to save.

In 2 years DH and I have managed to save for our deposit on our first home (£13k + fees) and we managed that on annual incomes of £24k each (Tbf, DH pulled quite a few Extra Shifts so his annual was probably closer to £26k) whilst renting (£800pcm) and I was on maternity leave (SMP so nothing extra) for 6 months. It was tight but we just viewed it as only 2 years of having to tighten our belts.

Just sold my house for the full asking price. It sold the day it went on the market. This was outside London. My agent has told me that there are currently more buyers than sellers and so a shortage of properties for sale which is keeping prices up.

freezerfoodyum - "I just don't like the narrative that it's completely impossible to buy in London for first timers. It isn't."

It's not really about whether you "like the narrative".

You can like it or not - the fact remains that compared to all historical norms, housing in London is now vastly more unaffordable than it has ever been before, even at the peak of the last boom in 2007. And we all know what happened then.

www.ft.com/content/cc77babe-2213-11e8-add1-0e8958b189ea

"For most of the 1970s, ’80s and ’90s, housing affordability in London remained relatively flat — the median house price ranged between two and three times the median earnings, according to the ONS. By 2014, it was more than 10 times. "

There is just no way that is sustainable.

(I should add that, our deposit was 5%! So relieved that option is back!)

Bolokov must vary greatly depending on location. We were told opposite in East-Anglia

Slight fall I reckon.

Maybe a bit more in some parts of the country, very little if at all in London. Parts of London will carry on going up - those bits currently "on trend".

Bolokov

You're outside London.

As I have repeatedly said, I expect prices outside London to continue rising for up to a couple of years. And in areas that have never risen, prices are unlikely to fall either.

But in London and the SE, I expect prices to continue falling. And more importantly, surveyors think that too.

But in London and the SE, I expect current price falls to continue.

pigmcpigface well said I hate this narrative that you should scrimp & save & feel #blessed to get a mortgage on a 2 bed without a garden for 350k.

I was born, raised & educated in London like tons of my friends & many have moved out or thinking about it. Even some of those with tons of equity or 1mill budgets don’t want to stay.