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

I’m nowhere near London and sold prices in the area I’m buying in are definitely going up.

Sigh. Yes, that's what the whole thread has said.

The price falls will start in London and the SE.

Whether they affect your area at all will depend on whether it has had unsustainable price rises or not.

If it hasn't, this thread is not about you and will not affect you.

Take your flat freezer how much do you expect it to gain in the next few years & where will that allow you to buy a family home?

Really I have no idea!! We bought it for 345k. I'd quite like to get 375k which from sold prices of similar properties in the area seems fairly realistic but obviously I don't know...

Then we'll probably move to an area of Bedfordshire like Flitwick or Biggleswade where we can still get a 3 bedroom semi with garden for less than 400k.

As for where I was renting cheaply - good old Lewisham! Newham is a good bet for cheap rent too.

And the average house price in Lewisham is 400k according to Google. I would have thought for a couple on average London salaries of 35k, that would be within reach. Maybe I am wrong.

PleaseSell2018

Reasonably-priced houses are still selling, even in London.
But if you think you can price it at 15% over what it would have fetched last year, you will be disappointed.

Sellers need to be realistic.

The only people who will lose out are those who own multiple properties, but they are also the ones who can most afford to take a hit.

And those of us who very recently bought our first properties with relatively small deposits.

It is so regional though. Our area is expected to rise next year due to a change with regards transport making us very desirable to people priced out of a bigger nearby city.

freezerfoodyum

Sure you will be fine - even if the price of tour flat does fall, the price of the place you're moving to will also fall, so you won't be any worse off.

"But a 16% fall isn’t the sort of ‘crash’ that these threads tend to be about. The threads that came up then (and look to be making a reappearance) were hoping for house prices to half or more. That’s just not going to happen. If you can only afford around the £100k mark, a 15% reduction in flats that were £500k doesn’t help."

Yes, I take your point that there's a difference between a 16% fall and a 50% one! I was just really answering a poster who said that 2008 had had "no effect", pointing out that what is true in one area may not be true of others. Which seems to be what you're saying too!

I am not an expert on monetary policy, but my understanding is that the landscape of regulation has changed a LOT since the 1990s and that this is propping up house prices and keeping down interest rates and generally preventing anything approaching the crashes that used to happen. Perhaps someone who knows rather more about this area than I do can comment in more detail!

Also it’s not good for the wider economy if all our 20-30 year olds are not shopping, eating out & staying home to save for a deposit.

Ah I probably painted a bleaker picture than it was, we did still do those things. We still got a takeaway or ate out once every couple of weeks.

As for going "out", neither of us drink so that takes a HUGE chunk out our outgoings.

Just didn't go on holiday to the maldives etc or eat at the ritz.

querty priced the same as last year (went SSTC but had to pull out) but received higher offer this time.

There is just not enough coming on.

If it hasn't, this thread is not about you and will not affect you.

So house price drops in London won’t necessarily spread then?

If you are only interested in discussing London, you should have specified it in your thread title and not insisted that what happens in London will inevitably affect us all.

Like most people who start these kind of threads, you do seem to have a big chip on your shoulder about anyone who does own property. We’re not your enemy.

I suppose it varies from area to area.

Near me, properties for sale have increased by about 1/3 (from 300 to 400) in a year.

So it is unsurprising that prices are also falling.

@AlanRickmansRightFoot hear hear!

@boomboom12 DH and I are 29 and 26, we put down 15% deposit and would be shafted if we come to remortgage and our value has dropped dramatically, if interest rates go up as well we could be in a really tricky situation, we've only been on the ladder 2.5 years.

The glee on these threads is definitely disheartening. And FWIW I don't think we will see big drops outside of London, because there haven't been such crazy rises. There may be some minor rebalancing but that's it IMO. If your house was worth £200k in 2008 and is worth £300k today, I don't think it will be worth less than £300k in the next few years, and if so it will be more like £290k if you want a fast sale.

I also disagree that one house selling low sets a precedent for prices. There are often reasons behind a house selling for a certain price that you don't know about. The housing market is built on trends, not anomalies.

I’ll never understand why a homeowner’s pain is more worthy than those priced out.

Because younger renters are less likely to be politically active and vote.

Home owners and pensions = big voters.

Freezerfoodyum And the average house price in Lewisham is 400k according to Google. I would have thought for a couple on average London salaries of 35k, that would be within reach. Maybe I am wrong.

DH and I are on £35k each, max we can borrow with a 10 per cent deposit is £335k. As I am self-employed and we have £14k of outstanding student loans (as people increasingly are these days) its is £305K we can borrow. We are currently in the process of buying a house further out from Lewisham in zone 4 for £295K.

No the £400k houses are not in reach for us with a joint £70K household income, no kids.

UnimaginativeUsername

Sigh again.

Do read my whole comment, not just half of it. It wasn't very long!

"The price falls will start in London and the SE.

Whether they affect your area at all will depend on whether it has had unsustainable price rises or not.

If it hasn't, this thread is not about you and will not affect you."

That doesn't mean that it will ONLY affect London. It will definitely affect other areas, too. But not equally. Some areas that have not had any price rises will escape. But areas that have, will not escape, even if they are outside London.

Understand now?

those buying won't be buying your house if you're not selling. What matters to them is that they will pay less next month than they would have paid 6 months ago
And my point is that they won't be paying anything because there won't be any available houses to buy. Because nobody will be selling unless they're forced to.

Furano

"Home owners and pensions = big voters."

True. But increasingly, homeowners and pensioners have children, or grandchildren, who can't afford to buy. So they are seeing the impact of high house prices on people they care about. They may well look at having to give the savings they'd planned for retirement to their children/grandchildren to allow them to get on the ladder. Or withdraw equity to allow them to do this.

The older generations are beginning to realise that high house prices have a negative impact on them too. As well as on those they love.

As I am self-employed and we have £14k of outstanding student loans

Mortgage lenders don't take student loans into account.

But yes, getting a mortgage while self employed is harder.

freezerfoodyum

According to rightmove there are only 2 houses for sale in Lewisham for under 400k. Both 1 beds, one at 250k & 1 at 330k so I guess sellers want more for their money & are sitting on them.

You’ll be fine as you paid an affordable price & will be able to afford to move to Bedfordshire.

Re staying in I meant a generalisation for the wider population.

We had loads of threads like this last time and the ‘crash’ never actually happened.

The difference last time was that on top of everything the government introduced measures to keep the asset bubble floated.

Now the snake has started to eat itself it could be different.

But as always we are never far away from crash/recession. People will pin point to brexit or whatever, but it's part of the economic cycle and waiting for inflation to naturally eat away causes its own problems.

That doesn't mean that it will ONLY affect London. It will definitely affect other areas, too. But not equally. Some areas that have not had any price rises will escape. But areas that have, will not escape, even if they are outside London.

Except that I am telling you about areas outside of London that have seen price rises (big ones) but are very unlikely to see falls for a whole range of reasons, even if prices fall in nearby areas. These areas did not see falls in 2008 either.

So things may be more complicated than you’d like.

Murane

Wishful thinking.

As I posted above, in my area, the amount of property for sale has increased by a third in the last year, from 300 houses to 400 houses. That applies in all the surrounding areas I'm looking at too. That's why prices are falling.

UnimaginativeUsername
Agree it's complicated.

What are the factors that you think will keep your area's house prices high, though?

Mortgage lenders don't take student loans into account.

Oh yes they fucking do! Are you a boomer by any chance? My parents seem to be convinced of this too.

They reduced the amount we could borrow penny for fucking penny on what was outstanding on our student loans. Monthly repayments were also considered for affordability checks.

And don't just comment on me being self employed, I could be employed and still not be able to afford a £400k house, are you deliberately missing the point?

OrcinusOrca I guess it depends how much you paid? I don’t think interest rates can stay where they are forever do you?