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

My student loans definitely weren’t a factor when we got a mortgage but that might be because I don’t repay them at the moment!

nobody will be selling unless they're forced to.

There will always be people forced to sell. Nobody is forced to buy.

We live near Cambridge and the prices in that particular bubble are just rising and rising. We are hoping once the A14 work is completed people will start looking at our area as a good commuting prospect and we are anticipating another price rise. So far our house has gone up at least £100k in four years.

Tammyswansontwo when did you get a mortgage? If you weren't paying them off then they wouldn't come under your affordability checks, but then you would be earning less than £21k, which I imagine would make it hard to afford to buy a house!!

Considerably better schools than the surrounding areas (the alternatives are very poor and house prices very closely align to where you can get your children into school - there is a very large drop as soon as you move out of the area you can get into the schools from). Lots of people decide that they’d rather pay a bit more for their house than spend money on private school.

Particularly good transport links in comparison to areas that saw a fall last time.

In some cases particular geographical features that are very desirable and you can’t get elsewhere.

Populations which disproportionately include people moving out of London for whom even the rising house prices seem ludicrously cheap.

Enormous demand for student housing in the area.

And a range of other reasons very peculiar to the local area.

OrcinusOrca

"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"

Why??

I’m sure that you’ll tell me that you know what’s going on in my local area better than I do though OP.

UnimaginativeUsername

Well, maybe your area will buck general trends then. :)

qwerty - time will tell but don't pin your hopes on any big change. I think you are likely to be disappointed.
You will need to time it precisely. How will you know when it's bottomed out?

UnimaginativeUsername

Ah, ye of little faith!

(crossposts)

I further back that lenders do take student loans into account! They are classed as a debt that is owed! With mine being £50 a month, I think it right they take them into consideration too!

querty
A 20% drop will not make my area affordable given that prices in the area have gone up so much in the last few years.

It's tricky as there are valid points on both sides. The answer is reducing the London centric focus in this country and building houses. The "metroland" suburbs of London show more vision than current housebuilders.

There will always be people forced to sell.
Yes, there are some forced sellers now but not enough to cause a crash. A large increase in the number of forced sellers would cause a crash though, due to an increase in supply of property. But the only way there'd be a large increase in forced sellers is a widespread recession. As long as there is no recession, people will simply sit tight and refuse to sell until prices go back up.

snewname

Why does it need to have "bottomed out"?

Why can't it just be affordable as opposed to unaffordable?

I think enough hysteria has been whipped up here now to case a significant fall in prices.

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

Um no, I am 29 and we bought 2 years ago. I have 18k worth of student debt.

Our mortgage lender did not take this into account.

I could be employed and still not be able to afford a £400k house, are you deliberately missing the point?

I said upthread how DP and I saved, but people took exception to that, so I didn't want to repeat it and get jumped on again!

'cause'

I was definitely earning more than 21k and definitely paying my loans back (at £75 a month) when we bought. I was told they were not taken into account so maybe my mortgage company (coventry) didn't make their calculations correctly.

Murane

Forced sellers won't be the only ones to sell.

You forget how many people in the market currently are speculators.

They will sell up in advance of falls. That's what I'm seeing in my local area - lots of properties that are obviously BTL properties where landlords have decided to get out.

They're not forced sales - only a few repossessions (though there were none until recently).

Just speculators who've decided the tight margins and likely capital losses make property near London a bad bet.

This is a very interesting topic and I must thank you OP and everyone who has contributed to it, I am enjoying it very much.
I am just struck with the thought who is telling the truth about property so we can all do the right thing ? I cannot trust the EA , or the Govt , or sellers. People lie all the time about what they sold/bought their houses for , it is only when you see the sold prices that you realise the lies being told. So how can any of us know what to believe.

i work for a london house builder, 1-3 beds usually anywhere from 400k-1.5m.
RICS prices havent risen in the last year on most of my schemes but they haven't dropped either. still ticking over the sales and no lack of buyers and we do still get reasonable amounts above the survey value.

Bolokov

Hysteria...or realism?

Againfaster

New builds benefit from Help To Buy. Buyers can get 40% off the actual cost courtesy of the taxpayer.

Doesn't apply to second-hand properties.

If nobody is buying because everyone thinks the prices will fall further or they are unsure of the future because of Brexit, then surely that alone accounts for the 33% increasingly in houses for sale in your area? The demand at the moment isn't there, but when confidence is restored or it seems to have "bottomed" out or stabilised then demand will pick up again and it will be self perpetuating.

Also, the stock market disagrees with you about how well new builds are going to do in the future:

www.sharesmagazine.co.uk/news/shares/why-barratt-is-latest-housebuilder-to-see-its-share-price-fall