To think house prices will drop sooner rather than later?

[motherinlawstongue]

Especially in Southern cities like London or Cambridge where house prices are ludicrous. AIBU to think that house prices are going to have to start dropping in a few years time, when those who missed out on house price jumps start moving to smaller houses for retirement and there'll be a glut of bigger houses for sale?

I doubt it given how few houses are being built. I had not thought of the air bnb effect which will also have an impact.

I think if anything it will be the other way. When the changes to buy to let tax relief fully kick in, in 2020 there will be more smaller properties on the market and there might be a bit of a drop in those type of properties. Larger properties where people have low or no mortgage they will not sell/downsize unless they absolutely have to or price is right so they will more likely hold value. I see a correction in London and south east occurring from over inflation, slower growth elsewhere, growth in parts of the northern cities; but unless there is a global crash or no deal Brexit I can't see a dramatic drop occurring.

I bought my house because it is a very nice house in a good area, I could afford it and I wanted a home for the next 10-20 years. It's price may fluctuate in that time but it's only an issue if I want to sell it even then I have decent equity and a desirable property so risk minimised as far as practicable. I'm more paranoid about interest rates than house prices.

In my corner of London there has been a correction (and I don't mean that euphemistically) since the Brexit referendum. Beforehand crappy flat would be sold for tens of thousands over asking price at open days; since it seems that good housing stock, priced fairly, will sell within a week or two, but more difficult to sell property will hang around. But people generally seem to hang on/extend rather than sell for less than they had in mind.

The only medium term effect I predict is the collapse of Foxtons.

Not only are prices rocketing, but there's more building going on in Manchester than anywhere else in Europe

They're only just about 60% recovered from the crash 12 yrs ago... What planet are you on? They will never ever crash like that again. People simply dont sell if they cant get their outstanding mortgage amount, then supply and demand hits the market and if anything they go up another 3%.

We sold at 87% of asking. We bought for 87% ... prices falling here. Outskirts of London

Asking price is a bit meaningless though isn’t it? It only comes from the estate agent: vendor. Asking price is never used for research into the market

The market has become completely stagnant where I live. People are listing houses for what they sold for pre referendum only to lower them a year later to achieve a sale. I’m not expecting a bit drop until the next recession though (to be fair that will probably be quite soon though).

@fiveredbricks that’s because interest rates have been meaningfully raised. If the government does raise it then lots of houses will be auctioned off when people reneg on their mortgages. Loads of people we know have adopted the interest rates are so low we might as borrow as much as we possibly can mentality no seeing the risk.

There is some stagnation as others have said. Unlikely to be a massive fall. If there was, everything else would impacted as the economy and house prices are correlated, so lower earners would also suffer from trickle down effect, like job losses. It's therefore fantasy to think much would change in respect to people suddenly being able to buy if they couldn't before. It always irks me somewhat when some people seem to be willing there to be a big old crash so they can see themselves snapping up bargains at the expense of other families potentially falling into negative equity.

Also financial markets (and by knock on effect, the property market) abhors uncertainty and that's what we've had since the Brexit vote. I'd say any drop is largely, already well and truly priced in.

Houses near me (East Mids town with a mainline station!) are selling for around 10% below asking price at the moment and the asking prices are up around £100k on 5 years ago.. Next door have their house for sale and have loads of viewings but no offers as people can't sell their own houses, partly due to the huge number of new builds around.

I hope they sell next door soon as its identical to mine except for a small kitchen extension but better maintained and more stylishly decorated with more modern kitchen and bathroom. I need to downsize this year due to change in financial circumstances.

No they won’t. The UK is an island where we are only able to use 20 percent of it’a landmass to live on; prices will definitelty increase. Even Brexit won’t have a huge impact because all it will do is increase migration of those people who prefer to buy rather than rent.

As for interest rates 5/ 10 year fixes are common so I think that impact will be minimised as much as one can expect

I've been hearing this for 20 years, and by rights it probably should have happened before now. Luckily I thought "fuck it" and bought anyway. Friends (and my brother) who were certain the market would drop have either had to pay vastly more, or are still renting.

It's not that you are wrong in saying it should happen. It's just that it keeps on not happening. Even in Ireland, where prices crashed, they are now as high as ever.

Teddybear45 makes another very good point I hadn't thought of. If Brexit happens, the housing market will be affected by pensioners having to move back to the UK from Spain and France. As a demographic, they are much more likely to purchase property. There's definitely a dip down south, the north is keeping the same pricing, but I don't see a crash coming if you look at the big picture.

Even in Ireland, where prices crashed, they are now as high as ever.

And when they crashed, it wasn't good news for anyone. Falling house prices doesn't mean people can suddenly afford to buy. It means young families stuck in negative equity, lack of lending, recession.

I hope we don't get a crash, that would make remortgaging my help to buy new build difficult if we were in negative equity. A dip might happen but it'll eventually go up again. Can't be sure of that dip so it's a gamble to wait for it

They are dropping in the SE (and I believe the NE too for some reason - the latter is surprising).

They have certainly dropped before. We sold two flats and a house in outer London in the 90s at a loss.

motherinlawstongue we are nearing retirement.

We are buying a bigger house. Definitely not down sizing.

I doubt we are going to see a huge crash. London has I am told being stagnating or gone down 10%. I think that isn’t going to go down much further.

All I know is we are looking. On our wish list there is one thing that is non negotiable.

I have come across only 3 properties that have been suitable and all have been sold within minutes of coming in the market.

We are looking in the 7 figure price range.

Anything that is priced correctly and hasn’t got a problem is going. The ones that are sticking are the ones with a high price tag.

Went to view a house at the weekend. For my business.

Priced very very reasonably for what it appeared to be.

Had been up on the market for some time.

Worked out why when we got there and came out thinking it was £100,000 over priced.

And when they crashed, it wasn't good news for anyone. Falling house prices doesn't mean people can suddenly afford to buy. It means young families stuck in negative equity, lack of lending, recession

A million times this.

Also ultimately an increase in homelessness as the stagnation of the home buying market put more pressure on the rental market, allowing rents to sky rocket.

Also ultimately an increase in homelessness as the stagnation of the home buying market put more pressure on the rental market, allowing rents to sky rocket.

Yup.

As long as people buy them they will continue to rise in price. Only a big recession that affects us all will drop house prices. People are now routinely taking out 30 year mortgages to get around the ridiculous house prices.

I wish they would drop as my dcs will never get on the property ladder otherwise but I don't think they will. Supply and demand is still in the sellers favour atm

And when they crashed, it wasn't good news for anyone. Falling house prices doesn't mean people can suddenly afford to buy. It means young families stuck in negative equity, lack of lending, recession

This is what I don’t understand about these threads, particularly those where people
Want house prices to crash. How could a non home owner buy a house when house prices crash? Lending will be curtailed, unemployment will rise, inflation will increase.

You won’t be able to buy a house, no matter how cheap, if you’re out of work or in and out of temporary/ unreliable work. Which is what happens in a recession

What would help ftb’s most is a massive push on supply. This doesn’t appear to be high on the governments agenda though.