To think we are headed for a house price crash in London

[hibbledobble]

The prices locally have gone up exponentially in the last few years. I have no idea who can afford to buy now as a first time buyer.

Given the number of redundancies, and the knock on effect on less buyers, tenants being able to pay less, increased repossessions, aibu to think the bubble will burst very soon?

Could we see another dip like in 2009? Or even worse?

How much do you think it will go down? Or do you think demand will be enough to keep prices stable?

IMO there may be a small dip but they will recover and increase again very quickly.

London house prices are mostly driven by wealthy elites, kleptocrats etc and as there are no shortage of these I wouldn't expect any drop in prices. These people know how and where to keep their money and lifestyles safe from the vagaries of viruses and financial crashes. Assets have bigger appeal than ventures incurring risk and financial insecurity has been shifted largely on to those outside of these circles.

I know quite a few people with million-pound houses who are in deep financial distress at the moment. If this continues they might need to sell to keep afloat whatever else they have in their lives. I’m talking about names you know too.

Air B&B owners with more than one place empty for months?

Apartments keep coming up on my local mums pages with reduced rents because they are empty and people want to rent them - no takers.

The market had slowed down massively with Brexit, and that was a U.K. problem, now we are facing a world-wide problem, there’s no way there’s not going to be a recession and a collapse of the housing market in London. At the end of 2019 there were so many houses reduced in price around here (North London, zone 1), so you could say that the market has already been very slow for 6 months. The EA I was talking to were hoping it would pick up again in feb 2020, it’s almost May and we are not even done with the pandemic!

I would wait for those famous foreign millionaires who apparently buy all over London to show up before counting on them.

Multi million pounds, that is.

How many versions of same thread are we going to have?

There’ll be no crash because nobody is selling unless they’re desperate. Unless the population is decimated there continues to be more demand than supply and finally banks will expect massive deposits for mortgages in a crashing market. The only people who’d benefit would be cash buyers.

Starting thread after thread literally wishing to move into dead peoples vacant homes is beyond weird.

You don’t not get a crash because people don’t move. You get a crash when house prices lower.

Prices will fall if

demand falls

Or

Supply rises

Supply
There aren't enough empty foreign owned flats to suddenly come on the market to make a difference.
Selling a foreign owned flat that has been rented to a tenant is not adding supply. Someone already lives in it.
New builds are likely to slow down reducing additional supply.

Demand
London's economy is likely to be more robust than most of the rest of the country (more diverse range of businesses, more knowledge jobs etc)
So people will still need to be in or near to London for work.

If they get made redundant they are still unlikely to move to Sunderland, since their chances of getting a new job there are going to be worse than in London (no offence Sunderland)

Some foreign residents may leave but it's not like their home country economies will be booming either so I don't think there will be a sudden flood out in order to take advantage of moving to a booming other country instead. Primarily it would be driven by family/sentimental reasons.

Young people may stay at home longer or move in with partners so you could more people in one household for longer but again, will that be enough to reduce demand?

It will slow down, I am sure, but seems less likely it will suddenly halve in price and make a nice 3 bed terrace in zone 2 west London affordable

Prices may go down to what they should be. Ridiculous money at the moment.

Is house price decline similar to beetlejuice?

The more you say it, it might happen?

I have been looking on a rental website and am surprised at the amount of prime location (central London) rooms to rent at the £500 pcm level. Nice rooms in Swiss Cottage, etc - one room directly opposite the British Museum, rooms in Bloomsbury - this must be down to people leaving (post Brexit) as normally those rooms are too expensive. The other thing I have noticed is that landlords e are offering 50% reductions for 3 months from now, etc so they must be experiencing some loss?

We are all moving from a zone 3 nice house to similar in zone 1 for same price.

This is not what I consider normal for London.

😂😂😂 check ‘property log’ and then come tell me house prices haven’t already come down in London... even before a pandemic...

First time buyers being unable to get on the ladder has never / will never forced a crash.

I honestly don’t understand the logic of that @This

First time buyers are crucial for keeping the housing ladder going. If things stagnate because no one can get on, eventually the weight from the buyers above the people in houses already falls too heavily on to them and they reduce prices, etc so they can move. The market has to keep some momentum and you need, and have always needed first time buyers to buy the bottom rung.

They are as essential a part of the chain as any other. The btl crowd took their place by buying up the cheap, ftb properties (flats, studios, doer uppers on the margins of areas) but their tax concessions changed in April of this year. That, ideally would have put those properties back on the market where ftb could have bought them and then kept the chain going. With corona, I don’t know what will happen next ftb need to be factored in much more to the equation - they were temporarily replaced by btl at that level, but now will probably wait to tie out corona and see what the housing landscape looks like then.

Demand
London's economy is likely to be more robust than most of the rest of the country (more diverse range of businesses, more knowledge jobs etc)
So people will still need to be in or near to London for work.

1. After SARS / swine flu / Covid / whatever-comes-next, people may start to re-evaluate whether they want to live in overpopulated areas.
2. After the advances in WFH technology, we may see a time where people don't need to be physically close to work anymore.

@senua yes, and the London market is built on the basis that you needed to be here. Areas outside of London need their young, ambitious people back and this might provide the opportunity (if after corona, the government helps people set up businesses).
I think people look at London objectively but forget that there are generations who grew up here and the housing market has always been an area locals kept an eye on - you needed to. Many have had to watch and wait for small cracks to open in areas just to get on and out of private digs, the drama of the last twenty years is not new to Londoners - it was just more zeros on an already moving target. I will watch and see.

Check out West Hampstead. 99% of those houses have been on for months, and at least 50% of them have had to lower their asking price. Hundreds of thousand of pounds in many cases!!

House prices drop when people are forced to sell for less. But that isn’t happening because the government is propping up people’s incomes via the furlough scheme, so most people are able to pay their mortgages and won’t be forced to sell or get repossessed.

House prices drop when people are forced to sell for less. But that isn’t happening because the government is propping up people’s incomes
Tell that to the ex-employees of Kath Kidston, Warehouse/Oasis, Debenhams, Laura Ashley, Carluccio's, Jamie Oliver, Brighthouse, Flybe ...

@Ezira yes, but many properties suitable for ftb are owned by btl people - who will not necessarily get them filled now and are affected by the tax changes in April. The European students I know have gone home from my area - I am not sure when they will come back. Many btl don’t have big secure jobs and don’t have the finance to cover several mortgages when secure landlords can do discounts. I think that if ftb are able to buy those properties within the next 18moths the market will stay secure however at a time as unprecedented as this, many ftb, after having waited a long time will be able to sit it out better than landlords with overheads particularly if they can work from home and live with parents, etc

For example, there aid a studio in nice portered block for sale in NW8, for £245. Two others in beautiful building for £300,000. Why would you pay the same in Se13 for example if you could live in NW8?

(Obv people have reasons for living in an area and there is nothing wrong with se13 but if you are comparing two flats but very different areas.

C'mooooon property crash Rubs hands together

I genuinely wonder if people are voting/answering based on what they wish will happen instead of what they rationally think will happen?
Most homeowners wish for prices to stay the same/increase. However you can’t ignore the fact that a lot of people will have to sell due to job loss (more due to come once furlough ends) and also people owning mortgaged holiday lets which are now empty so no income to pay the mortgage. Plus buyers will be cautious as the economy forecast is so negative.
I really think prices will go down and won’t go back up until the situation is stabilized, which is when a vaccine is available so 18m-2y.

I've just taken a glance off the back of this thread, and rental prices do seem to be way down compared to this time last year.

I have been looking on a rental website and am surprised at the amount of prime location (central London) rooms to rent at the £500 pcm level. Nice rooms in Swiss Cottage, etc - one room directly opposite the British Museum, rooms in Bloomsbury - this must be down to people leaving (post Brexit) as normally those rooms are too expensive.

I think it's more likely to be a result of Airbnb and other short-term let services closing - a lot of Airbnb landlords have a large number of properties they let out that are earning no money, the bills are due, and they're losing cash fast. Plus it's also likely that many international students have left and don't plan to (or won't be able to) come back. Bloomsbury is home to thousands of students, many of them have moved out, and the landlords are panicking.

Yep there will be a dip and I’m happy for it- and I’m on the London ladder- but seeing the recent price hikes and my friends struggle I welcome a slow down or crash