Are house prices going to go down in 2012?

[Deadsouls]

Hello,

As the title says, anyone know anything about these things. We live in West London, where prices on 3 bed houses have gone up by about £50,000 in 1 year, so prices seem high.

We think we are going to buy, a little out of our ideal area, because we can't afford our area. But it seems so crazy that prices are going up and up and up....so the dilemma we are in is that soon if prices do keep going up we won't be able to make the jump from flat to house (that is in the rough area we are in near DCs school).

OR are we buying at a peak and are prices going to go down...do we wait? Clueless about these matters, who can I ask, estate agent??

I'm an accidental landlord. But have no intention of selling as the rental income will be our pension in 20 years time. We have no other pension provision. So not all btl landlords are in it for capital gain. We're in it for monthly income which is very good.

I'm not basing my opinion on piffle - how patronising. I'm basing it on our sale and purchase this year plus two others that have gone through all in about two months. Our house got 5 offers over asking price with 3 cash buyers. My friend bid for a property that had 12 offers. I know plenty of people who have rented for past 3 years and their rents vastly more than local mortgages. Simple supply and demand.

Rents vastly moe than local mortgages? What does that mean All mortgages are different

newgirl It would appear all the people you know sold for some reason after their houses had fallen considerably in value and now are trying to buy back in at what will probably by viewed as peak in a few years time. They're not particularly financially astute are they?

Hi all. We've just bought. Have been very pessimistic about the market and the bubble since 2004!!!!! However, our decision re: moving on was based on our need for a family home. So we, set out 3 years ago to seriously look for something to move to. Our previous house we bought in 1996, plus we'd been DINKYs for a long time with good incomes and saved hugely, so in a strong position.
We looked at 100s of houses - mainly on internet, always looking at previously SOLD prices and what was on offer/how it compared to our check-list. I've had my eye on the house we have just bought for 18 months, while it has floundered on the market at an asking price that, looking at the trend for the village might have been achievable when the market was ramping away, but a bit daft in the strapped times we are now in. It changed agents, and I have spent time establishing a rapport with many agents in the area. Taking everything they said politely with a pinch of salt, and biding our time - because there were a couple of compromises and the asking price was simply too high. So, agent lets us know that the vendors are ready to move on, so we went in with an offer 20% below asking price, and ended up sticking to a level 16% away which due to rapport with agent, he recognised we would not shift from and he knew we knew the market and otherwise there would be no sale.
We have paid about right I think - £240 per sq ft, but with a very large garden. It has all the space we will need into the future and is in a very good position (SE) for two very popular cities and beautiful countryside. We will be spending money on decoration, but feel we did quite well and will have a great family home.
On the back of the house going 'under offer' a batch of other places came on the market and went 'under offer' very quickly, but I think when our LR data comes out, there will be a slight gasp.
So, I think what I'm trying to say is - yes the market is overheated and may well drop, but multi-factorial issues involved-
Supply & demand
Pent-up desire to get on with family lives
QE affecting buying power of sterling (£500k just ain't as much as it used to be, so values have already gone down hugely thanks to inflation, just the numbers look very similar over last couple years)
Position of individual buyers & sellers - fewer transactions in difficult market, but some will come to mutual agreement
Alternative 'investments' performing very badly
Government 'management' to ensure gradual decline rather than crash which will have massive negative effect on banking system and the whole economy
Every house/location/position/environs different and likely to be affected differently.

To anyone wanting to move in the current market - I would say know your market and get more savvy. There is all the data you need at the click of a button - engage agents (on your terms) and negotiate and move on. On a philosophical note, I've always regarded money as only being worth what you can do with it, so if trying to sell be less focused on the ££s and more on the deal you can achieve buying & selling to make it work for you.
It was easier for us as we were not in competition with other buyers, and I would never wish to be in that position - the asking price for this place was simply too high and put people off, I think, which worked in our favour. If the market does crash, then at least we should have a bit of a buffer and meanwhile we can get on with living and enjoying our new home and quality of life.
(Apologies for self-centred ramble )

Our rent is considerably less than the mortgage would be ( in se). To the tune of about £400 a month, which we save. So buying at these prices makes no sense. As someone else said, every £1 we save now means £2 less paid over the life of a mortgage, when we do eventually buy.

Agree that you have to be very savvy and check sold prices etc before even thinking about making an offer.

MLM, congratulations on your new home, I hope you will be very happy there

Am making notes from your post.
We are still a year or two off moving, but we could be sprung into doing it sooner at any point. Our deadline now is dd's move to secondary school in 2015, but my dad has just had a problem with his knee which meant he couldn't climb stairs easily. We have no downstairs loo here and nowhere to put one, and no possibility of a downstairs bedroom, so if the problem became more permanent it would mean he couldn't come and visit

Mylovelymonster - nice one and a great tale to read. Well done on getting the home you were after at, what sounds like, a good deal.

the people I am thinking off all sold at asking price or above having made money and now are trying to buy and are being outbid or houses are not available in the areas they want to buy. One friend is paying lots more in rent than she was on mortgage and she sees it as money down the pan. She's finding it stressful.

My point to op is that every situation is different and making a decision on a perceived national situation is not always helpful. Pockets around schools, in popular areas continue to hold their prices and rise. Rents in key areas can be high. Im purely basing this on people I know personally. Our mortgage on our house is half the price of the rent of a slightly smaller house on this street. I personally do not know of a house that has lost its value. Houses that are hanging around tend to have problems eg tiny garden for the size, busy road.

MLM - do you mean your vendor dropped the asking price? Or he didn't bother, just decided he would accept lower? And if the latter, why on earth would he do that rather than taking the chance to attract new interest by advertising it again with a lower asking?

The market has plummeted in the North, is stagnating elsewhere, and has gone up in overheated areas of the SE. I think it will be like this for a very, very long time, as we're likely in for a Japanese-style lost decade economy-wise.

it seems to me that prices are holding up in good areas in London - I'm not sure how much they're increasing. Certainly they've increased alot since 2006/7 (when I left London) in my area of N/NW London.

Noddy I'm trying to decide what to do about my house in Brighton. Estate agents unsurprisingly more upbeat now, but of course they have their own agenda.... I just worry that by holding onto a depreciating asset in Brighton I'm losing out in London where prices seem to be rising.

(my BTL friends in Brighton aren't selling, but they're holding on for the long term too - 20 odd years).

Beattie I think the location of your house would sell it but I do feel Brighton has benefitted from being 'trendy' for years and in reality I don't think it is as good a long term investment as London. My parents are trying to sell just outside Brighton and having real trouble whereas their tiny and a bit naff tbh little London flat would probably sell in a day at a huge profit! A long term BTL is a different story though it always should be a good bet just people trying to cash in (like the ones I know) are aware that with all the overheads they prob won't make much.

Tunip - asking price dropped small amount but no further. Think they had a virtual level in mind and wanted to stay at least 10% above that for asking price so a buyer would think they'd got a deal, yet at the level they were looking to achieve too. Tactics!! Got to know your tactics .
I was surprised they didn't drop the asking price too and maybe get some more interested parties involved but I think the time of year and paucity of strong position buyers, plus a bit of bloody-mindedness prevented that move. i think they only agreed because they found they could negotiate heavily on what they were after, when they knew what they could get for theirs from us. A rapport with the agent who knew us and what we wanted really helped as well as they knew we were serious and committed, and not to be messed about.
We're comfortable with what we bought at for the current market conditions, and that's key ultimately. I don't regard we got a 'bargain' - perhaps viewing recent and perhaps current trends, but in 5 years time it may be the normal level once more or may seem that we overpaid. Who can tell!!

Tunip - good luck with your house move, whenever that may come. Key is not to fear the market, but learn from it and use it to your advantage as far as you are able, to get the transaction that suits you and a new home you're happy to live in and work to pay for without stretching yourselves.You can only make your decisions based on your personal circumstances, and try not to get caught up in the media hysteria of absolute boom or absolute bust. Get to know your local agents and be diplomatic and firm - use them to your advantage, and never get caught up in competition with other buyers. Difficult to say in a lot of popular areas, I know. Just best of luck.
Here for support when you're going through it!
MLM

newgirl Earlier you posted houses had sold "within days". Now you're saying "two months". So which is it? There's a quite a significant difference between those two time periods.

Would you prepare to disclose whereabouts in the country you are? Because your own experience, and those of your friends, is very unrepresentative of any market that I've been studying in London - and of course I study them very closely given how much money I have invested.

I'm also fascinated by your claim that your friend bid on a house with 12 other offers. This is simply not how estate agents operate.

Thomas Personally, I was curious about how they all sold for 'asking price or above' at what would have been the bottom of the first sets of falls (early 2009) when according to the Land Registry, prices had dropped by around 20% pretty much everywhere (including London and the SE).

alabama

I'd be more inclined to believe what I was was being told if it didn't have the rank odour of Foxton's all over it. I've heard so much of their b*llocks over the years I'd recognise that patter anywhere

"Our mortgage on our house is half the price of the rent of a slightly smaller house on this street."

When you make daft statements like this one, you can see why I'm sceptical about your ability to see through estate agent piffle

How muchnyour mortgage is is based on percentages deposits interest rates mortgage deal etc etc. It bears no relation to the asking/selling price of the house or rents.

thomasbodley - suspect newgirl didn't initially mean that houses completed within days when she said sold within days

I think many peole would consider their house sold when they have accepted an offer and stopped actively marketing

Completion is of course entirely different.

I've recently sold (and completed) on a property in SE London not within days, but within weeks, had a number of competing offers at up to asking price. Lot of real hard demand in SE London.

That sounds plausible to me, greentown. I can well believe you had an asking price offer and - as Noddy and I pointed out - you can complete in 25 or 30 days if you're really motoring and chain free and cashed up on both sides.

My point was that chains aren't completing easily even in very desirable areas and it's important for the OP to realise that just because houses are going under offer at what she thinks are inflated asking prices doesn't then mean that they're completing at this price.

Moreover, I do agree that there's been a lot of buoyancy in certain price brackets - it's quite reasonable for there to have been lots of sales to FTBs in the run-up to the stampd duty holiday, for example.

The "12 offers" thing just made me laugh. Anyone who's been involved in sealed bids will know the reality consists of smoke and mirrors.

Noddy To be fair, I've met an awful lot of estate agents who don't know how to spell yield, never mind calculate it.

Does it matter!!?? If it is a home you are after & you can afford it then whether you buy at the peak or a slump is immaterial. When I bought my home the only thing that mattered was that we could afford it & it suited our needs & was in an area we wanted.

It only matters if you can't really afford it. I agree those looking for a home find a way but those relying on rising market to justify over stretching themselves always talk the market up.