sign of crash in london?

[itdc]

Some observations in north london recently:

case 1:
2 chain free property, was on the market since March. Asking price 900K and 950K respectively. Based on my evaluation at that time was over 10% higher than 'fair' price. We offered 800K and 860K in April respectively and was rejected. Both houses reduce asking price to 870K and 920K 3 weeks ago, today received email from agent saying it is open to offer OIRE 850K and 900K...

case 2:
2 bed flat in the same area, on the market since last thursday, the asking price is 100% of 5 years ago. Today (one week) it reduced 10K..

case 3:
property was asking price at 1M since March, now changed with another EA with asking price at 900K today

Taking a long view salary, stock market and housing market in general (not just london) is rising in moneytory form anyway.

Disagree with wages rising, plenty of research to suggest from the early 2000s they have stagnated in the uk in real terms.

Of course it can crash. But on current evidence a crash is not imminent. Supply is low and demand high right now, so until that changes prices will stay high. In our area sales that drag on longer than a couple months get cancelled by sellers who realise the house price has risen in the time it took the buyers to get their shit together.

We bought in North London last year having accepted that prices would start to fall because of tighter mortgage rules etc but not bothered because it would be our forever house and property should be a long term investment. The house opposite has just sold for considerably more than we paid - there's just no supply.

I checked RM again today:
Property on less than a month, asking 900k now 870k

Another property asking 1M for 2 months, now changed agent for 950k

There is supply but not at realistic demand price I would say.

BTW the area is one of the 'sweet spot' defined by savills. One of the highest avg price area in north London zone 3-4.

I'm seeing places linger and even get reduced. First time since 2009 round my way (popular sw suburb that has seen insane rises in the last 6 years, and has been seriously gentrified) that things haven't sold instantly for asking.

People are becoming more fussy. You can't just sell any old crap that tkj could 2 years ago. Still very strong for the right thing tho- my house is one of the nicest of its type - slightly different from others in the area- and we got 7 offers, some significantly over asking within a few days of going on the market this spring, when other things were already languishing unsold. Bloody house we were buying fell through so no use but anyway...

None of that means anything properties have always been reduced- it's common advice by estate agents, particularly foxtons winkworth et al, to put it on at a higher price first and see if anyone bites. I don't see why people read so much into it. It's always happened

I think the market has definitely slowed a lot in London. It started to slow around July 2014. Before then, almost every period property in London zones 1 to 3 went to sealed bids - it was insane. Even places that'd usually take a while to sell: next to railway track, above shop and in need of refurbishment, etc.

Some estate agents are refusing to accept this and are putting 'problem' properties on at prices that are even higher. For example, a flat near me in a slightly dodgy area, two bedroom but the second bedroom is a tiny single, scruffy decoration and awful kitchen, shower room instead of bathroom, a short lease with only 67 years remaining, and the agent put it on at £430k which is ridiculous. The last sale for a comparable property went to sealed bids and sold at £400k, but that was at the top of the market, it was in better condition, had a full bathroom and a share of freehold with a long lease. Plus, to add insult to injury, the agent managed to screw up the online listings for the new property so the map and streetview show it as being in a car park in Kidbrook, rather that a nice period leafy street in Zone 2! So online area searches don't even return it!

Unsurprisingly, it didn't sell at £430k, was reduced to £410k and still hasn't sold. Even if it was reduced to £380k and then sold, that'd still be a pretty good price considering its short lease and other defects. But it'd appear like a £50k reduction.

I have to disagree cunning regarding my part of SW London (not the flash parts!) Prices are increasing at a ridiculous rate and houses are selling. The price for a 2 bed house here has increased so much that we couldn't afford to buy our house now. I think people are buying 2 beds with the intention of adding a loft as the family grows.

It's the 'most affordable' hallow laugh way of buying a family home in London.

Agree with sleepy. Our period conversion flat on zone 1/2 borders has been on 3 weeks with very few viewings. It is by a main road so that will put off many people, but it's priced very to comparable properties on the same road. My sense is buyers are only going for bargains - ie do-er uppers or, as Stoned points out, smaller properties with scope to extend.

We are looking for houses in zone 2/3 areas, and yes there are many that are lingering and reducing, but equally some still sell very quickly. Seems slower than when friends bought and sold over the last year or 18 months, but I think (hope) its a stagnation rather than a crash.

Will link to article that says

House prices in the first quarter of 2015 were 2.6pc higher than the final three months of last year, as consumer confidence grows and interest rate rises still seem a far off reality.

www.telegraph.co.uk/finance/property/house-prices/11524328/House-prices-turn-a-corner-ahead-of-general-election.html

www.bloomberg.com/news/articles/2015-06-14/london-leads-u-k-house-prices-to-record-in-post-election-surge

Sorry I can only post links in separate posts on iPad!

Interestingly : Otherwise, the biggest monthly price changes in Greater London were in Merton, Brent, Newham, and Richmond Upon Thames, Rightmove said. The worst monthly performers were Tower Hamlets, Hackney, and Southwark.

I'll link to this article too, in next post:

The Land Registry’s data, which is based on repeat sales and so does not include new-build homes, showed large leaps in prices in several parts of the country. The biggest monthly price increase in April was in Yorkshire and the Humber, where prices increased 2.7% over the month to an average of £123,471. In London, prices rose by 2.3% to £474,544 and annual growth across the capital was 10.9%.

Above was from this article:

www.theguardian.com/business/2015/jun/02/uk-house-prices-surge-2015-election

Lastest from financial times www.ft.com/cms/s/0/e02d3796-1b59-11e5-8201-cbdb03d71480.html#ixzz3ejTBP2Tz

The annual rate of price growth in prime central London property in June fell to 2 per cent, estate agent Knight Frank said, down on the 8.1 per cent that held sway last June.
An “expectation gap” had opened between buyers and sellers in the prime market, with vendors anticipating a post-election bounce that failed to materialise.
Tom Bill, Knight Frank head of London residential research, said: “Seasonally you tend to see prospective buyers registering with estate agents in May. But that hasn’t happened post-election.”

Yes, a fluctuation from a very high rate of increase to one which is still a bit threatening to those trying to purchase.

I wonder how the fluctuation will be by winter.I've got a feeling it will remain at a fairly steady slow climbing %, there's a kind of property post party hangover after last years giddiness.

Prime London should be treated separately from normal middle-class London IMHO - v.different drivers, notably sterling.

Agree with SVK. Also:

"annual rate of price growth in prime central London property in June fell to 2 per cent"
But 2% is still higher than inflation - and my annual pay rise. So how is that a sign of a crash