House prices are officially starting to drop in London

[alazuli]

www.theguardian.com/business/2016/aug/09/average-london-property-price-falls-30000-in-july-haart-brexit-vote

(YAY)

Thank you! Does it matter that we are SE14 rather than SE4? I love the little cafe near the park - we've been regularly stalking the flat since we offered on it and had breakfast there a week or so ago.

I have nothing against ex LA but when we were looking in Nunhead I read up about Southwark because we wanted to extend and there's an entire association set up campaigning against Southwark for huge service charges etc.

Someone mentioned Lewisham can be difficult in the conservation area (where we are) but I'm hoping as the only external alterations we want to make are to the back of the flat - where nobody can see them - they'll be okay. (Not allowed to alter the front).

From the posts on there it seems like the SE4'ers are conquesting SE14, so you'll be fine kirin. "Greater Brockley" now seems to stretch from St Johns through Ladywell, Crofton Park to Telegraph Hill .

Jeffrey i agree i remember the 'prices are definitely falling now' chats two years ago - i thought/hoped so too, and no they didn't! But what does strike me is that quite a few new properties are coming on to the market in august so far, which seems to be slightly unusual - and in the past eas have tole me they advise against it, because so many people are on holiday.

Not sure what lies behind it, but maybe there was an 'artificial' increase before the stamp duty changes, then an inevitable lull to follow. But that still doesn't explain why more people than usual are not waiting until September to sell. Perhaps - pure speculation - they think there will be a rush of properties in september so best to get in before then. However initial asking prices at least round here are not falling, if anything still seem to be on the up - though quite a few reductions have followed. But obviously what matters is actual selling prices!

Yes really interesting times as a first time buyer. Up in Walthamstow nicely done up/situated places under 400k are still selling, and there’s plenty of FTB types still looking and can be seen wandering around with slightly panicked expressions clutching EA leaflets each Saturday.

However I hear (from EAs) that over this price things are slow. And even under this price places that aren’t so hot are sitting there for ages and getting slowly reduced. The climate has definitely changed and I don’t think it can all be blamed on it being summer. Rumour has it that Hackney/Clapton – which is where a lot of new Walthamstowers are coming from – are almost motionless.

So what I’m thinking about is that yes prices in prime London are going down, but will this have a knock-on effect on the more ‘up and coming’ areas? I think that in places like Hackney prices don’t have much further up to move and so may experience a reduction. While in Walthamstow people can still just about afford a two-bed flat between 300-400k – and are still scrabbling to get them – so the process might be slower here.

Our fear pre-Brexit of course was “buy in Walthamstow now or be priced out entirely in the next year or so”. But this now doesn’t seem so likely – though gentrification continues apace and continues to add perceived value to what was once not such a desirable area for people with 300 – 400k to throw at something (and still isn't in some respects).

We’ve seen people open to offers on decent places (eg not 15k over the asking price anymore!), but I’m not sure we can part with our deposit and risk missing out on somewhere bigger/nicer for the same price 6 months down the line, as really what we can afford is on the edge of what we’d want to live in for 4 years or so.

We were looking in Leyton in the early part of this year where silly offers were being made - like £70k over asking - but now I've started to look at what the actual sale price were it's clear that they were always going closer to asking. I don't think anyone can tell how significant reductions actually are until they can be compared to current actual sale prices and that information isn't going to be available until the land registry updates and I think that's going to be at least 6 months away as the LR apparently has a massive backlog.

Sunaloe, An interesting question is whether the places that have 'up and come' over the past 5 years will fall by the same proportion as 'prime'. They may not, because they've undergone a step change in desirability which you don't then lose if the market as a whole slows down. eg they now have the high street, cafes, etc and those won't just disappear. So they are in fact 'better' (subjective i know! But can't think of a more accurate word) areas than they were 5 years ago, so should fall by less than areas that have 'just' been having the general London price rises. On that basis walthamstow would fall by less than 'prime'.

Though the whole area round there is a bit 'one-off' because of the olympics effect anyway - just being quite close to the olympic park must have had a significant effect on prices - again a permanent step change.

I think 2 bed flats are a bit of a risk zone - there are loads of new builds completing and due to ocmplete. If develpmers have to start dropping those prices to get them sold, then once a ceritan point is reached people who did want to pay sligtly more for a 'period' 2 bed flat will see the price difference and be tempted into the new buils, hence lowering 'period' prices.

Waterfront is also a risk area - most waterfront commands a premium which you can't always see because it offsets the 'in the middle of fucking nowhere' discount i..e all the east canals. Shit loads of waterfront stuff coming on line, so expect the waterfront premium to fall.

That's interesting kirinm, the land reg does have some june prices now, so we should see some july prices at the end of august - but.i think july will be a bit of a 'unique' month anyway, so soon after the referendum!

It's very difficult for ftbs to know what to do, i think - because on the other hand there's the point that exchange rates mean it's now cheaper for overseas investors to buy than immediately pre referendum, so to some extent that may offset the btl tax changes and any 'brexit' changes.

I think most FTB will probably still buy if they can. Rents aren't cheap. It took us a year from the start of our search to (nearly) completion. There was a lot of competition and although I expect investors / BTL were there too, there were an awful lot of first time buyers.

If we waited another 6 months to see if the market crashed, we would've risked potential issues with getting a mortgage, another year long search once everyone is feeling more certain and competition is stiff again and we'd have paid nearly £30k in rent. We felt there were definite risks in continuing with the purchase but also risks in pulling out. What if the market doesn't crash? Any increase in prices could see us completely priced out.

ireallydon'tseewhy - Yes a good question, well put.

YelloDraw - Particularly as sneaky FTBs can buy those new builds with a help to buy equity loan, and therefore mitigate the risk of losing a big deposit if prices drop, which they can't a creaky conversion flat.

In the current economic climate I think it would be madness for anyone to take on a help to buy equity loan.

Same. Those Help to Buy schemes scared me pre-brexit!

It really is a scam, kirinm. I looked into it and then realised just how much debt I'd be saddled with. Scary!

I just wish they'd come up with a scheme that actually did help FTBs instead of adding to their debt on over-priced new builds.

In the current economic climate I think it would be madness for anyone to take on a help to buy equity loan.

100% agree!

I haven't run the numbers myself but leaving aside the over-priced nature of the flats in question, the HtB loan means you need to pay back the percentage of price, not the actual amount, borrowed for the deposit - which seems to offer some degree of safety if prices are dropping and you want to sell. Though I agree taking on more debt isn't the best idea if it can be helped, and it looks like it makes switching mortgage after any initial fixed term more difficult too.

Alazuli - yes it will trickle down to the bottom. It has to
(and if you are looking for a 1 ned, I am selling a very nice one in Dulwich :) )

Hey again Kirin

I didn't realise you were looking in Brockley! This is where our house that's overpriced and the roof is leaking is. I love the area, but we only picked this one because it came back to the market. This was before we found out it needs a lot of work, so if you're okay with that, we might pull out..!

We are actually the New Cross side of Telegraph Hill but it's all very close I think.

kirinm i think you're absolutely right to go ahead with your purchase now seeing as you've found a place you like. you can't put your life on hold! also if prices do drop, historically in london they've always risen again. have you tried to ask for a cheeky reduction though? i think that's quite common post-brexit vote.

sellotape12 - bet you it's way out of my budget. :(

No, we've exchanged and the vendor argued over paying £600 for a lease extension! We've done quite a bit of research and don't feel like we've paid over the odds so are happy with what we've paid. (At the moment)!

well as long as you're getting a good price. as soon as i find somewhere i like i'm buying. brexit will takes years and i think there'll be lots of dips in prices along the way (when article 50 gets triggered for eg) but i'm not willing to wait that long to buy something cheaper!

Whereabouts are you looking?

We looked into those HTB schemes, now there is the London one until the end of the year I think.

Just very scary figures overall- yes the properties are going to be new & shiny...but paying almost half a million for a 2 bed flat above supermarket in zone 5 seemed madness!

I just wonder, when you come to sell in the future, who are you going to sell to?
I know FTBs, but how are they going to pay 500k for a flat esp if HTB London is withdrawn at the end of 2016?

Shared ownership was another thing we have looked into but the figures didn't really make sense to us- maybe 5 years ago it would've been great.

The amount of rent you have to pay is relatively high, as well as the mortgage on the % that you own.

Especially as the properties are generally all new build and cost >£400,000 in SE London.

Getting a 'normal' mortgage feels just about do-able and we are searching for the right place- not our 'dream home' by any stretch but in the circumstances, what is affordable & possible.

"Exactly the same was reported last summer post-election."

A trivial General Election is hardly comparable to the Brexit vote.

When do we find out if we are going to lose our jobs?

Is there a date for when Brexit starts or finishes?

Did prices fall nearly six percent the previous July? (obviously not)