This weird property market...

[BlowingAHoolie]

We have finally put our place on the market to look for something bigger for our growing family.

It's only week 3, there haven been 3 viewings and the estate agent is already saying to me that it's a "weird market" right now.

We live in an area of London where things usually sell like hot cakes.

Have started to look at places to buy as I would like to have found something if we get an offer... it's just making me feel a bit uneasy.

Anyone have anything constructive to say that would make me feel better? Or just some good advice

Just sold my one bed in zone two SW London for asking price in a coupe of weeks. It was a realistic asking price but not low.

Now in a chain for the next one and negotiated a bit off after a price drop. Of course wondering if it's the right thing to move, worried about losing all of our equity, but can only look at our situation - no crystal ball.

Thinking of buying a small flat in central-ish London sometime on the next couple of years. I guess this all bodes well for me, although I sympathise with those negatively affected

Possibly, possibly not, Nigella. You may well find that the market is still uncertain/falling even after two years and you would be reluctant to commit to buy despite prices looking bargainacious compared to now, as there may still be room for downward movement. You may find, if you need a mortgage, that lenders have become very bearish about lending and will refuse you. You may find, if you are buying it as an investment, that you will struggle to get tenants and that the taxes brought in have made it very hard to turn a profit. Buying in a slump isn't the no-brainer it seems in theory.

While I agree that prices do need to come down, it's usually a very painful process and the people who should benefit from lower prices rarely do.

Are we going into a perfect storm with houses now? I think we might be and I think it could be really tough for ordinary people just trying to do normal things. There are so few people coming in at the bottom, the whole market is skewed by 'investors' (whether buy-to-let or just money-parkers), wage freezes/gig economy and inflations and of course Brexit. I don't have to move at the moment, thankfully, because I have deep concerns about what Brexit will mean financially - I'm public sector so my salary has lost a lot of value in the last 5 years and if interest rates start to go up we will have some issues. I really won't be taking on any extra debt or expenses for a year or two.

I have friends in Scotland in an area that has been very steady, their (nice house, good nick, fair price etc) house has been on market for 4 months with 3 viewings. I think the house market 'adjustment' we all knew was coming is dovetailing with on-going recession and an economic shock on the horizon. It ain't good.

House prices have already fallen a little in London. People are leaving because of Brexit and/or spooked by the potential uncertainties around it. Since you are a buyer and a seller in the same market, however, the dearth of confident buyers should work in your favour when you offer.

Be careful with your budgeting. There will also be interest rate rises over the next year, starting with a 0.25% hike in November- it's almost certain now after yesterday's inflation figures. I reckon there will be a slow but steady rise of 1-2% over the next 12-18 months.

I agree with other posters that I think it's the perfect storm. Wages have stagnated, record low interest rates. I think interest rates are going to have start slowly rising.

I'm in a nice part of SW London & what I have noticed is prices here have been more or less the same for the last 3 yrs ( v.expensive for what they are but great catchment area). Prices in the surrounding/outer areas have massively increased so I can't see how FTB can get on the ladder, small flats in so-so areas are now 400k. Now if FTB can afford that they might have to stay a while & start a family but these 400k flats are not in catchment areas.

Plus the old "rules" of buy a flat for 300k. sell for 500k, buy a house for 600k etc. don't seem to be working anymore as the starting prices are far too high & virtually all areas have been gentrified.

Another thing I've noticed is the local school catchment areas have increased as less people are selling up.

We need to upsize but I'm staying put for a while.

Whoop Whoop, perhaps they've cottoned on that other areas are better value for money ;) In my neck of the woods, you can get a 3-bed house in a very good catchment for 400k. To be fair, those properties still sell quite quickly - most that has been on for 2-3 weeks are now 'under offer'.

However, even in our cheap area, it's very stagnant with prices moving down rather than up when it comes to the bigger homes.

True jojo but is your area more appealing to families or FTBs? Also do you think the people buying the 400k 3 bed today will be able to upsize to the 4 bed in a few years time? I think that's another issue. A friend has just bought a 700k flat in NL & I doubt it will be worth 850k in a few years.

Your not Sutton way are you?

Whoop, yep, I’m in Sutton. The market caters for everyone - from small ftb flats for 200k to McMansions for 3M+. As it’s zone 5 with great suburban homes and gardens, it’s probably more appealing to families. Having said that, there are a lot of apartment blocks in the town centre that appeal to ftb.

With regards to moving to a bigger house - not everyone ever does or can afford it regardless of where they live.

I agree that a big issue is with how difficult it is for first time buyers to get on the ladder, especially in London. Because of the lack of first-time buyers it's impacting on everyone as everyone else is waiting for that first link in the chain for that necessary selling chain to form, and because no chains are starting, everything has gone stagnant.

Thought so probably one of the few places left with affordable family homes & good schools. I was looking that way as have some friends there.

True - but the leap seems very big now where many, many average London homes are 1m+.

Whoop, IMO the boroughs of Sutton and Bexley are best value for money or families. They’re both among the cheapest in London but at the top of the standings for schools and safety and very green.

@lalalonglegs - thanks for your advice - really appreciated! Luckily I wouldn’t be using a mortgage but buying outright - nor would I be intending to let the flat, but to stay in it myself when in London (and provide a bolt hole for DCs who will be London based).

Prices are falling in London, it's not a "weird market", it's falling and that's just how things are. Houses near me that six months to a year ago would have been snapped up at 500k are now at 475k and not budging. But a similar one came on at 425k, obviously with very motivated vendors, and went straight away.

I would only faff about with waiting for Christmas if you really want to wait anyway, because I don't think it will make much difference. Imminent interest rate rises plus longstanding affordability crisis plus Brexit uncertainty/trickle of high profile jobs leaving suggest this is all a long way from over. If you can afford to put it on the market at a price which will sell and still buy what you want, then do it now. The approach you have to take is that if you "made" money in previous price rises then that money was basically never real (unless you for some reason cashed it in, e.g. by leaving London and crystallising some of the gain).

We are in a hotspot in N. Wales, houses which would have sold before they even hit rightmove are sitting there. Went with DIL to look at a house way outside their budget which had been on the market a few months. Offered 20% under the asking price which was accepted. The mortgage company surveyor then knocked more off it. Again it was accepted.

We bought in a cul de sac last year it never even hit the market had to pay full price, a much bigger property has come on the market here they have only had a couple of viewers one of whom made an extremely low offer much less than we paid, so I guess we have already lost money on our home.

At the end of the day it does not matter I guess if all houses fall in price, mortgages will be less. I think the stamp duty has had an effect. We paid more than 7k for what I ask??

London is dropping - or at least stagnating while sellers are reluctant to sell at reduced prices. We live abroad and wanted to sell our apartment but having looked at the market have decided to re-rent it and not consider selling for a couple of years.
I reckon it will take that long before the market recovers from Brexit (there are a lot of European buyers in our area and frankly if you don't know if you'll be allowed to stay or if your company will move staff, why would you bother) and by recover I mean the market becomes active again not necessarily prices increasing.
For the Op you need to decide how motivated you are to sell and at what price, nothing is going to change dramatically by or after Christmas. A house is only ever worth what the market will pay at the time you need to sell - unfortunately at the moment it's not as much as in years before.

As long as you're buying and selling in the same market it doesn't make that much difference, plus it means hanging around for interest rate to rise.

It does mean if you get under offer you'll be in a very good position. We found this, as there was so little happening and chains collapsing, having good solid buyers really worked in our favour - thankfully. Always a bit stressful as nothing's definite.

I'd disagree that the market doesn't matter if you're buying and selling simultaneously. People tend to avoid selling in a slow or falling market if they possibly can, so the quality of properties available tends to be less attractive - ex-rentals typically and fewer nice family homes. This can end up creating mini-bubbles with too many people chasing the one good house in a catchment area that eventually comes on the market, artificially raising its value.

It probably does have some effects. I think we were really lucky in the end and got a house for a good price so it's influencing my take on it. I have a look around at other stuff that's available and think tg. But only one transaction of course.

Plus there were a few offers, some higher but we were in a position to go and the sellers were v keen. In the slow market they didn't want to wait for the others to get under offer which helped.

Marsha - how long did it take for you to find a buyer? Did you price lower to sell more quickly?

So difficult to know what to do. There are a number of houses on at reduced prices at the moment that tick all the boxes for us. Wondering if we should just go for it but I'm worried about our flat just not selling for ages. Not sure I can bear it!

Hey Friday had a look through emails and it took just over 3 months. We had one really interested couple before that but there were some restrictions that they couldn't get around.

We did reduce but by the same amount as the house we bought so felt ok in the end. Our valuations were a bit crazy as there was £100k difference, but in the end we settled on exactly the same as next door who was under offer - who then lost their buyer and lingered afterwards, really felt for them.

It's hard to know, because we had dithered for a while and it's always hard to know, 6 months before and it could have been better or not.

I can say I'm so glad we've done it, just the stress of it and things reducing and not much out there, I'm not sure it's going to get easier for quite some time. Then there's interest rates rising. Maybe take each step at a time, get some valuations then see how you feel.

Some wrong info being posted on here, either due to erroneous gut feel or wishful thinking. House prices, inc in London have not fallen, growth has slowed, but it’s still growth. The government produces a house price index which is published on line.

Bluntless - maybe that's average prices. But I am definitely seeing a reduction in asking prices in our area. There is no way that we would get the price we would have gotten 18 months ago, I know that for certain.

So at the moment it may be anecdotal but this trend will have to feed through to the stats at some point.

Bluntness government guides rather like the Halifax guide are not to be replied upon.