Is this the start of the house price plummet?

[Home2018]

Slowly but surely the papers are reporting reductions in line with the projected economic difficulties.

The Telegraph has today published an article which says those under offer should 'definitely try to negotiate a reduction'. The 'expert' then goes on to suggest trying for a reduction of 10-20%.

Is this the start of things to come?

www.telegraph.co.uk/property/buy/buying-house-coronavirus-advice-lockdown/

FTB, viewing a London 2 bed flat on Tuesday. Are we mad? Should we be holding off? Feeling like the years go by very quickly throwing away rent on our tiny 1 bed...

@rillette Hi, i bought a london 2 bed flat in zone 3 with DH last year. It depends on your plan. For me now, even though i know my flat would probably go down in value, I like the area very much (MIL lives nearby, 4 outstanding schools nearby, bus routes to jewish schools and private schools). Also planning on only child so its not like I absolutely need to move even though flat is small (though it does have a communal garden and loft storage). Also in this area, the jump to a house with garden is huge, the terraced house is 800K to a million. I dont think covid would change that so its not like i can get a better home for my money just by waiting

I don't know what area you are looking at, but if it suits your plans for the next 10-15 years and if the gap between the flat and the house is huge (there are several areas in London that are like that), while it is not a good time to buy, you may not feel as bad when the housing market crashes. I mean yes you overpaid, but you still have your home, you are still paying off your mortgage and its not like you could have gotten something better by waiting. There is also no guarantee you can upgrade more easily just by waiting and buying the property at a cheaper price; there are more factors involved. I get being stir-crazy - a big reason why i bought was cos i was living with MIL at that time!

Right now, I am pretty sure that my flat would go down in value. But its still my home and honestly even if it increased in value, it wouldn't really have helped me either.

@rillette

Depends on circumstances. Sounds like you may be better off buying than renting.

There's some talk on this forum that people may want to move out of flats and into larger properties with gardens - even if it means living outside London and commuting in and/or WFH. So, maybe you'll get a bargain on a flat or maybe start looking outside London for a house with garden?

Interesting perspectives both, thank you!

For the moment we love our London lifestyle. We have lots of friends here and enjoy seeing them regularly, enjoy eating out, coffee shops, etc. We have rented a 1 bed flat in Zone 2 for nearly 4 years. Rent has stayed the same (and will be doing for the next year - think our landlord is panicking!).

We are mid-twenties, recently married. Cautious about buying a 2 bed flat and getting stuck in negative equity in a few years, unable to move. Will see how the viewing goes on Tuesday and go from there. Eyes definitely peeled for a bargain!

*Smallgoon yes you can get driven out of a city but if you can’t afford to live somewhere saying you aren’t going to go anywhere else all you end up doing is renting until you can’t afford that.

Like a roof over my head I need transport and it would cost me a fortune to buy or rent my dream car so I buy what I can afford that serves a purpose.

One day I hope to have my dream car but in the meantime I make do with something that isn’t great looking but is practical and does what I need a car to do.

s3-eu-west-1.amazonaws.com/airdrive-images/wp-content/uploads/sites/6/20200515121202/Quarterly-London-housing-market-report-Q1-2020.pdf

interesting read @serenada

Viewing and buying just now is a bit risky and premature IMO, there is a LOT happening globally, and I don`t think very much of it is positive for house prices.

No.

I’m in south London - not one of the super desirable areas but nice enough. Three bed semis tend to be around the 550-600k region and two bed flats around the 300k mark.

We just bought in February - our first property, a ground floor two bed flat in a private estate of purpose built marionettes. There’s also the ground floor flats like ours. Some of the maisonettes are the same SQ foot as the ground floor flats, some are a little bigger. Since Covid, I have been slightly concerned we’d be stuck in negative equity but I’ve just seen recently two maisonettes next to us on Right Move - one of them is the similar size to us and one is one of the bigger ones. Both SSTC for 350 and 380 respectively, which were their asking prices. Which to be honest, is a small relief if it’s any indication.

We got ours for 260 because it needed updating. But we absolutely have to move within four or five years as we have our son sharing with his sister and he will need privacy in a few years. So we’ll need to move or move ourselves into the front room. It’s not ideal but we were FTB and it was all we could afford.

We rented for an incredibly long time and always bemoaned the prices. Now we’re on the other side of things. It’s amazing how your perspective changes.

Both SSTC for 350 and 380 respectively, which were their asking prices. Which to be honest, is a small relief if it’s any indication.

@GorgeousLadyofWrestling How do you know they are SSTC at those offers, out of interest?

I moved to SE London in Feb. I haven't had any concerns about a crash. There are limited properties coming onto the market yes, but if I've not noticed a drop in prices. Perhaps it's still too soon to see the effect if any with Corona.

Our 4 bed house in the south east went on the market last week. We had 14 viewings booked in the first weekend and 5 offers, all over asking price.

Things seem to be very busy at the moment. Not seeing any evidence of a crash just yet.

I’ve spoken to 3 people in this line of business and they’ve all stated they’re really busy.

One said it’s a product they are calling furlough fantasy, people have had time to take stock and are trying to live their fantasy by moving

doesn't it also depend on the property type? In London family homes in decent areas always keep their value but the market, imo, has been propped up at a foundation level by studios/one bed flats/btls all with less financial security (pyramid schemes/casual workers/100% mortgages) so it is the bottom end that could fall out and pull everything else down.

Or have I gt that wrong?

Might as well go into some estate agents and ask them; it would save them the trouble of posting here.

Interesting activity on my new build development - I've been watching like a hawk.

All the 3 bedroom houses that got released have all been reserved/sold, as have the biggest 4 bedroom style of house.

The ones that aren't shifting as well, so have incentives, are the small 4 bedroom houses, the medium 4 bedroom houses and the 5+ bedroom houses.

Prior the covid it was a bit more even - all ranges and styles of homes were selling as well as each other. Now it's all 3 bedrooms and just the largest largest of the 4 bedroom. Well, from my observation and talking to the sales lady too...

Take from that what you will. I'm speculating that those who could afford the small-to-medium 4 bedrooms are playing it safe with securing the next option down, a 3 bedroom. Likewise, those who would normally be able to afford a 5 bedroom are playing it safe by securing the next option down, the largest 4 bedroom. Who knows?! I guess the fact they are still selling at advertised prices is useful...

Or... those who would normally play it safe with the small-to-medium 4 bedroom houses are just going for the largest 4 bedroom houses because having more space has become more important with WFH and they anticipate having to stay longer in one place due to a possible recession? Who knows?!

But the change in what buyers want is noticeably different...

Or it’s the bank that is restrict their purchase

Many people live in London to avoid a long commute and/or for a certain lifestyle. They are going to ask themselves why they are making the huge compromises on living space that involves when they won't be back in the office at all for the foreseeable, and very likely only need to commute in a couple of times a week max in the future. They won't be enjoying the same type of lifestyle for the foreseeable either. If you own and are settled with schools etc then you might stick it out. But what are renters going to do?

Disclaimer, I am one and I don't know. But I think it's insane to throw away London rent when you are no longer close to the office...instead you are paying over the odds to work in cramped conditions in a London flat. I think there may be a lot of people leaving, either able to buy since out of London, or saving because on half the rent but the same salary if they are lucky enough that their job wfh survives.

Not sure how that impacts house prices, I guess through fewer first time buyers around and fewer buy to let buyers. Even before Covid stuff was sitting around on the market and getting withdrawn near us. Buyers wouldn't or more likely couldn't pay what sellers wanted. I can see that becoming even more the case because income and financial confidence will be low for some time. But, too early to say how any of this pans out.

Lots and lots of housing coming on to the market here, some decent prices and a lot of overinflated houses too. SO many BTL houses coming back onto the market too. Sadly we live in a rural area and a lot of job losses right now which I think will cause the market to stagnate, along with the inability to get a high ltv mortgage

Interesting article here where one case study talks about how everything is going for over the asking price at the moment...

metro.co.uk/2020/06/28/first-time-buyers-explain-how-coronavirus-has-changed-home-owning-dreams-12913709/

Following this thread with interest.

I am so scared of house prices falling. We are selling up due to redundancy and buying outright in another area of the country. We can afford for prices to drop slightly, but it'll be tight.

The house opposite us sold in 2 weeks a few weeks ago, so I'm fairly hopeful. We are very easily commutable from London but with a good garden and near open spaces, so hopefully the prices will hold. There are very few houses where we want to go though and they are getting snapped up quickly. We are hoping to get on the market next week.

We only have a 3 bed semi so not much scope for down sizing either. Such scary times but we can't afford to stay where we are long term now either.

I think houses are still flying off the shelves at the moment, but who knows what direction it will go in a few months

Mortgage approvals for May at the lowest since mid 1990s.

www.theguardian.com/business/live/2020/jun/29/markets-nervous-covid-19-cases-news-uk-mortgages-facebook-shares-business-live?page=with:block-5ef9b2788f0811612711975a

[quote thequantofmontecarlo]Mortgage approvals for May at the lowest since mid 1990s.

www.theguardian.com/business/live/2020/jun/29/markets-nervous-covid-19-cases-news-uk-mortgages-facebook-shares-business-live?page=with:block-5ef9b2788f0811612711975a[/quote]
Where are all the frantic house purchases coming from then?