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/

Have a look around at any other houses for sale signs in the area and what the general price range is?

@Desiringonlychild @ChocoTrio

you forgot to mention tradesman are more expensive in London
removal firms, solicitors, congestion charge,ULEZ.
hotels(if you've got guest)
buying second hand cars(I'm not sure)
tuition fees....etc

@mumsy27 I never used a removal firm in my life. When I bought my flat, I transported everything using Uber. Each trip was £7 or something

I used a solicitor in hitchin for my conveyancing. No car so no ULEZ

But that's the thing. As a city, it's very easy in London to cut out the discretionary spending because you don't need a car, you can shop at the cheapest supermarkets where the poor shop (there are plenty of them in London). Your daily running costs are lower so when times are bad, your actual expenses are low (except mortgage bwhich is at least predictable).

I think there will be a huge number of small businesses that go under during this pandemic whereby the owners have charges or personal guarantees on their homes. These will affect housing prices when they are forced to sell their homes by the banks to meet their debts. It’s going to be a disaster

In weighing up the pros and cons of returning to London, I agree with pps that once you've got over the hurdle of the enormous property prices and the SDLT on top, living there is much cheaper particularly if you don't go out much. Always shops within easy walking distance and even if you run a car you're bound to use it less. Last time I looked there were only two London boroughs with really high council tax, whereas some country areas it's very high for indifferent services. The only other things are higher insurance and residents parking charges (actually houses with front gardens converted to parking always put me off!)

@Desiringonlychild - hmm... your examples are anecdotal. A lot of people won't be able to put all their moving items (including furniture etc.) in an Uber for £7...

Like, I think in a previous post you've said you have a 2 bedroom flat in London that was £400k (I may have got that wrong). Outside London you would easily get yourself a freehold house with garden and maybe your own carport and garage (depending on where you went). Housing costs in London are still not as good value as outside London - but the balance is that you pay for the experience of being in London and the greater job opportunities (assuming WFH roles with London firms is not a valid option).

Sure, solicitors for conveyancing do not need to be London based. But there are certain things you can't escape from as @mumsy27 said - there are other hidden costs. It's the knock on effect of the costs of living in London.

London: "It's also one of the most expensive cities in the world, measured in terms of absolute cost or general affordability." www.investopedia.com/articles/personal-finance/091415/how-much-money-do-you-need-live-london.asp

@romatheroamer - but I'd argue the property costs and SDLT are massive obstacles to overcome in London. If you're not going out much then having somewhere to live that is nice, spacious and with a garden becomes even more important.

There are studies that show how living in a shoebox can be damaging for your health. Here is a link that discusses it regarding new homes - but the point remains "small living spaces can have a profound adverse effect on a person's health" www.brand-newhomes.co.uk/new-homes-are-too-small.htm

2 opposite reasons
staying stable because of relationship break ups & one partner moving out (although this can lead to increase sales but than might be increase in 2 cheaper homes??)
Downwards
apparently in paper today, people who have had mortgage holiday may/have! found getting a mortgage difficult (or refused) - this possibility was recognised

@ChocoTrio I am not saying London isn't expensive. But what I am saying is that depending on your circumstances, it may be more expensive to move further out, simply because there aren't accessible options in a small town. Of course if you live in Reading, work in Reading, that is definitely cheaper as Reading is a big town with many shopping options for all budgets, wide variety of housing, viable employment options within a short drive or bus ride etc. However if you live in a Home Counties town and you have to drive/take the train, that would cost. And that is a sunk cost which you can't get back unless investing in property.

my DH and I don;t earn much but we save 25%-50% of our salary in London. I don't think we would be able to do that if we paid 2 season tickets or had a car and commuted long hours everyday/had to pay parking. I don't think comfort should really be a factor because there isn't really a way of assessing that. A freehold 1000 sq feet house might be acceptable to most Brits as desirable housing but to an american, that is completely unacceptable as their houses are much bigger there (but the cost of getting a 3000 sq feet house would be prohibitive here in most desirable areas inside and outside London) .

what I am looking at is the smallest cost a couple can incur assuming both have London jobs.

One has to take a lot of these measures with a pinch of salt. For example, the stats have always measured Singapore to be the most expensive city in the world. These stats are used by expats to determine whether a place is suitable for them to move to and whether their pay would cover the comforts they are used to. However they often do not take into account the way the local population live. In Singapore, the cost of a car is always factored in despite the fact that only 25% of the population own a car and most use public transport. 78% of the population live in government subsidized housing that they own, and don't pay private rent (hence private rent isn't even an expense most people have). Alcohol is always factored in despite the fact that there is no drinking culture and most locals drink very rarely. Likewise in London, people adapt their lives so as not to incur the high costs; there is more sharing and communal living to save on space.

Of course you are right. London is an expensive city. However ex Londoners often move to places which are not much cheaper or retain jobs in London which mean that the added savings go on travel.

I dunno, I managed to save in London but I can absolutely see why it is "expensive" and why none of my friends on much higher salaries seem to have much savings. In London there is constant pressure to go out and do things. The work culture of companies seems to be after-work drinks (that go on past midnight), drugs and lunches. My friends always wanted to meet up for brunch, drinks, theatre, etc. To save money you basically have to say no to a lot of things, which then is met with "well why are you living in London if you just want to watch TV after work".

In the Home Counties you don't have this problem because a) in provincial companies people come from towns all over, so only 1-2 people from your team live in your town anyway, b) most people have families and kids so there isn't rampant forced after-work drinking, c) there's not loads of tempting food places that charge £6 for lunch, d) everyone is watching TV after work.

In London, work drinks mean buying everyone a round and staying till 1am. In the Home Counties, it means everyone buys themselves 1 drink (could be tap water) and goes home by 8pm.

moving out of cities in normal times means transport costs & length of travel time at end of day
this makes a big difference in living costs - if you decide to work from home - presumable you will go for a bigger place to allow for working for wfh
additionally there may be issues about facilities that you expect & take for granted ie hospital distances types of schools everyday sport & social opportunities for you & your dc - it could mean being well over 10 miles to your nearest hospital or quality shopping (when & if they survive this!)
I think its possible that more companies, shops & facilities are more likely to disappear in smaller towns than in major cities - basically their cuts will be linked to possible footfall & spending - which one will make more money?

@mumwon yes so far all the shopping outlets that are earmarked for closure are nowhere near me, meanwile my friends in manchester are devastated by the loss of the trafford centre as it is iconic and a part of their childhoods.

A lot of people talk about their lives fundamentally changing post covid. I am less convinced. Look at all the people flocking back to the shopping centres once lockdown is lifted. I know a lot of businesses are just itching to send their staff back into the office. WFH would be more of an option but then again it has always been an option and was usually taken on by older staff. I don't think the culture of presentism would go away - i just had my mid year review and one of the comments was I work long hours (this is positive for the business). My manager knew I worked long hours cos I always did prior to lockdown and yes this continued after lockdown. So if working long hours is 'positive', then who is in the better position- the young bright upstart who works long hours in the office or the person who works from home who may or may not work long hours (guess you can track someone's performance online, but still not the same as being in the office). When there is a culture of presentism (which there is in the UK/US, far more so than in Germany/Scandinavian countries), there would be downsides to wfh.

@Desiringonlychild

Good point about shops etc. London is perhaps more likely to weather that storm better because there's more shops and variety.

Your comment about long hours made me think of Bill Gates: "“I choose a lazy person to do a hard job. Because a lazy person will find an easy way to do it.” Lol!

Hmm... to be devil's advocate - yeah long hours is great but the "young bright upstart" may not always have that youthful energy to sustain those long hours (with time they too may become, as you put it: "the person who works from home who may or may not work long hours"). Sometimes it's a balance between quality and quantity. Often, wisdom and experience can be of great value to a business too. Some people have efficient time management skills to work within normal hours and get the job done just as well, if not better. People work differently. Bottom line is usually the output, profit and results of a project - whether that is achieved WFH or long hours in the office can be irrelevant for some businesses.

Also, I thought the issue with presenteeism was specifically about employees not fully functioning because of illness or other medical conditions? Source I could be wrong though.

I agree that WFH isn't the same as the office, so don't get me wrong. I just wanted to offer another slant t your point. It's just that people work in different ways - and in my experience the motivated, efficient and bright (regardless of age) will do well whether in the office or WFH because of their general work ethic and drive to do well.

Long hours doesn't mean anything, the people I know who worked long hours were generally quite slow and inefficient, and only worked those hours because they were incapable of getting their work done in 7.5 hours. I've never worked over 7.5 unless I absolutely had to, it didn't hinder me for promotion or better job opportunities at all. If you're so "bright" you should work out a way to get your work done faster, rather than boasting about sitting in the office for 12 hours....

@BeijingBikini its very industry specific. DH and I work in finance. Not Investment banking though, our peers who work in there work till 12 midnight to 3 am! And they kinda have to. And it does pay off financially.

@ChocoTrio if putting in long hours and time is not valued in the UK, why aren't women doing better in their careers? On that basis, having children should make no difference to a woman's career because lots of professional woman in their 30s can afford 9-5 pm childcare, particularly if its for 1 child. Working mothers are also very common in the uk, so most women are managing to pay for it even if it is expensive. Based on your logic,a smart woman should be able to get her work done in that time.

However, women's careers are very badly affected because its often the woman doing the school pickup. The man can basically work till 5, work till 9 pm, his career is basically the same pre and post kids. Most stats would tell you that working mothers are sidelined in the workplace, even with childcare and on full hours.

@Desiringonlychild - I think @BeijingBikini answered you already: "Long hours doesn't mean anything, the people I know who worked long hours were generally quite slow and inefficient, and only worked those hours because they were incapable of getting their work done in 7.5 hours. I've never worked over 7.5 unless I absolutely had to, it didn't hinder me for promotion or better job opportunities at all. If you're so "bright" you should work out a way to get your work done faster, rather than boasting about sitting in the office for 12 hours...."

As for the question: "if putting in long hours and time is not valued in the UK, why aren't women doing better in their careers?"

That is a really interesting topic and not straightforward to answer either. You've also conflated the point by adding in other variables that may impact the demands on a person's time, energy and resources. I'm not sure you understood the point in my devil's advocate point...

Simple answers to your question relate to: education attainment and industries that are predominantly women and/or men. There's a massive push for more women in STEM industries (which tend to have jobs that pay better but are under-represented by women, hence things like Women in STEM.

No one is saying that long hours is not valued - it's just that it's not the only way. Work smart, achieve more and all that... Here's a little funny meme to help illustrate.

Also - this is quite interesting on the topic too: An economist explains why women are paid less

Estate agents seem to be trying to overcome the issue of prices falling here by putting properties on the market at over inflated prices. Can't believe the prices newly marketed properties are coming on at - at least 20% higher than before Covid hit.

@ShellieEllie I've noticed the same thing. I've seen one house where a similar one was sold at 720 a year ago and it's listed at 850. And one on a road where there has been nothing sold on for the last few years over 750 and its come on at 900. Its just incredibly fustrating.

@ShellieEllie It happened here as well. One house has been in market for over 8 months for £365,000 last year, it has been put on market this week for £385,000, it has been STC next day. Another one is £330,000 last June, then it came back today as £335,000.. Are those people living in fantasy world or they are greedy?
Is it government release some positive information like economy will be bounce back like "V" which makes people go crazy?

@Desiringonlychild @ChocoTrio

Travel in London is super expensive (can't speak for the rest of the country) but services are too. Builders, plumbers, mechanics etc charge more for whatever reason. I get that operating a business in London is more expensive but sometimes the disparity in building costs for example for somebody in London vs somebody living in Biringham, is just ridiculous.

@Smallgoon - agreed.

I think @Desiringonlychild was making the point that you can, if you're savvy and frugal enough, find ways of living a bit cheaper in London. That is reasonable - I do believe it can be done - but I just think you also get what quality you pay for sometimes (but not always).