Are house prices falling in London?

[MoonfacedMilksop]

I’m in a tourist town in the SW and over the last couple of months property sales have gone insane - houses going within minutes of being on the market for 20% more than asking price. My uncle had his house on the market for the last 3 years and only had a couple of viewing. Then suddenly l, about 6 weeks ago he received 7 offers in one days and it sold for £270,000 despite asking price being £199,000.

In the last 2 weeks I have had countless leaflets through my door telling me to sell my house and have now just had a third estate agent turn up at my door asking whether I was planning on selling and telling me what he thought I could sell my house for - over 1 million when I purchased 5 years ago for £425,000. I’m sure he’s over egging it somewhat but it’s bonkers. A guy who owns some land near the edge of town has been parcelling it off, sticking a £5k shepherds hut on there and selling for over £120,000 an acre with no water or electricity. He’s been trying to get rid of it for years and had ‘offers over £60k’ for 23 acres with zero interest.

Is it like this in all touristy towns now? My town doesn’t have a train station, is a good 5 hour drive from London and in summer it’s generally impossible to get out of town by car.

I’ve been looking at house prices in London as my exh works there and rents. It doesn’t look like anything is actually cheaper though. Has it just stopped being quite so crazy? Is it all just from people realising they don’t have to go to the office every day?

Hope so, I'm selling in July.

I think it's the same in most places. I'm not sure that it's to do with commuting - I think it's people being stuck at home for a long time, and deciding that now is the time to move to somewhere that they're happier with. For some people that will be a home office, or a garden, but for some it's just a different area, or more/less bedrooms, etc. I know a lot of retired people who are moving, too, and SAHPs.

Combined with the stamp duty holiday, and the return of higher LTV mortgages, houses are selling like hotcakes.

Nothing seems to be any cheaper in London. We had our house on the market back in September and it sold at about 5% under asking. The sale fell through and we took it off the market. I have a horrible suspicion that if I put it back on now I'd get more for it. It's madness.

We are in SE coastal town and experience same as you. Being local we feel so defeated trying to find a house. Houses selling before they hit the market, and I think some estate agents are only sending buyers from London details of upcoming listings in advance as they know they will get well over asking price compared to local people with a budget. Houses bought two years ago selling for over 20/30% more than paid for.

Have to say, it does make me feel a bit sad. People who have always lived here, who have invested in the area, who have made the area what it is and given it the character is has, are now priced out. It has genuinely caused some issues of people not understanding how things work- e.g. farms and walks, farm animals and how to behave around them etc...And there is a dark part of me that hopes wfh falls out of favour in a few years and we will start to get back houses we can afford! I realise that makes me sound bitter (and I am!).

Flats in London, esp without outside space, seem to be falling in price ime. We’re in the market (SE London) and very little is selling quickly. People want good value now they don’t feel they can rely on a rising market.

cocoloda I know what you mean. It’s been similar here for years, particularly in the South Hams, where estate agents don’t even bother to advertise locally and just advertise to London markets. I live on a road of 11 houses and there’s only one other that is occupied full time, it’s really lost a lot of the community feel that was here when I grew up. My main bugbear is people moving down/ buying second homes and then objecting to housing developments of affordable housing which would prioritise people who have lived here all their lives. There are a lot of retired people who have moved down though and done some wonderful fundraising and charity work, it’s not all bad by any means.

I don't know abut this. We have a flat in London, no outdoor space, was just valued by the surveyor for mortgage company as quite a bit more than we paid for it two years ago, Wasn't expecting this, was actually worried about a down valuation. We also put an offer in on another flat in London for about 4% less than asking price, and a cash buyer trumped us with full asking. We've decided just to hold tight and see what happens in the coming months

I’m looking at the moment and it seems the opposite. House prices in London have gone mad, I’m hoping things will calm down after stamp duty break has ended. A three bed terrace, nothing special, upwards of £900k.

It’s insane round us. Just absolutely crazy (Scotland). I can’t see how it can continue really- recession but rising property prices when other inflation is relatively low.

It feels like the opposite in the London suburbs at least. Now that companies are being told how much they are needed back in the office, the reality of a 2 hour each way commute is dawning, even if it's just 3 days a week.
Those with real geographic freedom have always left London at some point. Why pay the premium if you're needed in person once a month?

The prices do need to stop rising at some point but then we'll have the papers say prices are stagnant or falling. We need to stop watching house prices so much.

I don't think house prices are falling in London. However London is a big place and it could be the case in some areas.

Flats, yes. Houses, no.

I think flats are a problem everywhere. There were only four flat sales where I am in the last year, and there’s usually loads, most people can only afford flats here. I suspect people are a bit put off the idea of smaller spaces, and lack of gardens, or communal ones. Private gardens with flats are unusual here.

House prices are falling a bit in London, but they rose so steeply over the past two decades that unless you bought very recently you will still be selling for a lot more than you bought, so it doesn't feel like it.

www.google.com/amp/s/amp.theguardian.com/business/2021/mar/31/london-worst-performing-region-uk-house-prices-fall

saz12 it’s bonkers, isn’t it? I could understand if it was somewhere that had really good transport links, internet connection, massive gardens etc. But there’s none of that in my town, houses are all on top of each other and a 25 minute drive to the nearest station which only runs a local service anyway.

Good houses in good areas (I suspect moreso the historically more affordable suburbs) have gone insane. 20%+ increases in the past year I suspect. Every house that gets listed adds another £100k to the price and people seem to go for it...

I’ve seen one listed at 1.5m and it last sold for 950k at the end of 2019 lol. Nobody has yet bought that one, not too surprising!

House prices are very high everywhere at the moment and I feel sorry for people with average salaries. However, I know people in tourist areas think its the city dwellers who are moving in and taking over their areas, but don't forget that many Londoners/city dwellers themselves have been displaced by people from outside the city moving there and inflating house prices. This has gone on for decades in cities and not many young people born and brought up in city communities can afford to live there now.
No idea what the answer is but I have advised my children to go North when they leave college as I know they can't afford to live where we do and where they were brought up.

yes very high here in east london...also selling very fast...yet some suburbs in zone 4 are not seeing the same increases...some are good value for money still.

Well said @sluj, I can well understand people being fed up of Londoners swooping in and buying locally and pushing prices up. However as a Londoner, with a graduate job and a partner, I could never have afforded our little flat without a key worker loan, and family help. We have raised our kids in this flat. Prices are pushed up by a proportion of Londoners earning silly salaries, and outsiders using London property as an investment, like holding shares. True that’s not in our modest neighbourhood, but I believe this concentration of wealth has the effect of rippling out and rising prices everywhere in the capital. I’m also encouraging my kids to leave London and to start the process by going off to study elsewhere.

I’m not in anyway blaming anyone for moving out of cities and into more rural areas. I’m sure I’d do similar if I could triple the size of my accommodation for the same price, especially if I had children in tow.

I just can’t get my head around the pricing, although admittedly economics is not something I know much anything about. But if so many people are moving out of London and other major cities which is causing a massive surge in prices in traditionally less desirable areas, unemployment is absolutely rocketing and businesses are being wrecked as a result of Covid and Brexit, surely it must mean prices are falling somewhere to balance it all? Or is the stamp duty holiday and low interest manipulating it and it will all go tits up further down the line? Or is housing just still in such short supply across the country that prices will remain high? Apologies if these are stupid questions, like I say I don’t understand it but find it interesting.

I know two people who have recently sold to Hong Kong residents. In London it's not just UK buyers who are pushing up prices.
The flat market is stagnant though.

@EssentialHummus

Flats in London, esp without outside space, seem to be falling in price ime. We’re in the market (SE London) and very little is selling quickly. People want good value now they don’t feel they can rely on a rising market.

Are you selling a flat? I haven't got a clue what the market is doing and can't judge it from Rightmove. We are a few weeks off getting valued.

I wouldn’t bank on the north being cheap, I’m in the north it’s very expensive and some houses are going within days. Everything is getting more expensive but I don’t think it can last. There’s a lot of mortgage money around at the moment, that money will dry up and things will steady especially when the stamp duty holiday ends.
The housing market has been very stop start for the last couple of years

@kirinm we were thinking of selling so had the agent round for a valuation last week. Basically we bought for x in early 2017 for the going rate, agent reckons we'd get x + 6/7% if we sold now. Except that when we bought the flat it was in a very poor state, so we've replaced 150 year old windows, installed a heating system, new kitchen, redecorated throughout etc etc. By any reckoning we'd be selling at a loss.

The agent showed me two comparables for our flat, both very large flats for the area (1200 and 1300 sq. ft. respectively, fair condition, one two bed two bath with garden, one three bed one bath) - both sold for the same sort of figure she's suggesting for ours. My feeling is that the market just hasn't shifted over the past few years, for flats anyway. I think (I'm not sure, it's a guess) that if you're in the "top end of flat market" in the current climate, you might be more inclined to take the considerable sums involved and go a mile or two down the road if you're not already living round here / tied to the area.

More anecdata - I've got one friend trying to sell a terrace just on the other side of the main road. Tried last year, no luck; now on the market again and not getting anywhere. Another friend on our side of the tracks trying to sell their "starter flat" last year, no interest. An identical flat in their building in much better decorative condition sold early last year, pre-covid, for what friend had paid for their flat in 2016, after about six months on the market.

I'm on RightMove every day and I am seeing flats and houses hanging around for a long time, reductions almost as standard. The things that seem to be selling are deceased estates and doer uppers, perhaps because people feel they can add value.

We're now wondering about staying put. I love the area; DH doesn't understatement of the year. Buying a house around here... well, the obvious problem. Plus we're uming and aahing about staying in the UK at all longer-term, so sinking a lot of money into a large home doesn't feel right just now. And DD goes to school next year, so staying put til the admissions deadline for the catchment of Wonderful School up the Hill makes sense at some level, then moving without being tied to catchments. Except that the impetus for the move is that I'm expecting DC2 and 3 (!) so, you know, how long can we stay in a flat?

You can PM me if you like, I have endless energy to discuss the market round our way .

[quote EssentialHummus]@kirinm we were thinking of selling so had the agent round for a valuation last week. Basically we bought for x in early 2017 for the going rate, agent reckons we'd get x + 6/7% if we sold now. Except that when we bought the flat it was in a very poor state, so we've replaced 150 year old windows, installed a heating system, new kitchen, redecorated throughout etc etc. By any reckoning we'd be selling at a loss.

The agent showed me two comparables for our flat, both very large flats for the area (1200 and 1300 sq. ft. respectively, fair condition, one two bed two bath with garden, one three bed one bath) - both sold for the same sort of figure she's suggesting for ours. My feeling is that the market just hasn't shifted over the past few years, for flats anyway. I think (I'm not sure, it's a guess) that if you're in the "top end of flat market" in the current climate, you might be more inclined to take the considerable sums involved and go a mile or two down the road if you're not already living round here / tied to the area.

More anecdata - I've got one friend trying to sell a terrace just on the other side of the main road. Tried last year, no luck; now on the market again and not getting anywhere. Another friend on our side of the tracks trying to sell their "starter flat" last year, no interest. An identical flat in their building in much better decorative condition sold early last year, pre-covid, for what friend had paid for their flat in 2016, after about six months on the market.

I'm on RightMove every day and I am seeing flats and houses hanging around for a long time, reductions almost as standard. The things that seem to be selling are deceased estates and doer uppers, perhaps because people feel they can add value.

We're now wondering about staying put. I love the area; DH doesn't understatement of the year. Buying a house around here... well, the obvious problem. Plus we're uming and aahing about staying in the UK at all longer-term, so sinking a lot of money into a large home doesn't feel right just now. And DD goes to school next year, so staying put til the admissions deadline for the catchment of Wonderful School up the Hill makes sense at some level, then moving without being tied to catchments. Except that the impetus for the move is that I'm expecting DC2 and 3 (!) so, you know, how long can we stay in a flat?

You can PM me if you like, I have endless energy to discuss the market round our way .[/quote]
You're having twins?! Wow! Congratulations. That would be a fairly valid reason to try and move!

We have carried out extensive renovations and spent a lot on our place. We've changed the layout so we have an extra bedroom, we have a balcony and own half of the large garden. I'm hoping that is enough to get some interest but it's hard to tell.

My DP also hates the area - the building is my main gripe - we are the only owners who live here and the others aren't interested in maintaining a 150 year old building sadly.

I will definitely PM as I don't really trust estate agents and need some first hand experience of the market!