So will the prices start going down soon?

[Notmyyearthisyear]

Because right now they seem to increase by at the rate of 10% a month!!! Every time I look, and I look every day, I can afford less than the day before 🤣🤣 Surely this cannot continue…

I can't see prices going down. I bought in 2019 worried there would be a drop but prices still increasing. We only have a poxy 2 bedroom house and they are now going for over 400k in a crummy area of London. It's ridiculous. I feel so bad for my sons generation. Everyone packed in like sardines, similar to Hong Kong.

Thinking about it, the prices in the area in central London we're looking to buy have gone down. I think by about 10-15% in the last 5 years. Not that they're exactly a bargain...

Prices where we’re looking are stagnating for greedily priced shit properties – fixer-uppers, things with small footprints on main roads with tiny dark gardens, or 2/3 beds aspiring to 4/5 bed status by claiming windowless cellars are bedrooms, that kind of thing. Lingering forever and having to reduce by huge chunks repeatedly to sell - think £150k lower than first asking.

But anything remotely decent – updated decor, no work needed, good schools, character with a reasonable garden, driveway and nice road – is going within days, regardless of price. And those same properties, if the chain collapses and they come back to market, are coming back on £75-£150k above what they first wanted. Still selling.

It’s like there are two rightmoves existing simultaneously, and there’s no middle ground properties: it’s either expensive, good and gone, or expensive, shit, lingers.

There won’t be any stagnation or reduction unless credit becomes expensive. Interest rates are very low , even though they are very slowly rising, it won’t impact house prices. They would have to rise significantly higher to make a dent.
Years of quantative easing by the government means that the government can’t afford interest rates to get too high hence why the BoE have maintained low rates.
The rising cost of living also won’t affect house prices as most movers are middle class where basic necessities (fuel/food) are a lower % of household income so they can absorb this rise more easily.
If you want to buy, now is the best time

@stuntbubbles

Prices where we’re looking are stagnating for greedily priced shit properties – fixer-uppers, things with small footprints on main roads with tiny dark gardens, or 2/3 beds aspiring to 4/5 bed status by claiming windowless cellars are bedrooms, that kind of thing. Lingering forever and having to reduce by huge chunks repeatedly to sell - think £150k lower than first asking.

But anything remotely decent – updated decor, no work needed, good schools, character with a reasonable garden, driveway and nice road – is going within days, regardless of price. And those same properties, if the chain collapses and they come back to market, are coming back on £75-£150k above what they first wanted. Still selling.

It’s like there are two rightmoves existing simultaneously, and there’s no middle ground properties: it’s either expensive, good and gone, or expensive, shit, lingers.

This is my experience as well. It's a really weird market out there right now.

Doubtful they'll drop as there is a housing shortage, and people are still buying. But I fell the market is somewhat levelling off.
Horse prices are like everything else, the price always goes up.

@Fretfulmum

There won’t be any stagnation or reduction unless credit becomes expensive. Interest rates are very low , even though they are very slowly rising, it won’t impact house prices. They would have to rise significantly higher to make a dent. Years of quantative easing by the government means that the government can’t afford interest rates to get too high hence why the BoE have maintained low rates. The rising cost of living also won’t affect house prices as most movers are middle class where basic necessities (fuel/food) are a lower % of household income so they can absorb this rise more easily. If you want to buy, now is the best time

Agree with this. I would also add that the rising cost of renting (and the difficulty of finding decent properties) also means that there is little appeal for those not on the housing market to "wait and see what happens". So if they have the money they are buying. (remember loads of well paid people actually saved huge amounts during covid it's these people who now have a deposit and can afford to first time buy)

@Fretfulmum

There won’t be any stagnation or reduction unless credit becomes expensive. Interest rates are very low , even though they are very slowly rising, it won’t impact house prices. They would have to rise significantly higher to make a dent. Years of quantative easing by the government means that the government can’t afford interest rates to get too high hence why the BoE have maintained low rates. The rising cost of living also won’t affect house prices as most movers are middle class where basic necessities (fuel/food) are a lower % of household income so they can absorb this rise more easily. If you want to buy, now is the best time

The vast majority of people who buy property in this country do so without a mortgage. So large houses (3 beds plus, decent footprint, in excellent school catchments) probably wouldn’t be impact. Still remember in the 90s that while other areas dropped in value the area I lived in, which was an Indian area with a local shopping area, great bus routes and 6 outstanding schools within walking distance, increased by 50k (to 90-100k). Now it’s considered one of the best areas of Europe to live in if you’re of Indian or Pakistani origin and house prices start at 300k for a small 3 bed mid-terrace that needs work.

But its still a cash buyer haven.

No, can't see a crash. The rate of increase in property prices may slow down a bit but the trend will be for houses to hold or increase their value. As pp have said, the U.K. is a small place and there's a limited amount of housing stock.

Someone on here bored that, in the not too distant future, the boomer generation will start dying or downsizing in larger numbers. I know it seems like a horribly calculating thing to say, but it is true, and this will result in houses at all price levels becoming available at a faster rate.

When that happens, prices will go down slightly and you may get buyers holding off on the hope of a further drop. You'll also get sellers trying to offload as fast as possible if they think a crash is coming.

Rising inflation and cost of living hikes will mean fewer buyers.

Plus there's a school of thought that prices crash every 18 years, which would put us on track for 2026.

I might be completely wrong, but that's my prediction!

*Noted, not bored

Article here about the 18 year cycle:

www.thisismoney.co.uk/money/mortgageshome/article-9601221/The-18-year-property-cycle-tips-house-price-boom-crash-2026.html

The UK population is projected to rise by some 3% in the next 10 years. The 2021 census might shed more light if anything has changed but I wouldn't bank on it. There is also an estimate of around 500k Hong Kongers relocating to UK, probably to the bigger cities into nicer areas with good schools.
Besides from what I can see on my street of 3-4 bed maisonettes and terraces the elderly population stay in their homes until the end. Maybe it's different for larger detached houses? But they cost so much in our area that we could never afford them.

So in conclusion I don't think it's worth hoping for a price drop anytime soon! The competition for good housing is just too fierce!

They might stagnate. If they do crash, like in 08, lenders just stop lending, so the only people that benefit are cash buyers.
I think ALOT of people get left behind by the market waiting for them to come down, and they never do, than end up stuck in negative equity.

As in a lot more people get left behind by the market than end up in negative equity

10% per month increase was of course exaggeration on my part, but let me tell you, in the area where I live it’s certainly way more than 10% over the last year… 🤦🏼‍♀️

I think there will be some levelling up of the market. Either prices will stagnate or fall a little. If inflation carries on climbing the BOE will increase interest rates and that will make mortgages more expensive or less affordable so fewer buyers will be chasing the housing stock.

They will stabilize but not go down. Its not like demand will reduce or supply will increase.

The problem with wanting a drop is that the fundamentals of the market here dictate that a drop would only happen with some kind of fairly seismic shock to the UK economy or some other alteration in general circumstance that would probably also alter your ability to buy.

We really, really need to encourage more supply, but people also hate that!

Best we can hope for is that we begin to build enough that prices remain broadly flat for a period while incomes catch up.

@sst1234

They will stabilize but not go down. Its not like demand will reduce or supply will increase.

Yes it will As soon as we get to a point where large numbers of first time buyers can't afford to buy (and we're very close to that already) demand will reduce, which in turn means that supply will increase.

Over the long term it will continue to trend upwards, but there will always be peaks and troughs.

We are sat waiting in our starter home, wanting to move. It would go for about 155-160 (we bought at 100) but the only things remotely worth moving for are upwards of 325 which is out of reach for us. There is nothing in the middle and then the rare property that comes on gets snatched up within a day. The exception being really shoddy things in not very nice areas.

We aren't on the market yet because we just aren't seeing anything, but then we aren't in a position to move quickly. I am thankful that we are owners rather than renting, but I am absolutely feeling left behind through being risk averse in these last few years, and we are desperate to have more space. Just not desperate enough to compromise on the area!

I think they will probably stagnate or maybe fall a little this year certainly relative to the high levels of inflation. If interest rates continue to go up there may be falls. People are noticing their bills and other costs go up a lot so may feel much less inclined to overbid on properties as has been the case in the last 18 months.

Government won't want to put interest rates up because I will make servicing the national debt even harder than it is now

@tinkywinkyshandbag

Government won't want to put interest rates up because I will make servicing the national debt even harder than it is now

No they won't, although it is meant to be the independent Bank of England who make these decisions. However, if inflation continues to rise they won't have much choice. They have already raised the rates very slightly twice this year.