UK house prices post biggest fall since October 2008 - Halifax data today Weds 7th Dec

[jimmyjammy001]

Just a quick note for anyone looking to buy, in particular first time buyers who run the extreme risk of running into negative equity if buying with a low deposit

UK house prices post biggest fall since October 2008

Also its important to note that "Property prices are up more than £12,000 compared to this time last year, and well above pre-pandemic levels (+£46,403 vs March 2020). "

I suspect there will be bigger falls yet still to come as well

And that's without even accounting for stamp duty

I imagine it would almost all be new builds which are always a dubious investment with a new premium.

I'm sure plenty are but London flat prices have really stagnated since Brexit. There was much more growth before that eg my period flat had doubled in price by 2014 but then barely increased at all. And new builds also saw growth in that time.

I can't see how London won't be impacted by higher interest rates, so much of the market relies on debt.

Does it really..I am one of the few in my social circle who bought my flat with a relatively large mortgage..an unbelievable number of people have lots of help from family. I even have a friend who has a house in z4 London (grotty part and 1 bed) who has never paid rent, stamp duty or mortgage in his life. And never will.

Yes, the London market is more reliant on debt ie mortgages & bigger ones than other areas.

I had help from family, I don't know anyone who didn't, nonetheless the London market has high mortgage debt.

So here is website is a great resource for actual sales prices: houseprices.io/
You really need a postcode rather than a borough, as the database of addresses doesn't always use the borough name. You also need to interpret the results somewhat - filtering out the "additional price paid transactions" (e.g. lease extensions, or collective enfranchisement of the freehold reversion) from the "standard price paid transactions", and also you need to filter out the sales of leasehold properties where the time interval between sales matches the expected depreciation of a shortened lease term.

But ... what is evident is that there are barely any (and I mean, a handful of instances from amongst the many thousands of transactions) where the nominal price has been lower than the previous one. And in these cases, the reductions are less than 5% which is well within the normal range of variation to be expected from differences in bargaining skill, and certainly not evidence of generalised price falls.

I expect if you looked at those instances in detail, you'd find localised, very specific reasons linked to value destruction that explain those drops, too - cladding issues, remodelling disasters, scenes of violent crime etc. But again, nothing I'd take as symptoms of a generalised price falls.

There's been a fair few cases where the real price (inflation adjusted) has been lower, and these are colour-coded red, but as we've agreed already, this doesn't count as a crash - although any reduction in house prices versus earnings due to wage inflation has the same practical effect for the buyer as a reduction in price - but it won't influence market sentiment and won't cause contagion.

Of course, none of this means that the next set of sales to be uploaded won't be a sea of red with drops in nominal prices too ... but it is completely wrong to claim that the crash has already started when it quite patently hasn't

Im good with Rightmove. Where did I say there was a crash? I simply said plenty of flats have sold for less than paid for in the last 5 ish years. This is my experience from where I lived & what my friends have experienced & what the ones I have in the industry have experienced. You can disagree if you like but ime flats have suffered in London post Brexit & Covid & it's not just because of crime....

Show me. Post a postcode area - let's check it. With data ... not anecdotes.

plus 5% is 5% & when you factor in stamp duty & any work you may have done it likely feels like more than 5% particularly when houses haven't seen the same issue & the gulf between flats & houses is much bigger now.

And looking at sold prices won't give you an indication of a crash or not. How can it due to the lag in data? Someone who completed recently will have had a mortgage rate agreed months ago.

Totally disagree. Only sold prices will give proof of a crash. Everything else is pure flannel.

I'm not giving you postcodes of where I live or friends & family live you nutter! Look on rightmove as I said.

Honestly I'm not sure why you are so triggered?

Only sold prices will give proof of a crash.

But you can't see current sold prices now which is my point, you can only see sold prices agreed months ago which doesn't tell you about the market today.

I'm not triggered. I said postcode area. SE4, SE18, that sort of thing. Doesn't even have to be the one you live in. Pick any one ... and show me any where there have been sales less than previous.

Or, just keep making stuff up on the internet 'coz it makes you feel good.

What am I supposed to be making up & for what reason?

What would make me feel good about saying my flat doubled in value & than barely saw any growth? 🤔

The website I posted shows 10,000 transactions alone from October 2022, from across the country. I just scanned the ten most recent pages, and after looking at seventy houses that had sold for nominal gains the first one came up that had sold for a reduction - a leasehold flat in W10 5AG that was sold for 11.9% less than the last time it changed hands in Sep 2016.
That's one property, compared to 70 that had appreciated. And, the sale of that one property will have a story - maybe the previous owner overpaid in 2016. Maybe they died there and it needed a complete refurb. Maybe it's got Japanese knotweed. Who knows? But statistically, 1 in 70 is an outlier, not a trend.

You have a go. Pick a postcode, any one you like, and find me an area where prices are dropping in a statistically relevant number. And if the two month lag is so upsetting - set an alarm, and come back in February, and we'll check again. If I'm wrong - I'll apologise. If you're wrong ... perhaps you'll admit that anecdote is a terrible basis for decision making, when empirical evidence is available.

Thank you for providing a source for actual impartial data rather than just the vague "I know it's true because I read it somewhere once ..." that certain others on here use to "back up" their viewpoint.

I just put in the postcode NW51UE as I know someone who lives in that postcode, it's Kentish Town in London. Seems like no one sold at a loss there and the data goes back to 1997.
Obviously there will be some losses in some London postcodes but as you say, there will be specific reasons for this and they will be very much in a minority.

Pick a postcode, any one you like, and find me an area where prices are dropping in a statistically relevant number

Where did I say this though?

As you said you need to look behind the data. Why are you talking about houses that have sold around the country. I was only referring to London flats & as I said houses here have increased in value & many flats have sold for more than they paid like mine did, because of when they were originally bought.

I specifically said the issue affected flats that had sold twice in the last few years & that flats hasn't seen anything like the growth pre Brexit.

And if the two month lag is so upsetting

I don't even know what this means?

I just put in the postcode NW51UE as I know someone who lives in that postcode

So did I & there weren't any flats that came up that had sold twice in the last few years so I'm not sure why that is relevant to the point I made.

Unless you bought in the last 2 years I can't see many selling at a loss.

Yes prices will go down but for example we paid 500k for our house 6 years ago, when we remortgaged after 5 years, the value had gone up to 780k. Looking at similar houses now, I'd say it would sell for around 700k, so from the peak price we have 'lost' 80k. But the reality would still be that the price had gone up by 200k

This will be the reality for most who bought pre pandemic

Flats on the other hand have massively stagnated since brexit I agree

www.bloomberg.com/graphics/2022-london-property-prices-apartment-values-fall/?leadSource=uverify%20wall

This article has a nice graph showing london flats & house performance from the Land registry.

www.ft.com/content/febf2512-675a-463e-8876-b5347135dbf6

And this article talks about what's happened to flats.

@Alexalee I only moved to a house last year & my ftb brother went straight for a house this year. Neither of us are particularly worried about price falls although I do think there could be stagnation, depends on the recession & what rates do. My mortgage would be £700 more a month if I had bought recently which is not insignificant.
Buying is still much more preferable then renting & my advice would be future proof as much as possible. For the average FTB, don't buy a flat (unless that's what you want long term), don't overstretch, think about energy efficiency & be mindful of big renovation projects, overpay. Long term it will work out for most

Definitely better off in a house than a flat

But you make the point yourself there about affordability, an identical you right now having to pay 700 a month more for the same thing would obviously not be able to afford the house you bought

It depends on individual circumstances, we didn't max ourselves & got a great rate so that £700 would just mean less savings/holidays. Personally though I would find it quite difficult to accept that I was having to pay that extra just in debt, seems like such a waste!

The FT one is behind a paywall and the other one just says that average prices of London flats have fallen 11% since their peak in August 2020.

I think most of us are aware that the prices of many London flats did suffer during the pandemic from their lack of outside space, plus more people working from home. The good news for London flat owners is that this trend away from London will inevitably be reversed as lockdown becomes more a nasty memory. The indications are that while prices will continue to fall next year, by 2024 they will be picking up with positive growth again from 2025.

The forecast for rental values shows increased prices every year for the next 5 years in London and the whole of the UK so maybe 2023 would be a good year for first time buyers to consider getting onto the ladder?

www.theguardian.com/business/2022/dec/21/london-extends-lead-as-most-searched-uk-location-on-rightmove

www.savills.co.uk/insight-and-opinion/research-consultancy/residential-market-forecasts.aspx