South London house prices stagnating/slowing

[strappyshoe]

So for a long time I have thought London prices were separated from reality, eg a bog standard terrace in not a great area with average schools costing close to 1m & wondered if there would be a tipping point. Was visiting parents on the weekend and noticed one of those flyers advertising a recent sale. Now this is a highly desirable area with a fairly insulated target market but the price was not that different to what it would have been some years ago which if calculating inflation would be a loss. And this was a prized house on a prized street.

Have family & in-laws in other parts of S London and have noticed a lot of property particularly at the top end sitting on the market and looking still overpriced.

Is it because of lack of equity in recent years making it hard to make the traditional move from a flat that's gone up in value to a house. Plus renovation costs? Is it the high costs of borrowing? stamp
duty? Hybrid working & huge fee increases for private school pushing families from inner London to Outer London. Do people just want more for their money?

I remember reading a theory that when "boomers" start to die there would be a glut of expensive property (family homes) for a sale at a similar time which would devalue prices because there were not enough buyers. I didn't think it sounded right but now am not sure.

I plan to move in the next few years but because of stamp duty it will be the last move. I'm also toying with moving to one z4 instead of where I am.

@XVGN thanks will have a read.

We aren’t far from Brockley and that’s the sort of increase we are seeing or worse. I’ll be very interested to see what things are actually selling for because I think there’s been a lot of offer high and reduce the offer down the line going on. It’s a shame the land registry takes so long to update.

Could they be sliced into flats which are still affordable for most professional couples (dh and I were looking at flats like that though dh prefers pre war purpose built so thats what we ended up buying). They wouldn't have cladding and traditionally service charges have always been arranged between the two flat owners on ad hoc basis.

2 flats actually is worth more than 1 house.

Do you mean she has had lots of interest at that price point or she hasn't?
I definitely think that East/SE London has been holding up much better than central/N/SW, as @kirinm says, but it will be very area dependent. It could be that zones a bit further out become more popular but, of course, it will all be very dependent on employment.

Live in a different area but massively agree re baby boomers - have renovated a few houses, one recently and the costs are truly astronomical - my parents just cannot get their heads round them. They kept mentioning their friends’ houses selling - all beautifully kept but owners in complete denial at 75 that they last ‘did them up’ when they bought them in early thirties. So windows, wiring, plumbing, heating all needing redone and then past a certain amount of work on the walls they all need to be insulated (if older house). It cost us much less to buy a wreck which essentially needed the same amount of work as a ‘naice’ house. There are nice 1930s houses here on for £800k that I can see needing £400k of work - there’s no way the end product would be worth £1.2m, we are far from london and even professional salaries here would not support that.

I agree. Sellers just don’t want to accept how much renovation costs now. Estate agents probably know but pretend not to.

@rainingsnoring sorry I meant lots of competition at that price point & you do tend to get bigger houses for that money vs parts of SW London.

I agree. Sellers just don’t want to accept how much renovation costs now. Estate agents probably know but pretend not to.

I agree with this, there are quite a few homes where I am looking that clearly belonged to older people but they are just completely overpriced when you factor in renovation costs.

Estate agents just want the business

Tbf it might not be the old people pushing prices but their families.

My friend is very keen to sell as she wants to move further out for schools. She doesn't like the secondary options (I don't know anything about them). I think she had hoped gps would help with fees so wasn't so concerned but I don't think that's on the table now &
with her increased mortgage costs and utilities etc she can't cover it.

I actually think an older generation just don’t realise how much things cost! A sibling has been thinking of moving, has a perfectly secure reasonable full time job, if buying on her own she is now able to afford a very good (and nice) ex council house. My parents are just like ‘but… but…’ dreaming of the detached bungalow with high hedges they see as ‘what People Like Us’ deserve. they can’t see that all their moves up the chain at the right time gave them equity that we would now have to pay for - like half a million pounds of cash! But salaries haven’t changed. It’s mad.

The baby boom era was a blip, not the norm.

Really interesting discussion. We bought mid last year moving from flat to a big house. We disregarded anything that needed major work (beyond some paint and finishing touches). Not only did we not want the hassle but as pp have correctly said the costs post Ukraine war are astronomical.

We also had to sell a family member’s flat after their death last year - they’d bought at the peak of the market just before the pandemic and we sold for about 10% less than that because the market for flats had dropped so dramatically. There was a good article in Times property about flats not selling a few weeks ago. And agree there are still so many massive developments - it boggles the mind. There was one not far from
us that clearly went bust halfway through and was sitting empty for a year but it looks like it’s been sold and restarted again.

I do think decent sized houses with 4-5 bedrooms in desirable areas will hold their value though because there really aren’t that many of them compared to flats.

Not really sure what this post is about other than blind optimism. The market is going up in south London, even in zone 4. A house we paid 555k for (5 years ago) has recently been valued at 900k. Whether we would find a buyer quickly or not is kind of by the by, because providing we were happy to wait until an offer of the correct value came in, materially prices have raised and we would stand to benefit from the rise upon sale. You may see all sorts of houses ‘kicking around’ but that doesn’t mean they will be reduced.

Estate agents value houses based on condition - same for bank valuations.

I'm not sure what you mean by blind optimism?

You may see all sorts of houses ‘kicking around’ but that doesn’t mean they will be reduced.

I can see houses that have been reduced though in lots of areas.

Estate agents value houses based on condition - same for bank valuations.

Yeah they never overvalue to get the sale...

They don’t here! Bank valuations do.

@BooToYouHalloween I remember saying on here a few years ago that I could see flats were selling for same or less than their previous sale price if bought post Brexit. For some reason so many people said I was making it up but the data shows that now.

A lady i know who sold her 5 bed family home- the people who bought it were developers who wanted to convert it to luxury retirement flats. Also an article in the Times about how many boomers want to rent now (avoid Mccarthy and stone style service charges) as it enables them to release money while living in age appropriate housing and preventing falls that would lead to a premature exit to a care home

I do think decent sized houses with 4-5 bedrooms in desirable areas will hold their value though because there really aren’t that many of them compared to flats.

There was an article in the Times a while ago (no longer get free subscription at work) that said the classic 3 bed semi with off street parking would be the most price resilient as families (fewer dc) & down-sizers would be competing for them.

There is a reason why most London councils have a ban on converting 3-bed family houses into flats. The limit is usually anything <130 sqm.

Banks and estate agents use the same desk top valuation system, this uses local data (of properties sold of same type/size sold on the same roads/adjacent roads) - pulling from land registry sold data. You may find it overpriced, but that is a separate issue.

@80smonster how come whenever I have sold a property I have had different valuations from estate agents before I went to market?

You may find it overpriced, but that is a separate issue.

It's not about me, it's a thing 😆

www.thisismoney.co.uk/money/mortgageshome/article-12168341/amp/Asking-prices-22-higher-homes-sold-estate-agents-overvalue.html