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.

But I do appreciate your amazing contribution to the thread @80smonster 😆

How do they value a house that is a wreck on a road where nothing has sold for 15 years? Every road where I am has wildly different values and you can’t look at sold prices on X Road to work out the value of a house on Y Road.

You’re naive if you don’t think estate agents over value. There are ones in our area who everyone knows overvalue.

Yes, each agent looks at the desk top valuation and then looks at what their agency has sold (houses that are SSTC, in legals but not yet sold) recently and make an estimate based on this. If one agents valuation is way offer another, you should ask them about agency sales on your road, as proof of their valuation. Agents work on commission, so wildly overvaluing properties works against them, not for. Also the bank will only loan what a property is worth, so there is only some wiggle room in pricing if a mortgage is to be sought.

They look at the next road and adjacent roads in the postcode and take into account period of house building and condition.

@kirinm I think they own a snazzy suit! 😆

pulling from land registry sold data

which comes through instantly obviously

That’s why you can ask the agent you are using for selling if they can share the details of houses in the legal process. Usually they can give you ballparks.

We will just have to agree to disagree.

The key to finding a good house is finding neighbours with similar aged kids who are going to stay so there is some sense of community. In much of inner London that has been eroded - that is partly why people are moving to Zone 4 and 5 - as they then stay there, the kids schools do not change much (as in, there is not turnover of 8 kids a year leaving!), they all go off to secondary together etc. It is not just price that matters to many families anymore. Then, it seems those areas gentrify anyway and there are tons of after school and holiday clubs etc. Once families move out, it is not the same anymore. Mine are getting older now but I would move out now too. It is the dirt/crime etc - although for me being close to culture is what matters more now and getting home. When the DC were little though I wanted them to do play dates at friends houses on their own street, with a mix of demographics, teachers, artists, musicians, not just lawyers and bankers. I think that is why people are moving out, for some normality and community feel.

But they can’t do that here because the roads aren’t the same. They don’t have the same draw.

Slightly outing but I live in an area where there are 4 roads which are considered the best roads. It is a conservation area where one company built the entire area back in 1870s ish so they all look quite similar although differ in size depending on the road.

One road has houses for £1.1-1.2 (3 bed terraces). Another road has 3 story big Victorian villas - £1.8. Another road has 4 story Victorian houses but not as wide - £1.4m.

The road on which I’ve offered is in the same conservation area but the road just isn’t anywhere near as nice and the agents know that. Yet they’ve priced it as if it as if it was. Nothing has sold on the road for years so there’s no easy comparator.

That's a good point @Araminta1003. The road I grew up on had lots of dc of similar ages & we played on the street/at each other's houses & all the families were very friendly. But the houses are now 2.6m plus & the adults that lived there still live there with very little new blood.

Where I am is very baby & toddler heavy (although less so in recent years) & there's less of the older dc. I know schools rolls are falling quite dramatically (I work in education) particularly in inner London.

So many of my friends left during covid - we toyed with it. From my dcs class over half left since reception.

and there are tons of after school and holiday clubs etc

This is one of the draws for me as dc do quite a lot of extracurriculars. Some outer areas have a lot more within walking distance whereas where I am you have to travel more & the traffic is a pain. I have also noticed more tweens & teens on the high street in little groups whereas I don't really see that so much where I am.

Also the newer people to my parents road are a different demographic. The dc only go to private school & they are bankers/lawyers which you would expect with 3m houses.

In that case they use the postcode to create a comparison. Generally they look for typology, scale and condition. Conservation areas I would expect pricing to be consistent with other houses in the conservation area. Depends how big the roads are, too. Generally in London that isn’t hard, there are lots of houses for sell and lots of sold data to review. Rural properties may be harder to value.

I know my conservation area extremely well. I’ve lived here 10 years and have been looking for a house for the last year. The pricing is different on every road.

Are you an estate agent? I’m finding it very hard to understand why you refuse to accept what people’s experience is with overvaluing.

I’ve bought and sold many houses, but am not an agent. Agents can whack a little extra on, but nothing that would prevent the property from being mortgaged, since a mortgage relies on a bank valuation. What agent would overvalue to the point they could not make a sale? You seem quite confused about how the property market works. Are you a renter?

Gosh could you be any more condescending? No, I’m not a renter. I’ve just sold my property in the conservation area I know extremely well.

I do unfortunately have a lot of experience with estate agents. The one we are dealing with now told us the renovation house would be a quick sale as the vendors had inherited the house and are chain free. In fact after a land registry search I established that the owners haven’t even gone through probate and have, since making the offer, now been told that they are buying not going into a rental.

I know that I know more than some of the agents around here.

No, I’m not a renter

What an odd response

Why is that odd? The poster asked me if I was as if to suggest that I don’t understand the market. I’m just clarifying that I’m not a renter.

@kirinm Sorry I meant the response from @80smonster was odd to ask whether you were a renter! It doesn't make any sense.

The trick with estate agents is to put everything in writing, on email. What is said orally is often just sales pitch, to be taken with a pinch of salt.

This is a really interesting discussion.

We tried to sell a Victorian conversion flat last year, dropped the price twice, then took it off the market to rent it out.

Feedback was that buyers could buy an ex council house for the same value, or a similar flat but ‘freshly done up’, in the next postcode. Our neighborhood is considered desirable (parks, high st, community, tube station) - the next postcode not so much, but buyers seem to be compromising location for value.

Number of bathrooms seem to be a bigger sticking point than kitchen size/gardens, no one wants just one bathroom any more! That surprised me, I’d much rather have generous rooms than squeezed-in en suites.

We’re now thinking of going back on the market but want to be realistic about pricing. The press keep saying that prices are slowing but still rising, but our experience suggests a drop in price to pre-Brexit & pre-Covid values.

Estate agents are saying they can still achieve the price we listed at last year, I just don’t see it.

It looks as if you may need to look closer to home to find the blindly over optimistic poster instead of accusing @strappyshoe!

Even Rightmove has commented several times in the past 2 year that sellers need to be realistic with their asking prices. There is so much over valuing by sellers and estate agents. This is absolutely clear if you look at the amount of reductions on Rightmove since 2022, which was market peak in the majority of areas (certainly in real terms). As I said earlier, I have seen masses of houses coming to market at wildly unrealistic prices, making small reductions and still not selling, popping back up the following Spring, changing agent, another small reduction, still not selling, etc. I've even seen the list price of new builds being reduced in multiple areas. These things are not signs of a rising market.
If you followed the property market, you would know this. That's before we mention the generally economy and the demographics that @strappyshoe has talked about.

Exactly. The demographics of areas have massively changed because house prices have totally outstripped incomes.
I also agree that moderately sized properties are likely to be popular, although I also expect to see an increasing trend towards 2 or 3 generations sharing housing. I've already seen this very clearly myself amongst the lower earning demographic.

Yep, the house we are looking for is going to need to be big enough that our DD can stay as long as she needs to and possibly my older DS can move back in to save!