Houses gone DOWN in price after five years - is this normal?

[ardeng]

We've seen a house that we like and want to make an offer on it. But to my surprise I see that a couple of houses on the street have gone down in value. I've never seen this before in all the areas I've been looking. Would you go for a house here, or is there a reason you could think of for this? I've included a picture with the values.

Two architects in the family. The price of bricks, mortar, wood, steel, the rules on insulation of new builds has all gone mad since COVID. The carbon zero rules, heat pumps, solar panels, passive haus have pushed the price up too. They stopped short of water sprinklers in every room because insurers said that it would make property uninsurable for contents.

Re point 4. please don't worry. In the long term, property always increases in value.

In the short term sometimes property increases in value, sometimes it decreases in value and sometimes it stays the same.

South coast of England: We are seeing a widening of the gap between 'perfect condition' and less-than-perfect. Also we do not see any "Doer-upers" going to private buyers. Always a tradie.
We are watching because we are selling a well worn house. It was let and we couldn't get the tenants out. At last they are going. We need to replace the boiler and the radiators.
We bought for £430k 2018. Advertised for £600k just after Covid. Didn't sell. Let it again and now advertised for £500k.
Similar original sizes have recently sold for £600k but look very nice if you like grey timber cladding.

This is a somewhat disingenuous question. If you are old enough to be downsizing you are old enough to remember negative equity in the 90s. And if you looked outside your south east bubble you would be aware that house prices stagnated in parts of the north for over 10 years after the 2008 financial crisis. Now prices are finally going up in the NE but are slowing in the south.

The first house I bought I got all the documentation from when it was first built in 1922. The same family owned it for 25 years and they sold it for £10 (1%) more than they had bought it for. We bought it in 2003 and sold it 15 years later for £10K (5%) more. Houses are always homes but, like every other thing that people view as an asset, can go down in value as well as up. But you've still lived in it for a long time and had the benefits of that.

Again with a doer upper it's the cost of materials that makes it nonsensical to buy.

We know tradies who do it. But they slide the cost of materials into their business reducing profit. Send the lads there when there's a lull in their normal jobs because of inclement weather etc.

We're south coast of England and bought a doer-upper as private buyers in Sept 2024....

....but, we've done it loads of times - to live in, not to make a profit, which hasn't always happened - and DIY as much as possible ourselves (not heating/gas/HETAS or notifiable electrics), having picked up the skills to do so on the way. So much so that DH is now doing conservation building/decorating work for others (alongside his day job), which is not what he was originally trained to do.

Our current place needs everything done - having not been touched since the 1960s - including reinstating a reception room where the 1960s renovation stuck an integral garage in a Georgian room 🤬

The price of materials is crazy - if we had to pay trades for the whole project, we wouldn't have bothered.

Wow I wasn't expecting so many responses. Thank you to everyone. Several people have asked this, I'm old enough but I've only lived in the UK after these periods you mention.

@HornetFox thank you for the local insight. I'm not local so appreciate it. I don't care about schools obviously as kids grown up, but would you say the area is not that good then?

It’s not unusual for property prices to go down as well as up. I have a friend who like me lives in an upper in four in a block, also known as a cottage flat. Over a period of 10 years three of the four flats were on the market. The first one sold was an upper for £130,000. Two years later a ground floor flat in the same block sold for £105,000 and 7 years later the other upper flat was on the market for offers over £120,000 and was valued at £125,000. The last flat also had a buyers fee of £2500 on top which means the seller couldn’t afford the estate agents fee so it was passed on to the buyer. The last flat sold for £143,500 and with the buyers fee on top they paid £146,000

It makes perfect sense and you are absolutely right. Assuming you do lose the money you are still better off than if you had been renting because in those two years you have also had security of housing which renters dont have. Freedom to make the house your home which renters dont have. No one with the legal right to take it off you (unless you dont pay the mortgage of course) just because they dont want you to live there anymore.

Those things cant be valued in financial terms but it doesnt mean that they are worthless.

So as you say, worse case scenario you would be no worse off than if you had rented for those two years

To answer about the area OP I think it's nice but I do live nearby so perhaps biased! Been very happy in WD24 for more than a decade now.

When I was buying one of the houses near Callowland had some very strange right of way issues. Only found out as a man wandered past the kitchen window through the garden when I was being shown round. That was a different road bordering the park so worth asking before you get to expensive searches.

Could also be parking issue as a few years ago streets voted on residents permits or not and the first ones to say 'no' in certain directions are a parking nightmare.

Just trying to think of reasons why that particular street has gone down in price whilst others in the area are going up.

I think in general as we're only 15 mins from zone one of London a certain value will hold, although not everyone commutes now since the pandemic of course.

This.

I remember the negative equity in the 90s and losing money on our flat when we moved out after 2 years. It wasn't bought as an investment but still disappointing to lose money and the same happened with our first house.

But after that we were fortunate to make money from property prices increasing. There is never a guarantee that you will make money from property over a few years. Though that first flat of ours we sold for 60k and it's now worth about 450k so it's a shame we couldn't hold onto it.

Think of it as a home not an investment because it's hard to predict exactly when house prices will fall or start rising again and there are regional variations.

I think it will be because it is leasehold with presumably a service charge. People are now much more aware of the issues (high ongoing costs) with these types of property.

Also the initial devalution will represent the new build premium paid for the property.

If you put the first property and postcode in the nationwide calculator, it should have increased by 18% to £403k between the 2 dates, so it is evidently that property that is the issue rather than the wider market.

I'm in Brighton and my partner is a first time buyer, we are in our 50s. . We are about to exchange on a semi detached bungalow in a lovely area that was on the market for £450, we have watched and waited and had an offer accepted at £365,000 14 years ago I sold a two bed flat in Brighton for more than that. It's a crazy market.

How on earth is it ‘shit’ that house prices are coming down?

Looking at neighbouring roads with similar sized properties but Victorian, they have gone up in the same period.
Ashby Road the other side of the park is comparable in size of house but Victorian builds.

It's probably something to do with being a new build or that specific location with backing onto the recreation ground, health centre and the school. Perhaps noise and parking.

Which one are you looking at OP? I can only see this one for sale that's a 2 bed and it's gone up loads, although of course they might not get asking price.

https://www.zoopla.co.uk/for-sale/details/70832689/

It's very location dependent. Houses here have doubled, almost, in the last five years.

However, the houses are the same and we all need a house to live in. So it's not that houses are worth twice as much money, it's that the money is worth half as much house.

Yes. I lost £75k on my sale in 2024. Of course it happens… depends on the market.

Wow! That is a bargain.
andbungalows are so sought after due to generally having decent plots.
well done on your patience!!

Thank you for replies everyone. @Sunflower2461 thank you for that tool.

@HornetFox can you DM me please, if you're OK to. I don't know how to do it.

Good question, I think the OP is worried that there is something wrong with the house/area. Rising borrowing costs, the end of the stamp duty "holiday" which was designed to help developers, and general cost of living is for sure going to make a purchase five years ago lose value.

It"s not really a bargain but it"s a start. Houses need to start deflating in price quite quickly now so we can all get back to a more normal healthier society.