Will SE London house prices go down?

[mumtobe245]

I’m looking for advice on whether the price we are offering for a house in SE9 London is reasonable.

The property has been on the market since September, with a Rightmove guide price of £700k–£750k. Recent sales on the same street show a wide range: one house with a poor interior and needing a new kitchen sold for £605k in April 2024, while another, recently extended with a high-spec open-plan kitchen, sold for £990k in July 2023 (all of similar size/ number of bedrooms)

The house we are interested in is quite dated and in need of modernization, so its condition is closer to the £605k property than the £990k one.

We made a cash offer of £650k, which was rejected. We were told that another offer of £700k a month ago was also rejected, and the seller seems to expect a “specific figure.” But that was a month ago and seller had since reduced the guide price on RM (to 700k).

We really like the house, but also
are wondering whether the market in SE London is softening. Should we wait for the seller’s expected price to adjust, or consider increasing our offer now? We are able to go up to £700k.

No one has a crystal ball but I don’t think house prices will go down. New ones just aren’t being built so they’re becoming more and more scarce and hard to buy. You can offer but the will likely say no.

In our bit of SW London prices have definitely gone down a little. Having said that, how much do you want the house? I'd personally be worried about losing the opportunity to buy it.

@Motnight we do quite like the house. It ticks all our boxes and would be a good family home

Another piece of context is we are not in a rush. We don’t need a new home for another 2 years and could wait for another similar house to show up, although don’t know how likely that is

Hold your nerve and do it overlay. You agreed a price you were happy with and it was rejected. Offer that again. Walk away again. I did this with a house. It took two years but we needed up buying it for less than we originally offered.

In SE9 (Eltham right?) I wouldn't expect them to go down if they follow the pattern of other outer London areas in recent years. House prices might be going down but in an area where they started out cheap they are more likely to stagnate I think. People think they've found an affordable area of London and then everybody wants to buy there and it drives the price up so it doesn't necessarily follow the pattern of the rest of London even.

The problem is that the housing stock itself is fine at best so it just seems like terrible value!

If you're not in a rush though, I wouldn't push it. The main thing is what you can afford and want to live in for the next number of years and if that is a long term thing, these fluctuations in price probably won't make much difference in the very long term unless everything goes really tits up in the market.

@Poppingbythat’s a very interesting point about Eltham being affordable and not necessarily following price trend of wider London. We are not local to SE London so this is definitely helpful.

We actually find the housing stock to be quite decent (lots of 4 bed Edwardian semis, which is what we are after), but are nervous about market tanking after we buy

The market might tank after you buy but that's the risk you take when you buy a house anywhere. If you're planning to live in it for a while the main issue is if you can afford it. If prices tank to the extent that you can't remortgage when the time comes because houses in Eltham are not worth what people paid for them, given they're on a direct rail line into London and were RELATIVELY cheap in the first place it is likely that the problem will be much more widespread and there will have to be some government intervention.

I'm not telling you what to do but as someone who is quite risk averse I have always fixed my mortgage rate for as long as possible. This has ended up costing me more than it would have if I'd been more agile or prepared to take the risk of interest rates going up high enough that I couldn't afford them, but it's worth it to me to avoid that worry.

Sorry that's an essay but what I mean is as long as you don't think you're being ripped off given the local market the most important thing is how much you want to live in the house, how long you want to live there, and that you get the type of mortgage you're happy with. If you're buying to make a profit I wouldn't bother. If you want a family home for a good few years in that area, a 4 bed semi 30 mins away from Charing cross for 700k doesn't seem like a bad bet.

Honestly £10k in the grand scheme of things is nothing.

Just buy it if you like it that much.

If the sellers are looking for a certain price, is it likely that they don't need to move, but woukd fornthe right money? If so the house is more likely to come off the market than sell for a reduced price.

Agree with PP. You need to treat it as buying a home, not an investment and balance what you can afford and what you need to pay to get the house you want.

It’s a question of supply and demand. Eltham is pretty mixed. But if you are looking at one of the Edwardian houses with easy access to the station, (Glenure, Westmount, Beechhill etc) they are highly sought after even when not renovated. Nicely proportioned, no nearby social housing, great commute into London, accessible green spaces, decent schools etc. All the things between the commons offers in Clapham but at less than half the price.

If I were selling there I would wait it out if I could. There will be a lot of families priced out of SW London and thhis is the kind of area they will be looking at. Nobody really expects to sell between Novemeber and February.

In September and the autumn the market was so slow as everyone was spooked by rumours about the budget.

I think it will pick up after Christmas - properties around me (a similar 'affordable' area in S London) are already selling a bit faster and more coming in to the market. Prices did fall a bit last year but my sense is that they will now stabilise or go up again.

I think it is worth going back to the agent to ask if they know whether other similar properties are coming on line in the new year. You are still interested in that one, but not prepared to go above X [a tiny bit more] for a house that you need to replace a bathroom and kitchen or whatever. They will in all likelihood feed back that you are still looking.

Problem is that most people living in a dated but otherwise solid and well kept home won't see the difference between the higher priced property and their own. That's your choice to spend more money, it's perfectly habitable. A house in poor repair is a different story.

Bear in mind that the cost of building materials is probably not going down so if you are planning on some fairly major investment, waiting two years will probably cost you the £50k anyway.

But do you really want to spend the next two years sitting on the side-lines watching the property market, seeing if prices go this way or that, or putting in offers, etc?

Most houses will need some sort of work to your own specifications - one thing is certain though and that is the price of labour and building materials will rise.

Suburban family homes will always be in high demand so if you see a house you like I would go for it.

We would all be rich if we could second-guess the future prices of the London property market!

Market is softening but it depends on the opportunity cost for the specific seller to wait it out. Buying from BTLs is usually where you will find most value.

Eltham prices are unlikely to go down. The same goes for other affordable SE London areas, like Lee and Catford.
So many people are buying in these areas now, as they are being priced out of Hither Green, Blackheath and Greenwich. Eltham is much more likely to go up in price.

Are you buying a home or an investment? No one knows what house prices will do in future in your specific area. Only you know if the house is worth 700k to you compared with other houses you could buy for around 700k.

No one will know when the market is at the bottom or the date prices start to rise. Thats why I’ve always just bought the best house I can find at the time I want to move. If it’s a family home it doesn’t matter too much what happens to prices over the next year or two because I will hopefully be there for quite a few years.

Thanks all. Some very great insights on SE London market, as well as a very good point on buying a home vs an investment.

We are buying a family home, with a view to live in it for at least 10 years. So I agree the immediate market fluctuations shouldn’t matter too much in our decision making.

The thing is we don’t need the house for another 2 - 2.5 years. So the question we are facing is whether to buy this house now for 700k, or do we wait for a bit longer and maybe could find something similar at a lower price, given that we are not in a rush.

A house on my street in SE London just went for a million and we're defintely not in what I would imagine others think of a particulaly boujie area. This was a 4 bedroom with a small extension.

I live in SE London 3 train stops further out from Eltham, bought our 4 bed house over 2 years ago for similar price, and value much the same 2 years on, but it’s irrelevant as we’re not going anywhere. We looked at the lovely grids of Edwardians in Eltham near the park but couldn’t afford even then, so the price you’re looking at seems reasonable. Loads of commuters get on and off at Eltham, it’s really popular, and catchment for some of the Bexley grammars. I wouldn’t worry too much about prices dropping or stagnating in the short term, it’s always going to be a great area for good size family homes, near to a great park, station and shops.

I understand that but no one can really see into the future re house prices though some profess to be able to.

Who would have guessed that house prices would actually rise during Covid? Most people would have predicted a crash. I discussed this with a few EAs at the time as my daughter was viewing flats at the time, and even they said the market had taken them by surprise.

This isn't the top of the market, it may not be the bottom either. But to try to gauge where exactly in the cycle it is is for a particular neighbourhood is pretty impossible.

I think this is just cold feet about buying a house to be perfectly honest. And I think that's completely understandable given how much money it is and how much control you actually have over the process.

My view is it's really unlikely house prices in SE London will go down in the next couple of years. They might obviously buy more likely to stay the same than fall. If something huge crashes the market all bets are off but nobody can predict that. If your plans are likely to change over the next 2 years - say, someone decides to take a job abroad or you actually don't want kids or something - sensible to wait. If this is your intended plan and you will be fucked over if prices are out of reach in 2 years, buy now. All you can do is weigh up how much risk you can or are prepared to take.

No one can tell you what future prices will do but you can monitor direction of travel - up, down or sideways - and make judgments based on that. Use Area360 Area Profile (Google it) to see what prices have done for different home types in a specific location over the last 10 years.

I’d say very unlikely to go down in price, in real value terms they’ve gone down already or at least stagnated over the past 4 years. I’d actually expect a large increase to catch up with inflation and the rest of the country towards the election when Labour are leaving, coupled with London returners now redundancies are on the increase and remote positions are on the decline.

I think you need to ask yourself whether the supply of family houses in that area will increase (NO) and whether the demand for those houses will decrease (also NO, if anything it will increase as families are priced out of SW London). So prices are not going to drop.