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.

My part of SE London didn’t drop in price this year - it massively increased. Nothing new has come on the market for months though and I expect there’ll be another mad rush once it picks up after Christmas.

As you say, type of house is important.

https://www.thisismoney.co.uk/money/mortgageshome/article-15238215/Buyers-BIGGEST-discounts-new-homes-decade-Seven-steps-negotiate-good-deal.html

Many families don"t want to be in London now though, combine that with the prevailing political mood and it isn"t easy to make predictions on demand and value.

https://www.standard.co.uk/news/education/london-school-closures-hackney-lambeth-interactive-map-neu-b1239420.html

People have been waiting for house prices to drop for 20 years and they never really have. Personally I would not wait.

I know that you're talking generally, but I can easily find places where prices are lower now than they were 23 years ago. Or we can look at central London where prices clearly are falling (red means that it sold for less than it was bought for in real terms)

We bought on Eltham 4 years ago. Our street is full.of 3 bed semis but prices are just like the street you described. Some are old with small extensions and are lower priced. Others have great extensions and loft conversions and go for the higher prices (not quite as high as the ones you're describing but they're bigger houses). We bought for 680.and prices in our street have remained steady on those 4.yeaes depending on the condition of the house. Huge demand and don't look like they'll go down

It's a lovely area to live in by the way.

Lower than 23 years ago?

Yes. For example

One example is not significant as you know. This house isn't even in London but Hartlepool and there could be an unknown reason for that particular house's fall in value like subsidence or something.

Wow, definitely not a good financial investment, but if someone enjoyed living there it was probably just like renting the house as well as the money from the bank? Why the jump in price between 07 and 08, was it the emergency rate cuts?

As a mathematician, you only need to find one counter-example to disprove a theory. There are actually many more if you want to check. Anyway, I have already accepted that prices rising are generally true. I'm simply making the case that you should not trust anyone who says prices always rise or that prices are not falling.

I would think large areas of London are not going to sell for what they did four or five years ago, rates, COL, general sentiment have changed too much?

https://www.ft.com/content/1bf94d50-93a5-413b-9258-0e2b8266998c

All prices tend to rise in line with inflation/wage inflation, houses price rises are mainly due to years of cheap lending which is going to be extremely hard to bring back and maintain.

I don't accept that cherry picking one very unusual example helps to prove or disprove anything.

Though like you I don't think that house prices always rise or never fall so we kind of agree overall.

I live in Eltham and just had our house valued (because my neighbours sold and I’m nosy). According to the EA, prices peaked in 2023 and have now stabilised. The houses you’re talking about (Corbett?) are always in high demand due to primary schools, proximity to park etc. As a bonus, it’s a great place to bring up a family.

Interesting take from the EA, did they give any reasoning? Most media I"m seeing seem to think London house prices and demand are under pressure, new-build sales down 60% etc.

I am looking for something to flatten my spare tyre.i have bought different brands but none seem tight enough to hold me in. Any ideas for a spare tyre nibivr

What the what?!

What the what!!!!

Nobody can tell you because it's just a guess.

It was tongue in cheek but my humour doesn't come across well on line!

The poster said people had been waiting 20 years for prices to fall so I posted the first page (most recent) of SW1 results which show multiple (not one) prices falling. That's not generally true everywhere for every home type but does illustrate that some people waiting are getting better deals now than a few years ago. I should have stopped there but I did respond to a question about 23 years with a specific example (I could have given many).

ah sorry ... sometimes nuance gets lost online!

My dh and I bought our first home in 2007 top of the market. We anticipated the bubble would burst (we both work in finance) but we decided the risk was totally worth it, as mortgage rates were bargainous in 2007 and over time house prices bear out plus we knew we could stay in the house and ride out a slump. In addition - we’d be paying off capital so there would be an asset; we wouldn’t be lining the pockets of our greedy landlord and horrible letting agent; and we’d have the benefit of home ownership - I’d own a washing line for the first time in my life!

Market crashed 2008 we went into shallow negative equity but we moved again in 2014 once we were back in profit. Our original purchase was £315k and we sold for £375k. Our next purchase was £450k and is now worth £685k. We are now mortgage free.

The point is - YES there is risk but there is ALWAYS risk. You may be in the same position in 2 years as now; all you’ve done is waste two years renting (I am assuming you are renting).

NOT buying is a risk too.

I know what you mean but if you are buying a property as a home then it's never really a risk because you're not treating it as an investment or pension. For those people buy whenever you can. For everyone else, bricks are a terrible investment - not diversified and not liquid.

@KeepPumping According to my EA, boom in 2023 was driven by post COVID confidence in the market then it flattened out again due to concerns over interest rates.

SW1 is not comparable to Eltham as it’s driven by big budget property investors, whereas SE9 is families looking to put down roots.

Houses in the 500-650k range go fastest, as theres a shortage coming onto the market. The 2m properties overlooking the park on Glenesk or on Court Rd are a harder sell.