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.

If the central banks had not bailed out the entire system in 2008, you will know the details working in finance, things would not have played out like that for you. Do you think they will bail mortgage holders out this time if things go pear shaped again? I would argue that the main targets of the bailout last time were big banks and big bankers not the general public, they just got lucky with the drop in rates. What do you think will happen to UK mortgage rates if Japan start raising interest rates?

The risk is that you stretch yourself when rates are low and get caught out when rates rise and your fix ends, people will lose their house doing that.

Fair enough, BTL will be key in many areas because investors/landlords can just bail out (if they can find buyers) without worrying about schools, jobs etc. If all the rumours about landlords getting out are true that in itself could cause a price slump?

I think the majority of BTLs in London are one or two bed flats - and there has been a drop off in prices in that sector.
Would be interesting to know how many nice Edwardian London family homes were bought as BTLs. The handful of rentals I know of that in that sector are from families who have been posted abroad /elsewhere in UK but expect to return in a few years.

We bought in SW London during lockdown when demand and prices were going mad. I feared we’d overpaid but we needed to move so had no choice, but the last few comparable houses in our street have sold for 15-20% more than we paid. A house in London is a fairly safe bet, in my opinion. It sounds like maybe you’re just not ready to move.

South West and South East London very very different though. I live in SW London and my DD has just bought in SE London and prices vary hugely. I do agree that it's unlikely that properties will lose value but definitely possible.

@Motnight Yes, they are different but both London, over populated and under supplied. If anything, I’d say SE has a better chance of holding/ increasing value as it’s more reasonably priced to begin with. We paid nearly twice what the OP has suggested for a 4-bed Edwardian semi in SW.

If it’s in the Eltham Park area then it will hold its value as it’s close to a station with two lines, the high st and two very good primary schools and is in the catchment for one of the best comps in the Greenwich Borough. The big double fronted Victorians and Edwardians are very sought after family homes.

If it’s not in that part of SE9 then there might be scope to hold out a bit. It all depends on the roads.

Do you like the street and area? If yes, then what are the chances of a similar house becoming available when you are ready, and what are the chances that you will get it? If the market is hot, then there will be competition, and if the market is cold, then sellers may wait, and you may also wait, thinking prices will fall further. The market at the moment is not at its peak, which is a good thing for buyers — so if you like the area, street, and the house, then go for it.

Bank surveyors will be nervous currently and valuing on the conservative side so someone who is buying with debt might have difficulty closing the sale.

You're cash buyers and you should be getting a lot of credit for that. You have a lot of leverage at this moment. From what you say, I’m not convinced the seller is aware of how many property deals go wrong once the bank surveyor gets involved. (The buyer then needs to increase mortgage (possibly not an option), find cash from another source or go back to the seller with a reduced offer.)

You need to realise you are in a very strong position. Tbh if they want to sell, they should be leaping on your offer. If they don’t, it is they who are taking the risk. You can move on to another more motivated seller.

Get an email from the agent about the other offer for 700, stating whether it was in cash and whether the buyer had anything to sell?

How long have you been looking? There’s always houses coming up in Eltham. People move there for the easy commute and great primary schools whilst they have young kids, and then move out for secondary, it’s quite a fluid market.

In my bit of SE LDN (not Greenwich! But I looked near Eltham too), the market is stagnant, people want to move, upsize, move for schools but because they’re not achieving the price they want they’re not accepting offers and hence not making offers. I know people who don’t necessarily want to move but would if the right house came up and then put house on market.

There is a double fronted house in Glenesk on at 1.65. I think the OP is talking about a different location.