where next for house prices?

[daysoftheweek]

yes sorry that old chestnut again.....
we are S London

all the agents round here are telling us lots of BTL landlords are selling up

one of my rightmove postcode searches has suddenly gone from 4 pages of over priced c^&p to 8 (and i mean over about 2 weeks)

so the market is being flooded with what are generally overpriced poorly maintained properties

still think it will take a rise in interest rates (coming but when?) and a rise in unemployment, interestingly a local public sector organisation i know well has gone from planning for 15% cut in budget to 15% cut in staff

still is any 3 bed terrace really work over 1 million even if it is SW11?

met someone the other day who told me prices in S London didn't fall the last time!!!
predicting 505 down for some places even round here.

I don't know the answer I'm afraid! But I live in SW London too, know a few people buying and selling at the moment and it seems that prices are definitely around 2007 levels. I guess one thing to bear in mind around here is that public sector workers are not the ones buying the million pound terraces - it tends to be (yes you've guessed it) finance sector people. The redundancies have already happened in that sector so it seems a bit of confidence (and bonus money) has returned to fuel this market. I wouldn't be surprised if there is a downturn in towns where the public sector is a mainstay employer, but I don't think I'd hold out for mega price falls in SW11 any time soon...

The press forecasts that prices in London will go up, possibly because they have already exceeded growth expectations. I don?t believe in sudden growth though. Maybe 0% within the next 12 months and up to 5% within next 5 years, but definitely there will be some ups and downs in between.

I think down over the next 2 years and then steady for years.It seems that the government went to any lengths to preserve the house price bubble and avoid the required correction to make houses more in line with wages.the tories will not be so kind I'm sure!I sold in March and there was definitely a return to high prices between xmas and about April because of low IRs and quantative easing.the agent who sold ours was selling more than at the peak in 2007 in January this year I am in teh SE. We have just had an offer accepted on a house last week and things have def slowed and sellrs are more open to offers than even a month ago.All the BTL are giving residential sellers competition and are happy to accept lowish offers to complete in time to avoid CGT rises.This will bring down other houses prices around them.

I think it depends what happens to interest rates. I think if they go up much there will be a lot of people who will struggle to pay their mortgages.

SE commuterbelt and London will go up; the rest of the country - who knows.

Well anecdotally from where I am (SW London, just inside M25), in the last month there has been an unprecedented number of price reductions, albeit by less than 5% in most cases, and a large number of previously 'sold STC' houses have come back on the market. I think it would be safe to say that very little has actually sold, to the point of completion, in my neck of the woods during 2010.

I think the only thing stopping prices going down around here is owners not being prepared to sell at a lower price which obviously has an affect on the number of transactions.

Prices are going up in SW11. Poor quality properties are sitting on the market for a while but anything decent is going within a few days. Just had one go round my way for in excess of 1 million and that was a terrace that needed complete refurbishment. I thought the asking price was ambitious but it went in about a week. Nappy valley is much in demand!

londonone out of interest where was that one that you mention?

Salcott road, off northcote road.

Salcott road, off northcote road.

property.jphomes.co.uk/salesPropertyDetails.do?p=63207

cheers

Depends on what happens with CGT and public sector job cuts!

Buy based on your long term affordability. I think that the risks are fairly well balanced/symmetrical.

-Most forecasts are fairly biased, they are mostly produced by research arms of agents. There is a small futures market from which you can imply some sort of forecasts [http://www.tullettprebon.com/Announcements/propertymthly/PDL201004.pdf here] but this market has its own dynamics and there is never 100pc certainty in predictions.

-I think a flatish market is most people's best guess.

_Take you time to find the right property- you have to lie there for a long time

-Consider 50pc fix rate, 50pc tracker (HSBC, First Direct have excellent rates) so that your bets are hedged.

forecasts at the bottom of this page from the futures market

But note that this is based on the general Halifax property index and isn't specific to property type/location

You can talk it up or down:

On the downside there is
-Sovereign debt crisis (Greece etc)
-public sector cuts
-long term interest rates rises to curb longer end inflation

Upside:
+UK is supply constrained especially detached family houses
+low short term interest rates
+The banking sector is recovering and stable employment-wise
+If we have general inflation spike then tangible asset prices like property should experience rises
+Fall in sterling makes UK property attractive/cheap. We have in fact had a large nominal fall in prices in dollar terms
+prices sticky on the downside

I had a nosey at Salcott Road - wow, that's realy expensive. I almost bought a flat on that road in 1998 for about £85k - how times have changed.

I'm in shock!

where is Sacott Road then?

Just off Northcote Road in Battersea - very Nappy Valley.

there you go 85K in 98!!

long-term affordability if we are talking about paying off 1,000,000 pounds compared to 250,000 that says it all really think about how many hours you will have to work to earn the 750,000 (after 40/50% tax)

thing is not everyone can be a banker, in fact most of the bankers I know don't live in SW11

I'm still seeing tulip bulbs and pryamid selling and thinking the bubble has to burst sometime

paying 1,000,000 pounds for your house is OK when interest rated are at 0.55 and you don't intend to pay off the capital

my banker friends pay the repayment part from their bonus but how many people are getting 100k as a bonus every year? they're not just SW11, but SW19 and N1 and all the places inbetween as well

londonone it was sw11 I was thinking about how clever!!!

also lots going up as sold and coming back on here.

i wonder what the salcott road one will eventually get, come back and post on here if you find out and can remember.

I don't expect prices to surge in either direction as people will only take a loss if the are moving up the chain or if they are forced to by unemployment etc. This is the reason why residential prices only dropped by 20pc compared to commercial property that fell by 50pc at one stage.

In Japan people inherit house + mortgage from their parents. IRs remain low. I think we could see low rates for a while yet. Although the problem is inflation due to falling pound.

I live in SW11 (very close to Salcott Rd) and was talking about this house yesterday with the husband. Our impression is that nearly anyone who has moved into the area in the past five years or so must be working in the City or working in a sector that services the City. It distorts not just the property market but so many other aspects of the local community as well. It feels as if we are living in a bubble here - not just a housing one - but one where there are very few poor people (natch), very few old people, very few ethnic minorities, there's not much in the way of normal, family-run shops even on the side-streets away from Northcote Road. It feels ever so slightly like a very large gated community.

so what do you get for a 800k semi in Salcott Road then?

We're in SW London too and in this area, prices continue to rise, and I think will continue to do so as, compared to areas such as Fulham just up the road, this area is underpriced by around 20-30% and, as ever, there are more people wanting to move in than family houses available. The combination of good schools, lots of green spaces and facilities for families mean that it is always sought after by young families. There is a lot more on the market than has been for some time, but they still seem to be selling within 4-6 weeks, if not sooner. Things plateaued around a year ago but anything in good condition still seemed to be for a good price, whereas overpriced tat hung about unsold.