How far will house prices fall [volume 4]
Discussion
jonah35 said:
No but they sure as he'll made sure they wouldn't fall and thats what they did. Few people in london are in negative equity and we have sucked up lots of foreign money, collected lots of stamp duty along the way
I'd guess probably close to zero people are in negative equity in London. It probably isn't possible. Most are likely sitting on massive amounts due to the increases. My friends equity on his Hackney flat has gone from 10% to 95% in his flat in 5 years due to price increases. I agree it's ludicrous and I think it should happen, but I just can't see it coming crashing down. If it happens z4chris I'll happily meet you and buy you several beers on it
Surely we have had a fall and a huge one at that. Not a sudden crash though.
Outside of London and the South East house prices are barely back to 2007 levels, if you factor inflation in at 3% a year ( and that's conservative) that's a 25% drop in real terms.
Number of sales are well down too.
I know newspaper headlines extol prices rising against previous year but in real terms the trend over the last 7 years is downward from what I can tell.
Outside of London and the South East house prices are barely back to 2007 levels, if you factor inflation in at 3% a year ( and that's conservative) that's a 25% drop in real terms.
Number of sales are well down too.
I know newspaper headlines extol prices rising against previous year but in real terms the trend over the last 7 years is downward from what I can tell.
I'm a long time reader of this thread, some sensible views and comments but it's a bit of a bear garden overall isn't it? There's always been no shortage of posters waiting in the wings ready to talk down the market, always some special negativity reserved for new build too, heh.
In the time I've been reading this thread, I've saved up and become a FTB buyer in 2011 with a new build two bed semi. Made money on that and with some addition funds cobbled together reserved an off plan new build 4 bed detached 11 months ago, all set to complete in a couple of weeks time. In the time elapsed since reserving asking prices have risen £20k+ on very similar plots, so the equity isn't in bad shape.
Obviously prices can go up or down, but historically the trend only goes one way, especially if there's confidence in it still doing so. My advice to those readers thinking of taking the plunge and buying is, don't let the doom mongers put you off!
I know several people still convinced the market is going to tank and and that they'll get their dream house for a bargain price, I've told them they need to join PH. In one case, I know of someone who had the opportunity to buy in London a few years ago but didn't because they were bearish about prices, they've since been left behind by significant rises in the market, to their consternation.
In the time I've been reading this thread, I've saved up and become a FTB buyer in 2011 with a new build two bed semi. Made money on that and with some addition funds cobbled together reserved an off plan new build 4 bed detached 11 months ago, all set to complete in a couple of weeks time. In the time elapsed since reserving asking prices have risen £20k+ on very similar plots, so the equity isn't in bad shape.
Obviously prices can go up or down, but historically the trend only goes one way, especially if there's confidence in it still doing so. My advice to those readers thinking of taking the plunge and buying is, don't let the doom mongers put you off!
I know several people still convinced the market is going to tank and and that they'll get their dream house for a bargain price, I've told them they need to join PH. In one case, I know of someone who had the opportunity to buy in London a few years ago but didn't because they were bearish about prices, they've since been left behind by significant rises in the market, to their consternation.
okgo said:
Your advice is probably OK outside of SE and London. I would not want to buy now in the London area.
20k is nothing and understandably your position is different. But to look at stuff now, which for me in SW London area is 30% up year on year, nothing suggests now is a good time.
well said chap. 20k is nothing and understandably your position is different. But to look at stuff now, which for me in SW London area is 30% up year on year, nothing suggests now is a good time.
XJ40 said:
I'm a long time reader of this thread, some sensible views and comments but it's a bit of a bear garden overall isn't it? There's always been no shortage of posters waiting in the wings ready to talk down the market, always some special negativity reserved for new build too, heh.
In the time I've been reading this thread, I've saved up and become a FTB buyer in 2011 with a new build two bed semi. Made money on that and with some addition funds cobbled together reserved an off plan new build 4 bed detached 11 months ago, all set to complete in a couple of weeks time. In the time elapsed since reserving asking prices have risen £20k+ on very similar plots, so the equity isn't in bad shape.
Obviously prices can go up or down, but historically the trend only goes one way, especially if there's confidence in it still doing so. My advice to those readers thinking of taking the plunge and buying is, don't let the doom mongers put you off!
I know several people still convinced the market is going to tank and and that they'll get their dream house for a bargain price, I've told them they need to join PH. In one case, I know of someone who had the opportunity to buy in London a few years ago but didn't because they were bearish about prices, they've since been left behind by significant rises in the market, to their consternation.
Completely agree, they don't make land any more. Well actually they do but its so expensive to build an island or a build plot that this will not impact negatively upon the house prices.In the time I've been reading this thread, I've saved up and become a FTB buyer in 2011 with a new build two bed semi. Made money on that and with some addition funds cobbled together reserved an off plan new build 4 bed detached 11 months ago, all set to complete in a couple of weeks time. In the time elapsed since reserving asking prices have risen £20k+ on very similar plots, so the equity isn't in bad shape.
Obviously prices can go up or down, but historically the trend only goes one way, especially if there's confidence in it still doing so. My advice to those readers thinking of taking the plunge and buying is, don't let the doom mongers put you off!
I know several people still convinced the market is going to tank and and that they'll get their dream house for a bargain price, I've told them they need to join PH. In one case, I know of someone who had the opportunity to buy in London a few years ago but didn't because they were bearish about prices, they've since been left behind by significant rises in the market, to their consternation.
gibbon said:
vescaegg said:
Yeah my calcs were way off 
He bought it for £180k and put £18k in, it's now worth £650k. It's around 75% he has in equity now.
I know hackney quite well, where has he bought for 180k that is worth 650k with no extension/renovation in 5 years?He bought it for £180k and put £18k in, it's now worth £650k. It's around 75% he has in equity now.
gibbon said:
I know hackney quite well, where has he bought for 180k that is worth 650k with no extension/renovation in 5 years?
I'm not sure of the road but think its near London fields. Its a fairly swanky new build (or was) and I believe his neighbour sold for £600k around Feb this year. I was guessing at the extra £50k since then. XJ40 said:
I'm a long time reader of this thread, some sensible views and comments but it's a bit of a bear garden overall isn't it? There's always been no shortage of posters waiting in the wings ready to talk down the market, always some special negativity reserved for new build too, heh.
In the time I've been reading this thread, I've saved up and become a FTB buyer in 2011 with a new build two bed semi. Made money on that and with some addition funds cobbled together reserved an off plan new build 4 bed detached 11 months ago, all set to complete in a couple of weeks time. In the time elapsed since reserving asking prices have risen £20k+ on very similar plots, so the equity isn't in bad shape.
Obviously prices can go up or down, but historically the trend only goes one way, especially if there's confidence in it still doing so. My advice to those readers thinking of taking the plunge and buying is, don't let the doom mongers put you off!
I know several people still convinced the market is going to tank and and that they'll get their dream house for a bargain price, I've told them they need to join PH. In one case, I know of someone who had the opportunity to buy in London a few years ago but didn't because they were bearish about prices, they've since been left behind by significant rises in the market, to their consternation.
I honestly can't understand the mentality of going short on the housing market. If you are in a position to buy, then buy, you are always going to need somewhere to live, and the downside risks of being priced out of the market indefinitely are massive. I don't think there are many on this thread who would do down the achievement of buying a family home to live in, even if you do end up buying at the top of the market. As for new builds, that's simply a matter of taste, some people love them, others don't. The quality of them is highly variable.In the time I've been reading this thread, I've saved up and become a FTB buyer in 2011 with a new build two bed semi. Made money on that and with some addition funds cobbled together reserved an off plan new build 4 bed detached 11 months ago, all set to complete in a couple of weeks time. In the time elapsed since reserving asking prices have risen £20k+ on very similar plots, so the equity isn't in bad shape.
Obviously prices can go up or down, but historically the trend only goes one way, especially if there's confidence in it still doing so. My advice to those readers thinking of taking the plunge and buying is, don't let the doom mongers put you off!
I know several people still convinced the market is going to tank and and that they'll get their dream house for a bargain price, I've told them they need to join PH. In one case, I know of someone who had the opportunity to buy in London a few years ago but didn't because they were bearish about prices, they've since been left behind by significant rises in the market, to their consternation.
vescaegg said:
gibbon said:
I know hackney quite well, where has he bought for 180k that is worth 650k with no extension/renovation in 5 years?
I'm not sure of the road but think its near London fields. Its a fairly swanky new build (or was) and I believe his neighbour sold for £600k around Feb this year. I was guessing at the extra £50k since then. To state the obvious, that sort of increase is simply unsustainable.
Ok consider this
I bought just over 1 year ago, the price difference between now and then on the same property to buy is around 5 years worth of rent for the same property. We know it can't go up the same proportion again. You often don't have to jump in now, and indeed in many cases you would save money by not I think.
I bought just over 1 year ago, the price difference between now and then on the same property to buy is around 5 years worth of rent for the same property. We know it can't go up the same proportion again. You often don't have to jump in now, and indeed in many cases you would save money by not I think.
Edited by okgo on Thursday 9th October 12:06
Magog said:
I honestly can't understand the mentality of going short on the housing market. If you are in a position to buy, then buy, you are always going to need somewhere to live, and the downside risks of being priced out of the market indefinitely are massive. I don't think there are many on this thread who would do down the achievement of buying a family home to live in, even if you do end up buying at the top of the market. As for new builds, that's simply a matter of taste, some people love them, others don't. The quality of them is highly variable.
If you're in the position to buy a home in the area you want to live, that will suit your immediate needs, I'd agree. What if all you can afford is an unsuitable place which will cost you double what a similar rented place would cost and would almost certainly lose value when IRs rise? Not to mention cost more when IRs rise.Some may not think its worth the risk or the additional cost just to say you own it for now and will be able to leave it to someone (the government for the most part) when you croak.
Pork said:
Well, to add to this, I know a chap who bought a new build overlooking the reservoir there about 2 years ago, maybe a bit less. He paid £500k for it and his neighbour just sold a near identical flat for £5 short of a million. Apparently, it near identical but not as nice!
To state the obvious, that sort of increase is simply unsustainable.
I bought a warehouse conversion 4.5 years ago over looking regents canal near Victoria park for 320k, I would expect it to be worth around 500k now. I now live in a Georgian terrace I bought in the same area at the start of the year, a neighbour recently sold for 300k more than I paid. However I still think the figures of 180k to 600k sound a little rich, but, stranger things have happened.To state the obvious, that sort of increase is simply unsustainable.
I think the difference here is that the area is changing massively, its not just price pressure per se, its area gentrification, I think in fact the area was undervalued before, its a combination of a correction, gentrification and general price growth.
The other consideration is the amount of development in these areas on existing buildings and plots, this massively distorts sale price stats.
Magog said:
I honestly can't understand the mentality of going short on the housing market. If you are in a position to buy, then buy, you are always going to need somewhere to live, and the downside risks of being priced out of the market indefinitely are massive
You're an early-thirties first-time buyer, looking to buy a 1/2 bed flat in a reasonable area of Zone 2 London, a property which has probably gone up threefold, maybe more, in the past fifteen years. Your budget is stretched and you'll need somewhere bigger in a couple of years or so. In that situation, my mentality would be twitching.gibbon said:
I bought a warehouse conversion 4.5 years ago over looking regents canal near Victoria park for 320k, I would expect it to be worth around 500k now. I now live in a Georgian terrace I bought in the same area at the start of the year, a neighbour recently sold for 300k more than I paid. However I still think the figures of 180k to 600k sound a little rich, but, stranger things have happened.
I think the difference here is that the area is changing massively, its not just price pressure per se, its area gentrification, I think in fact the area was undervalued before, its a combination of a correction, gentrification and general price growth.
The other consideration is the amount of development in these areas on existing buildings and plots, this massively distorts sale price stats.
It's a lot for sure but I'm only going on his story. He said his neighbour sold for £599 and I don't know why he would lie. I think the difference here is that the area is changing massively, its not just price pressure per se, its area gentrification, I think in fact the area was undervalued before, its a combination of a correction, gentrification and general price growth.
The other consideration is the amount of development in these areas on existing buildings and plots, this massively distorts sale price stats.
Thing is though, 5 years in the London housing market is like 50 years in other parts of the country.
Hackney though I'd definitely say its 50% gentrification too. Shame they can't kick all the gangs out while they add the eco hipster cafes. I'd still not want to walk around my mates late at night at all.
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