How far will house prices fall [volume 4]
Discussion
Mark Benson said:
I suspect that's probably just a reflection of the different environments those businesses operate in. Both are subject to sentiment, but houses aren't bought or sold in hours or even days usually.
Yes but house pricing is largely supported by sentiment, that sentiment across all elements before Brexit were mixed and seemingly seen as I guess overally positive before with some risks created by BTL changes e.t.c. Now we appear to be in a position whereby sentiment is largely on the negative side.Hence why we are seeing:-
Estate Agents/RICS - Reporting even before Brexit they were expecting a significant slow down
Banks - Tightening mortgages as a result of the current risks, a number of Banks have reported removing riskier LTV products.
New build developers - Reporting significant downturn in interest over the past few monts and people are reportedly using their brexit get out clause
This is then reflected in the shares for each. Foxtons down from 175p to 97p over the course of 4-5 days and don't forget that Foxtons has been dropping since the end of last year when it was around 250p a share. Berkeley have lost around a 1/3 of their value as they were around 3800p at the start of the year, about 3300 just before the referendum and now 2300 e.t.c. This isn't therefore just a daily change, the downwards trend started about 6 months ago but Brexit is accelerating it.
Shares/Sentiment of course change and no-one can call the future, but it's not looking rosy.
V6Alfisti said:
okgo said:
Those agents must be rare.
All the ones round me just take the property off and re-list it as new with another price rather than reducing.
There are quite a few that are, but I must admit I haven't specifically looked at agent's that do or don't.All the ones round me just take the property off and re-list it as new with another price rather than reducing.
Ha yes, I have seen that as well (i.e pull and relist).
Interestingly of my tracked shares (mainly banks and property related), it seems like today the banks are levelling off/climbing very slightly.
Whilst property related shares have dropped again, Foxtons dropping as far as 97p and now around 98p down from around 175p pre-brexit. Markets do of course fluctuate, but interesting to see they haven't followed the banks small gains of the days.
I am guessing most people use Property Bee to see/track changes to individual properties on rightmove? http://www.property-bee.com/
Edited by V6Alfisti on Tuesday 28th June 10:57
I understand completely that a FTB, and i assume that is you, will focus on it day and night but a 1-2 bed place in say W9 is solid as a rock and has only gone up in the 3 months, 6 months and 12 months periods. Take your pick. I don't know how long you have been looking for but I am guessing, 2 years at least? That is 20-25% up and even if you get the 18% which a completely random nonsense number, you are still down.
The 55-60 sm new builds at 2,500 a ft, yes, it's a difficult sell but not the older properties i mention above. I'll also add, one or two sales does not make a market. Happy to be shown good links to sales showing a fall in good parts of West London (not new builds) in the 1-2 bed sector.
Burwood said:
The only places in London I have direct experience is Maida Vale, I had a place there in the late 90's until 2007. Prices are still £1,100 a ft unless a total dump. Im talking warwick Avenue. Canary Wharf, on the river, had that place from late 90's too when i relocated to CSFB and then Barcap.
I understand completely that a FTB, and i assume that is you, will focus on it day and night but a 1-2 bed place in say W9 is solid as a rock and has only gone up in the 3 months, 6 months and 12 months periods. Take your pick. I don't know how long you have been looking for but I am guessing, 2 years at least? That is 20-25% up and even if you get the 18% which a completely random nonsense number, you are still down.
The 55-60 sm new builds at 2,500 a ft, yes, it's a difficult sell but not the older properties i mention above. I'll also add, one or two sales does not make a market. Happy to be shown good links to sales showing a fall in good parts of West London (not new builds) in the 1-2 bed sector.
Actually that is part of the area I was tracking as I used to live there and now Notting Hill. In fact there is a 45sqm-50sqm flat around here and onto Royal Oak that is sub £500k which I havent seen before.I understand completely that a FTB, and i assume that is you, will focus on it day and night but a 1-2 bed place in say W9 is solid as a rock and has only gone up in the 3 months, 6 months and 12 months periods. Take your pick. I don't know how long you have been looking for but I am guessing, 2 years at least? That is 20-25% up and even if you get the 18% which a completely random nonsense number, you are still down.
The 55-60 sm new builds at 2,500 a ft, yes, it's a difficult sell but not the older properties i mention above. I'll also add, one or two sales does not make a market. Happy to be shown good links to sales showing a fall in good parts of West London (not new builds) in the 1-2 bed sector.
The areas I was tracking were places such as Warwick Ave/Maida/Queens Park, and Kilburn/Hampstead Border.
I have been looking in London for about 18 months (but the quality of property was poor and priced to the moon with a few exceptions) and then I thought I had something with a house in zone 3 until yesterday when I got the final price back.
So lets focus on Maida,Queens Park,Warwick, when I started looking about 18 months ago, a 2 bed flat was around £500k for 45sqm and these were the ones that sold, the £550k property didn't sell. I know as I tracked about 20 of them in Rightmove and the sold numbers in the area were a joke. In the last week, I am still seeing property listed at £550k and then dropping to around £500k. Some are now being listed at around £500k. Then you have those that list at crazy prices and they sit on the market for about 4-5 months before being pulled. I suspect these are the ones you are seeing, although I didn't only specify my search on Maida and you may be looking at the £800k - £1.5m range which was not something I looked at.
Another area - Kilburn/Hampstead. This was again in the £440k + mark for a 50sqm flat. Again things appear slow there apart from two stand out properties
1) Around 45-50sqm flat, on the ground floor of a really very nice looking house. That was listed for about £380k and sold in a week (this is one example of a competitive property selling quickly). I didnt go for it because I had the zone 3 house in the offing.
2) Around 80sqm basement flat of a similarly nice looking house, that went up for £500k and took about 2-3 weeks to shift, but again was far more competitive than all the property around it just being relisted or having £25k taken from a high price.
There was also an oddity with one property on Minster Road between West hampstead and Kilburn, it was on the market for ages and I was considering an offer hence it was tracked. That was a lovely top floor flat for around £440k, it then sold and to my surprise about 3 months later it came back on the market having actually sold/completed but then came back at the same price or less.
This isn't my focus day and night, but of course a major concern and not one anyone should enter into lightly when the odds are so stacked against it.
People make their own choices and see what they see, I delve a little beyond the immediate surface.
Edited by V6Alfisti on Tuesday 28th June 12:00
Femur said:
Sounds like you're doing what most people do when they're looking to buy: studying the market for a while and noticing things.
Ha, from that example as the question was basically "what have you seen in this area and give me some examples".Of course, there is more to it in terms of understanding the levers of property prices and where those are headed, even reading varying views and forming an opinion. Most people don't have a clue, certainly my colleagues who work in FSI/Consultancy e.t.c barely look beyond what is presented to them.
I even had one quite friendly client say to me in direct relation to property, that they don't want to look for the information, they rely on papers and the news telling them what is happening. If that is true and I suspect largely it is in combination with sentiment, that might explain the current fear around property.
I would be hugely surprised if the majority of people look beyond papers, a quick scan of rightmove and the headline growth figures. I bet most don't know about the pitiful sales volumes, or the % of property that were being purchased by BTL'ers e.t.c
It is all standard research that we would carry out for a client if called in to do so, but people are lax with their own finances. Even my girlfriends mother who is a developer was saying just recently that house prices only go up, things are really good in the area and all the risks would never materialise. This week she has quite a different opinion and is now looking to reduce exposure.
Having said all that, I do not profess to know all the answers and can of not claim that I can 100% guess the market.
However I can at least say I have done the research, formed my opinion on the probability of growth vs falls and see what happens.
Edited by V6Alfisti on Tuesday 28th June 12:54
V6Alfisti said:
Ha, from that example as the question was basically "what have you seen in this area and give me some examples".
Of course, there is more to it in terms of understanding the levers of property prices and where those are headed, even reading varying views and forming an opinion. Most people don't have a clue, certainly my colleagues who work in FSI/Consultancy e.t.c barely look beyond what is presented to them.
I even had one quite friendly client say to me in direct relation to property, that they don't want to look for the information, they rely on papers and the news telling them what is happening. If that is true and I suspect largely it is in combination with sentiment, that might explain the current fear around property.
I would be hugely surprised if the majority of people look beyond papers, a quick scan of rightmove and the headline growth figures. I bet most don't know about the pitiful sales volumes, or the % of property that were being purchased by BTL'ers e.t.c
It is all standard research that we would carry out for a client if called in to do so, but people are lax with their own finances. Even my girlfriends mother who is a developer was saying just recently that house prices only go up, things are really good in the area and all the risks would never materialise. This week she has quite a different opinion and is now looking to reduce exposure.
Having said all that, I do not profess to know all the answers and can of not claim that I can 100% guess the market.
However I can at least say I have done the research, formed my opinion on the probability of growth vs falls and see what happens.
The thing is, in some ways it doesn't matter about looking more into it. The economics can be great, but if the majority of the public get spooked by public opinion it may well go down anyway. It's the final result that matters. That said, with studying it in more detail you may well get a heads start if you see something changing and can act on it.Of course, there is more to it in terms of understanding the levers of property prices and where those are headed, even reading varying views and forming an opinion. Most people don't have a clue, certainly my colleagues who work in FSI/Consultancy e.t.c barely look beyond what is presented to them.
I even had one quite friendly client say to me in direct relation to property, that they don't want to look for the information, they rely on papers and the news telling them what is happening. If that is true and I suspect largely it is in combination with sentiment, that might explain the current fear around property.
I would be hugely surprised if the majority of people look beyond papers, a quick scan of rightmove and the headline growth figures. I bet most don't know about the pitiful sales volumes, or the % of property that were being purchased by BTL'ers e.t.c
It is all standard research that we would carry out for a client if called in to do so, but people are lax with their own finances. Even my girlfriends mother who is a developer was saying just recently that house prices only go up, things are really good in the area and all the risks would never materialise. This week she has quite a different opinion and is now looking to reduce exposure.
Having said all that, I do not profess to know all the answers and can of not claim that I can 100% guess the market.
However I can at least say I have done the research, formed my opinion on the probability of growth vs falls and see what happens.
Edited by V6Alfisti on Tuesday 28th June 12:54
NomduJour said:
Love the comments about housing crisis and FTB, yes because there just aren't enough affordable £15m-£50m houses in central London for first time buyers.FourWheelDrift said:
NomduJour said:
Love the comments about housing crisis and FTB, yes because there just aren't enough affordable £15m-£50m houses in central London for first time buyers."STOP THEM!!!"
You live in a free market you utter morons.
NomduJour said:
Foxtons share price suggests otherwise.mike74 said:
NomduJour said:
Foxtons share price suggests otherwise.z4RRSchris said:
No boom.
It's flat as a pancake, was before brexit, still is after!
No boom either way (i.e growth or widespread collapse).It's flat as a pancake, was before brexit, still is after!
However I am seeing some prices I haven't seen in 1-2 years of scanning, and a ramp up in new listings and reductions.
One property dropped from £500k to £450k in April and now just listed at £400k
£550k 48sqm 1 bed property in a very decent part of Little Venice, and now listed with 3 agents! Clearly keen to sell. I just double checked and a similar property on the same road, same size is listed for £650k !
I spoke to the developer today regarding the price of the plot I reserved, they admitted they have not had the positive response they expected.
Not an absolute sign until there are widespread drops and more sizeable chunks, but I would say a change at least.
V6Alfisti said:
z4RRSchris said:
No boom.
It's flat as a pancake, was before brexit, still is after!
No boom either way (i.e growth or widespread collapse).It's flat as a pancake, was before brexit, still is after!
However I am seeing some prices I haven't seen in 1-2 years of scanning, and a ramp up in new listings and reductions.
One property dropped from £500k to £450k in April and now just listed at £400k
£550k 48sqm 1 bed property in a very decent part of Little Venice, and now listed with 3 agents! Clearly keen to sell. I just double checked and a similar property on the same road, same size is listed for £650k !
I spoke to the developer today regarding the price of the plot I reserved, they admitted they have not had the positive response they expected.
Not an absolute sign until there are widespread drops and more sizeable chunks, but I would say a change at least.
Burwood said:
Are you viewing these properties? One could be a shangrila the other a dump. If you have a link to the 400k example i'd be keen to take a look myself
No, I wouldn't want to waste their time or mine given the current situation, and I am angling for a house more so than a flat.The £650k propery is the same size, same type of property but doesn't have wooden floors or the nice furniture of the more expensive property. This is the £550k property, not a dump http://www.rightmove.co.uk/property-for-sale/prope...
£400k property http://www.rightmove.co.uk/property-for-sale/prope...
Price history
29/06/2016,
Price changed: £450,000 Offers in Excess of £400,000
01/04/2016,
Price changed: from '£500,000' to '£450,000'
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