How far will house prices fall [volume 4]
Discussion
RYH64E said:
p1stonhead said:
I cant see it happening either. There is too much demand which will swoop in if that happens, and prices will simply shoot up again.
I know at least 10 people personally who cant buy now but could with a 30% drop. Im sure many others do too.
What will happen to prices when every one of them can suddenly buy? Surely a rush and then prices rising again to meet demand.
Wait till the City job cuts start to filter through, how many could (or would want to) still buy if their monthly pay cheque stops coming through?I know at least 10 people personally who cant buy now but could with a 30% drop. Im sure many others do too.
What will happen to prices when every one of them can suddenly buy? Surely a rush and then prices rising again to meet demand.
p1stonhead said:
Well yes of course I suppose if we head back into a major recession thats different. I just hope we wont!
Regardless of whether we go into recession or not (and I think we will) there's likely to be more highly paid City based jobs relocated back into the EU than the other way round, that will probably have an effect upon demand. There will also be a lot of justifiable uncertainty for people who's job might be at risk, the last thing they will want is to take on a large financial commitment at a time when prices are predicted to fall and their income might disappear. The financial sector is one most likely to be affected by Brexit, and a lot of it is London based.It's not just the City, O&G as well.
I am lucky to still be in my job (just) but some of the agents showing us around have been saying that they have a lot of houses to let as a lot of the O&G guys lost their jobs and couldn't afford the rent.
Ok, the sales market is likely different, but I don't think a lot of the O&G workers who have been made redundant are showing up in the employment figures as they have savings. However, I suspect many will struggle to eek those savings out until the industry picks up.
Apparently it's hundreds of thousands of people... Though they'll be mostly concentrated in and around Aberdeen (where prices had got ridiculous) and perhaps Surrey (where we are) to a lesser extent.
I am lucky to still be in my job (just) but some of the agents showing us around have been saying that they have a lot of houses to let as a lot of the O&G guys lost their jobs and couldn't afford the rent.
Ok, the sales market is likely different, but I don't think a lot of the O&G workers who have been made redundant are showing up in the employment figures as they have savings. However, I suspect many will struggle to eek those savings out until the industry picks up.
Apparently it's hundreds of thousands of people... Though they'll be mostly concentrated in and around Aberdeen (where prices had got ridiculous) and perhaps Surrey (where we are) to a lesser extent.
Yeah but no but yeah...
The thing is with markets that people always SAY they would buy if it dropped 20%. But then when it drops 30%, they think it will drop another 10%, so they don't. Then it drops some more and they start to read all the doom and gloom articles that "the asset class is over" or some such and they start thinking that some other investment for the medium terms makes more sense. Bear markets tend to have three phases - a sharp fall, a rebound and then a long drawn out decline. It's only when people have given up that it finds its low.
That said, I think London property is a bit different. There are plenty of people renting who are desperate to buy - and with the cost of renting so high compared with owning, they will want to switch.
What mystifies me more is how few people move out. I get the 20-somethings with no kids. It's the 30-somethings that I don't really understand. Bringing up small kids in central London with a huge mortgage, bad schools, in a shoebox? I'd be gone in a heartbeat. Plenty of places on the periphery that are not silly money and commutable.
Also how few companies move out.
The thing is with markets that people always SAY they would buy if it dropped 20%. But then when it drops 30%, they think it will drop another 10%, so they don't. Then it drops some more and they start to read all the doom and gloom articles that "the asset class is over" or some such and they start thinking that some other investment for the medium terms makes more sense. Bear markets tend to have three phases - a sharp fall, a rebound and then a long drawn out decline. It's only when people have given up that it finds its low.
That said, I think London property is a bit different. There are plenty of people renting who are desperate to buy - and with the cost of renting so high compared with owning, they will want to switch.
What mystifies me more is how few people move out. I get the 20-somethings with no kids. It's the 30-somethings that I don't really understand. Bringing up small kids in central London with a huge mortgage, bad schools, in a shoebox? I'd be gone in a heartbeat. Plenty of places on the periphery that are not silly money and commutable.
Also how few companies move out.
AstonZagato said:
Yeah but no but yeah...
The thing is with markets that people always SAY they would buy if it dropped 20%. But then when it drops 30%, they think it will drop another 10%, so they don't. Then it drops some more and they start to read all the doom and gloom articles that "the asset class is over" or some such and they start thinking that some other investment for the medium terms makes more sense. Bear markets tend to have three phases - a sharp fall, a rebound and then a long drawn out decline. It's only when people have given up that it finds its low.
That said, I think London property is a bit different. There are plenty of people renting who are desperate to buy - and with the cost of renting so high compared with owning, they will want to switch.
What mystifies me more is how few people move out. I get the 20-somethings with no kids. It's the 30-somethings that I don't really understand. Bringing up small kids in central London with a huge mortgage, bad schools, in a shoebox? I'd be gone in a heartbeat. Plenty of places on the periphery that are not silly money and commutable.
Also how few companies move out.
Commuting in from my part of Suffolk costs £1k per month for the rail journey plus parking at another £200, say £14k of take home pay per annum, I guess some people would rather spend the money on mortgage payments rather than travel costs. Personally, I wouldn't want to live in London even if prices halved, I much prefer living in the sticks and having a 10 mile B road commute to work.The thing is with markets that people always SAY they would buy if it dropped 20%. But then when it drops 30%, they think it will drop another 10%, so they don't. Then it drops some more and they start to read all the doom and gloom articles that "the asset class is over" or some such and they start thinking that some other investment for the medium terms makes more sense. Bear markets tend to have three phases - a sharp fall, a rebound and then a long drawn out decline. It's only when people have given up that it finds its low.
That said, I think London property is a bit different. There are plenty of people renting who are desperate to buy - and with the cost of renting so high compared with owning, they will want to switch.
What mystifies me more is how few people move out. I get the 20-somethings with no kids. It's the 30-somethings that I don't really understand. Bringing up small kids in central London with a huge mortgage, bad schools, in a shoebox? I'd be gone in a heartbeat. Plenty of places on the periphery that are not silly money and commutable.
Also how few companies move out.
RYH64E said:
AstonZagato said:
Yeah but no but yeah...
The thing is with markets that people always SAY they would buy if it dropped 20%. But then when it drops 30%, they think it will drop another 10%, so they don't. Then it drops some more and they start to read all the doom and gloom articles that "the asset class is over" or some such and they start thinking that some other investment for the medium terms makes more sense. Bear markets tend to have three phases - a sharp fall, a rebound and then a long drawn out decline. It's only when people have given up that it finds its low.
That said, I think London property is a bit different. There are plenty of people renting who are desperate to buy - and with the cost of renting so high compared with owning, they will want to switch.
What mystifies me more is how few people move out. I get the 20-somethings with no kids. It's the 30-somethings that I don't really understand. Bringing up small kids in central London with a huge mortgage, bad schools, in a shoebox? I'd be gone in a heartbeat. Plenty of places on the periphery that are not silly money and commutable.
Also how few companies move out.
Commuting in from my part of Suffolk costs £1k per month for the rail journey plus parking at another £200, say £14k of take home pay per annum, I guess some people would rather spend the money on mortgage payments rather than travel costs. Personally, I wouldn't want to live in London even if prices halved, I much prefer living in the sticks and having a 10 mile B road commute to work.The thing is with markets that people always SAY they would buy if it dropped 20%. But then when it drops 30%, they think it will drop another 10%, so they don't. Then it drops some more and they start to read all the doom and gloom articles that "the asset class is over" or some such and they start thinking that some other investment for the medium terms makes more sense. Bear markets tend to have three phases - a sharp fall, a rebound and then a long drawn out decline. It's only when people have given up that it finds its low.
That said, I think London property is a bit different. There are plenty of people renting who are desperate to buy - and with the cost of renting so high compared with owning, they will want to switch.
What mystifies me more is how few people move out. I get the 20-somethings with no kids. It's the 30-somethings that I don't really understand. Bringing up small kids in central London with a huge mortgage, bad schools, in a shoebox? I'd be gone in a heartbeat. Plenty of places on the periphery that are not silly money and commutable.
Also how few companies move out.
princeperch said:
even if the journey goes well you are looking at 3.5 hours or more a day for that sort of commute. I think I would kill myself if I had to do it, which is one of the main reasons I live in London in a modest house rather than living in something pretty spacious outside of the smoke..
No, it only takes me 20 minutes, maybe 25 if the traffic is really bad...RYH64E said:
princeperch said:
even if the journey goes well you are looking at 3.5 hours or more a day for that sort of commute. I think I would kill myself if I had to do it, which is one of the main reasons I live in London in a modest house rather than living in something pretty spacious outside of the smoke..
No, it only takes me 20 minutes, maybe 25 if the traffic is really bad...Regarding moving out from London, I do don't know why more don't do it. I live in Beds and it's a half hour journey from my nearest train station to King's Cross (though I don't do the journey myself any more, work in Hert's these days). There has been something of a London influx here that has pushed up prices somewhat (based only on annecdotal evidence really), but it still looks very cheap next to London prices...
walm said:
I think he meant door-to-door for someone heading into London.
I know what he meant.On a good day it's 1 1/2 hours from home to Liverpool Street assuming you get dropped off at the station and there's no rail replacement service running, though to put that into perspective the same journey to LST would take at least 45 minutes from my old zone 4 London address including 30 minutes + on the hell that is the london Underground.
XJ40 said:
Regarding moving out from London, I do don't know why more don't do it.I live in Beds and it's a half hour journey from my nearest train station to King's Cross (though I don't do the journey myself any more, work in Hert's these days). There has been something of a London influx here that has pushed up prices somewhat (based only on annecdotal evidence really), but it still looks very cheap next to London prices...
For the South East certainly at the moment, it would be suicide because of this;https://www.google.co.uk/search?q=souithwrn+rail&a...
princeperch said:
even if the journey goes well you are looking at 3.5 hours or more a day for that sort of commute. I think I would kill myself if I had to do it, which is one of the main reasons I live in London in a modest house rather than living in something pretty spacious outside of the smoke..
I'm 1hr 10min from my front door to desk (reliably - and an hour if I'm lucky / cut it fine) - so more like 2hr 20mins of my day. The upside? I have a 7,000sqft house, tennis court, swimming pool, 3 garages and 4 acres. I can't see another house - just trees and fields (most of which I own). I'm 8 miles (15 mins) from a university town that has art, theatre, music and shopping (which makes it more accessible than admittedly better facilities if I lived in London). There are a myriad of schools that are as good, if not better, than London (that don't have stupid waiting lists / entrance requirements).
If I sold and bought in Chelsea, I'd get a 1,500sqft 3 bed terrace (and a 30 min commute).
On the train, I read and catch up with stuff that I'd spend time at home doing. So I'm not sure I lose much time out of my life. Actually, it is nice to have a moment in my day when I can put my headphones on and read the paper without any distractions.
The only downside is if I want to go out drinking or eating in the evening. A taxi home isn't an option.
...I haven't mentioned it for a while but I still think this thread title is a misnomer even despite the current uncertain outlook. I just had a look when this vol 4 post was kicked off, 2012. My property has gone up 38.2% in those last 4 years, according to Zoopla... I did start a "How far with house prices rise vol 1" thread but it didn't take off, I guess the worry of declining prices makes for a more interesting heading...
AstonZagato said:
The only downside is if I want to go out drinking or eating in the evening. A taxi home isn't an option.
If a commutable area is comparitively cheap there's a reason for it, because you aren't the only one weighing up the trade-offs.
AstonZagato said:
princeperch said:
even if the journey goes well you are looking at 3.5 hours or more a day for that sort of commute. I think I would kill myself if I had to do it, which is one of the main reasons I live in London in a modest house rather than living in something pretty spacious outside of the smoke..
I'm 1hr 10min from my front door to desk (reliably - and an hour if I'm lucky / cut it fine) - so more like 2hr 20mins of my day. The upside? I have a 7,000sqft house, tennis court, swimming pool, 3 garages and 4 acres. I can't see another house - just trees and fields (most of which I own). I'm 8 miles (15 mins) from a university town that has art, theatre, music and shopping (which makes it more accessible than admittedly better facilities if I lived in London). There are a myriad of schools that are as good, if not better, than London (that don't have stupid waiting lists / entrance requirements).
If I sold and bought in Chelsea, I'd get a 1,500sqft 3 bed terrace (and a 30 min commute).
On the train, I read and catch up with stuff that I'd spend time at home doing. So I'm not sure I lose much time out of my life. Actually, it is nice to have a moment in my day when I can put my headphones on and read the paper without any distractions.
The only downside is if I want to go out drinking or eating in the evening. A taxi home isn't an option.
the reality is for schmucks like me, if you just have say 500-600k to spend*, that doesn't get you very much out in the sticks at all these days. just a slightly bigger house, longer garden etc.
I honestly wouldn't be able to do a long commute for 30 odd years (which I consider to be over an hour each way) and I'd resent giving thousands of pounds away each year to the train co for the luxury of sitting in the cleaning cupboard on a packed train with everyone farting and smelling of BO.
- ETA - I don't want to sound like a dick but hope the point I was trying to make, albeit possibly unsuccessfully, is received as a valid one..
princeperch said:
I honestly wouldn't be able to do a long commute for 30 odd years
Me neither, I did my 20's living and working in zone 1 and was so over it, just getting around is such a royal PITA, did my early 30's in NYC which just works so much better than London, quality of life is leagues ahead for the same kind of money. The idea of living out and commuting on public transport anywhere though fills me with dread.fblm said:
princeperch said:
I honestly wouldn't be able to do a long commute for 30 odd years
Me neither, I did my 20's living and working in zone 1 and was so over it, just getting around is such a royal PITA, did my early 30's in NYC which just works so much better than London, quality of life is leagues ahead for the same kind of money. The idea of living out and commuting on public transport anywhere though fills me with dread.AstonZagato said:
The upside? I have a 7,000sqft house, tennis court, swimming pool, 3 garages and 4 acres. I can't see another house - just trees and fields (most of which I own). I'm 8 miles (15 mins) from a university town that has art, theatre, music and shopping (which makes it more accessible than admittedly better facilities if I lived in London). There are a myriad of schools that are as good, if not better, than London (that don't have stupid waiting lists / entrance requirements).
...
The only downside is if I want to go out drinking or eating in the evening. A taxi home isn't an option.
...
The only downside is if I want to go out drinking or eating in the evening. A taxi home isn't an option.
But look at the number of £1mm+ properties in zone 1. I had the conversation with a chap the other day at the cricket. He lives in Chelsea and his flat is worth £3mio apparently. He wants a house as he has kids. He is looking at Tooting, as that is where £3mio buys enough house for him (I haven't fact checked any of this - just a conversation). £3mio and you're living in Tooting. It isn't really the beating heart of the metropolis. I don't get it. But I don't really care. Different strokes for different folks.
I suppose it came down to the fact that, when I lived in London, I used to spend my weekends leaving the place. Going down to the Cotswolds or up to Yorkshire. Getting some space. I'm probably not a London person, though I enjoy the restaurants and chi-chi shops when I'm here.
I suppose it came down to the fact that, when I lived in London, I used to spend my weekends leaving the place. Going down to the Cotswolds or up to Yorkshire. Getting some space. I'm probably not a London person, though I enjoy the restaurants and chi-chi shops when I'm here.
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