How far will house prices fall [volume 5]
Discussion
gbrown2014 said:
Hi All,
First time buyer looking for some advice, currently considering using help to buy on one of the below properties, before reading this thread i was hoping to take advantage of some brexit jitters but it looks like there is the potential of a genuine slowdown, would people recommend holding off? i am in no rush but renting ATM and hoping to build equity at some point although i don't want to end up in negative equity!
https://www.rightmove.co.uk/new-homes-for-sale/pro...
https://www.rightmove.co.uk/new-homes-for-sale/pro...
The area is wandsworth and I would have to use HTB for the purchase
Would not touch it with yours. Go further south and buy an older 2 bed in Streatham for 350 grand and rent out the second bedroom.First time buyer looking for some advice, currently considering using help to buy on one of the below properties, before reading this thread i was hoping to take advantage of some brexit jitters but it looks like there is the potential of a genuine slowdown, would people recommend holding off? i am in no rush but renting ATM and hoping to build equity at some point although i don't want to end up in negative equity!
https://www.rightmove.co.uk/new-homes-for-sale/pro...
https://www.rightmove.co.uk/new-homes-for-sale/pro...
The area is wandsworth and I would have to use HTB for the purchase
gbrown2014 said:
Hi All,
First time buyer looking for some advice, currently considering using help to buy on one of the below properties, before reading this thread i was hoping to take advantage of some brexit jitters but it looks like there is the potential of a genuine slowdown, would people recommend holding off? i am in no rush but renting ATM and hoping to build equity at some point although i don't want to end up in negative equity!
https://www.rightmove.co.uk/new-homes-for-sale/pro...
https://www.rightmove.co.uk/new-homes-for-sale/pro...
The area is wandsworth and I would have to use HTB for the purchase
The problem is that HTB looks like built-in negative equity to me unless the market really starts going up again.First time buyer looking for some advice, currently considering using help to buy on one of the below properties, before reading this thread i was hoping to take advantage of some brexit jitters but it looks like there is the potential of a genuine slowdown, would people recommend holding off? i am in no rush but renting ATM and hoping to build equity at some point although i don't want to end up in negative equity!
https://www.rightmove.co.uk/new-homes-for-sale/pro...
https://www.rightmove.co.uk/new-homes-for-sale/pro...
The area is wandsworth and I would have to use HTB for the purchase
If you buy one of these flats now and want to keep it for five years, who is going to buy it from you? Why wouldn’t they prefer to buy a brand new one down the road compared to your five year old one, especially given that they will be entitled to HTB on the new one as well.
The Government and the developers will always tell you that demand is going up and they can’t build quick enough, but the reality is that the amount of funded demand (i.e. the amount of people who can actually pay £500k for a flat unsupported by HTB) is probably actually going down.
That all becomes irrelevant if the Government can get the sustained double digit rises going again, but they can’t at the moment even with schemes like HTB.
kingston12 said:
The problem is that HTB looks like built-in negative equity to me unless the market really starts going up again.
If you buy one of these flats now and want to keep it for five years, who is going to buy it from you? Why wouldn’t they prefer to buy a brand new one down the road compared to your five year old one, especially given that they will be entitled to HTB on the new one as well.
The Government and the developers will always tell you that demand is going up and they can’t build quick enough, but the reality is that the amount of funded demand (i.e. the amount of people who can actually pay £500k for a flat unsupported by HTB) is probably actually going down.
That all becomes irrelevant if the Government can get the sustained double digit rises going again, but they can’t at the moment even with schemes like HTB.
I agree that its unlikely that we will see sustained growth in the next 5 years If you buy one of these flats now and want to keep it for five years, who is going to buy it from you? Why wouldn’t they prefer to buy a brand new one down the road compared to your five year old one, especially given that they will be entitled to HTB on the new one as well.
The Government and the developers will always tell you that demand is going up and they can’t build quick enough, but the reality is that the amount of funded demand (i.e. the amount of people who can actually pay £500k for a flat unsupported by HTB) is probably actually going down.
That all becomes irrelevant if the Government can get the sustained double digit rises going again, but they can’t at the moment even with schemes like HTB.
Re-sale is something i have tried to think about a lot, looking at similar blocks in the area(next door) similar sized flats have sold for 415-425(sep-dec), so that made me think there is some demand there, i am not trying to make money out of this but i would ideally like to keep whatever equity i built up
HTB is closing in 2023(although it has been extended twice)
Justayellowbadge said:
Which parts?
Kensington and Chelsea / Westminster/ Hammersmith are particular focus areas. Check the acadata summaries for the high level pictures.Again with any prices changes, these are specific to specific sub areas/streets/properties, it would be wrong to assume this is a blanket change across the entire area across all building types/price ranges/streets. It requires research/analysis, some streets will be more resilient.
I posted quite a few sold examples (as per land registry) a couple of pages back where prices had fallen to their 2012 level.
Also if you download something like Property Tracker on Chrome, it will show you how the asking prices have plummeted on a very large majority of central london listings. Asking prices are of course exactly that, but it shows the journey of reality setting in, and how you can't ask 2017 numbers or anywhere near them anymore in/around the vast majority of London
e.g.
A quick search of Kensington shows a quickly familiar asking price haircut of £150k-250k over 12-14 months on the market, for properties in the £700-950k zone.
The additional 10% or so off asking, is taken from the average discount property buyers like Henry Pryor talk about, on already heavily discounted property. As a buyer in this market, I would certainly be going in quite heavily given prices continue to drop month by month. Just a few months ago, the numbers were coming back at being near 2014 numbers, now its 2012 numbers and still not selling.
Another good example of the drops, this one isnt even in the 30% world (albiet from asking in 2017 to sold in 2019, it was)
Listed at £2.5mil in 2017 after selling for £1.65 mil in 2010. Eventually it sold for £1.725 mil in Jan 2019.
Including inflation that's a 17% fall between 2010 and 2018 sold value.
Flat 4, St. Stephens Close, Avenue Road, London NW8 6DB
Jan 2019 Sold (about a 15% discount over asking price, after a 500k haircut to asking)
£1,725,000
Apr 2018 Listed for sale
Marketed by Behr and Butchoff
£1,995,000
Nov 2017 Listed for sale
Marketed by Aston Chase
£2,195,000
Oct 2017 Listed for sale
Marketed by Aston Chase
£2,195,000
Apr 2017 Listed for sale
Marketed by Hanover
£2,500,000
Edited by V6Alfisti on Tuesday 12th March 14:05
Sheepshanks said:
It somewhat is if you really want to buy the particular house / car the seller has for sale.
If that is the only car/option and you had to buy that second, then you would have to make yourself aware of the fact that you are paying above market to get something you needed right there.Or where I was coming from, the reality you will do what most buyer do, wait a few more weeks until something else comes along that meets your criteria at a competitive price i.e not funding the sellers desire to buy something they can't afford. Again this will come down to actual numbers, if you are talking £1k then you may think "it will cost me that in rent for another month", if its £50k then clearly quite a different story.
gbrown2014 said:
I agree that its unlikely that we will see sustained growth in the next 5 years
Re-sale is something i have tried to think about a lot, looking at similar blocks in the area(next door) similar sized flats have sold for 415-425(sep-dec), so that made me think there is some demand there, i am not trying to make money out of this but i would ideally like to keep whatever equity i built up
HTB is closing in 2023(although it has been extended twice)
Well, it’s always a gamble, but the developers and the Government seem to have become totally addicted to HTB, so I wouldn’t be at all surprised to see it extended again.Re-sale is something i have tried to think about a lot, looking at similar blocks in the area(next door) similar sized flats have sold for 415-425(sep-dec), so that made me think there is some demand there, i am not trying to make money out of this but i would ideally like to keep whatever equity i built up
HTB is closing in 2023(although it has been extended twice)
The problem is that London/SE has been in a housing bubble built on top of an existing housing bubble for a long time, and some of the factors that have allowed it to continue are starting to reverse (BTL selling up rather than buying more, foreign buyers drying up even though GBP crash should have made it more attractive for them).
My personal view is that the scale of the mess that has been created means that we’ll remain reliant on near-zero interest rates and schemes like HTB in the long term.
That doesn’t necessarily mean prices can’t go up of course, but it makes it less likely.
kingston12 said:
Well, it’s always a gamble, but the developers and the Government seem to have become totally addicted to HTB, so I wouldn’t be at all surprised to see it extended again.
The problem is that London/SE has been in a housing bubble built on top of an existing housing bubble for a long time, and some of the factors that have allowed it to continue are starting to reverse (BTL selling up rather than buying more, foreign buyers drying up even though GBP crash should have made it more attractive for them).
My personal view is that the scale of the mess that has been created means that we’ll remain reliant on near-zero interest rates and schemes like HTB in the long term.
That doesn’t necessarily mean prices can’t go up of course, but it makes it less likely.
I agree but just to add the spread has been narrowing for a little while with downsizers trying to take advantage of this last ten year boom scenario.The problem is that London/SE has been in a housing bubble built on top of an existing housing bubble for a long time, and some of the factors that have allowed it to continue are starting to reverse (BTL selling up rather than buying more, foreign buyers drying up even though GBP crash should have made it more attractive for them).
My personal view is that the scale of the mess that has been created means that we’ll remain reliant on near-zero interest rates and schemes like HTB in the long term.
That doesn’t necessarily mean prices can’t go up of course, but it makes it less likely.
Fooking glad i got out !
scenario8 said:
scenario8 said:
In anecdotal, sample size of one, 3 bed semi in unremarkable condition in unfashionable but not particularly stabby suburb of Outer SW London news (as previewed a page or so back) my neighbour who went on the market at what I considered pretty strong money in Q3 2018, sold at the asking, but then withdrew for health reasons, then relaunched last week at the same value has turned down an offer from a chain free buyer at 2% under.
Boomer, no “need” to sell.
Ballsy.
An update (it is all about me, after all).Boomer, no “need” to sell.
Ballsy.
My neighbour is still on the market. Viewing activity in the last week hasn’t caught my attention - which isn’t to say there has been none, I accept. Haven’t spoken to the dude on the matter directly as it’s an area of conversation I’m always happy to avoid but I rather suspect he should be regretting his earlier actions (of turning down an unencumbered 98% bid). Do we have example #trillion of early bids being the best bids? Has he missed the boat? Ten grand is ten grand, I guess.
Besides, as mentioned, he’s a boomer with very little motivation. Especially so when it comes to selling up to what he perceives to be “chancers”. If you’re in the industry you see this sort of thing all the time. Maybe he’ll sell. For his sake I genuinely hope so but I have a growing suspicion (and that suspicion started from a high base) he won’t be selling any time soon. Very possibly not for years unless something significant happens to raise his motivation.
On a wider point I hear from colleagues listing numbers haven’t been quite so bad in February as many expected but obvs way below target. Anecdotally quite a few of these listings, probably around half, are genuinely new listings and not just properties churned from lapsed contracts with competitor agencies. New instructions as a consequence of part exchange deals seem unusually high but that may be only as a consequence of listings numbers generally being down.
Happy Spring, all.
And still no sign of a proper proper cold spell to knock the old dears out of their own homes and into Homes. Damn you, Global Warming!
My neighbour has now decided to ditch the bricks and mortar model local agency (that got him the 98% bid) and has employed a no frills internet only agent (that even I haven’t heard of). Price is now a “guide” (of the same).
Still, we all know all agents are the same and just put photos on rightmove and wait for the phone to ring blah blah...
Fingers crossed for the guy.
scenario8 said:
It’s still all about me and my sample of one.
My neighbour has now decided to ditch the bricks and mortar model local agency (that got him the 98% bid) and has employed a no frills internet only agent (that even I haven’t heard of). Price is now a “guide” (of the same).
Still, we all know all agents are the same and just put photos on rightmove and wait for the phone to ring blah blah...
Fingers crossed for the guy.
HE may need more than luck if he turned down a 89% bid !My neighbour has now decided to ditch the bricks and mortar model local agency (that got him the 98% bid) and has employed a no frills internet only agent (that even I haven’t heard of). Price is now a “guide” (of the same).
Still, we all know all agents are the same and just put photos on rightmove and wait for the phone to ring blah blah...
Fingers crossed for the guy.
Croutons said:
Including WHAT inflation? RPI? CPI? Something else that fits your personal narrative of dreams of paying £30k for a detached 6 bed in SW1?
Wow aggressive, don't be silly. Calm down dear.No-one has ever talked about paying £30k in SW1, frankly a fiction played out in your own mind.
Just representing the falls that are occurring using sold data and actual listings. I see you have avoided that element and raise an argument about inflation
. I presume you are playing the fool and understand this.Croutons said:
Perhaps I should have said which measure of inflation are you using?
Your own position is perfectly clear. Good luck to you.
Clearly not if you think I am expecting a 6 bed house in SW1 for £30k , sorry it is so ridiculous it is laughable.Your own position is perfectly clear. Good luck to you.
Back to 2007/2008 would be fine with me, given some of the values are down to 2010/2012 already (which 2 years ago, many on here considered implausible/never going to happen/dream world)....it doesn't feel like that kind of world will be very far away or at least somewhere near/within some similar bounds in certain areas.
CPI - The measure used by Nationwide, BBC and the Bank of England to reflect the change. I know you consider this a trap by asking in a more considered way, but it frankly isn't - I value those sources as far more relevant than 'Croutons' on pistonheads.
I don't consider anything a trap, or my opinion to have any value.
I also don't see anyone else deciding that a variation between sold prices at any time also includes CPI. I think that's misleading. I think it helps people cement their view that gaps are bigger than they are. But that's my worthless opinion.
I also don't see anyone else deciding that a variation between sold prices at any time also includes CPI. I think that's misleading. I think it helps people cement their view that gaps are bigger than they are. But that's my worthless opinion.
Croutons said:
I don't consider anything a trap, or my opinion to have any value.
I also don't see anyone else deciding that a variation between sold prices at any time also includes CPI. I think that's misleading. I think it helps people cement their view that gaps are bigger than they are. But that's my worthless opinion.
It was an additional comment, not the only number stated.I also don't see anyone else deciding that a variation between sold prices at any time also includes CPI. I think that's misleading. I think it helps people cement their view that gaps are bigger than they are. But that's my worthless opinion.
If I stated this house price is down by 17% from 2018 to 2010 and left it at that, I would completely understand your sentiment/reaction. However the two sold values (2010/2018) were stated, and the inflation comment was an addition and clearly called out (which is also what lots of other property commentators, the BBC, Nationwide Mortgages e.t.c do).
I don't really see the problem, the point still remains that the 2018 sold figure is only a few percentage points higher than 2010, and in real terms inc inflation doing rather less well i.e the -17%. The reality is quite a few London properties are already down to their 2012 values, a large majority at 2014 and the odd few in 2010/2011. Not a surprise given how mixed the marketplace is and pricing fluctuates wildly by street/type of property.
If we had the perfect example e.g. property that sold at 2012/2014/2017/2019, I think you would find the 2017 to 2019 value change would be rather more scary than 17%. I know I have saved an absolute bundle, but I also know I won't buy/have the power to predict at the bottom, but I will buy at a time when I think we are getting near it / or my circumstances change and it's no longer a major benefit to live the way I am. I see it as a balance, and I know when to bite when I see it.
PS: No hard feelings, I just can't see how I misrepresented information given it was all there
Edited by V6Alfisti on Wednesday 13th March 10:28
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