How far will house prices fall [volume 5]
Discussion
p1stonhead said:
princeperch said:
crisp packet said:
Now getting back to getting up at 4.30am with occasional 3.30 so sort of hope it eases a bit but not too much. I like being busy.
That sounds absolutely grim mate. I'm a solicitor too but I prefer to get to work at 10am. We aren't doing brain surgery so I suggest you don't work yourself into an early grave.
Each to their own indeed- I work up this morning and realised I didn't have a spare shirt ironed so inserted an entry into the calendar for working from home.
Like Prince I stroll in at 9.30-10 after spending time with kids, (but do any essential work over breakfast/have emails on phone, and bring out the laptop on train if anything urgent hence client is very happy).
Edited by hyphen on Friday 19th October 21:05
The London housing market is in bad shape -- possibly even worse than it looks on paper.
Official numbers show that prices in the capital only started to fall this year. But it feels much more brutal to real-estate agents on the ground.
James Hyman, head of the residential agency division at Cluttons, has been in the business for two decades and knows how to read the signs. The market is already down about 15 percent in central London compared with four years ago and, in his view, it may fall another 7 percent in the next year and half.
For Hyman and other realtors -- not to mention home sellers -- the list of market challenges has grown in recent years. The slowdown, triggered by a slew of new taxes and stretched affordability, has been compounded by Britain’s impending exit from the European Union, and now there’s the threat of a new levy on foreign buyers.
That’s a lot of uncertainty to deal with when you’re looking to fork out 486,000 pounds ($633,000), the average London home price -- or far more, if you’re close to the center.
The real problem is all those years of skyrocketing prices. Even with the current weakness, only a third of young adults can afford to buy a house a London on a 10 percent deposit and a maximum mortgage of 4 1/2 times their salaries, according to the Institute for Fiscal Studies.
And the cost of the average London residence is almost 14 times the median full-time salary in the city.
Read more: London’s postcode lottery
For its part, Brexit has put off overseas buyers, reducing demand by as much as 70 percent from 2014 levels, according to Hyman.
“Brexit was the absolute final reason why the property market in London would come to a slide down,” he said in an interview. “This is about affordability.”
To help people get on the property ladder, the government tried to crack down on equity-rich homeowners buying up property to rent out. It increased sales tax on second-home purchases and changed the tax relief for mortgage interest on rental homes.
On top of that, it announced this month plans to impose higher taxes on foreigners looking to buy property in the U.K., impacting roughly half of all residential transactions in central London.
Those changes took the steam out of the market, which has long been buffeted by a shortage of homes. Brexit came as the final nail in the coffin, according to Aneisha Beveridge, a housing market analyst at Hamptons International & Countrywide Plc.
While prices may have already bottomed in prime central London, Brexit is preventing them from picking up, she said in an interview.
Diverse Capital
The picture in the capital varies widely in different neighborhoods. A report from LSL Property Services and Acadata last week showed prices fell in 21 of 33 boroughs from a year earlier in August, with Tower Hamlets seeing a near 10 percent drop and Greenwich, Westminster and Wandsworth seeing falls of around 9 percent.
While the expensive but volatile City of London and Kensington and Chelsea saw the biggest increases, areas of on the fringes of the capital such as Waltham Forest, Brent and Redbridge also showed gains.
Prime Minister Theresa May is inching toward a deal with EU counterparts before the U.K. formally exits the bloc in March. Hopes of reaching an agreement this month have been dashed as a series of summits failed to deliver.
“While a Brexit resolution will remove some of the uncertainty weighing on London house prices, the capital faces an affordability crisis," said Niraj Shah, a London-based economist at Bloomberg Economics. “Add to that the tax changes to the buy-to-let sector as well as proposed higher stamp duty on foreign buyers and the London housing market is likely to remain subdued for some while yet."To contact the reporter on this story:
Anurag Kotoky in London at akotoky@bloomberg.net
To contact the editors responsible for this story:
Fergal O'Brien at fobrien@bloomberg.net
Brian Swint, David Goodman
Posted on Bloomberg news today
Official numbers show that prices in the capital only started to fall this year. But it feels much more brutal to real-estate agents on the ground.
James Hyman, head of the residential agency division at Cluttons, has been in the business for two decades and knows how to read the signs. The market is already down about 15 percent in central London compared with four years ago and, in his view, it may fall another 7 percent in the next year and half.
For Hyman and other realtors -- not to mention home sellers -- the list of market challenges has grown in recent years. The slowdown, triggered by a slew of new taxes and stretched affordability, has been compounded by Britain’s impending exit from the European Union, and now there’s the threat of a new levy on foreign buyers.
That’s a lot of uncertainty to deal with when you’re looking to fork out 486,000 pounds ($633,000), the average London home price -- or far more, if you’re close to the center.
The real problem is all those years of skyrocketing prices. Even with the current weakness, only a third of young adults can afford to buy a house a London on a 10 percent deposit and a maximum mortgage of 4 1/2 times their salaries, according to the Institute for Fiscal Studies.
And the cost of the average London residence is almost 14 times the median full-time salary in the city.
Read more: London’s postcode lottery
For its part, Brexit has put off overseas buyers, reducing demand by as much as 70 percent from 2014 levels, according to Hyman.
“Brexit was the absolute final reason why the property market in London would come to a slide down,” he said in an interview. “This is about affordability.”
To help people get on the property ladder, the government tried to crack down on equity-rich homeowners buying up property to rent out. It increased sales tax on second-home purchases and changed the tax relief for mortgage interest on rental homes.
On top of that, it announced this month plans to impose higher taxes on foreigners looking to buy property in the U.K., impacting roughly half of all residential transactions in central London.
Those changes took the steam out of the market, which has long been buffeted by a shortage of homes. Brexit came as the final nail in the coffin, according to Aneisha Beveridge, a housing market analyst at Hamptons International & Countrywide Plc.
While prices may have already bottomed in prime central London, Brexit is preventing them from picking up, she said in an interview.
Diverse Capital
The picture in the capital varies widely in different neighborhoods. A report from LSL Property Services and Acadata last week showed prices fell in 21 of 33 boroughs from a year earlier in August, with Tower Hamlets seeing a near 10 percent drop and Greenwich, Westminster and Wandsworth seeing falls of around 9 percent.
While the expensive but volatile City of London and Kensington and Chelsea saw the biggest increases, areas of on the fringes of the capital such as Waltham Forest, Brent and Redbridge also showed gains.
Prime Minister Theresa May is inching toward a deal with EU counterparts before the U.K. formally exits the bloc in March. Hopes of reaching an agreement this month have been dashed as a series of summits failed to deliver.
“While a Brexit resolution will remove some of the uncertainty weighing on London house prices, the capital faces an affordability crisis," said Niraj Shah, a London-based economist at Bloomberg Economics. “Add to that the tax changes to the buy-to-let sector as well as proposed higher stamp duty on foreign buyers and the London housing market is likely to remain subdued for some while yet."To contact the reporter on this story:
Anurag Kotoky in London at akotoky@bloomberg.net
To contact the editors responsible for this story:
Fergal O'Brien at fobrien@bloomberg.net
Brian Swint, David Goodman
Posted on Bloomberg news today
dom9 said:
We completed today - LOL
Albeit in the Oxshott area, so outside of London and at a good price (we think)!
Locked in for 5yrs on the mortgage so we'll ride out Brexit and pay it down as fast as possible!
Congrats we completed 10 days ago and it’s a big ‘phew’ from us as we are now renting ! Albeit in the Oxshott area, so outside of London and at a good price (we think)!
Locked in for 5yrs on the mortgage so we'll ride out Brexit and pay it down as fast as possible!
Will be buying again within 3-4 months so back into the fray but a lot more comfortable with the price point .
If you’re paying down the mortgage in that time then no real risk . I just wouldn’t want to be leveraged up and worrying about paying the mortgage in the next 5yrs not knowing what could happen with brexit/jobs etc
Thank you 
Job is secure (I think) so we're in good shape as we didn't overleverage after a year off work (so smaller multiplier).
Will ignore this thread for a few years, methinks
Tonks - met the neighbours... Well, some of them! Couldn't work out who was who but it's a menagerie!
Just got to get some painting done and I think we'll generate a list of things to do after we've lived in it for a year!
Job is secure (I think) so we're in good shape as we didn't overleverage after a year off work (so smaller multiplier).
Will ignore this thread for a few years, methinks
Tonks - met the neighbours... Well, some of them! Couldn't work out who was who but it's a menagerie!
Just got to get some painting done and I think we'll generate a list of things to do after we've lived in it for a year!
Attempting to move from Kent back to SE London
Went on market in April and had numerous viewings and offers, accepted at asking price and found a place
We were close to exhange then someone in the chain lost their funding
Went back on the market a month ago, no viewings
Dropped the price 2 weeks ago, had 1 viewing and a piss take offer
Trouble is for us, we can drop further but need the next move upwards to also be realistic about their pricing and that doesn't seem to be happening
We're a bit stuck at the moment and its depressing
Went on market in April and had numerous viewings and offers, accepted at asking price and found a place
We were close to exhange then someone in the chain lost their funding
Went back on the market a month ago, no viewings
Dropped the price 2 weeks ago, had 1 viewing and a piss take offer
Trouble is for us, we can drop further but need the next move upwards to also be realistic about their pricing and that doesn't seem to be happening
We're a bit stuck at the moment and its depressing
I think a good house; ie in a good location will sell quick, a bad house with a realistic price will sell fast.
I viewed a few houses which sold within a few weeks of being on the market, mine sold in less than 10 days, but I accepted a lower offer than I ideally would have liked, but one which I was thought was acceptable.
I viewed a few houses which sold within a few weeks of being on the market, mine sold in less than 10 days, but I accepted a lower offer than I ideally would have liked, but one which I was thought was acceptable.
Tlandcruiser said:
I think a good house; ie in a good location will sell quick, a bad house with a realistic price will sell fast.
I viewed a few houses which sold within a few weeks of being on the market, mine sold in less than 10 days, but I accepted a lower offer than I ideally would have liked, but one which I was thought was acceptable.
in london depends when you bought, far too many people bought between 2013 and now and are expecting a huge profit. if they can get out at cost i thin kthey will be doing well. I viewed a few houses which sold within a few weeks of being on the market, mine sold in less than 10 days, but I accepted a lower offer than I ideally would have liked, but one which I was thought was acceptable.
p1stonhead said:
Yep 2013 and 2014 was absolutely INSANE round my way. Would often see people queuing out the door of ‘open days’ on the weekend and some went way over asking. Bats
t.
yup, t. im in the market, get loads of calls from agents first thing i ask is when did they buy and what did they pay. if they bought in the last 5 years and expect a profit then im out.
z4RRSchris said:
yup,
im in the market, get loads of calls from agents first thing i ask is when did they buy and what did they pay. if they bought in the last 5 years and expect a profit then im out.
We are in the process of buying but not exchanged yet. We are happy with what we are buying so will sit tight for now but we are getting calls from Agents asking if we'd like to offer on other properties and that we may be surprised what they would sell for. im in the market, get loads of calls from agents first thing i ask is when did they buy and what did they pay. if they bought in the last 5 years and expect a profit then im out.
One place is 'discreet marketing' which always makes me very suspicious
okgo said:
I sold for 31% up on summer 2013 purchase, are people really losing out much if they bought then? I\d agree if you bought in last 3 years, but not 5...
We bought in spring 2012. Sold August this year. We "made" 63%. OK we spend about 100k doing it up. If I account for that we "only made" 42%. Still insane. Feeling much more comfortable being out of the London market with a much smaller (less than half what it was) mortgage to survive the Brexit fallout withrobbieduncan said:
We bought in spring 2012. Sold August this year. We "made" 63%. OK we spend about 100k doing it up. If I account for that we "only made" 42%. Still insane. Feeling much more comfortable being out of the London market with a much smaller (less than half what it was) mortgage to survive the Brexit fallout with
Spot on and the we did the same....We're close to completing a purchase from almost 6 months back, we're lucky enough to be able to keep our small current place which we'll be renting out but we've had to put money into it which has made the purchase much more expensive, seriously having doubts if it's sensible now :/
There are plenty of people who purchased in 2013/14 who are still sitting in significant amounts of equity.
My old flat in bow I sold for 435 I'm December 2014, it's growth has been fairly limited but I think the current owners would probably get 450-475 without too much trouble.
Likewise my house 3 miles up the road, I paid 388 for it December 2014 and have probably spent 60k on it I'm that time, one has gone under offer for 625 round the corner from me.
I guess we are at the 'lower' end of the London market but whilst the slightly more gentrified areas such as hackney and Vic park continue to go up, the areas next door will do so too.
My old flat in bow I sold for 435 I'm December 2014, it's growth has been fairly limited but I think the current owners would probably get 450-475 without too much trouble.
Likewise my house 3 miles up the road, I paid 388 for it December 2014 and have probably spent 60k on it I'm that time, one has gone under offer for 625 round the corner from me.
I guess we are at the 'lower' end of the London market but whilst the slightly more gentrified areas such as hackney and Vic park continue to go up, the areas next door will do so too.
princeperch said:
There are plenty of people who purchased in 2013/14 who are still sitting in significant amounts of equity.
My old flat in bow I sold for 435 I'm December 2014, it's growth has been fairly limited but I think the current owners would probably get 450-475 without too much trouble.
Likewise my house 3 miles up the road, I paid 388 for it December 2014 and have probably spent 60k on it I'm that time, one has gone under offer for 625 round the corner from me.
I guess we are at the 'lower' end of the London market but whilst the slightly more gentrified areas such as hackney and Vic park continue to go up, the areas next door will do so too.
I think different price points here is the key. My old flat in bow I sold for 435 I'm December 2014, it's growth has been fairly limited but I think the current owners would probably get 450-475 without too much trouble.
Likewise my house 3 miles up the road, I paid 388 for it December 2014 and have probably spent 60k on it I'm that time, one has gone under offer for 625 round the corner from me.
I guess we are at the 'lower' end of the London market but whilst the slightly more gentrified areas such as hackney and Vic park continue to go up, the areas next door will do so too.
Most in the S/E around the 1.5mln mark are hanging around for long periods where as in the S/E in similar areas the up to 1mln mark is shifting.
Downsizing is the name of the game
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