How far will house prices fall [volume 5]

[klan8456]

Bullet-Proof_Biscuit said:

All property on the south of England are up markedly since pre 2020, the only place at all that seems to be going down is this E11 Leytonstone you bang on about? Could it just a sthole?

Nonsense, E14 has dropped massively as well

[V6Alfisti]

Bullet-Proof_Biscuit said:

All property on the south of England are up markedly since pre 2020, the only place at all that seems to be going down is this E11 Leytonstone you bang on about? Could it just a sthole?

100% not true, if you look at land registry the whole of greater London is now on average just back up to it's 2016 value for actually sold property. This is not "markedly up" pre 2020, even the latest Halifax report shows that London as a whole is up just 0.3% from last month.

E11 was just one example that was specifically pulled out, because we had some fun with ooid who at one point was posting every single property that sold in that area when it represented a tiny percentage of the overall available stock there.

The "softening" can be seen in a number of parts of London (lots of west London has gone that way, Greenwich Peninsula, Central e.t.c) , that example list would be rather much larger if I bothered to go through every single property, in fact here are just the post codes of some of those where property has either made an outright loss or a loss through inflation (typically on property previously sold in 2017 onwards and then sold in Q3 this year) This is from the last batch of sold results from Land Reg and not even the full batch just the first few I came across.

Clearly there are those that have gone up as well, the housing market is not an "average"

A quick check shows losses in SW15, SW18, SW19, SW1W, NW9, SW11, SW2, W2, E11, E14, E3, N1, N10, N6, SE1, SE10, SE15, SE20 e.t.c

Let alone those within commuting distance of London like Redhill, Caterham e.t.c

Edited by V6Alfisti on Thursday 12th November 08:52

[anonymous-user]

V6 will never admit to being wrong as it would mean he's wasted all this time waiting for prices to drop rather than just getting on the market and on with their life

[V6Alfisti]

anonymous said:

[redacted]

Apart from I am not, the data proves that. I know it's hard to stomach but land registry doesn't lie Keyser Soze.

If by put on hold, you mean live in my favourite area of London that I previously wouldn't have been able to afford living in or taken a massive haircut over the period, and now have zero chain in a declining market with a strong LTV . What an awful position to be in, I see what you mean

[princeperch]

I think a lot of the recent sales in E11 have possibly been landlords tarting up rentals and getting rid.

There are still some properties under offer recently at strong prices, whether they will complete is another matter.

https://www.rightmove.co.uk/property-for-sale/prop...

This was last sold 2016 for 400, they've done the loft and smartened it up but would have probably got change out of 65/75k for the work they've done (my house is identical and I've done an identical refurb).


https://www.rightmove.co.uk/property-for-sale/prop...

This is under offer at 680 breaking the ceiling price for the road

https://www.rightmove.co.uk/property-for-sale/prop...

Last sold 431 in 2017 had a fair sum spent on it (would have been in the region of 100k) but now under offer against a 675 asking

The point I'm making is that if you simply want to compare apples with apples i.e the same house purchased in 2016 then resold in 2020 with the same kitchen and decoration, that isn't the easiest task to do. People do work, change kitchens and bathrooms, do lofts so on and so forth. What is fairly clear is plenty of people in my area have made good money buying tired houses and doing them up, then reselling. It's all relative, if you have a mug buying your 2 bed flat in hackney downs for 600 and you can buy a nicely done 4 bed in Leytonstone- who cares about the purchase price, all that really matters is the cost to change- and if you aren't the mug funding it from the bottom rung then given how cheap money is, why put your life on hold waiting for a 5-10pc correction that might not actually occur? Buy the house enjoy the extra space, start a family, whatever, just get on with life.

Edited by princeperch on Thursday 12th November 09:18

[Helicopter123]

V6Alfisti said:

anonymous said:

[redacted]

Apart from I am not, the data proves that. I know it's hard to stomach but land registry doesn't lie Keyser Soze.

If by put on hold, you mean live in my favourite area of London that I previously wouldn't have been able to afford living in or taken a massive haircut over the period, and now have zero chain in a declining market with a strong LTV . What an awful position to be in, I see what you mean

Have you been renting then?

I know some have no choice, but cannot otherwise fathom why you might willingly choose to pay off someone else’s mortgage rather than your own as a long term decision?

Market goes up most years, down occasionally but property as a real asset is a one way bet longer term.

No offence meant.

[V6Alfisti]

princeperch said:

I think a lot of the recent sales in E11 have possibly been landlords tarting up rentals and getting rid.

There are still some properties under offer recently at strong prices, whether they will complete is another matter.

https://www.rightmove.co.uk/property-for-sale/prop...

This was last sold 2016 for 400, they've done the loft and smartened it up but would have probably got change out of 65/75k for the work they've done (my house is identical and I've done an identical refurb).


https://www.rightmove.co.uk/property-for-sale/prop...

This is under offer at 680 breaking the ceiling price for the road

https://www.rightmove.co.uk/property-for-sale/prop...

Last sold 431 in 2017 had a fair sum spent on it (would have been in the region of 100k) but now under offer against a 675 asking

The point I'm making is that if you simply want to compare apples with apples i.e the same house purchased in 2016 then resold in 2020 with the same kitchen and decoration, that isn't the easiest task to do. People do work, change kitchens and bathrooms, do lofts so on and so forth. What is fairly clear is plenty of people in my area have made good money buying tired houses and doing them up, then reselling. It's all relative, if you have a mug buying your 2 bed flat in hackney downs for 600 and you can buy a nicely done 4 bed in Leytonstone- who cares about the purchase price, all that really matters is the cost to change- and if you aren't the mug funding it from the bottom rung then given how cheap money is, why put your life on hold waiting for a 5-10pc correction that might not actually occur? Buy the house enjoy the extra space, start a family, whatever, just get on with life.

Edited by princeperch on Thursday 12th November 09:18

Apples and apples are the easiest comparison, but just a few posts above was exactly the scenario you mentioned where they had done a full extension and tarted it up. So not being ignored but rather called out, given quite a few people will see a big jump over that period and not actually look at the underlying.

[klan8456]

Helicopter123 said:

Have you been renting then?

I know some have no choice, but cannot otherwise fathom why you might willingly choose to pay off someone else’s mortgage rather than your own as a long term decision?

Market goes up most years, down occasionally but property as a real asset is a one way bet longer term.

No offence meant.

Plenty of reasons - e.g. if you don’t have UK citizenship and the UK isn’t your lifetime home, tying up several hundred thousand in a deposit is risky. What if you need to leave, work sends you somewhere else, and you need to sell in a hurry - being upside down or making a loss isn’t a nice feeling.

Renting is also much cheaper in some instances (most, in my area) when you take into account the mortgage interest, maintenance and service charges at 6 - 10k a year. I have deployed my deposit capital in shares, which have done far better than residential property.

My landlord is losing money hand over fist.

[NickCQ]

Helicopter123 said:

cannot otherwise fathom why you might willingly choose to pay off someone else’s mortgage rather than your own as a long term decision

If you take a look at gross (<3%) and net (<2%) rental yields in London as well as the tax position of BTL, you will conclude that renting is a pretty good deal.

[NickCQ]

klan8456 said:

My landlord is losing money hand over fist.

Mine too - million plus quid asset that he is probably getting <£20k from net of costs and taxes

[V6Alfisti]

Helicopter123 said:

Have you been renting then?

I know some have no choice, but cannot otherwise fathom why you might willingly choose to pay off someone else’s mortgage rather than your own as a long term decision?

Market goes up most years, down occasionally but property as a real asset is a one way bet longer term.

No offence meant.

Yes and we have covered it before.

Frankly because I not only get to live in a place/area I love and my savings that aren't invested in property, I put into shares/savings that more than cover my rent, also I knew at the time my first move was always going to be temporary i.e 2-3 years as I would get bored of the London lifestyle. So when you have plenty of savings, a decent track record of making money out of it in a market that I saw was facing headwinds...it just didn't make sense.

There is a reason people are selling up their family homes and moving into rental for a year, they expect the market to fall and equally want to take advantage of a temporary move somewhere they couldn't get away with (before Covid times).

That's not to say this is a long term decision, I am "liquid" and can move at the jump of a hat if needed, it's only been the last 6 months or so we have narrowed in on area that we like, before that we did the typical London journey (look at immediate area, not right for long term as the houses we like are over £7m, just not affordable, look a bit further out but too many compromises (i.e period terraced/semi for about £1.2m, look that extra step out and find somewhere you actually like and works for the commute).

Or I could have followed what other people do, buy a place in a "developing" area, compromise and live in a pretty average property/area for years in the hope the area/value improves and then sell on, but rather now I am in a position to buy what would easily be termed "the final house" in a nice area.

[V6Alfisti]

NickCQ said:

If you take a look at gross (<3%) and net (<2%) rental yields in London as well as the tax position of BTL, you will conclude that renting is a pretty good deal.

Equally this, I live in a near £1m flat but pay comparitively little vs having to mortgage up for that. Let alone the service charges. Like I said, this is a property that didn't make financial sense for anything but renting in today's market. Flat's on the street have had their asking dropped by 10%.

Let alone the fact that rents have dropped another 25% over covid, after I got 10% off the previous rental price when I moved in !

Edited by V6Alfisti on Thursday 12th November 09:47

[princeperch]

I am sure that in pH land, where ones equity portfolio never go down , the stocks are picked right at the bottom of the market with no risks at all, and ones landlord is a generous old lady who gives out rent discounts at the drop of the hat- renting is ideal.

Meanwhile back in the real world, most normal people scrape together a few Bob for a deposit, the bank lends them the rest (leverage- works both ways) and they get on with things and they buy their 150-200k house. The other most overlooked point is a straightforward repayment mortgage is the best form of financial discipline/enforced savings plan Jo Bloggs can have.

[Shnozz]

princeperch said:

Meanwhile back in the real world, most normal people scrape together a few Bob for a deposit, the bank lends them the rest (leverage- works both ways) and they get on with things and they buy their 150-200k house. The other most overlooked point is a straightforward repayment mortgage is the best form of financial discipline/enforced savings plan Jo Bloggs can have.

That to me is the nub of it.

As V6 has said, there is more than one way to skin a cat and you can get to the same end point different ways. However, for most people they don't have the discipline to follow a saving route, whereas bricks and mortar is an easy method to achieve equity whilst also the roof over your head. It's also (incorrectly in my view) seen as a one-way bet whereas equity markets are not. Betting against them is always a brave move but if done right there is no denying it cannot work considerably in your favour.

[p1stonhead]

princeperch said:

I am sure that in pH land, where ones equity portfolio never go down , the stocks are picked right at the bottom of the market with no risks at all, and ones landlord is a generous old lady who gives out rent discounts at the drop of the hat- renting is ideal.

The vast majority of people don’t report their losses. This is no different. You can mentally twist anything to suit your own narrative.

[V6Alfisti]

princeperch said:

I am sure that in pH land, where ones equity portfolio never go down , the stocks are picked right at the bottom of the market with no risks at all, and ones landlord is a generous old lady who gives out rent discounts at the drop of the hat- renting is ideal.

Meanwhile back in the real world, most normal people scrape together a few Bob for a deposit, the bank lends them the rest (leverage- works both ways) and they get on with things and they buy their 150-200k house. The other most overlooked point is a straightforward repayment mortgage is the best form of financial discipline/enforced savings plan Jo Bloggs can have.

No-one has said portfolio's never go down, stocks picked at the bottom with no risks. However everything is a balance, and my approach to shares has certainly beaten 0% growth for the whole of London between 2016, 2020. Equally anyone could have achieved that by putting £1 into a post office account.

You do realise rents are driven by supply/demand? When demand is cut, rents follow or you have voids. Equally London which is often talked about, is famously bad for yield for new entrants, clearly if it was bought 10-20 years ago...they are doing ok

[V6Alfisti]

p1stonhead said:

The vast majority of people don’t report their losses. This is no different. You can mentally twist anything to suit your own narrative.

Ditto with housing, as proven on here. With the fight against data and land registry.

[NickCQ]

princeperch said:

Meanwhile back in the real world, most normal people scrape together a few Bob for a deposit, the bank lends them the rest (leverage- works both ways) and they get on with things and they buy their 150-200k house. The other most overlooked point is a straightforward repayment mortgage is the best form of financial discipline/enforced savings plan Jo Bloggs can have.

Fine, but coming on this thread armed with cliches about renting being "burning money" and "paying someone else's mortgage" does not contribute to what is usually a high quality discussion about capital allocation, relative gross and net investment returns, leverage and so on.

[Carl_Manchester]

2020 - When you spend £650k and you still wake up in Leytonstone.

[V6Alfisti]

Carl_Manchester said:

2020 - When you spend £650k and you still wake up in Leytonstone.