Why are house prices so high when the economy is dire?!!?

[Spooner]

Hi

We are wanting to move to the area and have looked at several 4 bed period properties. We LOVE the area and naively thought we would get a bit more for our money than in Battersea where we currently live. How wrong were we!!?

It seems to get a 4 double bed place in Peckham Rye or East Dulwich that is not too far from the station with a good garden you are looking at ?700,000 or thereabouts. Estate agents tell us the area is going up and up in price...though we all know you can't trust anything they say. Having spent many hours looking at house price trends, it still isn't terribly apparent to me what we should be playing. All I can conclude is that these prices are overly inflated and seem to be very much bucking the trend, although as there is limited stock if we want to move anytime soon that is what we are probably stuck with.

I am really happy to pay a fair price rather than looking for some amazing deal but these prices just don't seem to sit with London trends or the dire state of the economy.

Any advice or opinions or useful websites would be much appreciated.

Thanks a lot

[stephent]

1) London has been the best performing area for houses for months - although Halifax/Nationwide report small increases this covers the whole of the UK. If you look at the regional breakdowns, London is up quite strongly (over 5% according to the last govt stats). Indeed even if you look at the country-wide numbers from the Halifax they currently under report current house price increases, as the seasonal adjustment they apply pulls the actual numbers down.

2) Is the economy that dire in London? As far as I can see there are plenty of highly skilled jobs on offer.

[Jacbuc]

you should check out the hill behind the horniman museum - good primary schools on the doorstep good rail links from honour oak and forest hill - it borders on east dulwich but tends to be cheaper. They are mainly 1930s semis or detatched but with generally bigger gardens and lofts that are often converted.

[ratty]

SE22 is still catching up with comparable areas. This combined with Russian and Chinese money coming into the area is keeping prices high I think (or so I am told). House in my road sold in about 3 weeks so people are still paying it and competition in the buyers market is still quite high.

[Moos]

?700k sounds extraordinarily high, though. Maybe it's the 'decent garden' bit, most houses here are on small plots and those with big gardens can perhaps attract a premium.

[????]

For London...Sterling has declined by 20% in 4 years. London is cheap as chips for Russian, Chinese and (especially with events in the Middle East) arab buyers with cash, that ripples down as people who used to happily buy in Chelsea/Kensington etc pushed out.

The City still doing well, much to the chagrin of the flat earthers whod like it removed.

Increased rail prices and ridiculous commuting times plus improving PRIMARY schools has massively increased demand for inner city decent suburbs such as ED...not sure if tghis is tryue for flats though just family houses

etc etc

[peterstorm1985]

I think the OP's reference to 'not too far from the station' may be highly significant to the prices seen. I live less than a ten minute walk from the station (but far enough not to hear train noise) and a couple of recent house sales in our street have beaten the 2007 highs (the sale prices were approx 5% less than asking). There will always be a premium for convenience, and those who've been pushed out of more central areas will put a higher value on that. There are far more 3 than 4 bed houses near the station, and if you add the 'good garden' to the requirements, it's a small pool of properties. If you're prepared to walk a bit further you'll find the prices are more reasonable.

[Marmora Man]

We moved to ED because of the greater VFM equation. The houses in Marmora and going south to Honor Oak are good value with equally good transport links. Honour Oak to London Bridge - 12 mins, the 63 / 363 to Elephant roughly 20 - 30 mins.

Look further than ED Station and you'll do better

[Dorothy]

You have made the mistake of being too fixated on being close to the station. Most of SE22 is not within easy walking distance of ED station at all. The station is right on the border of Camberwell. Those houses which are close to the station are the smaller 3 bed types (Crawthew Grove, Frogley Road, St Francis Road, Matham Grove) and they have small gardens or courtyards.

Four bed houses with good sized gardens within easy walking distance of the station are RARE. That's why they are pricey.

[Otto]

Those four beds near the station with okay gardens are also quite possibly in range to get into the village schools. And a hop skip and jump from lordship lane. An easy walk to dulwich park or peckham rye park...Worth their salt. But, of course, I'll admit, I'm biased!

I will say that they are all hovering around 2007 price levels at 700ish with the occasional gem leaping up further...in other words, you are looking at a price stall at the moment rather than a giant rise.

[chantelle]

try Honor Oak Park - better schools and trasnport links and houses rarely go above ?600k. I agree ED is inflated for what you are getting. It's only people who already have equity and are selling who can afford these prices. Otherwise you need income of around ?150k, which is quite a small group of people, even in London.

Also keep in mind a lot of sellers are taking the piss at the moment and their selling price will be much lower than the sticker price.

[lje1985]

Peckham Rye is doing particularly well at the moment - there's the tube which arrives next year, the new pub, pizzeria and delicatessen of Bellenden Road which is now a very nice little high street, and the fact that it's tranquil and has little traffic. You're paying for a great place to live. It'll only get worse once the rest of the world catches on

[chantelle]

I agree that Peckham Rye is fantastic but the prices already reflect that. I see virtually no difference in prices between PR and ED and unfortunately a lot of the PR (and ED) houses are really narrow and poky. Nunhead offers more space for better prices too.

[trizza]

Try the roads opposite/near Peckham Rye park. Dunstans, Friern, Upland, Underhill. Larger footprint than those near the station and you should be able to pick one up for less than ?500K. Getting to Peckham Rye on the bus from Forest Hill road takes less than 10 mins and I have never had any real issue with the frequency of the service.

[Grotty]

There are so many 3 bed terraced houses in ED/PR i reckon the trick is to buy one and do a decent sized loft giving four bedrooms and then extend the long thin kitchens sideways so you have a large kitchen/diner at the back - creating nice size house for far less than ?700,000...

[KeyboardWarrior]

All the time there are people wanting to move into the area like yourself then prices will stay where they are. Basic supply and demand. Look at rental prices, up 10% a year minimum for the last 5years, and will keep going up all the time people pay it. Same with petrol prices, 33% higher than 18months ago, I own a car, what can I do but pay it (rhetorical before someone pipes up :-) )

[benmorg]

KeyboardWarrior Wrote:

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> All the time there are people wanting to move into

> the area like yourself then prices will stay where

> they are. Basic supply and demand.

The price of credit determines demand. The main reason house prices have held up since 2009 is the dramatic fall in the base rate to a 300-year minimum. At some point, interest rates will rise again and house prices may resume their fall back to sane levels. But who knows when that will happen - could be next year, could be in 20 years.

[anna75]

The answer is that, finally, a whole quarter of London is being discovered. You have realised earlier than most, that is all. Battersea is horribly over-priced for a rather nasty inner city area, completely unsuited to children. THere has been a birth rate/population explsoion since 2000, so areas that are suitable for families have increased in price a great deal. Couple that with the fact that the East London line has reminded buyers of the hitherto unknown delights of a short commute and you get your higher prices.

Having said all this, I agree that these levels of icnrease year on year are untenable. I'd look in Nunhead, Honor Oak or Brockley if I were looking now. More for your money, not far away, good trasnport links to city/canary wharf and west end and the start of the boom not the end of it.

Good luck in your search

[mrcee]

I agree with a lot of the comments on here, relatively speaking south-east london is actually cheap compared to the rest of london excluding east london which is also on the increase.

I moved to Honor Oak Park where i got a lot more brick for the money and is not too far for an evening out in east dulwich which clearly has a lot more going on.

[bandwagonesque]

Nunhead is far better value.

[benmorg]

anna75 Wrote:

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> The answer is that, finally, a whole quarter of

> London is being discovered. You have realised

> earlier than most, that is all.

You'd have a point if SE London was rising in price faster than, say, Battersea, Fulham or Chiswick, but it isn't. The largest rises are happening in the highest price brackets in traditionally desirable areas, not in "up and coming" SE London.

[benmorg]

bandwagonesque Wrote:

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> Nunhead is far better value.

Bigger houses for sure, but not great for shops, pubs or restaurants. I enjoyed the quiet and greenery when I was in Nunhead. Good for country bumpkins but no good if you want urban buzz.

[anna75]

Benmorg, YOu make a good point.

Here is my understanding.

Different buyers - middle class Brits are increasingly priced out of the areas you mention. The people who can afford them are not dependent on mortgages, often have big bonuses (yes still and yes funded by us!) or are non doms (ironically) or the global rich moving money from volatile areas into places they perceive as safe. A flight to quality if you like.

None of those categories will be attratced to local markets like SE London where mc Brits can afford to buy, just, still.

[benmorg]

anna75 Wrote:

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> Benmorg, YOu make a good point.

>

> Here is my understanding.

>

> Different buyers - middle class Brits are

> increasingly priced out of the areas you mention.

> The people who can afford them are not dependent

> on mortgages, often have big bonuses (yes still

> and yes funded by us!) or are non doms

> (ironically) or the global rich moving money from

> volatile areas into places they perceive as safe.

> A flight to quality if you like.

>

> None of those categories will be attratced to

> local markets like SE London where mc Brits can

> afford to buy, just, still.

True, but the ripple effect peters out as you move further down the market, and in lower price brackets the mortgage drought dominates. ED straddles both worlds - it has large ?1 million houses bordering Dulwich and much cheaper 1-bed flats. It's simplistic to think in terms of location in the current market, which is fractured along price boundaries more than geographical ones.

[Jeremy]

"Cheaper" doesn't necessarily mean "better value". Nunhead is basically cheaper because it is less desirable (although I'm sure plenty of people like it there).

There are still plenty of people earning good money in the City - and I don't see any reason why they wouldn't be attracted to areas like ED (not all bankers can afford houses in Chelsea/Pimlico/etc).