Housing Market

[doodlebug]

Any comments on selling? Any ideas which agents are actually managing to sell properties? Can't decide who to list with. What are your views on what will happen? How low will prices go? When will things pick up? ...

[Marmora Man]

Having lived thru' the housing recession 91 - 95 my experience is that London house prices tend to stall and flatline while everywhere else outside London house prices fall. If you're moving outside LOndon - wait a while and then there should be some good buys. If you're in London - sit it out and it'll probably be OK.

Exceptions for London flatlining are areas that were "up & coming" as a result of high prices in adjacent quarters, so, as a local example, why pay high in Peckham when ED prices have stalled - or why pay high in ED when Clapham / Battersea have stalled?

All in all the best way to regard house values is as Monopoly money - whatever you receive for your 2 bed flat, 3 bed terrace or 6 bed mansion today you'll have to pay out the same sort of money to replace it. Of course if you're mortgaged to the hilt then a fall hurts - I've been there so I sympathise.

[Michael Palaeologus]

Prices may fall - but they will stabilise and ease back up - but not to a ridiculous extent.

The idea that the market would always rise does seem to be an imposssible dream.

[SeanMacGabhann]

slash nightmare

[????]

Getting your todger caught in your flies Sean?

[Dr De Soto]

doodlebug Wrote:

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> How low will prices go? When

> will things pick up? ...

Doodlebug, for all the pontificating by the 'experts' like Phil & Kirsty in the media, your guess is probably as good as anybody's. But East Dulwich (and the rest of London) has probably already seen a 10-15% fall in prices from the inflated and often speculative prices seen in estate agent windows last summer. One house near me went on the market at ?600k in January, probably a 'realistic' price at the time if you go by what others were on the market for, but it got no viewings. Its price has now been slashed to ?530k.

This is all very reminiscent of the 1980s/early 90s. At the time I had a 2 bed flat in East Dulwich, and at the very peak in 1988 flats like mine were going on the market at ?75k. Whether anyone was buying was another matter, but naturally everyone immediately assumed that is what their own place was 'worth'. Five years later, I sold the flat for ?50k, which given inflation levels at the time was probably a 50% fall in prices in real terms. Not even the gloomiest forecasters would have predicted that in 1988.

By 1993 the mood had turned overwhelmingly negative, and I remember 'experts' saying that house prices might not reach their 1988 levels again for a decade. Two years ago, I noticed my old 50k flat sold for ?300k. So what do the experts know?

[peckhamboy]

In all seriousness, have 'prices' actually fallen in ED? I can't see any evidence of it yet. So far, all that seems to be happening is that a few of the places that went on the market at very optimistic asking prices have been forced to set or accept more realistic prices. Which seems to me to reflect at best slow growth and at worst stagnation. A lot of people bought into or got used to the idea that their house or flat was 'worth' an extra ?5-10k each month and find it hard to accept that in fact prices have had to level out since the turn of the year.

Unlikely that there will be a significant crash though, IMO, if you look at the underlying causes. The demand is still there, it's just the supply of mortgages that has dried up a bit. One of the advantages of ED's "gentrification" though is that the target market is probably the part of society least affected by the credit crunch - young professionals in 'stable' careers. The difference is that now they are being offered 5x rather than 6x salary multiples on their mortgages, and often need to find at least 10% deposit so a young couple, both on ?50k, will struggle to reach/exceed ?500k. Banks still need to lend money to make money, though, and this is the group they will be targeting. As someone else said, London is generally better insulated against price drops than the rest of the country anyway.

Of course, this would all change if the credit crunch lead to a major recession, with spiralling unemployment etc...

[Jeremy]

Like peckhamboy said... I've not seen much evidence of falling asking prices round here. However, properties are taking much longer to sell, so I'm guessing that actual sale prices have decreased a bit.

[Brendan]

Question is. Is much selling at all at the moment?

We nearly bought our first house about a year ago but decided to hold off because the whole thing just looked too out of control and unsustainable (well that and we needed some of our deposit money for other things, which seems a bit fortuitous now). So now we are just waiting and watching. Which I suspect is what a lot of people are doing. Many others are going to sit on what they have until they can get back what they put in. So the whole shebang may well be stuck in the slow lane for a couple of years until the rest of the economy catches up. Then we can look forward to humanity?s propensity for greed and innate stupidity leading to it all going apeshit again.

[*Bob*]

Don't worry about the housing market.

Buy a property you're happy to live in with repayments you can afford to repay, forget about it and live happily ever after.

[Alan Dale]

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[*Bob*]

Of course, Alan.

But then I didn't just parachute in here from a rented flat with a suitcase full of money, you know.

[Alan Dale]

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[macroban]

A housing price slump is a good time to die. The children pay less IHT.

[Alan Dale]

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[Alan Dale]

macroban Wrote:

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> A housing price slump is a good time to die. The

> children pay less IHT.

No good if they're intent on cashing in though. Fine if you live in Canada and they're ready for a lifestyle change..

[*Bob*]

Alan Dale Wrote:

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> And let's not forget the kitchen makeover you did

> on your last place *Bob* Insightful stuff.

Sometimes you have to put a little work in yourself Alan - if you want to progress up that ladder. Something to bear in mind?

[Alan Dale]

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[*Bob*]

You should get into it.

Potential buyers are suckers when it comes to interiors. They forget all about the roof and the rotten windows - every time.

[Alan Dale]

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[SeanMacGabhann]

is this lounge-bound?

[Alan Dale]

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[Administrator]

Please stay on topic

[Leaf]

We've been watching the market around here for about 6 months now looking to buy and certainly seen properties drop their asking prices by up to 15% in that time, there are a lot of flats/houses staying on the market for quite a while but properties that are in excellent condition have gone very quickly, at what seemed like opportune asking prices. I'm not sure how well insulated ED is against a downturn in the market, we recently had an offer accepted that was over 15% below the asking price. Whether or not we've made a good decision time will tell but we are here for the long term.

[Brendan]

I?m busy writing about this at the moment*: The RICS has released its construction market survey for the first quarter of 2008 and there has been a sharp fall in the amount of housing being built.

So house prices will inevitably rise again at some stage because of simple supply and demand and the UK will continue to provide inadequate over priced housing.

http://www.rics.org/NR/rdonlyres/B511E1E6-D94C-4724-BA85-FEF7F332483B/0/RICSConstructionSurvey2008Q1.pdf

*Well I?m supposed to be but I?m procrastinating and wasting time on the forum.