Just been told that the market is cooling in SW London

melanzana

I don't live in UK, but love lurking!

Where on earth are people getting the money to buy these properties?

I do realise its London. But not everyone is selling a pre owned, and trading up or down, or a minted person who doesn't care ....surely?

What do ordinary folk do?, FTB for example...rent forever I suppose,

But London is the hotspot. And probably always will be.

I will watch with interest.

sebtomato

I have seen a nice 2 bed flat in Richmond borough being marketed for 3 months before the owner got an offer near the asking price (after around 15 visits without second visits for several months), set at around 10% more than the value of that flat last year. I am talking about some quality property, close to public transports, with communal gardens and dedicated parking.

I have seen some other flats being listed for several months, getting offers and then coming back on the market twice, as the sale fell through.

I don't think properties are selling as fast as the media would tell us. It's clear that prices have increased over the last year by about 10% in my location (Greater London), looking at recent sold prices, but it's not the frenzy advertised by newspapers. I think the volume of transactions is quite low.

Also, lots of sales are falling through, because people can't get a mortgage, and this is only going to get worse over the next few months, given the tighter rules and base rate increase. Making an offer in England is an easy task, but then getting a mortgage can be difficult, and some people have no clues (they base their offer on some bad and old assumptions) and make random offers.

On a positive note, I don't think the above is a sign of a crazy market, and therefore it's likely to stay stable, given this is Greater London and the level of demand, and possibly rise at a moderate rate over the next few years (5% per year?). However, the frenzy in central London, partially created by foreign investors simply speculating (and not even viewing the properties) will collapse, once the sentiment is changing, and the prices start to slow down/decrease.

theEnd

You can see the asking prices have cooled in the last month or two. Went crazy. Still somewhat crazy, but definitely down.

mobfant

House prices in and around Brixton are slowing, and about a third of the 2 beds I'm looking at in the 425-600k price range have had price cuts.

But maybe it's just a blip...

AndyGuil

mobfant wrote: »

House prices in and around Brixton are slowing, and about a third of the 2 beds I'm looking at in the 425-600k price range have had price cuts.

But maybe it's just a blip...

It will be asking prices slowing for the market to catch up. They got ahead of themselves and became disconnected from sale prices. That gap will have to close before it moves on again, to do that the asking prices will slow. Once the new mortgage rules have had their effect on the delay this will allow the market to continue moving on asking prices again.

observingthedebate

AndyGuil wrote: »

It will be asking prices slowing for the market to catch up. They got ahead of themselves and became disconnected from sale prices. That gap will have to close before it moves on again, to do that the asking prices will slow. Once the new mortgage rules have had their effect on the delay this will allow the market to continue moving on asking prices again.

I would agree with you. The silly asking prices has brought out a lot of properties on the market, particularly 2 bedders. Now there must be a lot of sellers chasing fewer quality buyers, post MMR. Sounds to me like a correction is going to happen soon.

AndyGuil

observingthedebate wrote: »

I would agree with you. The silly asking prices has brought out a lot of properties on the market, particularly 2 bedders. Now there must be a lot of sellers chasing fewer quality buyers, post MMR. Sounds to me like a correction is going to happen soon.

It is normal for supply to peak around this time of year. It is also normal for asking prices to dip this time too. In London. The supply will start dropping off soon in its normal cycle and asking prices go again. It isn't an fluke that the rises picked up towards the end of the year last year. It is part of the cycle. For the last 4 years at least there has been more supply than demand in May.

cells

melanzana wrote: »

I don't live in UK, but love lurking!

Where on earth are people getting the money to buy these properties?

I do realise its London. But not everyone is selling a pre owned, and trading up or down, or a minted person who doesn't care ....surely?

What do ordinary folk do?, FTB for example...rent forever I suppose,

But London is the hotspot. And probably always will be.

I will watch with interest.

The poor get to rent council homes for £0

The rich are rich

Those in the middle have to leave to other parts of the UK that are more affordable


OH and 50% of people in London can't afford to buy, and that number is rising rapidly (that is to say now less than half the homes in London are owner occupied)

AndyGuil

Renting and can't afford to buy aren't the same thing. Just pointing out the obvious.

movilogo

Picked up a copy of Evening Standard in London yesterday. There was a big heading news that the peak is already over and houses are taking long time to sell in London.