'We've reached a tipping point' Signs of house price weakness

lisyloo

Thanks both - good to have some proper discussion.
FWIW - I would like to buy a (small) bolt hole in London but currently mortgage barred due to new business.
Shame we're not allowed to use our pension funds (now there's a thought).

Interesting article here:

http://www.trustnet.com/News/529507/im-so-bearish-ive-sold-my-house-says-cantors-tan/

Jack_Johnson_the_acorn

Jason74 wrote: »

OK. I'll start. What I'm about to say is is limited to the London market, as that's the only area I really know a great deal about. So it might not be that relevant to the rest of the UK.


There are different views on how much of what is going on is seasonal, but I think the central view appears to be that part of the current slowdown is seasonal, but there is more to it than that. I'd certainly subscribe to that way of thinking, and take a view that the sealed bid madness of earlier this year has caused prices to overshoot a little, and that they'll now drop back a little as that overshoot corrects itself. I think you're looking 6-12 Months before you see meaningful rises from here, and prices wuill imho drop back a little before that happens.


In terms of a "tipping point", the answer imho is not really. The market is already dramatically cooling, and that should be no surprise given recent madness. Prices in most areas seem to have levelled off, and in some, they're actually dropping back a little as described above.


This process will imho continue for 6 - 12 months from here, but that imho actually might make this a good time to buy (I'm actually thinking about putting my money where my mouth is on this point and make the trade up to the "forever house" from my current little pad), as you have a little more time to make a sensible choice and negotiate on price, rather then having 20 minutes in a property with 40 other people and then having an hour to make the biggest financial decision you'll ever make and decide almost "in the dark" how much money you're willing to throw at it. The end of that nonsense is in itself leading to a dropping off of prices as people stop panic buying. Much as I hate to agree with Hamish on this, the simple fact is that the sheer number of people who want to buy will put a floor under prices and prevent a "tipping point" being reached


As for interest rate rises, the answer to your question is "none of the above" in relation to your A/B choices. Yes, it will spook the market a little, and will probably contribute a little to the cooling process described above. So hardly nothing. But certainly a long way from "shock and awe", and not a huge game changer imho.

Got to agree with all of the above, I also think homes will be removed from the market if prices do start to drop, thus ensuring demand outstrips supply and prices remaining much the same. Certainly no crash or rocketing HPI

Jason74

Jack_Johnson_the_acorn wrote: »

Got to agree with all of the above, I also think homes will be removed from the market if prices do start to drop, thus ensuring demand outstrips supply and prices remaining much the same. Certainly no crash or rocketing HPI

The homes being removed from the market point is an interesting one imho. Certainly, if people do pull from the market if it drops, that puts a floor under prices. The other possibility is of course that people "rush for the exits", hoping to catch peak prices. I don't see owner occupiers doing this in any number (why would they, after all they'll still need somewhere to live if they sell), but the BTL brigade may well be looking to cash out at something close to peak, so a sense of a falling market might put a bit more downwards pressure on those parts of London where a lot of BTL have piled in.

chucknorris

Jason74 wrote: »

but the BTL brigade may well be looking to cash out at something close to peak, so a sense of a falling market might put a bit more downwards pressure on those parts of London where a lot of BTL have piled in.

I looked at selling up recently, but I decided that it is better to stay in the market, because the rental profits are much better than any of the alternatives.

gallygirl

After reading a bit of this thread I checked my local market (East Midlands) for 2-3 bed houses as that's what I'd been researching recently. Around 20% had price cuts which initially made me go :eek: - but well over 1/2 had simply been priced too high to start with - and some of them still are IMHO.

saguk1234

http://www.rightmove.co.uk/news/files/2014/08/august-2014.pdf

Blooloo

chucknorris wrote: »

I looked at selling up recently, but I decided that it is better to stay in the market, because the rental profits are much better than any of the alternatives.

I see Hamish has thanked you for this little gem of advice. He obviously knows the ins and outs of your position and approves.

CathyP72

About bloody time. Madness!

wotsthat

Blooloo wrote: »

I see Hamish has thanked you for this little gem of advice. He obviously knows the ins and outs of your position and approves.

I reckon Hamish is running the Count of Nowhere account as a plant.

He nearly wet himself today after the Rightmove release and said he couldn't wait to see the effect on Foxton's share price. It went up 5%!

Comparing the MoM noise of Rightmove against the daily noise of Foxton's share price. Bizarre.

saguk1234

http://www.businessinsider.com/uk-property-prices-largest-decrease-ever-2014-8#comments