What's happening to house prices in the SE?

bluedrop

We viewed a few properties over the weekend.one agent asked if I thought the property was priced correctly? Another asked me if I'd like to make an offer of £X (10% less than the asking price) and see?
The third one called just now and said no offers yet.

What's going on? Crashing?

michaels

bluedrop wrote: »

We viewed a few properties over the weekend.one agent asked if I thought the property was priced correctly? Another asked me if I'd like to make an offer of £X (10% less than the asking price) and see?
The third one called just now and said no offers yet.

What's going on? Crashing?

Almost certainly...that or autumn!

bluedrop

Wondering if we should buy now or just wait...
(Let to buy - chain free )

catshark88

Where I am (SE), houses are selling very quickly if well priced, but can hang around for ages if not.

I feel that there is some sort of downturn in prices coming. Interest rates must rise at some point and certainly in London, people are pretty heavily leveraged. We had the MD of a branch of Savills round to value a property and he referred to potentially rising rates as "the elephant in the room".

I don't think there will be a crash, but wouldn't be surprised by a period of stagnation or some degree of drop for a period of time.

I'm hoping to buy something in London in the new rise future, but will certainly wait, to see what affect interest rates and Brexit may have.

gagahouse

catshark88 wrote: »

Where I am (SE), houses are selling very quickly if well priced, but can hang around for ages if not.

I feel that there is some sort of downturn in prices coming. Interest rates must rise at some point and certainly in London, people are pretty heavily leveraged. We had the MD of a branch of Savills round to value a property and he referred to potentially rising rates as "the elephant in the room".

I don't think there will be a crash, but wouldn't be surprised by a period of stagnation or some degree of drop for a period of time.

I'm hoping to buy something in London in the new rise future, but will certainly wait, to see what affect interest rates and Brexit may have.

Can't really see the economic case for rate rises for the next few years. Current currency induced spike in inflation will dissipate away from base effects as trade weighted GBP has been stable since initial devaluation lows in October.

You also have great uncertainty over Brexit which is clearly sapping confidence and growth (today's service PMI number at 8 month low) so can't see BOE doing anything there as they look through current inflation.

Real wages have gone negative so no pressure from there either for a monetary response to wage push inflation.

And while it is true that UK rates generally track US rates, this is one of those many times. as in the past, where they will not and will be anchored to purely domestic UK issues as it goes through the Brexit process.

The final thing to consider is that there has probably also been a structural change in the term structure of global interest rates - as debt issuance has increased substantially so have the corresponding currency deposits created at the same time. Those deposits then seek a home with a return and the main way this is achieved is by loaning them out. It is not just banks that this do, but all the world's holders of substantial deposits (corporations, governments, asset managers, pension managers, and even individuals collectively).
As we've increased the supply of money massively then its price, the interest rate, must come down as we;ve seen. The point is a normalisation of interest rates will not return us to 5-6% base rate but more like 1-3%.

Given those factors I would not worry about any interest rate rises of any significance for the next 2-3 years.