Interested in house, but the price has DROPPED 40K in the last 10 years, how to figure out why??

nannyto2

Saw a house in Somerset that I like that has been on the market about 2 months. Looking at historical prices for this house (and the houses on the same street) there has been a drop in prices by about 40K in the last 10 years. For example, the house two doors down sold for 210K in 2008, and then sold for 190K in 2019. The asking price for this house is also 40K less than what it sold for in 2009. I know there has been a drop in house prices recently, but 40K seems excessive on a 200K property.

If I asked the agent straight up about the reason for the price drop, would they even be honest with me?

I am trying to figure out why, as I see no problems, new reports etc, on the street itself. I did some googling and found out that Somerset has had issue with being labelled 'radioactive' due to Radon gas leaks, there have also been some flooding issues in the last few years. I thought this may be the reason for the drop but it seems overall house prices in Somerset have increased these past 10 years, though there was a peak and drop in 2019 - https://www.home.co.uk/guides/house_prices_report.htm?county=somerset&all=1

Not really sure how to investigate this, or figure this out.

davidmcn

Were the houses new in 2008/9? There's generally a premium for newbuilds (and the registered prices can hide incentives which reduced the effective net price). 

nannyto2

davidmcn said:

Were the houses new in 2008/9? There's generally a premium for newbuilds (and the registered prices can hide incentives which reduced the effective net price). 

No, however they were new in 2000, when they were about 120K

an example of the price history of a house on the street:

2000 - Sold for 120K (new Build) - Freehold

2008 - Sold for 210K - Freehold

2019 - Sold for 190K - Freehold

All the houses on this street follow this pattern, where around 2018 onwards there was a significant drop in prices.

davidmcn

Lots of places had a big price drop around 2008 and never really recovered, I don't have any local knowledge though. 

AdrianC

Show us a link.

I wonder if there's something nearby, maybe a new development that's turned a previously glorious view into suburbia.

2008 was, of course, the big crash. So no surprise that pre- and post-08 sales saw a drop. A lot of areas have never recovered fully.

ProDave

2008 was the peak of the last housing price boom.

There are a LOT of parts of the UK where prices still have not got back to 2008 levels after the last crash.

Nothing to worry about for a buyer now, but bad news if you bought at the 2008 peak in those places.

MovingForwards

My flat last sold in 2008, I paid £3k less than they did.

Whilst looking at historic sold prices, for the key financial crash dates helps, what you now have to do is take into account what similar properties in the area are currently selling for.

nannyto2

Could very well be the 2008 crash, does anyone know when abouts the house prices started to fall?

I worry there is something wrong that I may have missed e.g. maybe an issue with the build of the properties that has only just been discovered etc. I suppose a surveyor will pick up any major issues, just don't want to invest any further time or money if there's anything I can discover or investigate myself.

AdrianC

nannyto2 said:

Could very well be the 2008 crash, does anyone know when abouts the house prices started to fall? 

From http://news.bbc.co.uk/1/hi/business/8286028.stm



And a longer-term view...

seven-day-weekend

Is it leasehold?  The price will drop if the lease gets too short.

TripleH

The house price change is for a large area, there will always be regional / geographic variations. A school could be seen as desirable in 2010 creating a demand for local houses. In 2012 another school in the area becomes really popular causing a shift in desirability for schools and a local shift in demand. Better to review the larger area to see if variation is localised.