Humpty

That very same house has been back on the market. First for £975,000, then quickly reduced to £925,000, where it is on with loads of agents and has remained unsold for a few months.

CB, to comment on your post would be to spoil its perfection.

We STR in 2007, but the wife is getting increasingly keen to settle down. I applied to a well known bank for a mortgage of the same amount as the deposit we intend to put down on wherever we end up buying. They offered us 80% of the figure I had asked for. I was surprised at their caution given my earnings and the fact that we are only asking LTV of 50%. I reminded them that a year ago when everyone was pulling their money out of the bank and stuffing it under their mattresses, we trusted them with our (large) life savings and now they didn't have the confidence to lend us a similar figure. Much humming and hawing on the phone and obvious embarrasment from the nice lady I was talking to. To paraphrase an old saying, I lent them an umbrella when it was raining and look where it got me.

You have to be careful you don't come over as an obsessive. Exercising patience is quite difficult, especially if the wife is on one's back. I can't see anything dramatic happening until after the election when whoever gets into power will raise taxes and put interest rates up. Then all hell will break loose. However, this damn QE is definitely slowing everything down. Keep the faith and keep schtum would be my advice. Unless you're on this site a lot, NO ONE who owns a house wants to know.

The schools

Well prices have been falling. £957,000, £910,000 & £825,000 for the three house sold this year on that particular road. By the end of 2007, they were going for over £1,000,000 with £1,150,000 being the highest price paid at the peak. It just seems a bit mad that people are pricing higher than peak sold prices in the middle of a recession. Even the local EAs agree, but claim shortage of decent instructions and unrealistic vendors. Let's see how quickly these current two go under offer. We're not going for them though - I'd feel a right mug in a few years if I'd paid that much

Interesting to see that the last few houses to come on to the market recently are trying for 2007 asking prices again. Two in Woodwarde Road are on for more than any house on that road has ever sold for.

So you're saying that to live in Dulwich Village, you have to live on Dulwich Village? The rental is out of synch with the asking price, but it's the same for all family houses in or near the village. This may change as I'm recognising some of the new property coming on as houses we viewed for rental in 2007/2008. A supply side increase in homes for sale might just nudge prices down again as we approach Christmas.

They have dropped - about 15% in the best locations and more on the borders. I do agree with Duke about "time" and this next phase might be long and drawn out with a few more ups in places despite the long term trend down. My guess is another four to five years until the bottom, about a year after I suspect unemployment will have bottomed out. I wouldn't bank on more than a 25%-30% drop from the peak in the village itself though. I think this will be a very uneven HPC by the time it's finished with location triumphing once again.

There is definitely more demand than supply in the Village at the moment when it comes to good sized family houses for sale. I've spoken to a few agents who all said that potential sellers are convinced that earlier this year was the bottom of the market and they don't want to sell close to the bottom. Those that have to sell are receiving multiple offers very quickly if the location is good. But when you look at rental, a different picture emerges. The rent we are paying at the moment values our house at about £300,000 less than the owners probably think it's worth, so long term, something has to give. However, I can't see prices dropping any more around here until interest rates rise and all the cash rich buyers have bought.

Rheinhart and Rogoff, in their study earlier this year of past financial crises throughout the world, give the following average periods for top to bottom:- GDP - 1.8 years Stock market 3.5 years Unemployment 5 years Housing 6 years If, as people are saying, GDP has now bottomed out 2 years from the top of the bubble, we may have another 4 years before housing does, although we do not know if quantitative easing on the scale we are seeing will shorten this cycle.

I completely agree with this. We need months like this to convince sellers that it is a good market to sell into. if we get a flood of houses on the market over the summer, not all of them will sell immediately and the supply will force prices down again as the unsold ones start to look stale going into the late Autumn and Winter.

Actually, they got up to £1.1 million in 2007, but there was a terrific hike in price from 2006 to 2007, as silly banking money moved in.

I don't know if you've seen the attached document, or if it's been debated here on HPC, but it should give you some comfort Aftermath.pdf Aftermath.pdf

Early August 2007. We had our house valued in June, but dithered about putting it on the market. When we called the agent again in August to check the valuation, they suggested £50,000 less than they had two months earlier. Fortunately, we subsequently STR later in the year at the higher valuation to a private buyer with no EA commission to pay. Quids in, but skin of the teeth.

Like you, I have been tracking the Dulwich market closely (on Property Bee). We sold up last Autumn and have been renting a very nice house here since then, as we had no desire to pay £1 million plus for a house that would tumble in value over the next two or three years. My suspicion is that not many of these Dulwich owners are being forced to sell. They haven't really dropped their prices over the last few months and I think it is more a sad, belated attempt to cash in on last summer's price madness now the kids have gone off to Uni etc. There does seem to be one genuine attempt to sell though and the current discount from the (admittedly very ambitious) intital asking price is eye watering. £1,299,500 down to £850,000. I make that 35% off the original asking price since 23 May when it first came on the market and they will probably have to settle for less than that to sell it in this climate. Interestingly, it seems to be Foxtons who are the EAs being the most hawkish in reducing owners' price expectations. If this is the bellwether, then it looks like back to 2005 at least in terms of prices round here.