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Alfie Moon

Are Prices Going To Drop Like A Lead Ballon In Birmingham?

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On the 'What are prices doing in your area' part of this forum I have started a thread about house prices in Birmingham, and in particular Bearwood (an okish but very ordinary area of Birmingham) - see:

http://www.housepricecrash.co.uk/forum/ind...23&t=21881&st=0

My feeling is that prices in Bearwood and Birmingham, like the rest of the country, are ridiculous - but perhaps more so than some areas. To test this assupmtion I have used Land Registry figures to compare Bearwood/Birmingham terrace house prices to Reigate/Surrey terrace house prices. I have compared the year 2000 and 2005. My findings show that the long-term relationship between the difference in house prices in Bearwood Vs Reigate is way out of kilter. I would value any comments/analysis of what I have observed and of the implication for house prices in Bearwood/Birmingham. See the following for my calculations/observations:

To make sure that my observations about the price of houses in Bearwood/Birmingham Vs Reigate Surrey are not due to cherry picking individual houses for comparison I have visited the Land Registry site to get some overall average prices to compare. I have used the B67 5 postcode where the Herbert Rd mid terrace hose in Bearwood is located (see link I gave in 2nd post of this thread) and the RH2 8 postcode which is where the 2 bedroom mid terrace cottage is located in Reigate (see 1st link in post above this one where I gave 3 links to example properties in Reigate). I looked up the average price for terrace houses for these Bearwood and Reigate postcodes for Jul-Sep 2005 and Jul-Sep 2000. The results were as follows:

Reigate (postcode: RH2 8) Jul-Sep 2005 average price of terrace house = 178k

Reigate (postcode: RH2 8) Jul-Sep 2000 average price of terrace house = 144k

Bearwood (Brum) (postcode: B67 5) Jul-Sep 2005 average price of terrace house = 126.3k

Bearwood (Brum) (postcode: B67 5) Jul-Sep 2000 average price of terrace house = 60.5k

This means that in 2000 the cost of an average terrace house in Bearwood (B67 5) was = to 42% of the average cost of an average terrace house in Reigate (RH2 8).

In 2005 the cost of an average terrace house in Bearwood (B67 5) was = to 71% of the average cost of an average terrace house in Reigate (RH2 8).

Surely this reduced margin between prices in Bearwood (ordinary part of Birmingham) versus prices in Reigate (expensive London commuter country) cannot be maintained. Surely the long term trend, which I assume is more likely to be closer to 42% rather than 71%, is almost certainly going to reassert itself. If so prices in Bearwood will need to drop by a considerable amount. What do others think?

I have posted this here as far more people look at this part of the forum than the 'What are prices doing in your area' and so maximises the chance of me obtaining some feedback. Thanks.

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Better area's never seem to rise/fall as much in a house bubble, looks like reigate is 20% over, but bearwood is 100% over, its going to get messy in bearwood i think.

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I think you're right Alfie.

To me your ratios are proof that this property bubble has prompted people to pay what they can afford rather than what the value is.

Perhaps you would find that the ratios of household incomes in the areas of Bearwood vs Reigate are now similar to the ratios of prices. In other words, affordability is all that matters at the height of the bubble and not quality of life.

edit: And as you say, when people realise that this was just a bubble and nothing more, the ratios will revert back to their longterm trend. Bearwood -50% if they're lucky.

Edited by Sine270

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I'm looking in Reigate, and I had the feeling that it is over-priced, but not by as much as some other areas - interesting that it's confirmed by this analysis. Interestingly, while some of you in other areas are reporting huge numbers of houses for sale, in Reigate there are not that many on the market.

People are still over-stretched though looking at the state of most of the houses that we've looked at...

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Well more firkink jobs are being lost in the region.

Firkin jobs facing axe

Jan 12, 2006

More than 400 jobs were at risk today after historic Black Country bakery Firkin was put into administration.

M. Firkin Ltd runs 53 shops across the region as well as its bakery in West Bromwich but on Tuesday Kim Rayment and Dermot Power, of restructuring experts BDO Stoy Hayward, were appointed as administrators.

Firk it!

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On the 'What are prices doing in your area' part of this forum I have started a thread about house prices in Birmingham, and in particular Bearwood (an okish but very ordinary area of Birmingham)

... with a great name.

Reigate (postcode: RH2 8) Jul-Sep 2005 average price of terrace house = 178k

Reigate (postcode: RH2 8) Jul-Sep 2000 average price of terrace house = 144k

Bearwood (Brum) (postcode: B67 5) Jul-Sep 2005 average price of terrace house = 126.3k

Bearwood (Brum) (postcode: B67 5) Jul-Sep 2000 average price of terrace house = 60.5k

You need to do 1998 to 2003 for Surrey to map the same movement. Remember the ripple effect. It takes time for the rest of the country to catch up.

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Birmingham will definitely drop more than Reigate. The sme thing happened last time round - the hot spots outside the south east rose and fell by a greater percentage. If you saw "How to be a property developer" on Channel 5 on Tuesday you would have heard the statement that "house prices in Liverpool have crashed"! Could be a watershed moment ...

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http://www.rightmove.co.uk/viewdetails-651...pa_n=1&tr_t=buy

can they go higher? 1.6 million for a 3 bedroom flat....

I remember someone posted that a few weeks ago.

An unbeatable example of comedy flat pricing.

If I wanted to spend 1.5mil on a property in that area, I think this might be a better choice:

http://www.rightmove.co.uk/viewdetails-296...pa_n=1&tr_t=buy

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Better area's never seem to rise/fall as much in a house bubble, looks like reigate is 20% over, but bearwood is 100% over, its going to get messy in bearwood i think.

Indeed, the bears are really going to come out to play.

Bearwood isn't really that nice at all, parts of it have pretentions of being in Harborne but other parts are basically in Smethwick or West Bromwich (speaks for itself). I suppose there are plus sides for some people, it's in easy reach of Winson Green if people want to visit relatives :lol:

Certainly those flats are just lie-to-buy fodder, if you earn such a wage in Birmingham you're not going to live there, you'd look towards Solihull, Litchfield, maybe Sutton or Harborne if you really have to be in Birmingham, otherwise you're going to commute from the neighbouring shires.

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:):):)

This is a very interesting analysis: thank you very much.

It would be nice if we could also do the same comparison of local incomes. This might mean choosing more isolated areas, where the local travel-to-work area can be clearly defined. It might also mean making some assumptions about non-work incomes (e.g. pensions, disability benefit etc.) in the area as statistics for these are not easily available by area.

Anyone got any ideas ?

:):):)

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I remember someone posted that a few weeks ago.

An unbeatable example of comedy flat pricing.

If I wanted to spend 1.5mil on a property in that area, I think this might be a better choice:

http://www.rightmove.co.uk/viewdetails-296...pa_n=1&tr_t=buy

You could always snap up some of the remaining St Pancras chambers apartments. A nice 2 bed for a bargain £950,000

http://www.stpancraschambers.co.uk/

.. beware of the revolting flash based site though.

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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