Thursday, Jan 15, 2015

Defying the forces of a world depression?

Telegraph: London house prices to fall up to 5pc as sellers abandon the market

Estate agents expect house prices in London to drop by as much as 5pc this year with the cost of larger family homes falling the most, an industry survey has revealed.

Posted by hpwatcher @ 08:28 AM (3405 views)
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7 Comments

1. hpwatcher said...

A small drop of 5% - in UK housing - is quite small, given the retrenchment in the price of oil (see what I did there?).

It's partly the high price of oil that has allowed the UK property market to stay levitated for so long.

Thursday, January 15, 2015 08:34AM Report Comment
 

2. khards said...

In some prime areas of London agents are already reporting asking prices being slashed by over 10%, so I would think that the 5% is a conservative average.

Thursday, January 15, 2015 09:12AM Report Comment
 

3. reticent said...

In some areas of prime London, the majority of properties are worth more than £2m, but such areas make up a small portion of the total. So, 2-5% across the whole of London seems pretty reasonable to me.

This is pretty massive, though. I can't remember when RICS made a negative prediction for the year. You could hardly say they were biased towards bearish predictions.

That said, I think they've had a much more accurate record than most.

2-5% seems quite a narrow range to me, however, given the many uncertainties up in the air between now and the election, let alone the worsening global outlook.

Thursday, January 15, 2015 10:35AM Report Comment
 

4. wdbeast said...

As always RICS problem is volume sales, they are not that bothered about price, they just want high volumes to collect their commission from.
They have to tread a careful line, they need sellers to be more realistic about asking prices to increase sales volume at the same time as not spooking the market, so 2% to 5% is their attempt to achieve both.
I think volume sales in London will plummet this year, but as always, the lack of forced sellers will mean a small decrease in price is the most likely outcome.
We all know there is a price correction coming across all the UK, but it will not happen until our economics creates a market that has forced sellers to bring prices down. I am looking forward to prices coming down but not to the social and economic problems that will no doubt come at the same time.

Thursday, January 15, 2015 11:25AM Report Comment
 

5. sneaker said...

Weird logic somewhere in the article.

Sellers abandon market = fewer sellers = less supply ... but prices going down.

You only get price-drops if BUYERS give up on a market.

Thursday, January 15, 2015 12:41PM Report Comment
 

6. britishblue said...

WB @4 said 'lack of forced sellers will mean a small decrease in price is the most likely outcome'.
Totally agree this was the way in the past. But every housing downturn has different triggers. At the moment there are a lot of rich people in London that are poorer than they were last year and might be looking at divesting from London whilst the pound is strong and the prices are high. They include:
a. Oil monied people.
b. Rich Europeans that bought when there was Euro Parity and could have made a 100%
c. Rich Chinese who are getting squeezed
d. Rich Russians who have commitments and business back in Russia.

House price valuations are calculated at the margins based on a small number of sales and accelerate either upwards or downwards based on sentiment. It could be the year these people leave or it could be with increased trouble in the world London becomes even more favoured as a place of safety.

Thursday, January 15, 2015 05:19PM Report Comment
 

7. wdbeast said...

britishblue@6 You are right, it could go either way with the foreign money.

All it would take is a similar event to the terrible happenings in Paris, scary times!

Thursday, January 15, 2015 07:59PM Report Comment
 

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