Seeing as a thread about an ex-florist has morphed in to a discussion about house prices (at the expense of the poor stag beetle), we thought we'd feed the beast, with this little snapshot from

Propertysnake lists properties which have reduced their asking price most in comparison with the initial asking price at which they were put on the market.

Rather than serving as good guide to how prices are moving, it probably works best as a guide to where currently property price expectations are most unrealistic - where owners and agents face the biggest wake-up-calls.

In a completely non-scientific way, we have compared taken a snapshot of the first and tenth-biggest property price drop in SE4 and compared the average with the other London postcodes ending in "4", plus a few of our near neighbours, purely for sport. By this measure, Brockley and Telegraph Hill are amongst the most "realistic" property markets, ie: where asking prices are most closely in line with what the market will bear.

Make of it as much or as little as you will.

Postcode Area / No 1 drop / No 10 drop / Average of the two

SE4 / Brockley / 20% / 9% / 14.5%
SW4 / Clapham / 21% / 13% / 17%
W4 / Hounslow / 23% / 15% / 19%
N4 / Finsbury Park / 15% / 11% / 13%
NW4 / Barnet / 23% / 10% / 16.5%
E4 / Waltham Forest / 16% / 7% / 11.5%
SE23 / Forest Hill / 33% / 9% / 21%
SE22 / East Dulwich / 35% / 16% / 25.5%
SE18 / Telegraph Hill / 15% / 11% / 13%


Anonymous said...

Not really sure I understand what that means. A straight average of two drops doesn't really mean much. We need to look at the mode/frequency/numer of properties dropping at each percentage and weight accordingly.

I always use

Enter your postcode and it gives you recent completed sales, and sales to asking price ratio. That ration will indicate the level of price that a seller/buyer should settle at based on recent trends.

Its worth noting that in this ration, and in nicks, the level of 'drop' was circa 5% on average even at the peak of the housing market increases. so a 9% compared to a 5% percentage suggests brocklet/telegraph hill are holding up pretty well.

Nick, any chance you can get the comparision for a few years ago?

I'm still abit confused about definitions. I live in Telegraph Hill Borough but have a se4 postcode. A 0207 telephone number but listed as Brockley by lewishma planning.

Anonymous said...

Agents round here are pretty desperate now.

One recently quoted a %-based free for flogging my gaff. I went back with a proposed reduction and they agreed.

So I went back with a further reduction - and they agreed.

This is an agent not known for its conservative pricing.

Anonymous said...

Hugh - All goes to show that not only are there fewer buyers, but there are also fewer sellers and thus less choice if you're a home buyer at the moment. Anyone who doesn't have to sell, won't.

If I were looking for a time to buy, I would wait til the economy starts it's decline and people are forced to sell as they no longer have jobs.

If you're looking out west, there are surely going to be a few front office City types who get made redundant, originally come from overseas and decide to head home and so sell their London gaff.

If there is a long term slide in the economy coming, we're sure to see more people pushed into selling. that hasn't happened yet, I think a lot of people will just be holding on and unlike the late 80s, interest rates are low so people can still afford their mortgages so are not forced to sell.

Anonymous said...

and won't have to - things aint that bad; we're just not in the days of 'put it on the market and sell it in the afternoon' madness.

The economy is unlikely to slow down to the point of job losses; and the Brockley market is likely to hold steady.

The Brockley market slowed around 2003 - it is doing so now as people can be more cautious and are playing on the back of the worry that prices will drop further. However the credit crunch will bottom out (that's what Gordon is trying to ensure in his US trips) and when the worst is known then things will steady and gradually rise.

If I were Hugh I'd be looking to jump back on the market come September/October

Anonymous said...

James, you seem pretty optimistic to me. Prices are very high in historical terms and even without the 10%+ interest rates of the early 1990s, we've had a property bubble that now can't grow further.

As for whether Gordon Brown can reverse a global credit crunch by touring the US, forgive me my doubts.

Anonymous said...

And since it's fun to pin colours to masts, I'm prepared to bet than London prices will fall by at least 10% by the middle of 2009.

I'm hoping for more since we're looking to ascend the ladder.

Anonymous said...

That isn't much of a gamble hugh :o) Your timing could be abit off.

I also think generally, prices in london will go down. I also think anyone on the ELL route will negate the general decrease and hold steady. This is one of the reasons why i brought here.

Anonymous said...

The ELL gains will have been priced in a long time before the tube arrives, and it won't offset general price falls across the market.

If anything, marginal areas are less safe than more established neighbourhoods in a bear market.

There's a surprising level of optimism on this site about Brockley's prospects as a new East Dulwich or other hotspot for the economically disenfranchised middle class.

My own view is that the good news has happened. There won't be big price increases here again until there have been significant falls, or at the very least a long period of stagnation.

Anonymous said...

I think it's not unreasonable to expect house prices in Brockley to rise to an extent when the ELL arrives. Everyone knows how Londoners place the tube a priority. The ELL gives an area like brockley the chance to be viewed differently.

Anonymous said...

Who cares? Are you lot buy-to-leave investors or something?!

If the value of my house goes down then so does the value of the next house I want to buy.

I bought my house to live in, it's doing a reasonable job, I don't need to move geographically or acquire more square-footage, and nor do most of us. I like Brockley for what it is, not for its house prices. So do most of us, I imagine.

I'm already sick and tired of hearing about the so-called 'housing market slump' and we're only a couple of months in!

Anonymous said...

Hugh, I think your partially right in your thinking. I extend it somewhat.

I have a 'second wave' theory. Yes, prices have increased due to the ELL line coming but there will be a second wave.

This second wave will be directly as a result of the increased publicity/knowledge of brockley from the ELL. I wonder how many people will travel on it, just to check out the different areas on the route? I expect articles to be published in the london papers, about the different areas. I'm quite looking forward to the experience to vist the other areas that i havnt seen yet.

My point before wasnt that clear, but prices could still go down but less so than in london generally due to the permanent change in transport infrastructure. I anticipate, all else being equal, a 10-15% increse variance from the london general trend. (if you live immediately close to the station).

Obviously, if prices go down 20% then brockley will go down too.

Anonymous said...

SE18 is Plumstead. SE14 sellers are even more reasonable/realistic in their demands, it seems.

Anonymous said...

Prices in Brockers have definitely already lifted through the ELL/Overland link association, but once it's in place I certainly think there's room for it to add value to the area. We're already on the Tube map and as such it's going to raise the area's profile more and more. At the moment when I say I live in Brockley I get 1 of 3 responses - "where?", "Brockley - as in broccoli?" or "oh isn't that in Kent (Bromley), but slowly people are increasingly aware of Brockers.

I don't know if the line is going to mean massive increases in prices, but I'm sure when it opens there will be a certain amount on "fanfair" and further publicity for areas along the route which certainly can't be bad. And then there's phase 2 which will open up the line further.

Kate - I know this is all pretty irrelevant really unless you need to buy or sell, but there's nothing like a good house price debate...

Anonymous said...

Dunno - I agree with Hugh, in the sense that estate agents will have immediately jumped on the news that the ELL was being extended, so this factor will already have been "priced in". I'd expect to see Brockley on much the same price trajectory as parts of Hackney, in this case, as they're both 'marginal' areas seeing recent price gains on the back of future transport links.

Anonymous said...

Kate, if the value of your house goes down then yes, so does the house you want to move to.

Which is great for those of us planning to upsize.

Anonymous said...

Don't know what you plan to upsize to under the flight path to Heathrow, but expect to pay twice as much per brick out west.

Bea said...

Hugh - however, when house prices slump your own property devalues - so when it comes to sell there'll be less in your own coffers to buy the bigger, but less expensive than normal, house. (That is assuming they devalue at the same rate).

Anonymous said...

Bea, falling prices favour you if you're trading up.

You have a flat worth 100. Prices fall 20% and you sell for 80. You lose 20 of profit.

But the house you wanted for 200 falls to 160, so you save 40.

Net gain of 20.

J said...

Prices are and will continue to fall. Without trying to sound like an economics lecture :-)

House prices have been based on AGGREGATE Supply and AGGREGATE Demand. It seems zealots often forget this.

The supply of money increased with the surplus casued by China making the global economy more efficient

more money = easy money = supernormal house price inflation. This is not viable in the long term and a correcction was inevitable.

China cannot make things cheaper and is increasing demand for resources, further increasing inflation. At this point interest rates should go up, but the BOE panders and lowers them. It does little good as there is less money for banks to lend, so less money for people to borrow, reducing AGGREGATE suply of money, hence AGGREGATE demand for housing.

Personally I withdrew my offer on a flat and have invested in Euros and comodities. The pound is falling and will continue to do so until the BOE starts doing what it's supposed to and raise interest rates.

btw. I agree with Kate Brockers is still a nice place to live but I will rent instead of buy and invest the difference - better value.

Anonymous said...

@ kate.

I do agree with you broadly. we bought our house to live in - it more than adequately fulfills it function, and we're not really planning to move.

But as we progress through the family lifecycle, have kids, become a stay at home parent, blah blah blah - the value of our house has become more significant to us because we've dipped into our property to fund various things.

We're not alone in that - the UK has a culture of using property as an emergency fallback that you can dip into. Unlike, say France, where houses really are for living in (although Brits invasion might have changed that)

Anonymous said...

You have a flat worth 100. Prices fall 20% and you sell for 80. You lose 20 of profit.

But the house you wanted for 200 falls to 160, so you save 40.

The example assume it is linear. There is a good chance that 1/2/3 bed flats will fall much more %-wise than family houses because of over-supply and over-extended buy-to-let-ers.

If like in the example you are aiming to double (or more) your leverage into a declining property market, I agree that is still unlikely to wipe out all of your "savings" or "not losses" or whatever they are.

Anonymous said...

I'm listening to a middle class, dinner party discussion about property prices but without the dinner.....

...but yes I'm as obsessed as the next person, sad isn't it?

Anonymous said...

I don't think the equation is as simple as that. If your property falls by 20% in value then you have a new loan to value ratio. So it maybe that you still have access to an extra £100k mortgage and you decide to look for properties worth £180K. It may be that you don't have access to £100K mortgage any more so you are looking at properties worth less than £160K.

You need to factor this in otherwise there be no such thing as a housing market - everything would be relative.

max said...

Monkeyboy, if you go to the kitchen would you please bring me a Corona from the fridge please, my one's warm, and a bit of humous if there's any left wouldn't go amiss either. Thank you.

Anonymous said...

actually we've cleared the table.

Isn't this where all the 'DINKY'(Dual Income, No Kids Yet)couples break out the cocaine?

max said...

Locally sourced of course.

Anonymous said...

Not on Tyrwhitt Road though, and nowhere near that large house they couldn't shift for 1.4 large.

Anonymous said...

It's not sad to be obsessed with the property market Monkeyboy. I think that were just tapping into our inherent laziness. Lots of 'what if' fantasising centred around thoughts of "if I buy/sell at the right time, then I won't have to work as hard/at all to pay the effing mortgage".

Seems entirely normal to me.

Anonymous said...

All rather quaintly English as well. Few nations seem to be as property obsessed as the English.

Something to do with the heritage of a land owning gentry defining social class. Or maybe the fact that earning a pension without it being salamied by City boys or the Chancellor is so difficult. Property is the pension.

I've always thought that this was a rather naff way of running an economy.

Anonymous said...

I like "salami" used as a verb! Is it the chopping, squashing or slicing though.

Anonymous said...

See Please Here

Anonymous said...

Of course everyone assumes that prices have risen to ridiculous levels however others believe that they have only made up for "lost time" when there was no house price inflation, or indeed deflation between the end of the 80s and the mid 90s,

If you spread subsequent gains in price over that period (whilst salaries increased), they haven't really increased that much over what is essentially a 17 year period.

Problem with house prices is that the market is open to emotions as well as economics. Even if people have jobs, the economy is doing OK and rates are low, if the population believe the hype and sensationalism about the impending market crash, it will happen, even though according to economics it shouldn't...

As for whether flats will decline faster than houses, in some areas this is likely to be the case, but I doubt it in Brockers where there's a huge supply of both houses and flats, and if yuo expand that to include St Johns and Crofton Park, there are many, many more 3 bed houses. Not exactly a shortage.

Cocaine Monkeyboy? Do you know how bad cocaine production is for the environment in South America? The noxious chemicals are destroying forests!

Anonymous said...

Sigh...I was only kidding!

Anonymous said...

I know. I was being "ironic"...

Anonymous said...

I was being a pain in the arse.

Anonymous said...

Hmmmm, so is it my imagination that makes new property seems smaller than it was in the past?

Or, an unreliable memory that recalls a time when many more thousands of properties were built each year by the public sector?

Or are these plots with semi-derelict some sort of mirage?

Property in the UK is market artificially constrained by government policy, archaic property ownership laws, planning laws, an incomplete land registry.

It is used to store wealth and confer social status.

This is silly and wasteful. A lot to do with Thatcherite social engineering. Other countries simply do not do this.

We now have property values way out of line with average salaries at a time when new buyers are saddled with student debts which simply did not exist in the past.

Something has got to give.

Anonymous said...

Myopic to assert that the UK is the only country where people obsess on houses.

There have been property bubbles all round the world recently.

Anonymous said...

Few have ownership of property as embedded in the culture as in England.

Here it is the vehicle of middle class social advancement.

People define themselves and derive an identity and self worth by the property that they own.

On the back of this we have a festering culture of devious commission wallahs leeching value wherever a transaction takes place.

Estate agents, lawyers, banks, free holders.

This is our Tulip mania and it is all just as silly.

It is wrong to assume that other countries are as daft.

Anonymous said...

Do you have any reason to think they're not, or are you just trotting out pleasantries?

Anonymous said...

I am simply pointing out that property is the English national obession and is far more important to the economy than it should be.

Having seen the damage the last property boom and crash did to peoples lives I suspect there are some around here who may be in for a shock.

Last time people were left high and dry by the property market, it took nearly ten years for prices to recover. Years with an albatross of a mortgage and no way out.

It is all so unneccessary.

If I had my way, never mind bookies, I would ban Estate agencies. People should not be encouraged to gamble their lives away.

Anonymous said...

And the banks and mortgage brokers who chasing their own commissions encourage people to over-stretch themselves. OK, it was tough when you needed at least a 20% deposit and were only lent three times your salary but there were fewer repossessions then.

What happens now is that the mortgage lender cannot give a toss - their loan is covered and when the property is repossessed they add on all the interest, costs etc. etc. so that everything, including the nest egg from Granny, is absorbed and you are back not to square one but square about minus three.

It is irresponsible lending that has largely driven the prices up to the ridiculous levels they are now compared with the average wage.

Anonymous said...

The irresponsible borrowing is just as much to blame, people have a responsibility to themselves and too many people over the last 5 years have been living in denial about their personal circumstances.

I saw on the news today that the average price to income in London is 4.3 and mortage takes up 27% of income.Thats the average.

Anonymous said...

It's not just the UK where people seek financial advancement and security through property to the point that the economy is driven by property prices and people get "obsessed". Asia is an excellent example: Hong Kong is a refugee society so property is a replacement form of security people use to replace what was lost when they left their land in China; Thailand, Singapore, Japan and other Asian states all have status attached to property ownership which drives up prices; and South America also has a property market which is based on more than mere "rental" considerations, such as status and security. The impression that the UK is "different" comes from the fact that many west European states have a different property market model, but that too is beginning to change in may European cities. So we may be obsessed, but not uniquely so. Right, off to watch Property Ladder!

Anonymous said...


You are riht aout Japan - and it experienced a horrendous property crash from which it is still not recovered.

Luckily there are major differneces to our market and the market when japan's bubble burst.

I think we also ought to remember, when we mention the property crash of the 90s that the major differences are interest rates and employment. Interest rates in the 90s were in double figures. We are a long way from this happening.

Anonymous said...

@ bobblekin - but the irresponsible borrowers suffer (quite often) for their sins while the irresponsible lenders get off scott free. Which is the more morally reprehenisble - the desperate user or the dealer making money out of the desperation of others?

It is also capitalism run riot. Time was when insurers were insurers, banks were banks and building societies were building societies. Then all began dealing in each others trades and push-push-pushing for business.

I started getting confused when confectioners started selling toothbrushes and Boots diversified into chocolate!

Anonymous said...

Blaming lenders for offering to lend is a bit like blaming a dog for barking.

No one forces anyone to borrow or spend.

As for a mortgage being a potential albatross, if you don't want to own a property or take a chance on tax-free leveraged capital gains, don't. But don't behave as if having one is someone else's fault.

Anonymous said...

Indeed, people have choice.

And the financial services industry contrives through obscurity, pressure selling and marketing based on their supposed integrity to mislead their customers.

Customers who are ill served by an education system that does not educate people about finance and how to make sense of the complex products being sold.

So we have a procession of scandals and people getting into serious financial difficulty.

From endowment mortgages, to interest only deals, self certification, dodgy valuations for buy to lets, punitive charges for changing the terms of a mortgage, management companies that fleece the leaseholders with excessive goes on and on.

How much choice do people really have? They get bombarded my marketing every day selling a dream and ruthless salesmen guiding them towards the dotted line.

Should they be condemned for being stupid when they find they have done a deal with a financial Behelzebub? Devil take the hindmost? This is not the way markets should work.

The UK laizez-faire attitude towards the mess of banks, lawyers, agents, insurance companies with their noses in the property market has trapped a lot of people into financial commitments that will blight their lives for decades.

A great deal could have been done to make these deals transparent. It was not and debt is at record levels and this will affect the economy in due course.

Or am I wrong and it is just the fault of a few fools who bought dreams they could not afford and it will sort itself out without too much fuss?

Well...we will see.

Anonymous said...

Who really cares if there is a crash? Just sit tight and ride it out. Even if you play the gloom and doom scenario and say your house does get repossessed - well in that case you just go back to renting, which is presumably what the doom mongers are doing anyway. Despite what Max says if you've got anything about you you won't end up on the streets. Back in the day my father's business went tits up and he was made bankrupt - he lost absolutely everything, home repossed the lot. The man dusted himself off and started again, it wasn't easy but he wasn't going to let it ruin his life. People are too quick to play dwell on the negative things. If there is a crash it's not great but it ain't the end of the world and it's not a good enough reason to avoid buying a house thoughout your life. My advice is that now is a great time to buy - renting is just giving someone else money you could be banking yourself.

patrick1971 said...

@bobblekin: "I saw on the news today that the average price to income in London is 4.3 and mortage takes up 27% of income.Thats the average."

Interesting figures...I'm surprised that average is so low. Would need to know more about the survey: did it only ask people with a mortgage, or did it ask everyone? Is that 27% of net or gross income; single or joint income? My mortgage payments tend to take up about 30% of my net salary, and I don't think that's that unusual. And 4.3 seems a very low figure; when you think that a family home in Brockley costs about £350K, you'd need two adults earning just under £40K each for that 4.3 to be about right.

Anonymous said...

I agree with Hugh, you can't really blame banks for lending. It's what they're in business to do (partly). Like any enterprise in a capitalist economy, their primary objective is to make money. Any duty of care they have would either come from a sense of responsibility, which capitalist enterprises are not required to have, or through having rules and regulations imposed upon them.

Banks, bldg socs and other lenders/financial institutions are however in a win/win situation. They are aware that even a small bank such as Northern Rock cannot be allowed to collapse and as for major UK banks like HSBC or Barclays, if they were bancrupted and consequently millions lost their savings amd pensions, there would probably be national unrest. The government will always come running to their aid with taxpayers money.

For this reason the government and the FSA need to be far more vigilant, setting a definite framework of risk limits that banks are allowed to take. The Basle regulations have gone some way to doing this, however the FSA in the UK has completely let the man in the street down through not regulating, what are essentially private enterprises which cannot be allowed to fail. If the government is essentially responsible for propping up banks with our, taxpayers money, when times get bad then it should have much more say in how they are run and regulated.

patrick1971 said...

I think it's very easy to say "oh, people shouldn't have borrowed all that money", and I'm usually the first to condemn the "I have £50K on credit cards now I'm surprised they want it back" brigade.

But back before the tight restrictions on mortgage lending were eased, you did get some annoying situations. When I was first buying, I wanted to buy a four bedroom property in New Cross for £150K. I could only afford £100K based on income multiples at the time, but I planned to rent out the other three bedrooms. I went to three banks and they all flatly refused to take potential rental income into account, which was very frustrating. In those sort of circumstances you could understand why people would take advantage of easier lending rules.

Also, when you're trying to buy and the market is going up around you seemingly by the minute, and you know that your mortgage will be affordable for you, it must have been pretty impossible to resist taking what was on offer.

IMHO the house price rise has been driven just as much by loosening lending criteria as by mass immigration of extremely wealthy foreign businessmen and city bonuses. You see it in Dublin, where banks were prepared to lend people eight times their income for a period of fifty years. Before, when you just couldn't get any more than 3.5 times your income no matter what, it necessarily kept a lid on prices. We're probably returning to that sort of situation, so prices will stay stagnant or slightly decrease as wages gradually catch up.

Anonymous said...

I know what you mean about frustration re lending restrictions. I had a friend who was looking to buy a while back. He had carefully worked out what he could afford, but the banks would not lend him enough to buy. The irony was that he had been paying about 20-25% more than the mortgage would have cost per month in rent anyway, so he knew that he could afford more than they were willing to lend

Anonymous said...

I think I'm right in saying that in Hong Kong you can get a mortgage that you can pass on to your kids 'cos you'll be dead 20 years before you're close to paying it!

And yes it's not unusual to be paying more rent then you would for a mortgage - if only you could get a decent deposit to get a good mortgage deal. It's not all about greed, it's desparation sometimes.

Mind you it's everyones aspiration to own somewhere over here, it's not as important in Italy/France. Think their ecomomy works slightly differently. Must be the cheese.

Anonymous said...

The thing with HK and Japan is that it's very easy to pass property down through the family. None of the inheritance tax penalties and legal minefield of the UK. So you buy a flat and yes your kids carry on paying the mortgage, but they can easily take possession of the property and move in once you're dead. At least that's my impression.

Here in the UK, if I'm not much mistaken, it'd be very hard to get a 25 year mortgage at the age of 50 as banks may assume that you may not last as long as the term of the mortgage and the bank wil end up tied up in passing the property to the next generation.

Bea said...

Renting was more expensive than my mortgage is and yet on my income I can only afford a one bedroom flat (3x times my salary if you include bonus and overtime but a whopping 4.75x my base salary only). Thank goodness my building society was willing to take a risk on my overtime / bonus and lend me the money to start paying for my own property instead of paying off someone else’s mortgage. I am pleased that the banks / building societies etc have had to diversify and competed against each other so as to offer me a product that suits my needs. So long as I keep my job I don’t see the “housing slump” as a problem as I intend to stay put for the next four years or so.

And on a side note - according to the BBC show “What Makes Britain Rich?” with Peter and Dan Snow (on in January), if I remember correctly, I am within the top 5-10% of earners in the UK (most of them I presume working in London). However, what the programme failed to cover was the cost of London living and in particular the cost of housing. This was reflected in the survey out yesterday sponsored by Shelter where the average repayment as % of average income for London was 26.8% whereas in Scotland (the lowest) it was only 15.2%.

max said...

Monkeyboy, the Italian economic model is not one to aspire to.

Anonymous said...

Looks like someone is starting a property-based blog:

Anonymous said...

"IMHO the house price rise has been driven just as much by loosening lending criteria"

This is a good point; I've heard the 'property boom' described as being, in actuality, a credit boom. It's certainly a useful way of thinking about it.

Anonymous said...

I would agree to this too. I audit city companies.

Anonymous said...

Max, you have a point.

My uncles seem to think income tax is optional, one of them regularly pays a weekly retainer to a bloke to make sure his shop windows don't get stoved in and asked me to post some letters while I was passing through Switzerland because his kept getting tampered with in the post!

Great clothes though.

Anonymous said...

Failing, bankrupcy, dusting yourself off, starting again?

That is America, it is much more difficult in the UK. Bankrupts here are treat like criminals.

We don't really have a healthy environment for enterprise. Council regulations, Taxes, Landlords.

Look what they have created in Brockley: empty shops, businesses driven out.

max said...

And there's no need to bankrupt at all in Italy since Mr Berlusconi made false accounting legal (this is not a joke).

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