Is Prime London Crashing? - Merged Threads

[Patient London FTB]

11 hours ago, Peter Hun said:

Wait... I thought we were posting random opinions without any regard to facts? When you have some solid numbers of falling visitors and investors please feel free to post them.

In the mean time, we will try and beat the tourists off with a shitty stick.

 

This makes me want to talk about a theory I've got at the moment, which is tourism is delaying the London BTL reckoning.  

Basically, the closer your property is to the central areas that appeal to visitors, the easier it is to put off selling or being forced to accept a lower rent. You can stick it on Airbnb and wait it out. 

I follow the central London rental market closely on Rightmove and see a lot of flats that have hung around since the early spring that have in theory been empty and available since then. Their prices may have been cut a little over time, but the landlord doesn't seem to be under any pressure.

I suspect it's due to the Airbnb effect, which hopefully is temporary, not least because of the authorities taking a closer interest in enforcing the 90-day limit for short-term lettings. Also, tourism is seasonal, so after the summer these guys should be under much more pressure. 

The question is what happens when the sales and rental slowdown reaches beyond those areas, into Zones 3-6, which don't have that fallback option. Is that what we're seeing in Balham (Zone 3) for example? 

 

[Sancho Panza]

4 hours ago, anonlymouse said:

The two beds category does also include some recent three bed flats too. Took me by suprise a bit so I haven't created some separate columns in my data yet.

I might also add information on types e.g. ex-la / new build / purpose built / period and whether it's flats or houses but to be honest the information I already have is enough to give me a feel for the local market.

Is Sancho in this thread? If you are reading this would you mind running your charts for N1, N5, N4 and N16?

As below.Worth noting a few strange things at the minute

1) Rightmove has stopped updating it's Maketed properties thread since Nov 16

2) As an example of strange things happening,N5 has 213 properties for sale and yet if you include SSTC it goes up to 350.Obviously,there will be multiples in there,but however you look at it,that's 50% of the market in limbo.The relevance is that only 13 tranactions occurred in February.That's a lot of people trying squeeze through a small exit.

3) N4 was 410 to 688 using the SSTC filter.40 transactions in Feb.

4) N1 was 722 to 1058on 48 transactions

5) N15 was 144 to 255 on 11 transactions.

 

For my money,these indicate a major dislocation is ongoing.Dow theory states you can't really trust the price action if there's declining volume.

Using the raw sales data on a 12 month moving average

N1 peak was Jan 17 at £791 k.Feb 17 was £789k

N4 peak was Feb 2017 £609k

N5 peak was Nov 2015 £880k, Feb 2017 was £722k so down 17.% off peak

N15 peak was Jan 2017 £464k,Feb 2017 was £462k

Edited June 23, 2017 by Sancho Panza

[Sancho Panza]

5 minutes ago, Sancho Panza said:

2) As an example of strange things happening,N5 has 213 properties for sale and yet if you include SSTC it goes up to 350.Obviously,there will be multiples in there,but however you look at it,that's 50% of the market in limbo.The relevance is that only 13 tranactions occurred in February.That's a lot of people trying squeeze through a small exit.

3) N4 was 410 to 688 using the SSTC filter.40 transactions in Feb.

4) N1 was 722 to 1058on 48 transactions

5) N15 was 144 to 255 on 11 transactions.

 

 

 

Worth pointing out that N15 SSTC figure is basically 10 months transactions waiting to happen in a month or two.

Hardly a market that's clearing

 

[winkie]

18 hours ago, Peter Hun said:

No, but it goes to show that London isn't going to lose its appeal - no matter what,

Great....enjoy it, make the most of it and suck it for all there is to make from it, everyone should be free, prosperous and content, not only just a few.......the growing inequality in some places is massive and very easy to see.....happy days.

[dugsbody]

15 hours ago, anonlymouse said:

The two beds category does also include some recent three bed flats too. Took me by suprise a bit so I haven't created some separate columns in my data yet.

I might also add information on types e.g. ex-la / new build / purpose built / period and whether it's flats or houses but to be honest the information I already have is enough to give me a feel for the local market.

Is Sancho in this thread? If you are reading this would you mind running your charts for N1, N5, N4 and N16?

How do you filter out "lease for life" cr4p from your stats? From a manual search view it is very annoying seeing something that actually looks like reasonable value only to click and find it is half the actual price they want or only available to over 60s.

Also, what graphing library are you using please?

[Conquistador]

Update after April's ONS/LR figures. There was quite a lot of updating in the LR stats for recent months, so some of the juicier reductions have been flattened or even reversed. Overall, stagnation in real terms is basically the story. It boggles the mind that prices have almost doubled over London as a whole since April 2009. This will not end well.

Local authority / Month of peak / % fall from peak (Apr 2017) (annualised % fall)

City of London / Jul 2016 / -5.4% (-7.2%)

Wandsworth / Oct 2016 / -4.2% (-8.4%)

Islington / Aug 2016 / -3.2% (-4.8%)

Brent / Oct 2016 / -2.5% (-5.0%)

Kingston / Jul 2016 / -2.5% (-3.4%)

Lambeth / Sep 2016 / -2.1% (-5.0%)

Croydon / Aug 2016 / -1.0% (-1.5%)

Bromley / Aug 2016 / -0.9% (-1.3%)

Richmond-on-Thames / Jul 2016 / -0.4% (-0.5%)

Redbridge / Aug 2016 / -0.2% (-1.0%)

Barking & Dagenham / Oct 2016 / -0.1% (-0.2%)

City of Westminster, Hackney, Haringey, Havering, Hillingdon, Kensington & Chelsea, Lewisham, Waltham Forest - peaked?

Barnet, Bexley, Ealing, Enfield, Greenwich, Hammersmith & Fulham, Harrow, Hounslow, Merton, Newham, Southwark, Sutton, Tower Hamlets - rising

[anonlymouse]

18 hours ago, dugsbody said:

How do you filter out "lease for life" cr4p from your stats? From a manual search view it is very annoying seeing something that actually looks like reasonable value only to click and find it is half the actual price they want or only available to over 60s.

Also, what graphing library are you using please?

The only filters I use are price, location and minimum number of bedrooms. I don't worry about unusual leases/covenant types as I want a picture of the overall supply.

Graphs are from google sheets.

12 minutes ago, Conquistador said:

Islington / Aug 2016 / -3.2% (-4.8%)

Hackney - peaked?

This seems to match my data too.

[maverick73]

The Vank of England are going to slow the price decline as much as possible. It weird, for the last 10 years, they were harping on about making the basket of goods cheaper... So this must be the inverse.. they can make the basket cheaper by raising rates, yet they do not, it shows nature...

[Upabove]

Has anyone been tracking rental values at all?

When I moved to London I remember 1 bed flats being well out of reach starting at like 1300pcm mark for anywhere within 45min of Victoria.  Now they appear to be close to breaching the 1000 mark!

http://www.rightmove.co.uk/property-to-rent/property-60585862.html

If that is the case it might get very interesting for the HMO BTL types soon, A room in a shared flat still seems flat at like 700pcm, but as the two values get closer how many people will start switching? 

[maverick73]

2 hours ago, Upabove said:

Has anyone been tracking rental values at all?

When I moved to London I remember 1 bed flats being well out of reach starting at like 1300pcm mark for anywhere within 45min of Victoria.  Now they appear to be close to breaching the 1000 mark!

http://www.rightmove.co.uk/property-to-rent/property-60585862.html

If that is the case it might get very interesting for the HMO BTL types soon, A room in a shared flat still seems flat at like 700pcm, but as the two values get closer how many people will start switching? 

I sense a downsizing is in play.. everyone's cottoned on to negative sentiment and the scramble for the cash in exit doors has begun... 

[Sancho Panza]

1 hour ago, fru-gal said:

Lots of 1 bed flats for rent around the hipster paradise of Brixton and many have dropped by at least 10%;

http://www.zoopla.co.uk/to-rent/property/london/sw2/brixton-centralsouth-streatham-hill/?beds_min=1&include_shared_accommodation=false&price_frequency=per_month&price_max=1000&q=SW2&radius=0&results_sort=most_reduced&search_source=refine

Wow......!!!! and they appear to be cutting quickly to find the clearing price.Normally,they'd just wait for a 10% under offer.........

[Freki]

That's some nice news, can't wait for this to spread north (of London)

[highcontrast]

24 minutes ago, Sancho Panza said:

Wow......!!!! and they appear to be cutting quickly to find the clearing price.Normally,they'd just wait for a 10% under offer.........

Wow indeed! Crash-bleedin-tastic!

It's on like donkey kong!!! 

[Si1]

35 minutes ago, Sancho Panza said:

Wow......!!!! and they appear to be cutting quickly to find the clearing price.Normally,they'd just wait for a 10% under offer.........

That's the thing, cashflow is king.

[the_duke_of_hazzard]

I think this drop in rents is the real story in London.

I'm seeing rents crater in Dulwich since Brexit, drops of 20-30% by my reckoning. Income from my savings is more than covering rent, but no way can I afford to buy the same places. I make them overpriced by about 30-40% to buy.

 

[Darby Ram]

1 hour ago, the_duke_of_hazzard said:

I think this drop in rents is the real story in London.

I'm seeing rents crater in Dulwich since Brexit, drops of 20-30% by my reckoning. Income from my savings is more than covering rent, but no way can I afford to buy the same places. I make them overpriced by about 30-40% to buy.

 

I agree, and London is particularly affected because rents are being squeezed from the bottom (housing benefit freezes in a region with a relatively high proportion of the population on housing benefit: 11.0% of adults 16+ versus 8.7% in the whole of UK) and from the top (high-paying roles being moved elsewhere post-Brexit, and associated uncertainty). I don't see the latter phenomenon going away any time soon; if anything, we are just seeing the start of the process as businesses start to make contingency plans and high-skill immigrants decide not to take jobs in London at all. The bottom of the market is more uncertain, given that people like Shelter are calling for landlord subsidies to be kept in place rather than just protecting vulnerable tenants and forcing down the cost of housing.

Regardless, London is the centre of the pond and I'd expect these things to start rippling out sooner rather than later.

Edited June 25, 2017 by Darby Ram

[thisisthisitmaybe]

London BTL and South East BTL is in endgame territory. A friend of mine recently invested in a couple of BTL flats from an inheritance (I'd advised him not to, but hey). One of the tenants is moving out (he was already there when they purchased the flat) and now they are having problems getting a new tenant unless they substantially reduce the rent or spend a bundle doing the place up. 

It's classic bubble behavior - the early investors in BTL have already quietly gotten out, whilst the more conservative investors like my friend (who in normal economic times wouldn't go near BTL) are coming in too late and are now on the receiving end of the new taxation and a collapsing rental market. 

Edited June 25, 2017 by thisisthisitmaybe

[North London Rent Girl]

 

3 hours ago, fru-gal said:

One bedroom flat (tiny but self contained) in nearby Clapham for £607 per month (reduced from £693). That is cheaper than most flatshares.

http://www.zoopla.co.uk/to-rent/details/44089577?search_identifier=0a84d6e29e1905b370a9074f78c4a825

I wonder if that lower rent is because, although you would have the unthinkable luxury of your

Own Private Shower

you would also have the indignity of a

Shared WC.

Have to say that is really a nice big garden tho. If the loo were engaged you could nip out and pee at the back there under the trees.

Edit: am not arguing that rents are not dropping. Anecdotal but an old friend of mine who moved out of london for a year to study and is moving back to take up an internship said that rents have definitely dropped - she's been looking in stoke newington/islington. It's really looking very cheery.

Edited June 25, 2017 by North London Rent Girl
another bit

[Sawitcoming]

After paying the rent (£1850) on the dot for four years I was two weeks late and he gave me a hard time about it saying it had caused him to have bank charges. He caught me at a very bad moment and I told him that it is not my fault he has leveraged himself to the nuts and a two week delay with the rent has brought him to his knees. He evicted me.

Truth is I had refused to accept his rent increases for the last two years and I think he thought he would get more rent if he put it on the market. He is very much an amateur landlord and I don't think he has any idea. He had not decorated the place in 10 years. He has now done a big redecorating job, and had two months void an put it back on the market for £1700. 

I think there might be a lot of this coming around soon. When the prices were going up, they could rent any old s41t and charge top dollar. I think the BTL brigade will have the double whammy of having to invest in improvements as well as drop the price in the coming months or learn what the term void means.

[Sawitcoming]

Wimbledon. Just outside village.

[spiker]

Guy in my work has dropped 50k off the price of his 600k property in Blackheath and still no takers.
Says he's getting hassled by chancers coming in looking an additional 50k off.

Things are changing....

[thisisthisitmaybe]

27 minutes ago, Sawitcoming said:

After paying the rent (£1850) on the dot for four years I was two weeks late and he gave me a hard time about it saying it had caused him to have bank charges. He caught me at a very bad moment and I told him that it is not my fault he has leveraged himself to the nuts and a two week delay with the rent has brought him to his knees. He evicted me.

Truth is I had refused to accept his rent increases for the last two years and I think he thought he would get more rent if he put it on the market. He is very much an amateur landlord and I don't think he has any idea. He had not decorated the place in 10 years. He has now done a big redecorating job, and had two months void an put it back on the market for £1700. 

I think there might be a lot of this coming around soon. When the prices were going up, they could rent any old s41t and charge top dollar. I think the BTL brigade will have the double whammy of having to invest in improvements as well as drop the price in the coming months or learn what the term void means.

Interesting anecdote. Amateurs certainly underestimate the maintenance and improvement costs of property, although the UK's incredibly loose laws regarding standard of rental habitation has allowed them to get away with doing nothing for a long time. 

 

10 minutes ago, spiker said:

Guy in my work has dropped 50k off the price of his 600k property in Blackheath and still no takers.
Says he's getting hassled by chancers coming in looking an additional 50k off.

Things are changing....

 

He should flog it for 500k before Corbyn repossesses it for f-all.

[Sawitcoming]

Dont want to go further and start idientifying it. This is a public forum  

[Frizzers]

1 hour ago, fru-gal said:

So he has basically lost £150 per month in rent by evicting you and having to pay to redecorate?

What area in London?

More than that. £150 pcm assuming he lets it out at £1,700.

So far 2 months of it not being rented out - £3,700.

Cost of refurb - say £2,000.

Various admin costs of a new tenant - say £300

Possibility of higher agency costs

 

So far his tantrum has cost him in excess of £6k, I'd say.

[999house]

On 6/22/2017 at 10:56 AM, TheCountOfNowhere said:

approx 50% drops in prices for Balham over the last 2 weeks.

Given that prices were going through the roof even 12 months ago, this is significant.

I think people maybe be struggling to sell, now I wonder what the problem could be...hmmm...let me think

 

Balham is one of those areas that is nice but not as nice as its more salubrious neighbour. So people that are priced out of Clapham move to Balham, and people priced out of Balham move to Streatham / Tooting.

Clearly the Clapham overspill has pushed prices up well beyond what they should be (I know this for a fact as I lived in both areas). No way is a 1 bed in balham worth 600k. 

You could buy a flat in central london for 600k 10 years ago.