Is Prime London Crashing? - Merged Threads

[dugsbody]

On 01/08/2018 at 07:49, SamuearlJackson said:

The Knight Frank July 2018 Prime London report is out:

https://content.knightfrank.com/research/156/documents/en/prime-london-sales-index-july-2018-5735.pdf

Headline figures:

Prime London -1.9% 12 months, -0.8% 3 months, -0.2% 1 month

Prime Outer London -4.0% 12 months, -1.2% 3 months, -0.5% 1 month

 

Prime central London is defined in the index as covering: Aldgate & the City, Belgravia, Chelsea, Hyde Park, Islington, Kensington, Knightsbridge, Marylebone, Mayfair, Notting Hill, Riverside, South Kensington, St John’s Wood, Tower Bridge and Victoria.
Prime Outer London comprises Barnes, Battersea, Belsize Park, Canary Wharf, Chiswick, Clapham, Dulwich, Fulham, Hampstead, Queen’s Park, Richmond, Wandsworth, Wapping and Wimbledon.

Interesting. So according to this report, outer London is falling harder than central prime? Kind of the opposite of a bunch of other evidence.

[hurlerontheditch]

32 minutes ago, dugsbody said:

Interesting. So according to this report, outer London is falling harder than central prime? Kind of the opposite of a bunch of other evidence.

Prime is skewed by volumes I think 

[highcontrast]

This will help:

https://www.independent.co.uk/news/business/news/brexit-london-house-prices-exodus-jobs-affordability-housing-crisis-a8482596.html

[guest_northshore]

LSL Acadata:
+2.7% yoy London in June (from revised +2.2% in May)
+1.6% yoy England and Wales in July

http://www.acadata.co.uk/acadataHousePrices.php

[Smiley George]

So in the space of 2 weeks we have:

Headline figures:

Prime London -1.9% 12 months, -0.8% 3 months, -0.2% 1 month

Prime Outer London -4.0% 12 months, -1.2% 3 months, -0.5% 1 month

And this morning we have this:

+2.7% yoy London in June (from revised +2.2% in May)

There is so much contradictory information being released at the minute, it seems impossible to work out what is actually happening.

[Oliver Sutton]

From the latest Land Registry figures. (Annual falls)

City of London	£709,020	£930,979	-23.8%
City of Westminster	£956,365	£1,088,417	-12.1%
Kensington And Chelsea	£1,154,270	£1,341,276	-13.9%

 

Certainly looks like Prime London is crashing (finally).

[LondonBound]

Good Economist piece on the global housing market rolling over. 

Apparently London is 59% over valued versus income with the population expected to continue declining for the next decade.

Oslo down 12% in the last year .

https://www.economist.com/finance-and-economics/2018/08/11/our-cities-house-price-index-suggests-the-property-market-is-slowing

[advicewelcome]

5 hours ago, Oliver Sutton said:

From the latest Land Registry figures. (Annual falls)

City of London	£709,020	£930,979	-23.8%
City of Westminster	£956,365	£1,088,417	-12.1%
Kensington And Chelsea	£1,154,270	£1,341,276	-13.9%

 

Certainly looks like Prime London is crashing (finally).

Above does not mean a lot without volume data. The longer the mexian standoff between buyers and sellers, the more the variances once things get going transactionally.

Land Reg dataset is probably reliable, even though it does have issues with incl. all types of sales and I assume a two month odd lag before the solictors get around to registering the sale with Landreg after exchange).

I look for data tallying with other data sets. Seems contradictory with the below analysis I posted up before: https://www.bloomberg.com/graphics/property-prices/london/

Kensington & Chelsea is showing a 20% increase in value over last year in that analysis. But transactions numbers in April 2018 are down to all time low of 90 transactions (compared to 482 transactions in the pre-Brexit pre-BTL-tax crazy days of March 2016). 

Anyone can provide an explanation for such variances?  

 

[guest_northshore]

LSL Acadata:
+3.6% yoy London in July (from revised +1.9% in June)
+1.8% yoy England and Wales in August

http://www.acadata.co.uk/acadataHousePrices.php

[Smiley George]

24 minutes ago, guest_northshore said:

LSL Acadata:
+3.6% yoy London in July (from revised +1.9% in June)
+1.8% yoy England and Wales in August

http://www.acadata.co.uk/acadataHousePrices.php

So the answer to the question posed by this thread, would appear to be no, in fact we're still a long way from anything which could be construed as a crash.

I simply don't understand, my local area (SW London/Surrey) loads of reductions/multi-reductions and nothing is selling, it's been like this since April/May time.

Probably should have reviewed the report first!

It is massively skewed by large rises in PCL (City of London and Chelsea) everything else flat or large drops both monthly and annually. I the numbers are skewed by the fact that we've hit record low transactions so one or two large multi-million pound sales in PCL will cause a spike in the data - I guess.

Edited September 17, 2018 by Smiley George
update

[stop_the_craziness]

Perhaps the prices are so high and the volumes so low in London that a single super-mansion changing hands from oligarch to oligarch can determine a whole month's "average" ?

[Smiley George]

[hurlerontheditch]

1 hour ago, Smiley George said:

So the answer to the question posed by this thread, would appear to be no, in fact we're still a long way from anything which could be construed as a crash.

I simply don't understand, my local area (SW London/Surrey) loads of reductions/multi-reductions and nothing is selling, it's been like this since April/May time.

Probably should have reviewed the report first!

It is massively skewed by large rises in PCL (City of London and Chelsea) everything else flat or large drops both monthly and annually. I the numbers are skewed by the fact that we've hit record low transactions so one or two large multi-million pound sales in PCL will cause a spike in the data - I guess.

reductions from prices which were total kite flying.

I too am in this area, and anything decent is way overpriced and more often than not is taken off the market and relisted with another agent at the same price but no price drop

[Tapori]

?EA/Landlord Anecdotal East London update:

So I have a colleague, nice guy but who is die-hard landlord buy-to-let supporting person but a smart one (i.e. not amateur or 118 crew)

2 years ago he didn't think a fall would happen; never thought anything wrong ethically either with the skewed credit for house purchases or tax-releiefs or HPI. Many arguments ensued.

Now spoke to him by chance; he manages properties with his company, for landlords who let to the Local Housing Authority in East London Areas.

What a difference a year or 2 makes so here is some juicy-ness for you London folk:

Because he deals with now, a large number of London East properties, he has said:

- minimum 20 percent drop on the way in East, especially post 0% BTL-Mortgage-interest tax relief changes post-2020 and  bigger declines starting after next April.

- Most of his Landlords STILL don't care/ignore the tax-reliefs and are highly leveraged. Despite him telling them their tax obligations. Assesses many forced sales and much CGT pain for them. Sees many sob stories falling on deaf accountants ears post April 2019.

- Agrees rents may see a short spike but generally market is heading for a fall.

- Didn't mention Brexit; said falls would happen regardless.

- Thinks market will pick up rapidly after that dip as people pile back in.

- Says, give it 2-3 years for best purchase window .

Point is, if even someone who is pro-HPI, pro-BTL- pro-Landlord and who's business has a vested interest in higher prices and rents is saying a steep fall is coming then that warms my soul.?

[the_duke_of_hazzard]

2 hours ago, Tapori said:

?EA/Landlord Anecdotal East London update:

So I have a colleague, nice guy but who is die-hard landlord buy-to-let supporting person but a smart one (i.e. not amateur or 118 crew)

2 years ago he didn't think a fall would happen; never thought anything wrong ethically either with the skewed credit for house purchases or tax-releiefs or HPI. Many arguments ensued.

Now spoke to him by chance; he manages properties with his company, for landlords who let to the Local Housing Authority in East London Areas.

What a difference a year or 2 makes so here is some juicy-ness for you London folk:

Because he deals with now, a large number of London East properties, he has said:

- minimum 20 percent drop on the way in East, especially post 0% BTL-Mortgage-interest tax relief changes post-2020 and  bigger declines starting after next April.

- Most of his Landlords STILL don't care/ignore the tax-reliefs and are highly leveraged. Despite him telling them their tax obligations. Assesses many forced sales and much CGT pain for them. Sees many sob stories falling on deaf accountants ears post April 2019.

- Agrees rents may see a short spike but generally market is heading for a fall.

- Didn't mention Brexit; said falls would happen regardless.

- Thinks market will pick up rapidly after that dip as people pile back in.

- Says, give it 2-3 years for best purchase window .

Point is, if even someone who is pro-HPI, pro-BTL- pro-Landlord and who's business has a vested interest in higher prices and rents is saying a steep fall is coming then that warms my soul.?

In my part of London (southern part of Southwark) I can see definite signs of desperation. All the properties I'm watching remain on Rightmove for a long time and I can see there's a race to the bottom with a lot of them.

The froth has most definitely gone.

[Freki]

Well for a 3bed house under 500k the closest you can find will be Streatham. A long way to go...

[maverick73]

A crash would require 42.67% correction in values at a minimum to consider the salary; affordability situation. 

[guest_northshore]

LSL Acadata:
+3.9% yoy London in Aug (from revised +3.0% in Jul)
+0.9% yoy England and Wales in Sep

http://www.acadata.co.uk/services/house-price-index/

http://www.acadata.co.uk/assets/uploads/2018/10/LSL-Acadata-EW-HPI-News-Release-September-18.pdf

[lostinessex]

20 minutes ago, guest_northshore said:

LSL Acadata:
+3.9% yoy London in Aug (from revised +3.0% in Jul)
+0.9% yoy England and Wales in Sep

http://www.acadata.co.uk/services/house-price-index/

http://www.acadata.co.uk/assets/uploads/2018/10/LSL-Acadata-EW-HPI-News-Release-September-18.pdf

Worth reading the report - the London situation isn't as bouyant as the yoy figure initially indicates. The average has been heavily skewed by a 20% rise in the City of London - which as anyone who knows London will know isn't an awash with residential property - what little it does tends to be very high value. The map they show of the wider London aread is a sea of drops with a handful of regions rising.

[Freki]

yes, extremely noisy, the yoy price changes across the different boroughs: -11.8% to +12.7%

Also the colour coding is shit Tower Hamlet is deep blue when it shows a moderate -2.4% drop.

[austrianec]

The LSL method for calculating the London average looks to have averaged the change in price in every borough. This magnifies the effective weight of the priciest boroughs; and with Kensington and Chelsea/City of London rising 11.5/20.9%, you get a nonsense figure out. It's even worse than that because they also have lower transaction levels than some of the other boroughs (no surprise because they're the biggest outliers)

If you take the Land Registry figures for transaction by borough (it's similar data to the data they've used) and work out the average change per house sold, the figure you get it -2.3%, which makes a lot more sense sitting alongside their figures for the South East/East of England.

Also, 21 of 33 boroughs have seen falls...London isn't going to be rising faster than the rest of the country!

[SamuearlJackson]

Knight Frank September data is as follows:

Prime Central London -2.9% year on year, -1.4% in the last quarter

Prime Outer London -4.3% year on year, -1.2% in the last quarter 

[highcontrast]

Possibly worthy of its own thread!

https://www.theguardian.com/business/2018/oct/31/brutalist-market-flats-at-londons-centre-point-taken-off-market

"Half of tower’s 82 luxury flats remain unsold as Brexit jitters and tax rises bring ‘silly offers’" - Lolz! They're overpriced you moron!!!

"More than half of the 1,900 ultra-luxury apartments built in London last year failed to sell, adding to fears that the capital would be left with dozens of “posh ghost towers”. The swanky £1m-plus flats, complete with private gyms, swimming pools and cinema rooms, are lying empty as hundreds of thousands of would-be first-time buyers struggle to find an affordable home."

[highcontrast]

Apologies if this has already been posted, but more bear food in the Guardian...nom nom nom ?

https://www.theguardian.com/business/2018/oct/11/brexit-uncertainty-taking-toll-property-market-rics-research

Yeah yeah...it's all brexits fault, course it is mate. 

The bubbles popped you moron!

 

[Freki]