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What Would Cause A House Price Crash In London?


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#31 Si1

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Posted 31 January 2012 - 02:13 AM

Yes.

Nowhere is immune to the laws of economics.

C London is roughly flat in prices yet the lowest rates in history, falling jobs and a falling €. They're not selling nearly as many as they say they are. Obvious.

Price follows volumes. Everywhere


oh i am sure yes; it's just that occasionally the laws of economics take a wee holiday off somewhere only to come back with a horn

#32 200p

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Posted 31 January 2012 - 06:31 AM

Radio 4 about 3pm I think yesterday, Arab money buying in London, the lady kept saying "why not, why not?". Probably a good "investment" in her eyes, as well as buying Harrods.

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#33 hotairmail

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Posted 31 January 2012 - 08:09 AM

Radio 4 about 3pm I think yesterday, Arab money buying in London, the lady kept saying "why not, why not?". Probably a good "investment" in her eyes, as well as buying Harrods.


Overseas cash buying in London relies on the "ripple effect" of residents to move further out to cheaper areas for it to impact on national prices. Once its all sold, that ripple effect will no longer happen. More then half of all Londoners rent already and the majority of new build flats and homes over £1 million are bought by overseas 'investors'.

"The chicken is radiating disorder out into the wider universe."


#34 TheCountOfNowhere

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Posted 31 January 2012 - 08:26 AM

Time.

#35 winkie

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Posted 31 January 2012 - 10:31 AM

Time.



http://www.youtube.com/watch?v=Wb9By-lODgk
What you don't owe won't worry you.

Less can be more.

#36 eric pebble

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Posted 31 January 2012 - 11:25 AM

http://www.youtube.com/watch?v=Wb9By-lODgk

:lol:
What the media today are still not telling us in full - for some reason the lid is being kept on the whole story:
HERE IN THE UK: THE UK SUB-PRIME CATASTROPHE - IT IS NOT ONLY IN AMERICA!! THE UK LIAR LOAN INDUSTRY - Source of FICTITIOUS "MONEY", and the principle driver of the House "Price" Pyramid/Ponzi Scam & Bubble, the "Credit Crunch" - and an unacknowledged major part of and cause of the ensuing Worldwide Financial Crash.
---------------------
The following was reported in a superb documentary in late 2003 - This is now over 10 years ago!! Since then shamefully little has been done here in the UK by journalists/broadcasters to dig down deep on this story - a vast elephant in the room: Why? If you're a serious journalist - here's your story - start investigating - it is the biggest financial scandal of all time:

THE ARTICLES BELOW ARE FROM AS FAR BACK AS 2003!!

Mortgage customers 'urged to lie' - All this was way back in 2003 by the way!!
Housebuyers are being encouraged to break the law in order to obtain huge mortgages, the BBC has discovered. Brokers, and even banking staff, have been telling buyers to lie about their incomes to get bigger and bigger loans. And these underhand tactics could also be the reason why house prices have gone on rising for so long.
CLICK HERE - http://news.bbc.co.u...ess/3222053.stm

"Could you believe that a bank would invite customers to defraud it? It may sound incredible, but that is what some of Britain's biggest mortgage lenders have in effect been doing."
CLICK HERE - http://news.bbc.co.u...ess/3478635.stm

The BBC Money Programme uncovers massive mortgage fraud [2003!]: BBC TWO's The Money Programme has revealed a huge mortgage fraud with brokers from some of Britain's biggest estate agents and financial advice groups advising customers to break the law and lie about their incomes to get massively bigger mortgages. And it shows how the illicit cash raised by this method has been pouring into the housing market, boosting prices and leaving many people risking financial ruin.
CLICK HERE http://www.bbc.co.uk..._mortgage.shtml

AND READ THIS: - http://www.housepric...howtopic=152508
-----------------------------
WATCH THE VIDEO OF THE 2003/4 DOCUMENTARY HERE: -
Click on parts 2 & 3 as you go along watching this video.
------------------------------
AND WATCH THE LATEST VIDEO OF LIAR LOANS STILL IN ACTION HERE in 2008 - http://news.sky.com/.../20080641317257

#37 Logan3

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Posted 31 January 2012 - 12:15 PM

Hi Folks,

Here's an anecdote for you:

I was in my gym in a posh(ish) part of NW London around Christmas and overheard a conversation between an American banker and his in-Laws.

He said he was about the only American ex-pat out of all his friends left in London. Said people were gradually finding 'other opportunities' and leaving, and that London would 'be a very different place in a couple of years time'.

Driving around St John's wood which is American Banker Shangri-La there are a TON of To Let and For Sale signs going up, so I dare say the exodus is real.

I think this is likely to have a much greater effect on house and rent prices than all these mysterious foreign buyers.

#38 SaintJay

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Posted 31 January 2012 - 12:30 PM

sharia law?

#39 Jem

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Posted 31 January 2012 - 02:57 PM

Time.


Yes, something very strange is happening in North East London in areas around RM1- Romford and a mile and a half further out. Hardly anything has sold for nearly two years, prices are being reduced at around 15k at a time. You can now get a lovely refurbished 5 bed for between 250k and 300k and prices are still falling, yet it is only 30 minutes on the tube or train from Central London.

What has interested me more though is this; a year ago my brother was looking for a 4bed to rent in the area, he could hardly find any, at the moment the number of houses available for rent is absolutely astonishing and yet there are very few takers. Properties remain available for months on end. I pondered about the reasons for this, it seems to be multiple. Owners unable to afford the mortgage payments are putting up their properties to rent since they cannot sell them. The rental requested is so high that cash strapped renters cannot afford them, added to by the change in housing benefit rules. Plus, this area has large numbers of public sector workers and self- employed running small businesses. Both of these groups are under pressure in terms of employment and work available.

Here is a classic recipe for stagnation, prices will have to fall considerably in the rental and for sale sector for anything to move. Distressed sales are already appearing and will accelerate in due course. This seems to me to be the pattern of future price decline in London. 'Normal' Londoners do not live in the areas bordering the Thames unless they are in social housing or on housing benefit. Ordinary working people with families move out.

www.rightmove.co.uk/property-for-sale/property-21477444.html

Property above reduced by £17 000 yesterday. The corrective or crash will be slow and unobtrusive in various suburbs where ordinary Londers live and in which the overseas investors are not interested in.

#40 koala_bear

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Posted 31 January 2012 - 03:39 PM

The corrective or crash will be slow and unobtrusive in various suburbs where ordinary Londoners live and in which the overseas investors are not interested in.


Agreed the conditions for the crash are there but there is no driving force to progress the crash. Increasing IR and unemployment would drive the inevitable faster. Wage increases failing to keep up with inflation will take even longer to have an effect.

#41 OnlyMe

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Posted 31 January 2012 - 03:44 PM

Sounds like an utterly fake market has been presented for london - lots of companies selling propoerty to the rich in unstable middle eastern countries and of course the olympics - where investors rush in and then out either before or after the opening ceremony.

Meanwhile those running companies in London will struggle to find or pay for staff and the staff themselves will struggle to make it pay too.

What a mess.

Edited by OnlyMe, 31 January 2012 - 03:50 PM.

"Asians make things and sell them to Americans, who borrow money from their suppliers (on the inflated value of their houses) in order to continue living beyond their means. Asians take their profits and either relend them to Americans...or use them to buy more productive capacity, in America and elsewhere.

For those who wonder where this trend will lead, we offer a guess: The average American will be left with a shoeshine kit and instructions on how to say 'please' and 'thank you' in Chinese...."

Bill Bonner.

Socialists want socialism for everyone else, but capitalism for themselves, while capitalists want capitalism for everyone else, but socialism for themselves.
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#42 winkie

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Posted 31 January 2012 - 03:48 PM

Plus, this area has large numbers of public sector workers and self- employed running small businesses. Both of these groups are under pressure in terms of employment and work available.



This is a good point.....public service cuts also impact hard on private sector employment, there are many that rely on available public money, grants and consultancies for example. ;)
What you don't owe won't worry you.

Less can be more.

#43 Austin Allegro

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Posted 31 January 2012 - 04:43 PM

Oh your Granuiad reading type, latte swilling effete.

London has a couple of nice areas. A few nice but boring areas on the outer urbs.

The rest of it varies from scummy crap holes to Somalia by the Thames.

Still nicer than Reading and Bracknell.


A bit of a sweeping statement! Taking just the NW postcodes, I would say:

NW1 - A mixture of very nice (Regent's Park) and horrible (Camden)
NW2 - mostly horrible
NW3 - very nice
NW4 - ok but fairly dull suburbia
NW5 - mostly horrible
NW6 - equally divided into very nice and horrible, along the division of West End Lane.
NW7 - very nice, known as 'Londonshire' for its village feel
NW8 - very nice
NW9 - fairly dull and mildly grotty suburbia
NW10 - awful, here be dragons
NW11 - some very nice parts on the Hampstead borders and the garden suburb, the rest a bit bland unless you're Orthodox Jewish


So I don't think you can say London only has a 'couple of nice areas'!
Why treat those who call themselves atheists as enemies? Why not simply say to them: ‘We have no quarrel. The “God” whose existence you deny you do well to deny. It is an object among other objects and I deny it also. The necessary ground of all rational thought, on which you and I both depend to make sensible statements, that is what I mean by God.’ Rev Anthony Freeman

#44 Austin Allegro

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Posted 31 January 2012 - 04:45 PM

Hi Folks,

Here's an anecdote for you:

I was in my gym in a posh(ish) part of NW London around Christmas and overheard a conversation between an American banker and his in-Laws.

He said he was about the only American ex-pat out of all his friends left in London. Said people were gradually finding 'other opportunities' and leaving, and that London would 'be a very different place in a couple of years time'.

Driving around St John's wood which is American Banker Shangri-La there are a TON of To Let and For Sale signs going up, so I dare say the exodus is real.

I think this is likely to have a much greater effect on house and rent prices than all these mysterious foreign buyers.



Did he also say an anonymous phone caller told him to stay away from the Twin Towers on 9/11? ;)

I'd like to believe him, but we were saying this about London 4 years ago; that the foreign money would be moving on; it still doesn't seem to have done so...
Why treat those who call themselves atheists as enemies? Why not simply say to them: ‘We have no quarrel. The “God” whose existence you deny you do well to deny. It is an object among other objects and I deny it also. The necessary ground of all rational thought, on which you and I both depend to make sensible statements, that is what I mean by God.’ Rev Anthony Freeman

#45 Stret

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Posted 31 January 2012 - 04:46 PM

True. London is many different towns almost under one banner. I wouldn't bank on Kensington, Chelsea, Pimlico, Queens Park et al dropping anytime soon. Head out to Stockwell, Brixton, Peckham etc and my EA mate reliably informs me they can't shift anything unless it's at a significant reduction.


I started a thread on these lines in the London prices forum - http://www.housepric...howtopic=173993 .

In unfashionable areas and below average quality flats and houses there are real price falls in London already, I routinely see stuff advertised at or below 2005 prices. So far nothing that I would want to buy and I wouldn't exactly call it a "crash" but the bottom end is on its way, and I remember this was what went down first and furthest in London back in the 90s. We are waiting for a catalyst for a proper crash and tbh I don't see one on the horizon (it was IRs back in the 90s) but we are already seeing a slow steady fall beginning and I don't see anything that's going to stop that developing further over the next 18-24 months. One factor that will come into play is popular sentiment which at the moment seems to still be bullish to me but will surely go bearish eventually?




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