Monday, Oct 19, 2009
A Tale of Two Cities (part 1 - London)
Bloomberg: London Agents ‘Sold Out’ as Home Prices Reach Record
Amazing and hurts me to say it, that despite all the speculative excesses, the UK, and London in particular seem to be escaping the worst of the downturn.
Posted by john galt @ 11:07 AM (1877 views) Add Comment
24 Comments
- If you do not have an admin password leave the password field blank.
- If you would like to request a password allowing you to add comments and blog news articles without needing each one approved manually, send an e-mail to the webmaster.
- Your email address is required so we can verify that the comment is genuine. It will not be posted anywhere on the site, will be stored confidentially by us and never given out to any third party.
- Please note that any viewpoints published here as comments are user's views and not the views of HousePriceCrash.co.uk.
- Please adhere to the Guidelines
1. uncle tom said...
This is so delusional..
Take any London postcode area, lookup the number of properties for sale on Rightmove, and then look to see how many have sold in the same postcode area on houseprices.co.uk..
..in all the postcode areas i've checked, there are far more for sale than have sold since the start of the year.
The hype put out in this piece is blatently dishonest, and stands no scrutiny..
2. James In London said...
But once again this is asking prices isn't it?
Anyone want to buy my stapler for £2000? No?
How about £3000? An instantaneous 50% increase on a minute-by-minute timescale!
Extrapolate 50% rise per minute on a compounded fashion that to a whole TEN MINUTES and you'll discover my stapler will be worth £76,886.72... over 38 times more expensive!
Sure, this may sound flippant but this is an easy demo of how one can become deluded when supply is constrained and turnover is low. The article itself even makes it clear that people may well be pushing their luck: “In this sort of market sellers quite naturally will be tempted to test buyer appetite at a higher figure.”
However, I think in this instance that to "test buyer appetite" can be translated as an effort to "fish for the few remaining cash-rich", no?
3. smugdog said...
It makes good reading though UT!
4. mander said...
QE has had one result only: "asking higher prices for houses without making economic sense" It is very difficult to accept that houses are no longer going up and they are wasting their time making people believe that prices will go up and so people will need to hurry on the property ladder.
5. need-a-crash said...
@2. Smugdog
What EA's are out of stock and prices are too high anyway... err so I'll carry on renting then. Doesn't exactly make me want to run out and buy a house?
6. Another_pleb said...
So, basically people are buying houses like they're going out of fashion?
7. Yeahrite said...
"Amazing and hurts me to say it"
Why does it hurt you to say it?
Escaping the worst is a good thing... unless youre a vulture looking for carrion of course.
8. bystander said...
mander@3 - the same could be said of the current state of play in the stock market -"asking higher prices for houses (shares) without making economic sense' - all caused by manipulating sentiment for personal gain - ie the gain of the parasitical, sociopaths of the financial 'services' industry.
9. crunchy said...
Trees don't grow to the sky, or into the darkness of space.
10. mark wadsworth said...
I second what UT says. For the dozenth time.
11. uncle tom said...
Thanks Mark,
We have a tapestry of irrationalities in all forms of investment at the moment...
..I'm looking at the profit I stand to make from Barratt's rights issue, and keep thinking 'where's the catch?'
Things are getting a bit too surreal at the moment - and that usually leads to an upset..
12. shipbuilder said...
Houses at the top end of the market in London are selling. Why should the rest of the UK or even London, care?
13. greenshootsandleaves said...
Vendors (or should that be 'would-be vendors'?) asking for more... You don't suppose estate agents are putting them up to it, do you, just to get the headlines they so badly need?
I think I'll put a sleeping mask on (please note, smugdog: not blinkers). I'm sure the various vested interests will waste no time in telling us when prices really are up (i.e. when selling prices have risen and turnover is no longer down to a trickle). Let me know when they do! Zzzzzzzzzzzz
14. it_is_going_with_a_bang said...
Very amusing.
So what are the chances of finding an estate agent with nothing to sell because everything is selling so fast..... Remote.
Strange how everything is blamed on affordability .... except the silly asking prices which is of course the only reason why affordability is bad.
The UK is not escaping anything - it is merely putting off the inevitable.
15. greenshootsandleaves said...
Slightly at odds with the general drift of this news item is the four-bedroom terraced property which has just come up on Rightoldmove. It's on Kilmartin Av. (SW16) and is to be sold by auction on 5 Nov. with a guide price of ... £100,000. Now, I don't know anything about the property or the area, but my guess is that someone is looking for an 'auction guide prices pulverised as buyers flock back, etc.' type of story on this one.
PS Has Rosie Millard's property been snapped up yet? If it hasn't she may well find the Bloomberg story a bit puzzling.
16. clockslinger said...
Why the reluctance to accept that part of the London property market is going up fast? Wouldn't it be surprising, given the bonuses hand out and massive fall in sterling, if at least some areas of London are seeing asking prices, and in all liklihood sale prices, increase quite a bit. What would it cost a Japanese banker paid in yen to get a place in Chelsea compared to Feb 2007? And if you work for the vampire sqid, well most property is eminently affordable if you save up for a couple of months. Given the daily news on increasing prices who wouldn't ask more for a place? Still, I, like everyone else here, hope it goes tits.
Thing is though, I still don't see why rising unemployment will be the catalyst for a proper fall...what else would one do? Rent? More expensive, surely, than interest only mortage for forseeable future, isn't it? I don't want to sound like a bull, but isn't this right?
17. clockslinger said...
Why the reluctance to accept that part of the London property market is going up fast? Wouldn't it be surprising, given the bonuses hand out and massive fall in sterling, if at least some areas of London are seeing asking prices, and in all liklihood sale prices, increase quite a bit. What would it cost a Japanese banker paid in yen to get a place in Chelsea compared to Feb 2007? And if you work for the vampire sqid, well most property is eminently affordable if you save up for a couple of months. Given the daily news on increasing prices who wouldn't ask more for a place? Still, I, like everyone else here, hope it goes tits.
Thing is though, I still don't see why rising unemployment will be the catalyst for a proper fall...what else would one do? Rent? More expensive, surely, than interest only mortage for forseeable future, isn't it? I don't want to sound like a bull, but isn't this right?
18. Brownsters_billions said...
I'm a FTB who nearly bought in Sep 07, and very glad I didn't. However, married now and looking to dip my toe back into property. I understand it will probably go down in value but I need somewhere to live for the next 5 years.
When people talk about a shortage, I can see where they're coming from. There is a real shortage of quality housing in the areas of London I'm looking in, and when something good comes on it is being snapped up for more than the asking price. More on the market there may be than what is being sold, but most of it is cack. I'm just hoping plenty of the ones that have gone 'under offer' will now not be able to find finance, so I can swoop in!
19. greenshootsandleaves said...
clockslinger @ 16 & 17
I assume you meant to type 'did not increase quite a bit'. Anyway, I agree.with you to some extent, but:
1. asking prices do not paint a complete picture (there is certainly a reluctance to give equal prominence to transaction levels and selling prices);
2. the bonuses have not all been paid out and will be paid out to fewer people (some people are arguing that the fact that are to be paid at all is down to there now being less competition in the City);
3. the now even cash-richer foreign buyers (one minute they're threatening to leave in droves because of the 50% tax band, the next they want to put down roots!) can only do so much, you know. Propping up segments of the market they're not even interested in is not one of them!
20. uncle tom said...
greenshootsandleaves,
I've a post-it note that 39 Thornhill Sq N1 sold for 1,096,000 on June 5th - was that the place La Millard was buying, or the place she was selling.. - I forget..
21. bufferbear said...
greenshootsandleaves
Off the top of my head, houses in Kilmartin would have an asking price of £250-275k and still overpriced. 100k sounds correct:)
22. greenshootsandleaves said...
UT @ 19,
Yes, I think that's the one she was selling. But was the asking price not £1.5 mill? Like people say: there's no harm in asking, is there? So much for London somehow bucking every national or indeed rational trend !!
The property and its former owner are not really of any consequence, of course, but don't you think we'd have heard a bit more about it if the outcome had been 'more positive' (I'll spare you the obvious pun) from her perspective?
23. greenshootsandleaves said...
bufferbear@20:
Let's say it goes for a 'modest' £200k (double the guide price). That's only slightly below the percentages which helped fuel the Times article posted on HPC last Thursday (15 October):
"Times: Auction house prices soar over guide values
Homes sold at auction are achieving record sums above the guide amounts set by valuers as lower property prices have brought about a bidding war among bargain-hunters. Graham Barton, senior auctioneer for Westcountry Property Auctions and a presenter on BBC One’s Homes under the Hammer, said: “These are the biggest margins over guide I can remember in 30 years in the industry. In a recession these results are amazing."
Are we to conclude, therefore, that people in the property industry are easily stunned?
24. This comment has been removed as it was found to be in breach of our Blog Policies.