Fulham

[fodder]

I find Fulham v Putney comparisons interesting too.

Not least why those wizzards at the Wandsworth Town Hall can empty the bins, register the births, deaths and marriages of their residents and do all the other things councils do with Council Tax half what it is in H&F. For the last three years of course, the H&F Tories have chopped an annual 3% so the gap is now closing. No one has ever explained to me why Wandsworth can have the country’s lowest Council Tax year after year after year . The most usual “explanation†being the less than incisive; “ Well it was Thatcher’s favourite, wasn’t it“

I heard, can't remember where from, that Clapham Junction has some sort of tax on all trains that pass through (apparently added by Maggie) making it a nice little earner for the council. Of course, it's probably a complete myth...

[Postigol]

This place sold for £400k in 2004, then for £375k in 2007.

1a Breer Street, London, Greater London, SW6 3HE

Failed to sell at the Allsop auction on the 15th September, it's yours for £310k. Currently generates £16,640pa from an AST, making a 5.3% yield.

what a strange looking place! cannot believe anyone ever parted with £400k for it. I also love the fact that it must have been the only property in the uk to have depreciated in value between 2004 and 2007!!!!

[James Wyatt]

We have just released our quartely data for Fulham. Our graph and index uses actual pounds per square foot achieved on the date of exchange. The index reported June 159, July 152, August 178 and September 173. Prices "softened" in September, but are still up around 8.8% over the quarter. In certain price brackets agents are still reporting a lack of stock and due to the low interest rates some owners will not consider offers. Other indices and graphs for other areas will be posted on our website and there are some very interesting results. The indices do seem to replicate the market volatility.

James Wyatt M.R.I.C.S.

John D Wood & Co.

[BandWagon]

Allsop auction on the 15th/17th December:

http://www.auction.co.uk/residential/onlineCatalogue.asp

Lot 135, Guide Price 475k

London SW6 21 New King's Road, Fulham SW6 4SB

A Freehold Mid Terrace House with Potential for Conversion of Existing to provide Self-Contained Flats, subject to obtaining all necessary consents

Lower Ground Floor - Two Rooms, Kitchen Raised

Ground Floor - Two Rooms, Rear Half Landing, Bathroom with WC and wash basin

First Floor - Two Rooms, Box Room

[The Three Little Pigs]

Well there’s been three months between my posts and few additions by others. (Thanks to those that did keep the topic alive.) This lack of activity, on this thread and others, suggests bear food has been scarce recently.

So what do the numbers say? Today the Land Reg released its results for November recording 0.9% growth nationally with H&F chalking up 1.3% growth. This latest figure comes on top of September and October rises of 2.1% and 1.3%. The cumulative effect has been to ameliorate the annual rate of change from a stonking minus 16.9% in May of 2009 to 0% now, In other words prices are the same as they were in November 2008,

That is not to say prices have regained their peak . If you bought between June 2007 and October 2008 you are still underwater. In £ terms the average price is £55,542 below its top.

Volume for September 09 (the latest available) was 201, more than double September 08 but down on the 300 average for Septembers through the decade.

Several well rehearsed points are confirmed by these numbers:

1. Stimulus has had an effect.

2. Interest rates at 0.5%, few forced sellers

3. Some foreign money coming in to London residential - sterling depreciation

4. City - bonuses still being paid, job prospects improved.

So. where next? What does 2010 hold in store for H&F?

An election that’s what. A change of regime. English voters maybe deeply unhappy with Labour but I’m not sure they quite remember how politics and policies can change things. (Of course the Tories aren’t yet giving them much to build this belief upon.)

I see it this way: through the winter months seasonal factors are at play, early 2010 will be hobbled by election nerves, May 2010 sees a substantial Tory victory ( disregard this present wishful thinking by the left for a hung parliament and recent promotion of a March vote), the World Cup in June has house buyers stuck on their sofas and following England’s group stage success but before the semi final defeat by Brazil on July 6 we have an economic crisis.

The Tories want this crisis. They need it – and soon after the election so to pin responsibilty on Labour. Taking over, without a crisis, just as the benefical effects of QE come to an end risks a one term mandate. Without a crisis Labour’s mismanagement and profligacy will not be crystallised in the minds of the electorate and the Tories will find delivering change harder. The population might not take the pain and the associated social unrest without the “requirement” to do so firmly established. Cameron’s dream must be the men from the IMF arriving at No 10 the day before he does, unforunately for him that looks as it will remain a dream.

All this does make one major assumption: that the Tories want more than to manage the speed of the UK’s decline.

Earlier this year, the European Commission forecast that unless action was taken to cut state pension costs and healthcare bills, UK public debt would rise from around 60pc of gross domestic product this year to 160pc by 2020, 406pc by 2040, and 760pc by 2060. The Tories need a substantial majority AND the crisis to sort this as well as the QE debt.

The Spectator says Osborne has been meeting with Fitch , the rating agency. The suggestion being we hold onto our AAA on the basis of Osborne's promise of the level of cuts. This scenario is echoed by Andrew Ellson of The Times in his predictions today for 2010. It is now an established view that Osborne’s cuts and debt reduction package will be substantial enough to keep interest costs low enough to afford for us to pay back the principal.

But what if Osborne has over promised. He can not be sure of his numbers yet.

If the numbers are worse than he has based his promises upon, the already prescribed medicine will not be strong enough. Then its: - bye-bye AAA, hello sterling crisis and open wide, here comes the nasty medicine.

A nice crisis gives the Tories a blame free mandate to address public sector pensions, the size of the state, the costs of unlimited immigration and other big ticket items. It establishes the requirement to change and change rapidly and at the same time type casts Labour and the Left as incompetent villains. Just what the doctor ordered,

The sterling crisis causes interest rates to rise,so property prices fall nationally.

In H&F the increase in PAYE to 50% and to a lesser extent this year’s bonus restrictions already suggest price falls. Add in the above and it’s a double whammy causing prices to fall faster and harder in H&F than nationally.

This time table and outlook suggests prices stay level through to July then start falling at the same sort of pace we saw last year. (1-2% pcm in H&F) That means the Land Reg ( my preferred index) will only record three or four months of the trend in its 2010 figures - TLP’s 2010 H&F Land Reg prediction is therefore minus 6.43% with larger falls to come in 2011.

It is of course foolhardy to be specific in forecasts which is why the pros give you a range and why I choose to go to only two decimal places.

Anyone else got a crystal ball?

[James Wyatt]

We have just released our figures for Fulham and elsewehere.

The final quarter of Fulham saw our index drop from a September index point of 173 to 156 for October, 160 for November and 164 for December, which represents around 25% year on year increase (December to December). The index is based upon actual pounds per square foot achieved at the date of exchange. Agents are still reporting a shortage of properties and this has been driving the house price rises. Recent agreed sales would suggest the next quarter prices may start to reach the highs previously achieved in 2007.

There will be significant headwinds for the national property market towards the back end of the year due to the likely cuts in expenditure and tax rises by the government. The local market in Fulham is dependent upon the City and changes to the regulatory structure and the tax on bonuses as well as the incoming 50% tax level will affect demand. However, most owners are sitting on large amounts of equity and due to the low interest rate environment many can afford to sit tight thereby constricting supply. If interest rates start to rise this may bring forth far greater supply.

If you are interested, Kenneth Rogoff of Harvard and Carmen Reinhardt have produced a very good short summary on the depth and length of credit crises (which tend to last for at least 6 years and this only started August 2007):-

http://www.economics.harvard.edu/files/faculty/51_Aftermath.pdf

There have also been several academic papers showing prices can be "sticky" downwards. As you will see from our graphs many areas witnessed an "unsticky" fall following Lehmans and have since recaptured most of the falls. It is thought the "sticky" point for prices is the price at which people bought their property. Consequently, with so few transactions taking place over the last few years the market may well be exposed to further volatile movements.

James Wyatt MRICS

The graphs and indices will be shortly published on our website under Surveyors and Publications.

[The Three Little Pigs]

If you are interested, Kenneth Rogoff of Harvard and Carmen Reinhardt have produced a very good short summary on the depth and length of credit crises (which tend to last for at least 6 years and this only started August 2007):-

http://www.economics...1_Aftermath.pdf

In it they determine real estate markets take 6 years on average to bottom after a financial crises. And its that sort of timescale I believe."

Go to Post 385 of this thread for the live link

[Frizzers]

Well there’s been three months between my posts and few additions by others. (Thanks to those that did keep the topic alive.) This lack of activity, on this thread and others, suggests bear food has been scarce recently.

So what do the numbers say? Today the Land Reg released its results for November recording 0.9% growth nationally with H&F chalking up 1.3% growth. This latest figure comes on top of September and October rises of 2.1% and 1.3%. The cumulative effect has been to ameliorate the annual rate of change from a stonking minus 16.9% in May of 2009 to 0% now, In other words prices are the same as they were in November 2008,

That is not to say prices have regained their peak . If you bought between June 2007 and October 2008 you are still underwater. In £ terms the average price is £55,542 below its top.

Volume for September 09 (the latest available) was 201, more than double September 08 but down on the 300 average for Septembers through the decade.

Several well rehearsed points are confirmed by these numbers:

1. Stimulus has had an effect.

2. Interest rates at 0.5%, few forced sellers

3. Some foreign money coming in to London residential - sterling depreciation

4. City - bonuses still being paid, job prospects improved.

So. where next? What does 2010 hold in store for H&F?

An election that’s what. A change of regime. English voters maybe deeply unhappy with Labour but I’m not sure they quite remember how politics and policies can change things. (Of course the Tories aren’t yet giving them much to build this belief upon.)

I see it this way: through the winter months seasonal factors are at play, early 2010 will be hobbled by election nerves, May 2010 sees a substantial Tory victory ( disregard this present wishful thinking by the left for a hung parliament and recent promotion of a March vote), the World Cup in June has house buyers stuck on their sofas and following England’s group stage success but before the semi final defeat by Brazil on July 6 we have an economic crisis.

The Tories want this crisis. They need it – and soon after the election so to pin responsibilty on Labour. Taking over, without a crisis, just as the benefical effects of QE come to an end risks a one term mandate. Without a crisis Labour’s mismanagement and profligacy will not be crystallised in the minds of the electorate and the Tories will find delivering change harder. The population might not take the pain and the associated social unrest without the “requirement” to do so firmly established. Cameron’s dream must be the men from the IMF arriving at No 10 the day before he does, unforunately for him that looks as it will remain a dream.

All this does make one major assumption: that the Tories want more than to manage the speed of the UK’s decline.

Earlier this year, the European Commission forecast that unless action was taken to cut state pension costs and healthcare bills, UK public debt would rise from around 60pc of gross domestic product this year to 160pc by 2020, 406pc by 2040, and 760pc by 2060. The Tories need a substantial majority AND the crisis to sort this as well as the QE debt.

The Spectator says Osborne has been meeting with Fitch , the rating agency. The suggestion being we hold onto our AAA on the basis of Osborne's promise of the level of cuts. This scenario is echoed by Andrew Ellson of The Times in his predictions today for 2010. It is now an established view that Osborne’s cuts and debt reduction package will be substantial enough to keep interest costs low enough to afford for us to pay back the principal.

But what if Osborne has over promised. He can not be sure of his numbers yet.

If the numbers are worse than he has based his promises upon, the already prescribed medicine will not be strong enough. Then its: - bye-bye AAA, hello sterling crisis and open wide, here comes the nasty medicine.

A nice crisis gives the Tories a blame free mandate to address public sector pensions, the size of the state, the costs of unlimited immigration and other big ticket items. It establishes the requirement to change and change rapidly and at the same time type casts Labour and the Left as incompetent villains. Just what the doctor ordered,

The sterling crisis causes interest rates to rise,so property prices fall nationally.

In H&F the increase in PAYE to 50% and to a lesser extent this year’s bonus restrictions already suggest price falls. Add in the above and it’s a double whammy causing prices to fall faster and harder in H&F than nationally.

This time table and outlook suggests prices stay level through to July then start falling at the same sort of pace we saw last year. (1-2% pcm in H&F) That means the Land Reg ( my preferred index) will only record three or four months of the trend in its 2010 figures - TLP’s 2010 H&F Land Reg prediction is therefore minus 6.43% with larger falls to come in 2011.

It is of course foolhardy to be specific in forecasts which is why the pros give you a range and why I choose to go to only two decimal places.

Anyone else got a crystal ball?

Good work TLP, as always.

You're absolutely right: a early crisis would give the Tories the excuse they need to take the tough measures we all know need taking.

But I don't think they've got the ********. They're still in the Blair pandering mindset. Trying to keep everyone happy. We need real leadership here. Someone with strongly defined opinions who will actually act on them. Not a button pusher.

[The Three Little Pigs]

http://209.85.229.132/search?q=cache:dklj10mqtOQJ:www.mckinsey.com/mgi/publications/debt_and_deleveraging/index.asp+mckinsey+debt+and+deleveraging&cd=2&hl=en&ct=clnk&gl=uk

Follow link and then register to download McKinseys "Debt and Deleveraging" report - the latest key credit crunch text. Highlights include: UK is the world's most indebted country and economies take 6 to 7 years to reduce ratio of debt to GDP by 25%,

[The Three Little Pigs]

http://www.bbc.co.uk/blogs/thereporters/robertpeston/2010/02/tories_withdraw_support_from_t_1.html

Today's Pesto-wire considers Cameron's motives for softening his position on the pace and depth of cuts:

"The innocent explanation is that it is a response to growing and widespread fears that economic recovery in the UK is far from robust or entrenched - so Messrs Cameron and Osborne would not want to be seen to be killing off the buds in a sharp frost of public-expenditure reductions and tax increases. "

TLP prefers the concluding paragraph:

"Now if you were a conspiracy theorist, you would note that David Cameron's change of tone on debt-reduction coincides with what will probably be the most important financial decision this side of the general election - that is whether the Bank of England will stop buying gilts.

If he has made the fiscal position of a future Tory government less clear, he has made the Bank of England's decision on whether to withdraw support for the gilt market that much more complicated.

And - you could argue - that Mr Cameron has increased the risk that investors will stop lending to HMG or demand much more onerous terms.

Which, of course, would upset him, but perhaps his personal pain would be rather less if any sterling crisis were to happen before the general election."

[The Three Little Pigs]

Just started Sebastian Faulks' new one "A week in December" - it's cast includes a hedge fund manager, tube driver, jihadist and lawyer together portraying fin de siecle London.

On the very first page is this brief gem of a comment on the new Westfield centre:

"This was not a retail park with trees and benches, but a compression of trade in a city centre, in which migrant labour was paid by foreign capital to squeeze out layers of profit from any Londoner with credit".

Aaah - it's always the artists who have the distance to create the commentary that lasts.

[Property Owning Democracy]

A Week In December

A really good read

[The Three Little Pigs]

The Land Reg Feb HPI data was publtshed today and whilst I am not doing the full update I did think it was worth noting what has been going on with the H&F peak figure.

The timing of the peak according to the Land Reg has remained the same since it was announced - Feb 2008 - but now the peak figure is more than £5000 below the peak peak figure. Look through previous posts on the thread and you will see peak figure of more than £515,000 - now the peak is recorded at £510,186.

I have no doubt this is Ed Balls's doing; he personally applies quarterly smoothers to the H&F figures. Ballsian logic being: "There can never be a crash because there was never any boom - just look at the Land Registry numbers.. Certainly no boom whilst my wife, sorry partner, was Minister. Now make my tea Yvette and put some clothes on, you're sagging."

Edited March 26, 2010 by The Three Little Pigs

[James Wyatt]

We have just finished our quarterly update and the figures have shown Fulham house prices have reached a new record high. January 179, February 204 and March 194 with the previous peak being in May 2007 at 190. This, together with our other indices, will shortly be available on our website under Surveyors and Publications.

The index is independently compiled by Dr Gibbons at the London School of Economics and it uses a regression analysis (pounds per square foot from the date of exchange). It does highlight the extreme volatility which has been experienced in recent months very well and the frenzied bidding (most agents have been reporting sealed bids on many houses).

In terms of outlook this is for other to speculate on. However, if you allowed for average earnings growth for Fulham buyers of 5-8% (given the propensity of City and City derived buyers this is probably conservative) compounded over the last ten years the index does not seem too far out of kilter. This should be balanced by the reality of an Austerity Budget, a 50% tax for those on £150k and the enormous fiscal debt burden all of which would continue to suggest the risks are weighted on the downside.

If you are interested in knowing more about the dynamics behind the housing market, here are a few papers:-

Flowerdew, R. T. N. (1977) In social geographyNorthwestern University.

The logic of the decision process in residential choice

Herring, R. and Watchter, S. (2002) In Asset Price Bubbles:Implications for Monetary,Regulatory,and International PoliciesFederal Reserve Bank of Chicago and World Bank, Chicago.

Doran, E. J. (1977) In EconomicsUniversity of Santa Clara, Santa Clara.

An empirical specification of a model of buyer search behaviour in single family residence market

Adair, A., Berry, J. and McGreal, S. (1996) Journal of Property Research, 13, 67-83. Hedonic Modelling, housing submarkets and residential valuation

Cronan, T. P., Epley, D. R. and Perry, L. G. (1986) Journal of Real Estate Research, 1, 19-31. The Use of Rank Transformation and Multiple Regression Analysis in Estimating Residential Property Values with a Small Sample

Elder, H. W. and Zumpano, L. V. (1991) Journal of Real Estate Research, 6, 341-356. Tenure choice, housing demand and residential location

Glower, M., Haurin, D. and Hendershott, P. (1997), Vol. 2003 www.jrer.com. Selling Time and Selling Price: The impact of seller motivation

Jud, D. G. and Seaks, T. G. (1994) Journal of Real Estate Research, 9, 289-298. Sample selection bias in estimating housing sales prices

Muellbauer, J. and Murphy, A. (2000), Vol. 2003 Housing Outlook. Booms and Busts in the UK Housing Market

Recent papers by Professors Rogoff and Reinhart as well as the McKinsey debt report or even Bill Gross's excellent monthly analysis give a more sobering macro-economic outlook. Horst Hanusch and Florian Wackermann issued a paper (Feb 2009) on the Credit Crisis from a Neo-Schumpeterian perspective suggesting excessive liquidity resulted in a vast misallocation of resources.

I trust all the above is useful.

James Wyatt F.R.I.C.S.

[Olala]

I trust all the above is useful.

James Wyatt F.R.I.C.S.

Useful? No, not really. Just rather dull. Come back TLP with your finesse and wit!

[the_duke_of_hazzard]

I trust all the above is useful.

James Wyatt F.R.I.C.S.

Useful? No, not really. Just rather dull. Come back TLP with your finesse and wit!

Don't listen to him. Thanks James, it's appreciated.

[mid_gen]

Still don't see the attraction with Fulham! I live in Barnes just the other side of the river to the West.

Had a couple of drinks over Fulham the other week, and not really having explored much before, I was struck by how busy the roads are, how small and cramped all the houses are, and how dirty the whole place is. Honest to god I have no idea what the attraction is?

Decided to walk home via Hammersmith bridge....and as we were walking throgh some of the residential streets, saw a group of 15 or so teenagers, quickly clocked them as very middle-class, talking 'proper' and not in chav uniform......and then one of them ran back down the road and hurled a brick through someone's front window.

[James Wyatt]

Our Fulham Graph and Index for the second quarter has just been finished and it has the index points as 178, 175, 182. February 2010 was the peak at 204 so the market has eased off by over 10%. Activity levels and best bids in the last few weeks would suggest the figures for July may show continued improvement.

With the onset of the "Age of Austerity" there will be strong headwinds for property. It is probable negative real interest rates will continue, giving succour to those on variable mortgage rates, but penalising the majority whom have savings. With the government set to slash expenditure and cut jobs, the outlook remains weighted on the downside.

James Wyatt F.R.I.C.S.

[arrgee1991]

Still don't see the attraction with Fulham! I live in Barnes just the other side of the river to the West.

I used to live in Fulham in a houseshare and it is nice enough. Decent sized houses/flats and good transport links. My main bugbear with it was lack of parking. Getting within 200 yards of your house of a evening was an achievement.

Yes, Barnes is nicer, but at the time access to public transport was key to me, and Barnes is a little lacking in that respect.

[angrypirate]

Our Fulham Graph and Index for the second quarter has just been finished and it has the index points as 178, 175, 182. February 2010 was the peak at 204 so the market has eased off by over 10%. Activity levels and best bids in the last few weeks would suggest the figures for July may show continued improvement.

With the onset of the "Age of Austerity" there will be strong headwinds for property. It is probable negative real interest rates will continue, giving succour to those on variable mortgage rates, but penalising the majority whom have savings. With the government set to slash expenditure and cut jobs, the outlook remains weighted on the downside.

James Wyatt F.R.I.C.S.

When you say continued improvement does that mean improvement for us HPCers so looking like a crash, or continued improvement from a homeowners / estate agents point of view so things turning around?

Also, do your figures mean

June - 178

May - 175

April - 182

Or the otherway round?

Also "weighted on the downside"?

Why speak in these ridiculous riddles?

SPEAK ENGLISH

[James Wyatt]

Apologies for not making this more clear

April 178

May 175

June 182

I used the "weighted on the downside" expression as this is a good description i.e. there is a greater probability of prices falling due to the underlying economy (see Bank of International Settlements Working Paper 300). Last year, following Lehmans, the market looked as though it would "correct" only for an acute shortage of properties to drive the market to new highs.

Our other graphs covering Prime Central London, Chelsea, Notting Hill etc, will be on our website very shortly (www.johndwood.co.uk under Surveyors and Publications)and there are some very interesting results.

James Wyatt FRICS

[The Three Little Pigs]

Our Fulham Graph and Index for the second quarter has just been finished and it has the index points as 178, 175, 182. February 2010 was the peak at 204 so the market has eased off by over 10%. Activity levels and best bids in the last few weeks would suggest the figures for July may show continued improvement.

James Wyatt F.R.I.C.S.

Interesting James, interesting

But then you did also say in Aptil of this year:

":We have just finished our quarterly update and the figures have shown Fulham house prices have reached a new record high. January 179, February 204 and March 194 with the previous peak being in May 2007 at 190. This, together with our other indices, will shortly be available on our website under Surveyors and Publications."

So far no sign of your new high in the Land Reg figures.

Indeed latest Land Reg figures say prices have fallen a smidge for recent completions ( see following post)

And according to the Land Reg this applies to the more expensive homes ( like you measure) as well as the cheaper ones .

One has to be so careful choosing which data sources to trust, don't you think?

Edited July 12, 2010 by The Three Little Pigs

[The Three Little Pigs]

H&F has turned.Prices fell according to the latest Land Reg figures.

Not by much admittedly – indeed by the smallest percentage the index can record, -0.1%. Translate that into pound terms and the fall equals £459. The average H&F property was worth a paltry £494,730 in May 2010, yet just a few weeks previously commanded a magnificent £495,189.

If this is the turning point, and there are few reasons tobelieve it isn’t, then it can be confirmed H&F never regained its peak. Feb 2008 remains the top albeit with its ever changing result – this month the Feb 2008 peak is recorded at £509,414.

Given the up,down,up, down recent history let’s work backwards through the possibilities:

if you bought the average H&F home in April 2010 you have lost £459

If you bought a home between March 2010 and May 2008 you are ahead

If you bought a home between November 2007 and April 2008 you are behind

if you bought earlier than October 2007 you are ahead.

And if you bought in 1995 or 6 you are a lucky saud.

(It will be interesting to do this exercise again at the end of the year.)

[James Wyatt]

We do look at Land Registry. However, Land Registry is based upon completions whereas our data is derived from the date of exchange. Consequently, the Land Registry is a lagging indicator by several months. It should also be noted the Land Registry figures are covering Hammersmith and Fulham and our data is only on houses within Fulham. You should also be aware we make adjustments for size by using pounds per square foot, which we believe gives a more accurate reading. The data is independently compiled and all our indices have shown greater volatility in both directions, which is in keeping with what agents have been reporting.

As mentioned above we recommend reading the BIS working paper 300 as the outlook due to the national debt is very "bearish".

James Wyatt FRICS

[Frizzers]

Effing negative real rates are propping the whole sham up.

I wish we could just hurry up, crash, flush out the shit and move on.

But if we don't see signs of it by the end of the summer, or, say, Xmas, it ain't going to happen imo. It'll be like the 70s. they'll destroy the currency first.