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Mikhail Liebenstein

Worst Place To Invest In Property In The Uk?

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I've been banging on about Kingswood in Surrey for quite a while . It is definitely the home of the overpriced McMansion, but it also has a terrible problem with oversupply. In my personal opinion this is the worst part of the UK in which to buy a house today as its where you'll lose the most money.

Take a look at the data from www.houseprices.co.uk I have pasted below, as you can see there are very few homes selling for more than £1m in the area. This is of course a massive problem then for those developers who have built large number of £1m+ (many for £2m to £3m) McMansions. Currently listed in right move are 48 entries for homes with asking prices greater than +£1m. If you buy one of these, say for example for £2m then I reckon you'll almost immediately be nursing a 50% loss.

http://www.rightmove.co.uk/property-for-sa...p;auction=false

Source www.houseprices.co.uk

Sale Date Price Type Tenure New Build Address

1 09/06/09 £297,500.00 Ter. F Yes 81, Buckland Road, Lower Kingswood, Tadworth, Surrey, KT20 7EF

2 22/05/09 £900,000.00 Det. F No Leyscroft, Sandy Lane, Kingswood, Tadworth, Surrey, KT20 6ND

3 15/04/09 £499,950.00 Det. F No 11, Lilley Drive, Kingswood, Tadworth, Surrey, KT20 6JA

4 27/03/09 £625,000.00 Det. F No Dusun Lama, Sandy Lane, Kingswood, Tadworth, Surrey, KT20 6ND

5 13/03/09 £375,000.00 Det. F No 38, Josephine Avenue, Lower Kingswood, Tadworth, Surrey, KT20 7AQ

6 12/03/09 £250,000.00 Semi F No 55, Smithy Lane, Lower Kingswood, Tadworth, Surrey, KT20 6UA

7 12/02/09 £199,000.00 Ter. F No 33, Beechen Lane, Lower Kingswood, Tadworth, Surrey, KT20 6RY

8 09/01/09 £230,000.00 Semi F No 49, Josephine Avenue, Lower Kingswood, Tadworth, Surrey, KT20 7AB

9 19/12/08 £370,000.00 Det. F No 50, Smithy Lane, Lower Kingswood, Tadworth, Surrey, KT20 6TX

10 19/12/08 £249,950.00 Flat L Yes Flat B13, Chesham Heights, St Monicas Road, Kingswood, Tadworth, Surrey, KT20 6DF

11 15/12/08 £195,000.00 Ter. F No 6, Church Close, Lower Kingswood, Tadworth, Surrey, KT20 7DH

12 05/12/08 £308,000.00 Flat L No Flat 11, Furze Hall, Furze Hill, Kingswood, Tadworth, Surrey, KT20 6EP

13 18/11/08 £212,500.00 Flat L No Flat 6, Kingswood Grange, Babylon Lane, Lower Kingswood, Tadworth, Surrey, KT20 6UY

14 11/11/08 £215,000.00 Flat L No Flat 12, Kingswood Grange, Babylon Lane, Lower Kingswood, Tadworth, , KT20 6UY

15 07/11/08 £3,200,000.00 Det. F No Hightrees, The Chase, Kingswood, Tadworth, Surrey, KT20 6JD

16 24/10/08 £215,000.00 Semi F No Winter Cottage, Brighton Road, Lower Kingswood, Tadworth, Surrey, KT20 6SY

17 21/10/08 £900,000.00 Det. F No Forth House, Beech Drive, Kingswood, Tadworth, Surrey, KT20 6PJ

18 14/10/08 £685,000.00 Det. F No 16, Kingswood Road, Tadworth, Surrey, KT20 5EG

19 29/09/08 £256,000.00 Semi F No 7, Orchard Way, Lower Kingswood, Tadworth, Surrey, KT20 7AD

20 26/09/08 £1,100,000.00 Det. F No Avalon, Woodland Way, Kingswood, Tadworth, Surrey, KT20 6NW

21 26/09/08 £785,000.00 Det. F No 4, Grove Shaw, Kingswood, Tadworth, Surrey, KT20 6QL

22 26/09/08 £192,000.00 Semi F No 24, Buckland Road, Lower Kingswood, Tadworth, Surrey, KT20 7DP

23 26/09/08 £800,000.00 Det. F No High Bank, Forest Drive, Kingswood, Tadworth, Surrey, KT20 6LU

24 26/09/08 £275,000.00 Semi F No 2, Hunter Hall Cottages, Mogador Road, Lower Kingswood, Tadworth, Surrey, KT20 7EW

25 17/09/08 £186,000.00 Ter. F No 36, Beechen Lane, Lower Kingswood, Tadworth, Surrey, KT20 6RY

26 16/09/08 £249,950.00 Ter. F No 36, Dents Grove, Lower Kingswood, Tadworth, Surrey, KT20 7DX

27 12/09/08 £230,000.00 Semi F No 55, Rookery Way, Lower Kingswood, Tadworth, Surrey, KT20 7DT

28 22/08/08 £315,000.00 Det. F No 2, Chipstead Lane, Lower Kingswood, Tadworth, Surrey, KT20 6RE

29 21/08/08 £265,000.00 Flat L Yes Flat B9, Chesham Heights, St Monicas Road, Kingswood, Tadworth, Surrey, KT20 6DF

30 15/08/08 £360,000.00 Flat L Yes Flat B3, Chesham Heights, St Monicas Road, Kingswood, Tadworth, Surrey, KT20 6DF

31 26/07/08 £850,000.00 Det. F No Inchbrakie, The Chase, Kingswood, Tadworth, Surrey, KT20 6HY

32 25/07/08 £675,000.00 Det. F No Walton Gorse, Lower Kingswood, Tadworth, Surrey, KT20 7HL

33 25/07/08 £467,500.00 Ter. F No Little Warren, Woodland Way, Kingswood, Tadworth, Surrey, KT20 6NN

34 25/07/08 £435,000.00 Semi F No 13, Kingswood Road, Tadworth, Surrey, KT20 5EE

35 18/07/08 £1,340,000.00 Det. F No Greensleeves, The Glade, Kingswood, Tadworth, Surrey, KT20 6LH

36 18/07/08 £280,000.00 Det. F No 16, Josephine Avenue, Lower Kingswood, Tadworth, Surrey, KT20 7AQ

37 11/07/08 £244,000.00 Ter. F No 77, Beechen Lane, Lower Kingswood, Tadworth, Surrey, KT20 6RU

38 07/07/08 £360,000.00 Flat L Yes Flat B14, Chesham Heights, St Monicas Road, Kingswood, Tadworth, Surrey, KT20 6DF

39 04/07/08 £1,310,000.00 Det. F No 24, Birch Grove, Kingswood, Tadworth, Surrey, KT20 6QU

40 27/06/08 £1,080,000.00 Det. F No Mogador House, Lower Kingswood, Tadworth, Surrey, KT20 7HQ

41 27/06/08 £1,250,000.00 Det. F No 5, Gledhow Wood, Kingswood, Tadworth, Surrey, KT20 6JQ

42 20/06/08 £980,000.00 Det. F No Brambletye, The Glade, Kingswood, Tadworth, Surrey, KT20 6JE

43 19/06/08 £442,000.00 Semi F No 36, Chipstead Lane, Lower Kingswood, Tadworth, Surrey, KT20 6RE

44 06/06/08 £520,000.00 Det. F No 78, Kingswood Road, Tadworth, Surrey, KT20 5EQ

45 30/05/08 £280,000.00 Flat L Yes Flat A6, Chesham Heights, St Monicas Road, Kingswood, Tadworth, Surrey, KT20 6DH

46 29/05/08 £930,000.00 Flat L Yes Flat B16, Chesham Heights, St Monicas Road, Kingswood, Tadworth, Surrey, KT20 6DF

47 28/05/08 £290,000.00 Flat L Yes Flat A14, Chesham Heights, St Monicas Road, Kingswood, Tadworth, Surrey, KT20 6DH

48 28/05/08 £280,000.00 Flat L Yes Flat A4, Chesham Heights, St Monicas Road, Kingswood, Tadworth, Surrey, KT20 6DH

49 20/05/08 £425,000.00 Det. F No 90, Kingswood Road, Tadworth, Surrey, KT20 5EQ

50 16/05/08 £875,000.00 Det. F No 2, Walnut Drive, Kingswood, Tadworth, Surrey, KT20 6QX

Edited by mikelivingstone

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Surrey was bad enough before the boom, now its insane. The fact that these are back below the £1m mark doesn't really change that much...

Edited by HPC001

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Surrey was bad enough before the boom, now its insane. The fact that these are back below the £1m mark doesn't really change that much...

My view of the village is that it was once a nice village not too far from London. When the London boom happened expectations for the area got ahead of themselves as it was attractive to the London spill over. If you can't afford a £5m house in Kensington or Chelsea, why not settle for £2m-£3m McMansion in Kingswood (or another similar London dormitory). With prices collapsing in London and jobs going in financial services, the Chelsea and Kensington properties may be back on for the few that are buying, whilst these dormitory areas will now be left to the locals. Unfortunately for the developers most locals can only stump up a few hundred k, with a few pushing to £1m. So how can they ever off loads these properties for £2m+ they need to make a profit.

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My view of the village is that it was once a nice village not too far from London. When the London boom happened expectations for the area got ahead of themselves as it was attractive to the London spill over. If you can't afford a £5m house in Kensington or Chelsea, why not settle for £2m-£3m McMansion in Kingswood (or another similar London dormitory). With prices collapsing in London and jobs going in financial services, the Chelsea and Kensington properties may be back on for the few that are buying, whilst these dormitory areas will now be left to the locals. Unfortunately for the developers most locals can only stump up a few hundred k, with a few pushing to £1m. So how can they ever off loads these properties for £2m+ they need to make a profit.

You're talking to someone who can't afford to *rent* a flat in the biggest dump this side of the city, nevermind buy a home in the KT postcode area :lol:

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You're talking to someone who can't afford to *rent* a flat in the biggest dump this side of the city, nevermind buy a home in the KT postcode area :lol:

But we do need a collapse at both ends of the market to bring everything in the middle down.

Right now there are a lot of boomers at the top end refusing to downsize and this is gumming up the price falls. We need transactions at lower prices to cement the lower prices.

Over supplied areas of high end houses collapsing will surely help.

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But we do need a collapse at both ends of the market to bring everything in the middle down.

Right now there are a lot of boomers at the top end refusing to downsize and this is gumming up the price falls. We need transactions at lower prices to cement the lower prices.

Over supplied areas of high end houses collapsing will surely help.

All a bit moot when there are so many unemployed (including the ones not claiming welfare). When you're a young person on JSA, anything above 1 bedroom in a shared house is out of reach. Granted, perhaps the councils are going to be propping up BTLs but the landlords themselves still have an ingrained dislike of DSS tenants...at least around here.

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All a bit moot when there are so many unemployed (including the ones not claiming welfare). When you're a young person on JSA, anything above 1 bedroom in a shared house is out of reach. Granted, perhaps the councils are going to be propping up BTLs but the landlords themselves still have an ingrained dislike of DSS tenants...at least around here.

Well another factor in Kingswood is that they will be building a lot of social housing at the old Legal and General site. So this should help some of the locals - it may be that prospective McMansion buyers don't like that. But as more people need social housing than McMansions its pretty clear which group deserves to win that particular argument.

Frankly who care if a few bankers spend £2m in the area on a McMansion only to find they are living next door to some social housing which then "devalues" their property. The buggers have stolen enough via the bailout, so I don't think so called "posh" areas should be protected anymore than anywhere else.

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My view of the village is that it was once a nice village not too far from London. When the London boom happened expectations for the area got ahead of themselves as it was attractive to the London spill over. If you can't afford a £5m house in Kensington or Chelsea, why not settle for £2m-£3m McMansion in Kingswood (or another similar London dormitory). With prices collapsing in London and jobs going in financial services, the Chelsea and Kensington properties may be back on for the few that are buying, whilst these dormitory areas will now be left to the locals. Unfortunately for the developers most locals can only stump up a few hundred k, with a few pushing to £1m. So how can they ever off loads these properties for £2m+ they need to make a profit.

The process of price falls is an interesting one.

Part of what happens in a market where prices and volumes are falling is that people can get a better house for any given amount of money. People also need to make fewer compromises. Suddenly they can live one station closer to work. On the Tube rather than the Overland transport system. On a less busy road etc etc. Suddenly, all of the compromised houses stagnate and which pushes down all prices.

I quite like Kingswood but the transport links into London are slow and there is quite a bit of background road noise from the Brighton Road. Prices there are simply too high relative to somewhere like Cobham with better transport links to London and less background road noise.

Overall, I agree that Kingswood is in for a bigger fall than other parts of Surrey as people are no longer going to hold their noses and buy there. In a bull market, compromises have to be made. In a bear market, less compromises need to be made.

Overall, the KT postcodes seem to have been very strong in the last three months. I certainly didn't expect the dormitory towns for the City to do so well. I thought that they would be one of the weaker areas in cummutable London rather than one of the stronger areas.

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Never been to Kingswood. It looks just as nice as all the other private estates around Cobham/Esher/Weybridge, but cheaper. What gives?

I think that is pretty fair, though i'd say the train service from the other places you mention is better. The key thing with Kingswood though is that there have been a lot of older homes on large plots that have been demolished and replaced with +5000 sqr ft homes. In doing so a £900k or £1.3m plot is suddenly advertised for £2-3m. Homes at this price were selling just 2-3 years ago, but now the demand has collapsed. The other factor I'd add is that there is the old BBC Site and the Legal and General Site which will all be going over the development. So in essence there is large current over supply with an even great potential oversupply in the pipeline. To me this says you can't sustain dozens of dozens of new builds for £2-3m, really they should have been building several £400k-600k homes on large plot instead. They will of course get some flats and higher density development once the larger sites come on, including social housing, but for now the developers in the area look stranded.

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Never been to Kingswood. It looks just as nice as all the other private estates around Cobham/Esher/Weybridge, but cheaper. What gives?

I am not sure that Kingswood is cheaper :

This is in Kingswood :

http://www.rightmove.co.uk/property-for-sa...y-25988693.html

This is in Cobham :

http://www.rightmove.co.uk/property-for-sa...y-21318937.html

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The process of price falls is an interesting one.

Part of what happens in a market where prices and volumes are falling is that people can get a better house for any given amount of money. People also need to make fewer compromises. Suddenly they can live one station closer to work. On the Tube rather than the Overland transport system. On a less busy road etc etc. Suddenly, all of the compromised houses stagnate and which pushes down all prices.

I quite like Kingswood but the transport links into London are slow and there is quite a bit of background road noise from the Brighton Road. Prices there are simply too high relative to somewhere like Cobham with better transport links to London and less background road noise.

Overall, I agree that Kingswood is in for a bigger fall than other parts of Surrey as people are no longer going to hold their noses and buy there. In a bull market, compromises have to be made. In a bear market, less compromises need to be made.

Overall, the KT postcodes seem to have been very strong in the last three months. I certainly didn't expect the dormitory towns for the City to do so well. I thought that they would be one of the weaker areas in cummutable London rather than one of the stronger areas.

I agree with this. I think the process of price falls needs areas like Kingswood to illustrate the correction. The typical scenario is developers get fooled by excess market valuations into overpaying for plots just outside of the mainstream commuter areas. They invest in large McMansions which they then sell at over inflated prices, a few sell , but then the boom comes to and end and as suggest people then no longer need to compromise so pick areas nearer London or with better commutes etc. Thus the areas, like Kingswood which offered the space to build and a reasonable if slightly longer commute are left with over supply and hence rapidly falling prices.

In my view most of these McMasions will eventually fall to 50% of their current prices.

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I agree with this. I think the process of price falls needs areas like Kingswood to illustrate the correction. The typical scenario is developers get fooled by excess market valuations into overpaying for plots just outside of the mainstream commuter areas. They invest in large McMansions which they then sell at over inflated prices, a few sell , but then the boom comes to and end and as suggest people then no longer need to compromise so pick areas nearer London or with better commutes etc. Thus the areas, like Kingswood which offered the space to build and a reasonable if slightly longer commute are left with over supply and hence rapidly falling prices.

In my view most of these McMasions will eventually fall to 50% of their current prices.

I think that you are right.

Like others, I am also puzzled as to who the actual buyers are at the moment for the McMansions in the £2-3m range. We keep hearing that they are cash buyers. We also keep hearing that it is almost impossible to g et a mortgage for more than £1m. Just how many people are there who are willing and able to plunk down £1-3m in cash to buy a house like this.

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I am not sure that Kingswood is cheaper :

This is in Kingswood :

http://www.rightmove.co.uk/property-for-sa...y-25988693.html

This is in Cobham :

http://www.rightmove.co.uk/property-for-sa...y-21318937.html

That kinds of makes my point about the new builds in Kingswood being massively overvalued.

I'd rather live in Cobham than Kingswood by a factor of about 5. The fact that the McMansions in the area are asking similar prices is clearly deluded. One issue I suspect is that many of these Kingswood properties were finished in 2007/8 and the developers have paid top whack for the land and now are left with properties they can't sell. As I proved in the original house price table, in Kingswood only a few properties have actually sold for over £1m in the last year, but there are 48 entries in right move for homes between £1m and £4m. Clearly there is no market for homes between £1m and £4m in the area and so I suspect the developers there are sitting on huge losses. It will be interesting to see when these losses are crystallized what these homes sell for, but they certainly won't be Cobham prices.

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What are the £2m new builds like? Are they like they as poorly built as the cheaper housing?

I don't understand why anyone would opt to buy a newbuild over a renovated early 19th century house, especially when they have £2m to throw around.

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I think that you are right.

Like others, I am also puzzled as to who the actual buyers are at the moment for the McMansions in the £2-3m range. We keep hearing that they are cash buyers. We also keep hearing that it is almost impossible to g et a mortgage for more than £1m. Just how many people are there who are willing and able to plunk down £1-3m in cash to buy a house like this.

Absolutely, and this issue is beyond places like Kingswood. In fact the whole of Surrey is seeing very few transactions for over £1m if you compare things with 3 or more years ago. My belief is that there was a point where people genuinely thought prices only ever go up and in such circumstance clearly the right thing to do was to borrow as much as possible. Who care if you borrow £2m and struggle to pay the mortgage, because with rise of 15% per annum your £2m property will be worth £2.7m in a couple of years.

Now that prices are reversing the opposite is true, and an so people are now paying what they need for a house to live in, not the maximum possible for reasons of speculation.

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What are the £2m new builds like? Are they like they as poorly built as the cheaper housing?

I don't understand why anyone would opt to buy a newbuild over a renovated early 19th century house, especially when they have £2m to throw around.

I'm not so familar with £2m houses, but have seen quite a few £1m-1.3m. My comment is that they are certainly finished to a higher standard and the kitchens and bathrooms tend to use much more expensive fitting, but then fundamentally I am not convinced the walls, roof and foundations are any better than your bulk standard £250k house. They are quite literally just bigger.

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I'm not so familar with £2m houses, but have seen quite a few £1m-1.3m. My comment is that they are certainly finished to a higher standard and the kitchens and bathrooms tend to use much more expensive fitting, but then fundamentally I am not convinced the walls, roof and foundations are any better than your bulk standard £250k house. They are quite literally just bigger.

My experience is that it depends on the developer. I've seen some houses up for £1.5m without solid internal walls.

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I am not sure that Kingswood is cheaper :

This is in Kingswood :

http://www.rightmove.co.uk/property-for-sa...y-25988693.html

This is in Cobham :

http://www.rightmove.co.uk/property-for-sa...y-21318937.html

I think Cobham has its own oversupply of new build McMansions - Rachman will be able to tell us more. What is the rental yield on a ~£1m place in Kingswood? Weybridge is approx 4-5% and Cobham around 3-4% in my (admittedly) limited research.

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Well another factor in Kingswood is that they will be building a lot of social housing at the old Legal and General site. So this should help some of the locals - it may be that prospective McMansion buyers don't like that. But as more people need social housing than McMansions its pretty clear which group deserves to win that particular argument.

Frankly who care if a few bankers spend £2m in the area on a McMansion only to find they are living next door to some social housing which then "devalues" their property. The buggers have stolen enough via the bailout, so I don't think so called "posh" areas should be protected anymore than anywhere else.

What "old Legal and General site"? The beeb have moved out but L and G have no plans to move, although it would be very funny to see a load of social housing up there and maybe an immigration centre.

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I think Cobham has its own oversupply of new build McMansions - Rachman will be able to tell us more. What is the rental yield on a ~£1m place in Kingswood? Weybridge is approx 4-5% and Cobham around 3-4% in my (admittedly) limited research.

Somewhere between 3.5 and 4.5% I believe.

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What "old Legal and General site"? The beeb have moved out but L and G have no plans to move, although it would be very funny to see a load of social housing up there and maybe an immigration centre.

Well may be ahead of myself, but I heard plans were afoot.

http://news.bbc.co.uk/1/hi/england/7964039.stm

http://www.financemarkets.co.uk/2009/05/12...560-job-losses/

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Worst area for property? Surrey. I don't think so.

With many of the more marginal regional economies exhibiting vacancy rates of 25% plus in their shopping centres I think there will be many, many stronger candidates for that title.

Depends whether you think the areas that were last to rise will fall most or those that are most overvalued.

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Sorry Mike this is incorrect. L&G have only recently renewed their tenancy with the owners of the Kingswood site, British Land.

Kingswood and Lower Kingswood and Tadworth are different villages by the way.

As a local lad I've never seen why Kingswood commands such a premium, it has no community or history and is just chocka with hideous McMansions. It's not so much a gated community as a collection of gated-persons.

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