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Doesn't Commute Anymore

Ah, Now I Remember Why I Left London.........

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I was enjoying my work-sponsored conference in Central London - a trip down memory lane from my responsibility-free early 20s.

But then the Evening Standard ruined it all with this:

Buy-to-let revival is a curse for new buyers

http://www.thisislondon.co.uk/markets/article-23950754-buy-to-let-revival-is-a-curse-for-new-buyers.do

Section A

A depressing graph for the have not's

( those with a hefty bank of M+D can move straight to Section B )

LondonRentals_415.jpg

Section B

Same old, same old VI comments to help the have's sleep well tonight - immigration, more single households etc. etc.

(those without a hefty bank of M+D, stop reading immediately and get back to earning the rent for this journalist's BTL portfolio!!!)

While rental may be a lifestyle choice for some, for many, many more it's unavoidable and a source of unwelcome uncertainty. A realistic chance to own is being denied to a generation in the transition from property boom to mortgage famine. For them it's the "dead money" of rental that awaits - and the continuation of iniquitous transfer of wealth from young to old, from equity-poor to equity-rich.
Buy-to-let loans now claim a record share of all outstanding mortgages at around £152 billion, accounting for all the growth in mortgage products this year. It's depressing but in the kind of market with rentals in such short supply, it makes perfect sense for the banks to raise their lending to cash-rich landlords, typically at lower loan to value rates of 60%-75%: it's a lower risk and ties up less capital than lending money to a first-time buyer who has struggled to scrape together a 10% deposit

This has a horrible smell of unsustainability about it, but I said that several years ago when I left. The Standard has to be free now - the workers clearly don't have 50p disposable income anymore. I know its pretty clear that London will be the last domino to fall in this housing slump, but I expected it to be wobbling now and I am a little bemused that it isn't. Sounds like it is still "This time next year, Rodney!" in dear old London :(

Edited by Diet Cola Addict

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ive lived in london all my life- at the moment im living in a bit of a dump of an area in west london- what i can see is people around me unaffected by the cuts, spending without fear- they're working hard mind - i know of several people who work 7 days a week - people around me arent affected by the economic slow down and i think they represent a large number of people in london- if prices fall in london they wont fall much and i cant see affordable housing returning - or i dont see any crashes in london - theres far too much demand, high poulation, loads of money around. I know some may point to falls in the US and Japan- but i would say NY is holding up and japan doesnt have a rising population. I hope i'm wrong but i dont think i am- high house prices in london are here to stay

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ive lived in london all my life- at the moment im living in a bit of a dump of an area in west london- what i can see is people around me unaffected by the cuts, spending without fear- they're working hard mind - i know of several people who work 7 days a week - people around me arent affected by the economic slow down and i think they represent a large number of people in london- if prices fall in london they wont fall much and i cant see affordable housing returning - or i dont see any crashes in london - theres far too much demand, high poulation, loads of money around. I know some may point to falls in the US and Japan- but i would say NY is holding up and japan doesnt have a rising population. I hope i'm wrong but i dont think i am- high house prices in london are here to stay

Hear what you're saying but I think London as a whole is not bomb proof, although certain pockets are. I'm in Chiswick/Richmond/Kew area and I can't see this part of London dropping. Ever. If anything prices are rising. On the flip side, one of my best mates is an estate agent in South London. Her boss sent her home last week and she's complaining there's been nothing to do for the last two years. Think their agency has sold 2 houses this year (must check) and they are kept afloat with their rentals only.

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ive lived in london all my life- at the moment im living in a bit of a dump of an area in west london- what i can see is people around me unaffected by the cuts, spending without fear- they're working hard mind - i know of several people who work 7 days a week - people around me arent affected by the economic slow down and i think they represent a large number of people in london- if prices fall in london they wont fall much and i cant see affordable housing returning - or i dont see any crashes in london - theres far too much demand, high poulation, loads of money around. I know some may point to falls in the US and Japan- but i would say NY is holding up and japan doesnt have a rising population. I hope i'm wrong but i dont think i am- high house prices in london are here to stay

I agree completely. London and New York will not be affected much, if at all.

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Take a slightly longer perspective, and those rents are hugely down. Average below £1000/month! If rents had followed house prices over 30 years you'd be looking at a minimum well above that, not for a flat but for a run-down slum bedsit.

I remember why I left London: a rent of two thirds of my after-tax income left me within £1/week of the dole to live on. Or a whole lot less after accounting for costs of working, like commuting, and paying sandwich-man prices for lunch. And that wasn't an average rent, it was bottom-end in Peckham.

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While the bottom can and will eventually fall out for most of the country, London will go down only a little bit or even rise. People with really serious money from around the world want to buy in London, and don't care what the price is.

Remember also the banks are located there as is the central government. After they spend generously in London, the scraps are thrown to the 'provinces'.

Thirdly mega cities have their own internal energy and flow. Like a small town might be dependent on the local steel mill or something, a mega city is the market.

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ive lived in london all my life- at the moment im living in a bit of a dump of an area in west london- what i can see is people around me unaffected by the cuts, spending without fear- they're working hard mind - i know of several people who work 7 days a week - people around me arent affected by the economic slow down and i think they represent a large number of people in london- if prices fall in london they wont fall much and i cant see affordable housing returning - or i dont see any crashes in london - theres far too much demand, high poulation, loads of money around. I know some may point to falls in the US and Japan- but i would say NY is holding up and japan doesnt have a rising population. I hope i'm wrong but i dont think i am- high house prices in london are here to stay

And when they need to work 8 days a week to make ends meet? Or their body gives up with exhaustion what then?

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While the bottom can and will eventually fall out for most of the country, London will go down only a little bit or even rise. People with really serious money from around the world want to buy in London, and don't care what the price is.

Remember also the banks are located there as is the central government. After they spend generously in London, the scraps are thrown to the 'provinces'.

Thirdly mega cities have their own internal energy and flow. Like a small town might be dependent on the local steel mill or something, a mega city is the market.

You're talking about one small part of the London market (probably less than 1%).

People with serious money don't want to buy 2-bed flats in Hackney.

The super-prime stuff may well retain its "value", but who cares, it's not for the likes of us anyway.

The other 99% will crash just as hard as the rest of the UK.

Edited by Constable

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While the bottom can and will eventually fall out for most of the country, London will go down only a little bit or even rise. People with really serious money from around the world want to buy in London, and don't care what the price is.

Remember also the banks are located there as is the central government. After they spend generously in London, the scraps are thrown to the 'provinces'.

Thirdly mega cities have their own internal energy and flow. Like a small town might be dependent on the local steel mill or something, a mega city is the market.

sounds like the old Buenos Aires, a permanently High Plateau....ohh wait a minute

Edited by georgia o'keeffe

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You're talking about one small part of the London market (probably less than 1%).

People with serious money don't want to buy 2-bed flats in Hackney.

The super-prime stuff may well retain its "value", but who cares, it's not for the likes of us anyway.

The other 99% will crash just as hard as the rest of the UK.

exactly

p*ss-poor yields says bye-bye bubble

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exactly

p*ss-poor yields says bye-bye bubble

London is still in a bubble, but things are starting to change. My landlady paid £510k for the flat I live in (in 2008). There is a very similar one in the same street now one the market at £399k...

I posted this a while ago (in the wrong forum) about London EC1 where I live http://www.housepricecrash.co.uk/forum/index.php?showtopic=162229.

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London = QE dump - that is where all the money went. Keeping London expensive will have long term ramifications service sector jobs.

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You're talking about one small part of the London market (probably less than 1%).

People with serious money don't want to buy 2-bed flats in Hackney.

The super-prime stuff may well retain its "value", but who cares, it's not for the likes of us anyway.

The other 99% will crash just as hard as the rest of the UK.

+1

Lived in London all my life and every previous bust has dropped prices for most areas. When the financial sector has it's over due "haircut" I could see every area being affected. Saying that London is different is as naive as someone in Scunthorpe saying that we're different . :blink:

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You're talking about one small part of the London market (probably less than 1%).

People with serious money don't want to buy 2-bed flats in Hackney.

The super-prime stuff may well retain its "value", but who cares, it's not for the likes of us anyway.

The other 99% will crash just as hard as the rest of the UK.

My instinct says that this is the most likely scenario for London. The non savvy who are buying high now in places not coveted by the top 1% of earners could be looking at massive -ve equity in a few years time.

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London is still in a bubble, but things are starting to change. My landlady paid £510k for the flat I live in (in 2008). There is a very similar one in the same street now one the market at £399k...

I posted this a while ago (in the wrong forum) about London EC1 where I live http://www.housepric...howtopic=162229.

the best explanation for the london bubble that I heard was from the Economist - which said that it was held up from the top down as an extension of the emerging (China, Aus) property and investment bubbles - rich Russians, Chinese, Indians etc parking money in London as a tangible tax-efficient wealth store

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My instinct says that this is the most likely scenario for London. The non savvy who are buying high now in places not coveted by the top 1% of earners could be looking at massive -ve equity in a few years time.

Yep imo outside the exclusive postcodes, the falls if anything could be worse than average.

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My instinct says that this is the most likely scenario for London. The non savvy who are buying high now in places not coveted by the top 1% of earners could be looking at massive -ve equity in a few years time.

It's even worse than that since most of those in the top 1% of earners can't afford to buy in the places coveted by people with high-net worth.

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London is still in a bubble, but things are starting to change. My landlady paid £510k for the flat I live in (in 2008). There is a very similar one in the same street now one the market at £399k...

I posted this a while ago (in the wrong forum) about London EC1 where I live http://www.housepricecrash.co.uk/forum/index.php?showtopic=162229.

I am looking to buy at the moment now within zone 2-3 and selling prices are around 2006-7 level. Some listing prices over 2007, but they are not selling, stuff on the market, months, and in some cases YEARS in good central locations! LOTS of good price reductions. The odd bargin can definitely be had, and I mean well below 2006 prices. The London market is dead, volumes are terrible that is obvious to see. I only see indicators pointing down for the London market, immigrants leaving, lack of demand (or lack of people with deposits/jobs) and gov't cutbacks will hit hard. A lot of unoccupied places out there on my viewing trips. Agents, brokers, surveyors are like leeches desparate for work. The bubble is deflating slowly....

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You're talking about one small part of the London market (probably less than 1%).

People with serious money don't want to buy 2-bed flats in Hackney.

The super-prime stuff may well retain its "value", but who cares, it's not for the likes of us anyway.

The other 99% will crash just as hard as the rest of the UK.

And it's always 'prime' London the likes of Savils mean when they're quoted (ad infinitum) . Savils don't deal in ordinary-mortal property, so whether deluded or not their views are of s*d all interest to most of us.

Having said that, I don't think most of 'ordinary-mortal ' London will drop as much as some other areas. The difference being that if you lose your job in London, you are probably more likely to be able to find another.

And again, so much of it depends on area. I've been getting Primelocation alerts for some time now. I'm getting a lot of 'new price' alerts for Streatham/Norbury, plenty of new listings too, but far fewer of either for next-door Tooting.

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If London was immune then it would not have fallen so hard and fast in early 90s. I know I was there -well, living in Reading ,working in Bracknell but getting the fast train (25 mins - quicker than travelling within London) into Paddington and going out in the West End.

Since 1998ish, London has just become a more extreme, more leveraged version of the UK as a whole.

The UK will snap back. London will snap back even more.

London is not a centre of hard working private sector types. Throw a brick and it's more likely to hit someone on benefits or one of the many public sector or public sector funded workers. You can now add the financial sector to that very long list now.

Yes there are some rich Foriegners there. Always have. They are pretty price insensitive because 1) they nicked the money from their country 2) they are buying a place, less as a london crash pad more a 'stay in london and don't get lynched by the mob place'.

Anyhow, the rich bit of london have about much influence on the normal Londoner as the price of crofts in the shetland isles.

You are talking several 1000 places in, what, great population of ~13M = ~ 5M households.

The reasons peple are syaing 'London is different' is due to IRs being slashed. When IRs start rising - even to 6% ish, London will just collapse.

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+1

Lived in London all my life and every previous bust has dropped prices for most areas. When the financial sector has it's over due "haircut" I could see every area being affected. Saying that London is different is as naive as someone in Scunthorpe saying that we're different . :blink:

exactly, pure naivety, having said that Maidstone should hold up

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  • 312 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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