Two Tier Market

[Nautorius]

That's always a possibility, but if the mid-low end properties are selling at 20% off peak prices ( which is certainly the case in NH from what I see ) then why should the top end places be exhibiting a different selling pattern ?

I think the Londoners moving to the country and buying what appears to them to be a great value house ( even though they are paying well over the odds ) and getting a low market rate is simply keeping these prices up.

The key has to be the London Market. When it goes, everything goes.

When will London pop.....dunno

OK, Real life anecdote.

South Northants Village on the border of Banbury Oxon. Young Couple (Early thirties ) move out from Hampstead London 2 bed flat. Bought in 2002 for £280k. Sold 2011 for aprox £650k. They had paid off mortgage. Move to village and buy House at £775k which I valued at £550-600k in todays market. Vendor had it up for £875k for 1 year but they were old and wanted to go. Reluctantly sold for £775k whiuch was price recommended by estate agent. The couple did not negotiate at all. Paid what the estate agent thought it worth today, cash purchase.

Everyone in village up in arms as 'House sold too cheap' and that affects their house value. Lots of angry mumblings at estate agent. This is traditionally a London money village where people move to have a family. Mostly cash or high value deposits and prices to match. Entire Village overvalued by 30% IMHO. Although most were mortgage free, a selective few had moved out of corporate life in London to set up own businesses to improve lifestyle. I believe several are supporting themselves and businesses on Mortgages they have now had to take out.

If these become forced sellers it will change the whole dynamic of the Village.....10 years of comfort into potential next door repo and big value drops.

It is only then will we get the POP and associated Drop. Utill then only Death and Divorce can drive the market, a market where their is greed and avarice.

Needless to say I want to live in the Village, but cannot afford it. I am currently out of UK but may return IF house prices become realistic and Taxation simplified. In meantime saving like mad.

N.

[TheCountOfNowhere]

OK, Real life anecdote.

South Northants Village on the border of Banbury Oxon. Young Couple (Early thirties ) move out from Hampstead London 2 bed flat. Bought in 2002 for £280k. Sold 2011 for aprox £650k. They had paid off mortgage. Move to village and buy House at £775k which I valued at £550-600k in todays market. Vendor had it up for £875k for 1 year but they were old and wanted to go. Reluctantly sold for £775k whiuch was price recommended by estate agent. The couple did not negotiate at all. Paid what the estate agent thought it worth today, cash purchase.

Everyone in village up in arms as 'House sold too cheap' and that affects their house value. Lots of angry mumblings at estate agent. This is traditionally a London money village where people move to have a family. Mostly cash or high value deposits and prices to match. Entire Village overvalued by 30% IMHO. Although most were mortgage free, a selective few had moved out of corporate life in London to set up own businesses to improve lifestyle. I believe several are supporting themselves and businesses on Mortgages they have now had to take out.

If these become forced sellers it will change the whole dynamic of the Village.....10 years of comfort into potential next door repo and big value drops.

It is only then will we get the POP and associated Drop. Utill then only Death and Divorce can drive the market, a market where their is greed and avarice.

Needless to say I want to live in the Village, but cannot afford it. I am currently out of UK but may return IF house prices become realistic and Taxation simplified. In meantime saving like mad.

N.

I have a few similar anecdotes I can share with you.

1) Friend of ours in Clapham, has agreed a sale on her 1 bed flat for...wait for it.....£355K !!!!!!!! She is moving with her boyfriend to Surrey and buying somewhere for £550K. The countess sold her flat nearby recently and we easilly negotiated the estate agent fee to 1%....this lady used the same agents and we told her that they would do 1% easily, she is paying 1.75% !!!!! She also seems oblivuous to the stamp duty increase at 500K. They got 15K off the asking price. They are stretching themselves to buy.

2) Another london couple, bought a 2 bed ( or it might be 3) house in Brixton, just sold for 175K more than they paid for it 3 years ago !!!! They are moving to Birmingham to buy something nice.

3) 2 people I know trying to sell "big" houses in Northampton are sitting waiting for someone from London to come and buy it from them and hoping for something close to asking price!!!! They've actually said..."we're hoping for a london buyer" !!!

4) A mate of mine has tried selling his (150K 4 bed house ) all year...not even a sniff. Has taken it off the market to wait till next year. I guess no one coming out of London wants a crappy 150K house mortgage free when the see they can only win BIG on houses and can get cheap credit to buy somewhere in reality they can't afford.

As I've said a few times now....When London goes pop, and it will, the housing market around London will collapse big time. None of the locals in Northampton can afford the 150K house never mind the 500K+ houses.

Edited September 19, 2011 by TheCountOfNowhere

[The Masked Tulip]

But when will London pop? When Greece pops?

[TheCountOfNowhere]

But when will London pop? When Greece pops?

That's the $1000000 question.

In London the prices right now are peak+.

Peak prices were crazy so the peak+ prices are going to destroy a lot of people, they will loose their parents hard earned cash very quickly.

They can only be occurring because of the crazy BoE interest rate policy with people buying based on monthly affordability and the sense that they just can't loose buying a house in London. ( And why should they think otherwise, the CC only dented prices and people are still making a fortune ).

1. IR's going up with stop this madness ( and it's a madness that should be stopped ASAP )

2. One of the banks going pop and CC 2 might stop it, but it might stop most things

3. Greece defaulting might cause a bank or two to collapse I suppose, resulting in CC2.

4. Otherwise prices will expand to meet peoples affordability but when that point is reached ( and surely we must be there ) it's anyone's guess what will happen.

5) Massive job losses might see things plummet but we aleady have 7million people out of work and they are living very nicely thank you very much mr Brown.

6)One thing is too awful to contemplate....Large scale terrorist attach such as a small nucleur device, highly unlikely in my opinion.

7) Prices just keep going up for ever and we all sell out house to Londoners...god bless them.

8) A change of government that understands the problem...6) is more likely.

9) UK rating downgrade, bond market telling Osborne his pretend austerity is transparent, IMF given the keys to the door and interest rates hit 10%.

10) The plague returning.

Whatever scenario you take, it's difficult to see when it will happen, but one of the above will happen. The consequences will be worse than they were 4 years ago ( is it that long now !!! ) and this country is going to take decades to recover. Forget buying a house...leave.

[Si1]

2) Another london couple, bought a 2 bed ( or it might be 3) house in Brixton, just sold for 175K more than they paid for it 3 years ago

unbelievable - lottery win