Something Is Happening

[dances with sheeple]

Just viewed a property in Mumbles - newish build. Landlord is selling up. Has the property next door, also on the market.

So something is definitely up? Lower yields combined with HPI reversal and long time on the market to sell for most property mixing together to create the all important shift in sentiment?

[thecrashingisles]

Just viewed a property in Mumbles - newish build. Landlord is selling up. Has the property next door, also on the market.

Do your local EAs not get fed up showing you around everything on their books or are the rumours true?

[The Masked Tulip]

Do your local EAs not get fed up showing you around everything on their books or are the rumours true?

When animals turn on one another you know that they are doomed.

[The Masked Tulip]

So something is definitely up? Lower yields combined with HPI reversal and long time on the market to sell for most property mixing together to create the all important shift in sentiment?

Put this way. This house had been on for 300K, (One other in road on for 290 and another on for 280) but dropped to 260 asking.

I said that I would not pay more than 200K for it and was a tad surprised when the EA suggested that I could "always make an offer".

[tomandlu]

Put this way. This house had been on for 300K, (One other in road on for 290 and another on for 280) but dropped to 260 asking.

I said that I would not pay more than 200K for it and was a tad surprised when the EA suggested that I could "always make an offer".

Tch... you EAs and your cosy little arrangements....

[wherebee]

Yes, in 2008/09/10 they were driven by the 'fear factor', looking for a safe haven. But with a new equities bubble and good rates of return on some types of secure bonds making a comeback, the very things which made London attractive have dissipated. In that sense it's a combination of factors, but yields certainly also come into it.

WRONGO! I should just cut and paste this reply as it comes up about once a week on HPC. Asian buyers love the UK. dont care about yield or value of GBP. It gives them an asset out of reach of their grasping governments - and a bit of cachet in owning somewhere in London. Many dream of moving there eventually.

Unless we see massive riots in London, this will not end.

[dances with sheeple]

When animals turn on one another you know that they are doomed.

[dances with sheeple]

WRONGO! I should just cut and paste this reply as it comes up about once a week on HPC. Asian buyers love the UK. dont care about yield or value of GBP. It gives them an asset out of reach of their grasping governments - and a bit of cachet in owning somewhere in London. Many dream of moving there eventually.

Unless we see massive riots in London, this will not end.

We have seen massive riots in London.

[motch]

We have seen massive riots in London.

those involved though were mostly punished heavily for many minor offences.

stop all benefits for 4 weeks - then we'd see massive riots!

[Quicken]

WRONGO! I should just cut and paste this reply as it comes up about once a week on HPC. Asian buyers love the UK. dont care about yield or value of GBP. It gives them an asset out of reach of their grasping governments - and a bit of cachet in owning somewhere in London. Many dream of moving there eventually.

Unless we see massive riots in London, this will not end.

I think this kind of thing would do the trick.

In 2013, tougher wealth tax rules come into force. Wealth tax applies to owners of properties worth at least €1,300,000 and to UK trusts. Both will pay up to 1.5 per cent tax. The owner of assets worth at least €1, 310,000 will pay:

Between €800,000 and €1,310,000: 0.5 per cent

Between €1,310,000 and €2,570,000: 0.7 per cent

Between €2,570,000 and €5,000,000: 1 per cent

Between €5,000,000 and €10,000,000: 1.25 per cent

More than €10,000,000: 1.5 per cent

Non-residents previously exempt from paying Contribution Sociale Généralisée (CSG) will now have this specific tax of 15.5 per cent added to any tax due by non-residents, whether income or capital gains tax.

[Dorkins]

WRONGO! I should just cut and paste this reply as it comes up about once a week on HPC. Asian buyers love the UK. dont care about yield or value of GBP. It gives them an asset out of reach of their grasping governments - and a bit of cachet in owning somewhere in London. Many dream of moving there eventually.

Asian buyers sound exactly like UK buyers in 1997-2007. They "love" and "dream" about property, "don't care" about the maths, and want "an asset out of reach of their grasping government". Animal spirits can switch very quickly from love to hate or from greed to fear.

[theChuz]

Wow... still some old faces around.. not many but a few.... i cant believe its still being debated, not with the vigor it used to be but then i suppose the crash happened so whats left to talk about ha.

It will be alright in the end.. if not... then its the end anyway.

[Dr_Mibbles]

WRONGO! I should just cut and paste this reply as it comes up about once a week on HPC. Asian buyers love the UK. dont care about yield or value of GBP. It gives them an asset out of reach of their grasping governments - and a bit of cachet in owning somewhere in London. Many dream of moving there eventually.

Unless we see massive riots in London, this will not end.

I think it's fine if you want to hold this opinion, but other than conjecture what evidence do you have to support it?

I seriously can't see lots of Chinese people purchasing an expensive asset in a far away country with a falling value and extremely low yield. That would be quite insane. It made sense to buy London property in 09/10, but it makes no sense now. Prime prices are falling so the evidence doesn't appear to support your view.

[betonr]

So, this just happened to me...

A month ago I reserved a flat off-plan in London. Very nice area. EA didn't show any flexibility on the asking price and because I was keen, he influenced me to go for the asking price because the developer wasn't negotiating at that stage.. all that thing about having a lot of interest, etc. And the fact that I chose the best layout as well, which usually attracts more interest anyway.

The development is in its 3rd phase, having another 3 to go until 2018 (originally scheduled to complete by 2017, but already running late).

They didn't offer any incentives, nothing could be changed or adjusted to my taste, which was already bothering me.. it was feeling I had reserved under pressure, as if I was going to waste a great opportunity.

Anyway, today my solicitor received a letter saying there is a memorandum where the seller wants to get access to the deposit upon exchange of contracts.

Is this something usual? To me this indicates the builder is having some liquidity issues as they need working capital and usually they don't need to access deposits so quickly, right?

Or am I just too scared?

There are also 4 properties delivered on phase 2 for sale for quite a while and the owner (investor from HK) is asking for a ridiculous price.

Btw, I'm a FTB, not using any government scheme, so I've been quite naive in the beginning.

But I haven't exchanged yet and I'm inclined to cancel this purchase as I feel I was manipulated and now I am questioning the financial health of the builder.

Comments?

[Bloo Loo]

So, this just happened to me...

A month ago I reserved a flat off-plan in London. Very nice area. EA didn't show any flexibility on the asking price and because I was keen, he influenced me to go for the asking price because the developer wasn't negotiating at that stage.. all that thing about having a lot of interest, etc. And the fact that I chose the best layout as well, which usually attracts more interest anyway.

The development is in its 3rd phase, having another 3 to go until 2018 (originally scheduled to complete by 2017, but already running late).

They didn't offer any incentives, nothing could be changed or adjusted to my taste, which was already bothering me.. it was feeling I had reserved under pressure, as if I was going to waste a great opportunity.

Anyway, today my solicitor received a letter saying there is a memorandum where the seller wants to get access to the deposit upon exchange of contracts.

Is this something usual? To me this indicates the builder is having some liquidity issues as they need working capital and usually they don't need to access deposits so quickly, right?

Or am I just too scared?

There are also 4 properties delivered on phase 2 for sale for quite a while and the owner (investor from HK) is asking for a ridiculous price.

Btw, I'm a FTB, not using any government scheme, so I've been quite naive in the beginning.

But I haven't exchanged yet and I'm inclined to cancel this purchase as I feel I was manipulated and now I am questioning the financial health of the builder.

Comments?

Ive got a very nice genuine antique bridge, near the Tower of London, It goes up and down and stuff....PM me for a price.....you wont regret it.

[betonr]

Ive got a very nice genuine antique bridge, near the Tower of London, It goes up and down and stuff....PM me for a price.....you wont regret it.

That I shall pass, but thanks

Anyway, I know what everyone here will say. I already made many mistakes in all this situation, so if I can still get out, than it's better to get out.

I'm new in the forum btw, but have been reading a lot of new and old threads for the past 2 weeks and I find it quite useful.

[betonr]

Just to add to the "Something is happening" thread:

1. I used to rent a flat in Royal Victoria Docks, in London, and before the Olympics the landlord wanted to raise the rent. I left the flat and moved to a better area for just a bit more. 2 months ago a lettings agent called me asking if I would like to go back to that area because they had some units available and they were calling previous tenants to check if we wanted to return. (WTF #1: I always thought this was a landlord market?)

2. A builder in need of working capital while developing in zone 1, where there are a lot of buyers and Asian investors? There must be something happening...

[Dr_Mibbles]

That I shall pass, but thanks

Anyway, I know what everyone here will say. I already made many mistakes in all this situation, so if I can still get out, than it's better to get out.

I'm new in the forum btw, but have been reading a lot of new and old threads for the past 2 weeks and I find it quite useful.

You've bought at new build the peak of a bubble, so expect to lose 20% of the value the moment you walk in the door (happens to all new-builds), and a further 30% when the market corrects itself, either through a crash or erosion over time, as prices revert to the mean.

[Gigantic Purple Slug]

I think it's fine if you want to hold this opinion, but other than conjecture what evidence do you have to support it?

I seriously can't see lots of Chinese people purchasing an expensive asset in a far away country with a falling value and extremely low yield. That would be quite insane. It made sense to buy London property in 09/10, but it makes no sense now. Prime prices are falling so the evidence doesn't appear to support your view.

Do you really find the concept of hedging so difficult to believe ?

If I lived in China and had 10 million quid then yes, I would want to put a fraction of that out the way of the government (maybe 5% or so). The government there is a lot more likely to confiscate your money at the drop of a hat than here.

Chinese love investing property. Hence all those ghost cities with no one living in them. And there are an awful lot of Chinese people with a few hundred thousand or so to squirrel away.

Sometimes it's not about return on the money, but return of the money. My guess is that if you asked the general population whether or not it is a good idea to put your money in a place where the local government cannot get their hands on it you would get a very different answer depending on whether you lived in the UK, China or Cyprus.

[Dr_Mibbles]

Do you really find the concept of hedging so difficult to believe ?

If I lived in China and had 10 million quid then yes, I would want to put a fraction of that out the way of the government (maybe 5% or so). The government there is a lot more likely to confiscate your money at the drop of a hat than here.

Chinese love investing property. Hence all those ghost cities with no one living in them. And there are an awful lot of Chinese people with a few hundred thousand or so to squirrel away.

Sometimes it's not about return on the money, but return of the money. My guess is that if you asked the general population whether or not it is a good idea to put your money in a place where the local government cannot get their hands on it you would get a very different answer depending on whether you lived in the UK, China or Cyprus.

You could have just replied "I have no evidence to support my view".

[Gigantic Purple Slug]

You could have just replied "I have no evidence to support my view".

Do you have any evidence to support yours that this is not the case ?

I'd be genuinely interested in any evidence to suggest that the current rise in London prices is not in part being fueled by foreign buying, but I don't know where you could go to get the stats on this.

[57percent]

You could have just replied "I have no evidence to support my view".

The pounds have to go somewhere. Every time we buy some pointless stuff from another country, we have to give them something back.

All we've got is property and education.

[Dr_Mibbles]

Do you have any evidence to support yours that this is not the case ?

I'd be genuinely interested in any evidence to suggest that the current rise in London prices is not in part being fueled by foreign buying, but I don't know where you could go to get the stats on this.

Oh, no, I agree that foreign investors have driven up prices, but that was in the days of good yields and global financial chaos. There are now more arractive investment options, and we know two things for certain: yields on prime London are now below 2%, and prices in prime London are falling.

The point that prices will carry on rising because Asian people like London and "dream of living here", even in the face of falling property value and extremely low yields, is however just not very credible, so as a claim it would need some evidence to support it.

[Gigantic Purple Slug]

Oh, no, I agree that foreign investors have driven up prices, but that was in the days of good yields and global financial chaos. There are now more arractive investment options, and we know two things for certain: yields on prime London are now below 2%, and prices in prime London are falling.

The point that prices will carry on rising because Asian people like London and "dream of living here", even in the face of falling property value and extremely low yields, is however just not very credible, so as a claim it would need some evidence to support it.

Well that's pretty much the same reason why pure analytics in terms of investment can often fail. Because you are dealing with people not calculators and people can behave irrationally paying a high premium for "benefits" that you as a supposed "rational" investor are not interested in, and not being interested in more fundamental benefits like ROI.

Let's face it, if investors were rational then the markets would behave very differently. Would all of those ghost cities be built for example ?

One of the interesting things about the housing market is that non professional investors inhabit it at all levels. This, government intervention and the relative lack of liquidity means it behaves much differently to other markets.

The bottom line is that there is nothing wholly implausible about foreign investors using London property as a flight to safety, although I agree there is no evidence to support that the market is being held up by this.

Edit : I wonder how much the yield is on a ghost city appartment that has never been inhabited is ?

Edited May 21, 2013 by Gigantic Purple Slug

[Dorkins]

Do you really find the concept of hedging so difficult to believe ?

If I lived in China and had 10 million quid then yes, I would want to put a fraction of that out the way of the government (maybe 5% or so). The government there is a lot more likely to confiscate your money at the drop of a hat than here.

Given that this influx of Asian investors is quite a recent phenomenon, have Asian people only recently become fearful about the risk of confiscation?