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koala_bear

Guardian London Housing Article

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Guardian article on Battersea Power Station redevelopment which has some interesting stats on the London market I hadn't seen here before.

http://www.guardian....er-sells-flats

The first half of the article talks about the about the power station redevelopment but some new interesting facts in the 2nd half:

Recent research by property broker Jones Lang LaSalle (JLL) found that overseas buyers accounted for more than half of London's new home buyers last year. The JLL study found foreign buyers bought £3bn worth of London residential property in 2012 – a 25% increase on the year before. Six out of seven foreign buyers planned to let out their properties, the research said.

"Post-credit crunch it's much harder to get bank debt but with 30% to 40% of units sold 'off plan' to foreign buyers, that triggers work on the development," Adam Challis, JLL's head of residential research, said. "Without international investors most residential developments in London wouldn't happen and the housing crisis in the capital would be even greater."

The foreign invasion into London's property market is most stark at the high end, with most of the apartments in One Hyde Park bought through offshore companies.

Russians bought 8.5% of all London properties worth more than £2m between March 2012 and March 2013, according to research by estate agent Knight Frank. Buyers from the United Arab Emirates, the US and China each accounted for 2.8%.

So it looks like confirmation (if any more were needed) that London house prices are driven upwards by foreign investors and we would be having an HPC if they stopped buying.

No idea who can afford the rent those BTLer will want to charge who couldn't do better looking elsewhere.

Edited by koala_bear

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Guardian article on Battersea Power Station redevelopment which has some interesting stats on the London market I hadn't seen here before.

http://www.guardian.co.uk/business/2013/may/20/battersea-power-station-developer-sells-flats.

The first half of the article talks about the about the power station redevelopment but some new interesting facts in the 2nd half:

So it looks like confirmation (if any more were needed) that London house prices are driven upwards by foreign investors and we would be having an HPC if they stopped buying.

No idea who can afford the rent those BTLer will want to charge who couldn't do better looking elsewhere.

It's an interesting point regarding foreign off-plan buyers providing the capital required to fund the development by increasing sales sufficiently.

I suppose it's merely storing up greater problems by increasing the supply further than it might otherwise have been. I presume foreign BTLers will be much more ruthless if/when they want to get rid. It would be good to see the yields on offer to a canny off plan invester. No reason to suppose they are not of the same mindset as the average UK BTLer- rent is a bonus on top of the ginormous HPI that will surely come along.

Pretty risky, phase 1 will not be completed until 2017, many a slip betwixt cup and mouth.

PS your link is broken- full stop at end should be deleted.

Edited by cheeznbreed

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It's an interesting point regarding foreign off-plan buyers providing the capital required to fund the development by increasing sales sufficiently.

I suppose it's merely storing up greater problems by increasing the supply further than it might otherwise have been. I presume foreign BTLers will be much more ruthless if/when they want to get rid. It would be good to see the yields on offer to a canny off plan invester. No reason to suppose they are not of the same mindset as the average UK BTLer- rent is a bonus on top of the ginormous HPI that will surely come along.

Pretty risky, phase 1 will not be completed until 2017, many a slip betwixt cup and mouth.

PS your link is broken- full stop at end should be deleted.

Maybe they're not even expecting HPI. Maybe they're just parking cash, which is far too easily lifted from bank accounts by or at the behest of governments, in what they regard as a sound asset in a safe haven, and would just be satisfied with getting the money back when they want it.* Then any rent on top would, as you say, be a bonus.

* What a shame it would be if they were disappointed.

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Maybe they're not even expecting HPI. Maybe they're just parking cash, which is far too easily lifted from bank accounts by or at the behest of governments, in what they regard as a sound asset in a safe haven, and would just be satisfied with getting the money back when they want it.* Then any rent on top would, as you say, be a bonus.

* What a shame it would be if they were disappointed.

There are times when the return of your capital is more important than the return on your capital.

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Yes, London is British, we want it back! :P

Mentioned in today's Evening Standard that under current trends foreigners could outnumber British born residents in London by 2031.

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Mentioned in today's Evening Standard that under current trends foreigners could outnumber British born residents in London by 2031.

Anecdotally I've heard rents have halved in Kensington during the last year as the rental market has been flooded due to foreign money piling in and subsequently looking to let the property.

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Maybe they're not even expecting HPI. Maybe they're just parking cash, which is far too easily lifted from bank accounts by or at the behest of governments, in what they regard as a sound asset in a safe haven, and would just be satisfied with getting the money back when they want it.* Then any rent on top would, as you say, be a bonus.

* What a shame it would be if they were disappointed.

Quite possible, but hard to say without knowing much more about the marketing etc. I guess many are just normal leveraged to the max foreign BTLers with no shady past or oil billions.

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Guardian article on Battersea Power Station redevelopment which has some interesting stats on the London market I hadn't seen here before.

http://www.guardian.co.uk/business/2013/may/20/battersea-power-station-developer-sells-flats.

The first half of the article talks about the about the power station redevelopment but some new interesting facts in the 2nd half:

So it looks like confirmation (if any more were needed) that London house prices are driven upwards by foreign investors and we would be having an HPC if they stopped buying.

No idea who can afford the rent those BTLer will want to charge who couldn't do better looking elsewhere.

There was a thread on this last September with an interesting FT vid

FT vid

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Anecdotally I've heard rents have halved in Kensington during the last year as the rental market has been flooded due to foreign money piling in and subsequently looking to let the property.

Yes, rent in prime London is collapsing. 25% fall is more like it, but that grows every week. I've noticed it directly myself as I've been looking for a place to rent in Shoreditch. I keep holding off as prices fall month-on-month. I might even be able to rent a two-bed, for the same price as a small one-bed six months ago.

There is an excess of premium rentals, and with job losses continuing in the City and the housing benefit cap, it's impossible for foreign 'investors' to get even a mediocre yield. I really do believe that this will be the straw which breaks the London markets back.

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"Foreign" buy-to-let landlords buying up lots of newbuild?

That sounds a lot like it could in fact be UK companies that just register offshore for tax purposes. What's the betting vehicles belonging to the likes of Aviva and the Pru are behind some of them?

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Yes, rent in prime London is collapsing.

Is it? /me raises eyebrow

That's what I'd expect if "help to buy" was a big success. Top end of the rental market creamed off as lots of former renters with decent incomes buy places.

Though I expect Prime London is different as usual.

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Is it? /me raises eyebrow

That's what I'd expect if "help to buy" was a big success. Top end of the rental market creamed off as lots of former renters with decent incomes buy places.

Though I expect Prime London is different as usual.

Well, people who rent in London tend to live and work in London.

There are a whole lot of myths about Banking salaries, the raw truth is that an exceptionally small number of people earn very large amounts of money and could afford current prime rents. Most people in banking earn between 40-70k + bonus. Not a bad salary, but not enough to afford £1000 a week on a one bedroom flat.

And the number of Banking jobs is decreasing each year - with a large amount of job cuts scheduled to take place this year. When you combine falling demand for prime rentals with an increase in supply thanks for foreign investors, you have the perfect storm.

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No idea who can afford the rent those BTLer will want to charge who couldn't do better looking elsewhere.

Arent London rents falling? this would reduce the speculative interest from a BTLer unless they werent in it for just the yield e.g. just parking cash and they just need a trickle of rental income?

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Foreign off-plan buyers, that worked out well for the Brits in Spain and Dubai, didn't it.

Thats probably another reason - these investors probablty have more trust in british home builders than Spanish, Dubai or other places that offer new build "opportunities"

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Maybe they're not even expecting HPI. Maybe they're just parking cash, which is far too easily lifted from bank accounts by or at the behest of governments, in what they regard as a sound asset in a safe haven, and would just be satisfied with getting the money back when they want it.* Then any rent on top would, as you say, be a bonus.

* What a shame it would be if they were disappointed.

I wonder what proportion are Euro vs Far Eastern investors. You can guess that Euro investors are hedging against a currency breakup or savings haircut. But whats in it for the Far Eastern guys? There must be loads of things, property or other related, to invest in over there - new factories, business, even opening up a bar or shop has got to be a money spinner when their economies are growing at 5-10% and people are positive about the future. Ok, if its devaluation of the GBP making it cheaper, then surely, this devaluation will continue long term making it difficult to repatriate the profits in the future? Must be some kind of bubble related euphoria kicking in.

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Yes, rent in prime London is collapsing. 25% fall is more like it, but that grows every week. I've noticed it directly myself as I've been looking for a place to rent in Shoreditch. I keep holding off as prices fall month-on-month. I might even be able to rent a two-bed, for the same price as a small one-bed six months ago.

There is an excess of premium rentals, and with job losses continuing in the City and the housing benefit cap, it's impossible for foreign 'investors' to get even a mediocre yield. I really do believe that this will be the straw which breaks the London markets back.

The banks have already shed 30% of staff ((link). In a city of 6 million, this has not made any difference but from personal experience, the vast majority of these staff are the 30-70K level backoffice type roles gone to India. And, I have to say, again from personal experience, most of these are mainly Essex but generally home counties commuters with generally only the young 20s/30s renting in London. Many of these guys got good payoffs when they got the boot so they are doing something else on a lesser salary or just living off the payoff? But whatever they are doing, they dont seem to be dumping their properties.

Anyway, an excess of rentals in premium areas is good news for the benefits people who formerly enjoyed living in prime areas but had to give it all up due to the cap. Maybe they can afford to return to their former residences now that the rent has collapsed if it has collapsed 25% and more falls due. Some sort of floor will be hit at the HB level.

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I wonder if new London purchases by offshore companies has slowed down with the new taxes kicking in?

To start with 15% SDLT, then annual property ownership tax of 15K - £140K. Presume the rental income is tax free as offshore?

When they exit, they are subject to CGT. It does not seem to add up having offshore companies any more.

SO what are they doing instead, individual purchases with all the problems of personal taxation on BTL income? or IHT on HPI? They can avoid CGT by declaring it their residence. and the concern about longer term currency devaluing.

Just does not seem to add up why so much money continues to be poured into London

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I wonder if new London purchases by offshore companies has slowed down with the new taxes kicking in?

To start with 15% SDLT, then annual property ownership tax of 15K - £140K. Presume the rental income is tax free as offshore?

When they exit, they are subject to CGT. It does not seem to add up having offshore companies any more.

SO what are they doing instead, individual purchases with all the problems of personal taxation on BTL income? or IHT on HPI? They can avoid CGT by declaring it their residence. and the concern about longer term currency devaluing.

Just does not seem to add up why so much money continues to be poured into London

The SDLT charge for offshore companies is only for properties over £2m.

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  • 242 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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