Is Prime London Crashing? - Merged Threads

[winkie]

Beds in sheds has made it onto the roof of this one.

Always make me laugh that no matter HOW BIG a house is people HAVE TO extend it.

That is what happens when people find they need more space but find they can't afford to move....home prices have risen faster than income required to pay for them....can you imagine what things would look like if planning regs were relaxed more than that?.....not a pretty sight.

[Sancho Panza]

Beds in sheds has made it onto the roof of this one.

Always make me laugh that no matter HOW BIG a house is people HAVE TO extend it.

Nice lawn though.Love the way he/she has mowed it.

[Wurzel Of Highbridge]

Nice lawn though.Love the way he/she has mowed it.

Isn't that photo shop? Like the fake flames you get in fireplaces?

[Milkshock]

Sorry, but this winds me up massively; blood boiling.

"FTBs don't think for themselves".. upsizers too, setting these prices. It's no excuse whatsoever. "They don't think for themselves" paying x2 x5+ prices/debt others would pay. Everytime one of these overpayers dies, I feel the world get lighter - but sadly most of them all living, and happy as anything with forever HPI. They don't think when just pushing and falling over each other to pay quarter million pounds for a small newbuild box, or in London, half mill for a little flat in a dodgy conversion.

And casting blame off on media, EAs, gubbermint (although I understand "it's so easy" message blame you put their way) - but not vs these prices. No way. Personal responsibility.

To deny it, is when we're still renting, whilst in 2003, Steve from the warehouse, and Mandy a clerk in accounts, pays more than solicitor (now Senior Associate) and her husband (IT arhitecture pro) were willing to pay; still renting. With little hope of getting into a position with a house as Steve and Mandy.

MSE. How many who would have lost their houses if interest rates hadn't been floored, have held onto them, rented them out, and upsized! So many such threads in mortgage forum from 2008-2013. Reckless and rewarded by stimulus, and, a lot by those who are ultra-tolerant and forgiving. Keep it up and a new round of buyers, paying 30%-50% above 2007 in 2013/14 will see a second bailout.

Also I doubt banks making that much money - not as much as they could with higher mortgage volumes against lower prices. Carney's London foreign cash buyers can only be making sellers the profit, no so much the banks.

This is the problem. Reckless, yes, anyone can be reckless - but why are the reckless rewarded with stimulus and bailouts? Repent at leisure is not a phrase those who over burdened themselves have had to come to terms with over the last 15 years in the UK housing market.

[Venger]

This is the problem. Reckless, yes, anyone can be reckless - but why are the reckless rewarded with stimulus and bailouts? Repent at leisure is not a phrase those who over burdened themselves have had to come to terms with over the last 15 years in the UK housing market.

Because if the market is allowed to work, they would have required to accept much lower prices from buyers (such as those on the forum) at the margin.

The lower prices set also brings down values for the equity rich and outright owners at the mid-to-top of the market. Politics with no stomach for a crash, and sadly, no stomach from many renters it has seemed. Hoped to see that change, but more casting buyers paying x2+ what members of my family would pay, as 'pure innocents' today, makes me doubt it.

Then they banks positions... I'd have rather see them fail, and bought out by new smarter participants in in the market. Much of the debt on their books always worth something, then loads of fresh lending at lower house prices. With loads of new transactions, lower prices, people able to spend in shops in economy (hello new jobs and companies making sustainable profits), for they're not totally overstretched with debt. Breaking up BTL positions who seldom have no interest in community values, and older owners with 2nd homes, for a positive rebalancing; an opportunity for younger independent people. Sadly just worse, when it was bad enough in 2004, the liar-loaners and BTLers gorging on massive mortgage debt.

Edited August 22, 2014 by Venger

[19 year mortgage 8itch]

Sorry, but this winds me up massively; blood boiling.

"FTBs don't think for themselves".. upsizers too, setting these prices. It's no excuse whatsoever. "They don't think for themselves" paying x2 x5+ prices/debt others would pay. Everytime one of these overpayers dies, I feel the world get lighter - but sadly most of them all living, and happy as anything with forever HPI. They don't think when just pushing and falling over each other to pay quarter million pounds for a small newbuild box, or in London, half mill for a little flat in a dodgy conversion.

And casting blame off on media, EAs, gubbermint (although I understand "it's so easy" message blame you put their way) - but not vs these prices. No way. Personal responsibility.

To deny it, is when we're still renting, whilst in 2003, Steve from the warehouse, and Mandy a clerk in accounts, pays more than solicitor (now Senior Associate) and her husband (IT arhitecture pro) were willing to pay; still renting. With little hope of getting into a position with a house as Steve and Mandy.

MSE. How many who would have lost their houses if interest rates hadn't been floored, have held onto them, rented them out, and upsized! So many such threads in mortgage forum from 2008-2013. Reckless and rewarded by stimulus, and, a lot by those who are ultra-tolerant and forgiving. Keep it up and a new round of buyers, paying 30%-50% above 2007 in 2013/14 will see a second bailout.

Also I doubt banks making that much money - not as much as they could with higher mortgage volumes against lower prices. Carney's London foreign cash buyers can only be making sellers the profit, no so much the banks.

Prudence and modesty are not the evolutionary behaviours our politicians are looking for.

[mmt]

Isn't that photo shop? Like the fake flames you get in fireplaces?

Yes, it looks like they replaced a cloudy sky with a nice blue one.

[dances with sheeple]

Not only first time buyers almost all buyers.......very few would buy something for the love of it if they had a good idea it would half in price a few months later.....they would rent and invest in something that they know will create value........what we need is better, safer things to invest in, but the powers that be have seen to it that any taxed hard worked for savings eventually become even worthless unless spent in the places they want you (at this point in time) to spend it........things will change.

They are not winning that game though, my rent hasn`t moved in years, and now food is dropping like a stone? Quite happy having a few k in premium bonds at the moment.

[NewBrit]

Here's another one on Willoughby Road - number 58.

http://www.rightmove.co.uk/property-for-sale/property-30741123.html

Price history:

Dec 2012: £535,000

Apr 2005: £342,000

Jan 2002: £250,000

Jan 2001: £159,950

The adjoining property (number 56) sold for £462,500 in Aug 2007.

Amazing what an 'attractive' loft conversion can do to the asking price isn't it? I bet everyone on the street will have one soon.

I think people tend to forget how much £800k really is. The gross annual wage in London is 34k, so the asking price for this house is 23.5 times the local wage.

[Wurzel Of Highbridge]

They are not winning that game though, my rent hasn`t moved in years, and now food is dropping like a stone? Quite happy having a few k in premium bonds at the moment.

If your food is going town, Ricardo's law of rent says your rent will go up! Hence the need for LVT, rent controls and relaxing planning permission.

[Ologhai Jones]

Yes, it looks like they replaced a cloudy sky with a nice blue one.

So, all in all, it's a kind of an artist's impression of the house you might be thinking of buying.

[FreeTrader]

I think people tend to forget how much £800k really is. The gross annual wage in London is 34k, so the asking price for this house is 23.5 times the local wage.

I'm staggered by the asking rents as well.

This is a similar house just around the corner on Craven Road, which sold for £595,000 in Oct 2013:

http://www.rightmove.co.uk/property-to-rent/property-31999275.html

30K p.a. rent. Sheesh.

Mind you, it does have what the agent describes as a "fantastic garden":

[winkie]

[NewBrit]

I'm staggered by the asking rents as well.

This is a similar house just around the corner on Craven Road, which sold for £595,000 in Oct 2013:

http://www.rightmove.co.uk/property-to-rent/property-31999275.html

30K p.a. rent. Sheesh.

Mind you, it does have what the agent describes as a "fantastic garden":

Indeed, this is why I moved out of London 6 years ago. Best decision I ever made. I am saving more money every month and have a higher standard of living.

[Venger]

I'm staggered by the asking rents as well.

This is a similar house just around the corner on Craven Road, which sold for £595,000 in Oct 2013:

http://www.rightmove.co.uk/property-to-rent/property-31999275.html

30K p.a. rent. Sheesh.

Mind you, it does have what the agent describes as a "fantastic garden":

Same... people need to pay what it's worth though. Either via buying or renting.

Check it out victim-hunters...who are always only the ones who pay ever sillier high prices for houses... 'the hardship' ... 'we need more deficit spending'... 'buyers never knew what they were doing/just wanted a home' / 'clone applaud Tony Blair into Government' - reckless spenders hey hey HPI HPI HPI - "Because that is the right thing to do."

________

Last sale: £385,000 | Sale date: 16th Dec 2008

Source: http://www.zoopla.co.uk/property/10-craven-road/kingston-upon-thames/kt2-6lw/11761139

Source 2: http://www.rightmove.co.uk/house-prices/detailMatching.html?prop=38082398&sale=19152560&country=england

16 Dec 2008: £385,000

12 Aug 1999: £198,000

Previously listed for sale on 25th Feb 2014. £775,000 - 3 bed property. http://www.zoopla.co.uk/property-history/10-craven-road/kingston-upon-thames/kt2-6lw/32098281

Previously listed for sale on 30th Jun 2012. £614,950 - 3 bed property. http://www.zoopla.co.uk/property-history/10-craven-road/kingston-upon-thames/kt2-6lw/20081012

And the saddo thing is, even the previous owner, (who owned it from 1999) was taking the renting it out option (pre the loft conversion) from 2004 and maybe earlier.

£1,275 pcm - http://www.zoopla.co.uk/property/10-craven-road/kingston-upon-thames/kt2-6lw/11761139

Edited August 22, 2014 by Venger

[dances with sheeple]

Fantastic garden for keeping pigs Oh bring on the end to this nonsense!

[TeddyBear]

If you can bear it, have a look at last night's Location, Location, Location on catch up (I know it takes a particular form of sadism to watch it). It was in East London. Examples of young(ish) buyers who are partaking in the madness. Not sure when it was filmed, pre or post MMR changes, they gave an update from July saying sales are actually going through, they hadn't actually gone through though. Was interesting to hear that one potential purchase of one of the couples had fallen through because surveyor did not agree with offer price and they could not get mortgage for offered amount, hopefully they will be saved from their flat purchase by another sensible surveyor.

[FreeTrader]

If you can bear it, have a look at last night's Location, Location, Location on catch up (I know it takes a particular form of sadism to watch it). It was in East London. Examples of young(ish) buyers who are partaking in the madness. Not sure when it was filmed, pre or post MMR changes, they gave an update from July saying sales are actually going through, they hadn't actually gone through though. Was interesting to hear that one potential purchase of one of the couples had fallen through because surveyor did not agree with offer price and they could not get mortgage for offered amount, hopefully they will be saved from their flat purchase by another sensible surveyor.

Down valuations by surveyors were blamed for falling prices in the 1990s crash.

The Independent, August 1992:

"Gazundering is linked with the growing number of properties being 'down-valued' by surveyors. Estate agents believe that valuing property below the agreed price is the single major reason for sales collapsing and that about a third of deals are lost for this reason."

And from the end of that article:

"One of the casualties of the collapse of the housing market in London and the South-east is what might be called the castles-in-the-provinces factor. In the boom years of the late 1980s, home-owners could thrill themselves with the thought that their modest London semi or terraced house was worth the price of a small Scottish castle, a moated (if tumbledown) manor in the West Country, or a whole street of two-up and two-downs in Co Durham. Today property prices are much more even, and London and the South-east are in steep decline. The striking comparison is between Greater London and Scotland. According to the Nationwide Building Society, the average price of a London house in 1986 was £54,000, rising to £94,000 in 1989 and falling to £68,000 this year. Scotland by contrast shows a steady rise - with averages for the same years of £33,000, £44,000 and £51,000. The four-bedroom houses in London and Glasgow (above) are still about £100,000 apart in price."

I wonder whether we'll see a similar story one day. But this time is different, right?

[Venger]

If you can bear it, have a look at last night's Location, Location, Location on catch up (I know it takes a particular form of sadism to watch it). It was in East London. Examples of young(ish) buyers who are partaking in the madness. Not sure when it was filmed, pre or post MMR changes, they gave an update from July saying sales are actually going through, they hadn't actually gone through though. Was interesting to hear that one potential purchase of one of the couples had fallen through because surveyor did not agree with offer price and they could not get mortgage for offered amount, hopefully they will be saved from their flat purchase by another sensible surveyor.

The 'victims' are everywhere. It's wired in their brains, and because in good areas, they've been bailed out an rewarded by more hpi, just about everone (including hpc-ers, claiming debtors are innocents)... it's double-lust fever now, it seems.

DoctorHousingBubble (US/SoCal housing blog) has mentioned it in many entries; especially since their 2013-2014 reflation, matching UK experience. If they can borrow millions of dollars, they will pay millions of dollars to meet ever higher asking price. They won't stop, until they are stopped.

April 2014

House horny buyers will always find a reason to buy. They don’t mind spending 50 percent or more of their net take home income on purchasing a California home. For some, housing is everything. Even in 2006 and 2007 when a bubble was clear as day, I was still getting e-mails from people about buying a home and justifying prices. The e-mail always came with a long justification as to why it made sense to buy and some even justified it with option ARM monthly payments. My response? Buy! You are the one that is going to carry that full mortgage payment every month. This includes the principal, interest, taxes, insurance, and maintenance. Yet these folks wanted a timing signal to buy to ease their house lusting desires. Psychologically what was surprising was these same people in the same breath were saying a stock bubble was clearly in place while paying outlandish prices for a shack in SoCal.

Today it is rather clear we are at an inflexion point.

http://www.doctorhousingbubble.com/southern-california-housing-values-sales-low-prices-high-orange-county-most-inflated-county/

[Venger]

Down valuations by surveyors were blamed for falling prices in the 1990s crash.

The Independent, August 1992:

"Gazundering is linked with the growing number of properties being 'down-valued' by surveyors. Estate agents believe that valuing property below the agreed price is the single major reason for sales collapsing and that about a third of deals are lost for this reason."

Get downvaluing surveyors. They must be awaiting a signal from their banks.... 2013-2014 hpi just about done me totally in. Can it fall.

And from 1997... perhaps the start of easy HPI, led by EAs, banks wanting to lend more, and of course, always victims wanting to pay higher prices. There was a study, I forget now, that people actually get a glow out of paying higher prices, as it makes them personally feel worth it/superior. And of course it sets higher prices for surrounding house. No lose HPI.

[zugzwang]

Down valuations by surveyors were blamed for falling prices in the 1990s crash.

The Independent, August 1992:

"Gazundering is linked with the growing number of properties being 'down-valued' by surveyors. Estate agents believe that valuing property below the agreed price is the single major reason for sales collapsing and that about a third of deals are lost for this reason."

And from the end of that article:

"One of the casualties of the collapse of the housing market in London and the South-east is what might be called the castles-in-the-provinces factor. In the boom years of the late 1980s, home-owners could thrill themselves with the thought that their modest London semi or terraced house was worth the price of a small Scottish castle, a moated (if tumbledown) manor in the West Country, or a whole street of two-up and two-downs in Co Durham. Today property prices are much more even, and London and the South-east are in steep decline. The striking comparison is between Greater London and Scotland. According to the Nationwide Building Society, the average price of a London house in 1986 was £54,000, rising to £94,000 in 1989 and falling to £68,000 this year. Scotland by contrast shows a steady rise - with averages for the same years of £33,000, £44,000 and £51,000. The four-bedroom houses in London and Glasgow (above) are still about £100,000 apart in price."

I wonder whether we'll see a similar story one day. But this time is different, right?

Surveyors (appraisers) are known colloquially as upraisers in the US because house prices only ever go up...

[zugzwang]

London hedge fund bonuses get whacked!

Remember that time you thought you might want to move to a fund in London? Maybe reconsider.

Bloomberg reports that bonuses for hedge fund employees have dropped 94% since 2012, according to data collected by Emoulment.com.

Across the board compensation shrank by 50%.

Your average mid-level employee or director is now taking home a $13,300 in their bonus as opposed to around $220,000 in 2012.

Base salaries have fallen to just under $150,000 from just under $200,000 since 2012 as well.

Of course, there's a reason for this. Simply — Hedge funds aren't performing.

Hedge funds have returned 1% year to date, according to Goldman Sachs' 'Hedge Fund Trend Monitor', an analysis of 775 hedge funds. Meanwhile the s&p 500 has returned 7%.

"Consistent large allocations to retail and media stocks in the Consumer Discretionary sector have been headwinds to returns," said the report.

Hedge funds have allocated 20% of their assets to this sector, which has only returned 1% year to date.

That doesn't mean funds are necessarily changing their strategies though. "Portfolio turnover continued to fall to new record lows," said Goldman.

Read more: http://www.businessinsider.com/hedge-fund-bonuses-got-whacked-in-london-2014-8#ixzz3B9CrptQK

[FreeTrader]

London hedge fund bonuses get whacked!

Probably can still afford this place though (with the obligatory comparison to a Scottish castle - see post #1840).

Estate agent quote for posterity: "I know it seems crazy, but that’s just the market. It could be a good investment."

[MississippiJohnHurt]

A few KT properties on the market at present:

http://www.rightmove.co.uk/property-for-sale/property-45864751.html

http://www.rightmove.co.uk/property-for-sale/property-45756263.html

Brilliant way of presenting it for the facebook/mse mindset. We're all 3x richer than in 2006 or demand is 3x higher? Heh, Some huge asking price drops ahead.

[AvoidDebt]

Brilliant way of presenting it for the facebook/mse mindset. We're all 3x richer than in 2006 or demand is 3x higher? Heh, Some huge asking price drops ahead.

Agreed. Shall we all try to do about 10 each? And then someone with a twitter account can publish under a nice hashtag #BritishPropertyCrash #LondonPropertyBubble.

Would be nice to get it trending.