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Damik

Is Prime London Crashing? - Merged Threads

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Prophet's word is spreading:

http://www.estateagenttoday.co.uk/1522-agents-with-new-london-offices-like-lemmings-says-buying-agency

Estate agents opening new offices in London, against a backdrop of sharply lower turnover and uncertainty over the general election and property taxes, are like lemmings, according to one of Britain’s leading buying agencies.

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It's like the gold rushes in the good old days. Your turn up with your spade only to find 200,000 other desperate people had the same idea.

A couple get lucky so the rest keep digging.

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I worked in Whiteladies road in Bristol for a short while earlier this year and a number of estate agents popped up there.

Between where I worked and the Gym (about 1 mile) there were no less than 14 estate/letting agents!

there's going to be a lots of unemployed sales people and empty shops in Bristol in the next 12 months.

you should see hoe street walthamstow!

there must be about 15 stacked up in pile 'em high sell 'em cheap fashion

although, they are not selling them cheap (yet)

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Read quite a few reports, even into last few months, of EAs opening new branches and was totally confused as to why. Although on a confusion scale, nothing will ever topple the repeated claims that those oubid me by £50,000 to £250,000 over the years were the actual victims (even when they're hoping for more hpi) vs those who rented and refused to pay silly prices, now enduring the QE and 0.5% and everything else.

Appears to me the Deputy Governor of BoE was taking a big step back the other day from expecting forever cuddle-protection policy for those who believe they've have special-protection status in the wider economy.

Love that quote:

"Over time, trends in real asset prices are determined by real, non-monetary, forces. We may occasionally be prominent actors but it's someone else who's written the script,".

Central bankers never take responsibility for what they have done! Quite the opposite of what the Bank of International Settlement (BIS) has been saying.

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Love that quote:

"Over time, trends in real asset prices are determined by real, non-monetary, forces. We may occasionally be prominent actors but it's someone else who's written the script,".

Central bankers never take responsibility for what they have done! Quite the opposite of what the Bank of International Settlement (BIS) has been saying.

Well to be fair to BoE their actions are based on the CPI, which is a complete fraud ... same as GDP number

If the house price (not the mortgage payment or rent) is 30% of the CPI basket as it should be; then we would not have any house based asset bubbles at all ...

But we have morons in charge, who are going to sucrifice short term election win over long term stability ...

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From the estateagenttoday link


“What it does say is that all estate agents are in trouble. The London boom of the last five years has been responded to by new agents setting up shop and existing agents opening new branches in new areas” says the buying firm.

Property Vision says that with greater control of the housing market being passed to, and sought by, the Bank of England, it is unlikely that high demand will return in the near future.

“This wasn't too hard to predict - but still the new offices opened to chase turnover. Lemmings come to mind” concludes the blog.

They should be encouraged to keep office/shop space open and paying the councils' taxes for as long as possible.

Every little bit helps to fund council wages and pensions and keep others council taxes down - it also helps to avoid more extensions to double yellow lines and other chargeable parking restrictions.

Edited by billybong

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It's like the gold rushes in the good old days. Your turn up with your e waispade only to find 200,000 other desperate people had the same idea.

A couple get lucky so the rest keep digging.

People waiting for the media to tell them about a bubble or a slow down are about 6 months too late.

I was playing golf with folk from uni and their pals few months back. A couple have places in London and their chat hot down to their flat shooting up to x or whatever. I just casually mentioned the London market is crashing. Some pretty surprised looking faces.

Interestingly though - once I did the usual "high prices are not good" - everyone seemed to agree.

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you should see hoe street walthamstow!

there must be about 15 stacked up in pile 'em high sell 'em cheap fashion

although, they are not selling them cheap (yet)

EA's are a leveraged play on house prices.

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EA's are a leveraged play on house prices.

Hot tub sales are a leveraged play on EAs

EAs are a leveraged play on house prices

house prices are a leveraged play on banks

banks are a leveraged play on GDP

GDP is a leveraged play on demand

Demand is a leveraged play on fiscal policy

Fiscal policy is f*cked

(hint - short hot tubs if the Tories are in power)

Edited by R K

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From the estateagenttoday link

They should be encouraged to keep office/shop space open and paying the councils' taxes for as long as possible.

Every little bit helps to fund council wages and pensions and keep others council taxes down - it also helps to avoid more extensions to double yellow lines and other chargeable parking restrictions.

I also suppose that EAs, who face redundancy, will turn to black mail and extortion to get some price reductions in and sell ... surely if you have to choose between your hungry kids and some equity owner the choice is clear ... :wub::wub::wub:

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From the estateagenttoday link

They should be encouraged to keep office/shop space open and paying the councils' taxes for as long as possible.

Every little bit helps to fund council wages and pensions and keep others council taxes down - it also helps to avoid more extensions to double yellow lines and other chargeable parking restrictions.

Yes, always nice to have someone to smile and wave at through the window whilst they are trying to look busy or twiddling their thumbs. :)

Edited by winkie

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I also suppose that EAs, who face redundancy, will turn to black mail and extortion to get some price reductions in and sell ... surely if you have to choose between your hungry kids and some equity owner the choice is clear ... :wub::wub::wub:

I posted this on the thread a couple of weeks ago, but it gives me a lift every time I think of it - knowing there actually is a countering force weighing down after the easy-money policy tightens and actual mortgage demand falls ways, against such prices, to finally challenge the world-view of the HPI forever fantasists of the last few years/decade+.

Paul

October 4, 2014 at 4:18 pm

….EXACTLY CORRECT ….

This spike in escalating home prices was due to temporary lack of inventory,

but the prices and sales are declining slowly.

Once the reductions TAKE HOLD .. the price reductions will escalate …. WHY?????

Because the REAL ESTATE SALES PEOPLE (Agents/Brokers)

MUST MAKE A LIVING .. THEY WILL TELL THE SELLERS ANYTHING …

” Sorry — I can’t get you Top Dollar for your house… Sales are DECLINING”

What the R.E. Agent/Broker is really saying is :

” I really need to SELL SOMETHING, I have bills to pay and I need to make

a quick sale on your p.o.s. House — I need my money FIRST … You can take

your FANTASY PROFIT that we promised you when you signed the Listing Agreement

and just “eat your heart out” ….. TOUGH LUCK FOR YOU…. I NEED MY COMMISSION,

IT’S TIME TO DISCOUNT YOUR damn PROPERTY”.

*** AND THAT IS EXACTLY HOW THIS WILL PLAY OUT.****

Just go back and take a look at 1991 to 1996 California R.E. Statistics,

I lived through it and bought a house at 75% discount. I saw how

desperate and hungry the Agents and Brokers were — THEY ONLY CARED

ABOUT THEIR COMMISSION….. REALITY RETURNS TO US AGAIN.

Combine it with that blog from that landlord the other day.

The industry is polluted with degenerate assholes

I’m not just talking about letting agents here, although they seem like the obvious target. We all know what they’re capable of- everything you’ve heard about them is true. They’re mostly a bunch of unscrupulous tossors that create imaginative ways of swindling money out of landlords and tenants. The bigger picture is somewhat more terrifying, and that’s because every level has an asshole waiting to suck the life out of you. The industry is just contaminated and it’s extremely difficult to entirely avoid collision.

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Maybe but most sellers arnt distressed at the moment. Employment is high and interest rates low.

Market is still prone to HPC !

It wouldn't matter if the majority own outright. Look at the buying side, the weakness and challenges there.

How many houses am I seeing hitting the market at £500K+ that are totally dated inside from the 50s-70s, with the same sort of furniture. You see enough upsizers in the market to meet asking prices, and also asking prices of younger entrants who overpaid?

Tigher money, mortgage lending tests, mortgage lending falling... demand for mortgage dropping

People seem to take for granted that financial values can be created endlessly seemingly out of nowhere and pile up to the moon. Turn the direction around and mention that financial values can disappear into nowhere, and they insist that it is not possible. “The money has to go somewhere…It just moves from stocks to bonds to money funds... For every buyer, there is a seller, so the money just changes hands.” That is true of the money, but it’s not true of the values...

For prices of assets to fall, it takes only one seller and one buyer who agree that the former value of an asset was too high. If a million other people own it, then their net worth goes down even though they did nothing. Two investors made it happen by transacting, and the rest of the investors made it happen by choosing not to disagree with their price.

Financial values can disappear through a decrease in prices for any type of investment asset, including bonds, stocks and land. Anyone who watches the stock or commodity markets closely has seen this phenomenon on a small scale many times. Whenever a market “gaps” up or down on an opening, it simply registers a new value on the first trade, which can be conducted by as few as two people. It did not take everyone’s action to make it happen, just most people’s inaction on the other side.

The “million dollars” that a wealthy investor might have thought he had in his bond portfolio or at a stock’s peak value can quite rapidly become $50,000 or $5000 or $50. The rest of it just disappears. You see, he never really had a million dollars; all he had was IOUs or stock certificates. The idea that it had a certain financial value was in his head and the heads of others who agreed. When the point of agreement changed, so did the value. Poof! Gone in a flash of aggregated neurons.

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Maybe but most sellers arnt distressed at the moment. Employment is high and interest rates low.

But this is the top of the bubble, where the majority of owners are not occupiers, but just investors/speculators. It is not a normal market where supply == demand!

Dubai market in 2007 was exectly in the same position. And when the investors sell off starts it can not be stopped ...

Edited by Damik

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But this is the top of the bubble, where the majority of owners are not occupiers, but just investors. It is not a normal market where supply == demand!

Dubai market in 2007 was exectly in the same position. And when the investors sell off starts it can not be stopped ...

I was going to explain exactly that to the EA chap over on the lse foxtons share price forum, but you know what, I couldn't be bothered.

Not many "normal" people have partaken of the low sales volume mega bubble pie, but those that did will be badly hit. Some investors will loose, some will win.

The top of the bottle was in April. The land registry is now showing June/July sales and it's clearly going down. Them that think they can get out at the top are 6 months too late.

Some might get lucky, most wont.

How are the sales volumes looking now ? I think they now hold the key...if they keep climbing it's game over.

Edited by TheCountOfNowhere

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As sanctions begin to bite, Russia is looking inward...

http://www.bbc.co.uk/news/world-europe-29778823

Thus, months before the Ukraine crisis, Russian officials with a taste for foreign luxury were being told to close foreign bank accounts, repatriate assets, and bring their families back to Russia.

No wonder Russian officials shrugged at US and EU blacklists. They are already under instructions not to travel.

...

A series of senior Russian officials who came to talk to us in our mountain eyrie tried hard to argue that Western sanctions - far from being a blow - were really an opportunity.

Yes, they admitted, there had been some pain, especially in Russia's financial sector (foreign currency loans which are increasingly hard to service, billions lost in capital flight, plunging rates for the rouble), and especially with a budget squeezed by almost zero growth and falling oil prices.

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I agree that the investor segment is the bit that is likely to go 'pop'. I found the following interesting: http://www.edmundconway.com/2014/04/londons-foreign-cash-property-buyers-may-be-less-cash-rich-than-you-think/

Basically saying that 'cash' buyers often arn't really 'cash' buyers at all because they have foreign debt. Important because any slowdown could precipitate further sales.

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I agree that the investor segment is the bit that is likely to go 'pop'. I found the following interesting: http://www.edmundconway.com/2014/04/londons-foreign-cash-property-buyers-may-be-less-cash-rich-than-you-think/

Basically saying that 'cash' buyers often arn't really 'cash' buyers at all because they have foreign debt. Important because any slowdown could precipitate further sales.

He is a little bit smarter now. Chief Economics Editor at the Telegraph, at such a tender age..... complacent into HyperBubble 1.0 (apparently proceeding to buy after a HPC senior member tried to convince him of the risks).... crunched and getting turned down for credit cards.

Saver-renters.. including myself, sacrificied to save both over-indebted and outright older owners who didn't want to give back any of their hyper-equity gains over the long wave (20 years+) - and also to perhaps keep illusion of banks mark-to-market debt positons extended/solvency.

No doubt about it for me... reflation and 0.5% and $Trillions QE, pulled in even more dumb idiot complacent money/debt for HyperBubble 2.0.

Property market: Word on the street

Edmund Conway

12 Apr 2008

Don't let your own credit crunch take you by surprise, writes Edmund Conway

Sooner or later, this credit crunch will catch up with all of us. It may take some time, but eventually the financial morass on Wall Street and the City filters through and starts affecting everyone - even economics journalists.

My own personal crunch day is fast approaching. And I confess that, despite writing about these kinds of things on a daily basis, I'm still not sure how badly it will hurt.

I experienced some tremors a couple of months ago when, for the first time in my life, I was rejected for a credit card. Despite not having a blot on my credit record - having never missed a credit card or other major bill - the company did as many of its peers did and restricted the number of cards it was issuing.

This is small beer compared with the impending months. Like many of you, I have a fixed-rate mortgage that needs to be renewed soon.

Unless I find another deal, my monthly loan payments will shoot up dramatically. Suddenly, I'll have less money left to spend on key things like food, transport and, most important of all for a twentysomething Londoner, going to the pub on Saturday nights.

It wasn't supposed to be like this. When I bought my home two years ago (I was one of the fast-diminishing ranks of first-time buyers), I assumed, like most others, that I would be able to get a similarly priced deal by this autumn.

in fulll http://www.telegraph.co.uk/property/propertymarket/wordonthestreet/3360981/Property-market-Word-on-the-street.html

Couple of years later left the Telegraph.. he must have sources of income (unless he sold up) to fund time out in Harvard, before later getting the Sky gig. One of the Sky trailers last year with him was doing my head in, soppy face looking to BoE as what is should do with rescues.

Edmund Conway

I was, until recently, Economics Editor of The Telegraph, but these days I am at the Kennedy School of Government at Harvard, where I will blog occasionally when I'm not knee-deep in homework

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From the Edmund Conway link


The credit situation in London is also extremely tight, at least from a Singaporean perspective. Let me give you a concrete example. In the UK market, banks usually lend 2.5X to 3X of the applicant’s annual salary as the maximum amount of loan. In Singapore, this figure is easily 10X. Yes, almost all our London purchases are now financed through Singaporean banks as the credit is so much harder to get from a UK bank.

It goes back to the recent MIPIM (Le marché international des professionnels de l’immobilier) thread and an organisation much favoured by Mr Johnson the London Mayor.

It's almost impossible for the average person in London and eventually for the rest of the UK people if London/UK house prices are set and kept high in this way.

Edited by billybong

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How are the sales volumes looking now ? I think they now hold the key...if they keep climbing it's game over.

No trend yet ... but confirmed 25/50% drop of sales is good enough indicator for me; also it confirms the aggressive price reductions ...

http://landregistry.data.gov.uk/app/hpi/view?from_m=9&from_y=2000&loc_0=Hammersmith+and+Fulham&loc_uri_0=http%3A%2F%2Flandregistry.data.gov.uk%2Fid%2Fregion%2Fhammersmith-and-fulham&m_hpi=1&m_vol=1&source=preview_form&to_m=9&to_y=2014

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He is a little bit smarter now. Chief Economics Editor at the Telegraph, at such a tender age..... complacent into HyperBubble 1.0 (apparently proceeding to buy after a HPC senior member tried to convince him of the risks).... crunched and getting turned down for credit cards.

Conway posted on this forum?

Edited by Eddie_George

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  • 396 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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