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Damik

Is Prime London Crashing? - Merged Threads

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Also worth considering that in some/many cases, people are keeping their houses and using the rental towards buying a new house because they couldn't find anyone willing to pay their asking price.

So...house goes on market - perhaps after inflated promises from an agent - but it's overpriced and nobody bites. Owners start to wobble but agent says, don't fret, don't drop the price, just keep it as in investment and borrow enough money to buy your new house. They profit from all the ancillary services agents are starting to offer, like lawyers, mortgage brokers and admin fees and they might even be handling the new house sale.

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Also worth considering that in some/many cases, people are keeping their houses and using the rental towards buying a new house because they couldn't find anyone willing to pay their asking price.

So...house goes on market - perhaps after inflated promises from an agent - but it's overpriced and nobody bites. Owners start to wobble but agent says, don't fret, don't drop the price, just keep it as in investment and borrow enough money to buy your new house. They profit from all the ancillary services agents are starting to offer, like lawyers, mortgage brokers and admin fees and they might even be handling the new house sale.

I know at least 2 people who have done this. They now have 2 dangerously over priced assets and if mortgage rates gop up they are f***ked.

Still, the agent got his sales commission and his ongoing rental commission.

If the places they kept are such a great investment why didnt the agents snap their hands off to buy them :rolleyes:

Lot of trouble to come for unplanned lords.

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Many current happenings seem to defy common sense. We know it can't keep on going like that forever. The question is when and what will be the trigger for the big collapse?

Edited by Fairyland

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Many current happenings seem to defy common sense. We know it can't keep on going like that forever. The question is when and what will be the trigger for the big collapse?

The big collapse happened in 2007.House prices in real terms all round the country are down 30-50% ( look at the front page graph ).

I think you are looking for something that might not come.

Saying that, London and the S.E. will have a BIG collapse, which should take down the asking prices outside london and wake up sellers to the fact that their house is now worth 2007 prices - 10% instead of 2007 prices + 30%

We are living through the crash, not waiting for it to start !!!

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I know at least 2 people who have done this. They now have 2 dangerously over priced assets and if mortgage rates gop up they are f***ked.

Still, the agent got his sales commission and his ongoing rental commission.

If the places they kept are such a great investment why didnt the agents snap their hands off to buy them :rolleyes:

Lot of trouble to come for unplanned lords.

I'd guess they made their move ~2004-2009ish.

You'd struggle to get a bank to loan you an extra mortgage.

I've known a couple of people in 2005ish who, even then, were struggling with an illiquid housing market so ended up letting out the (old) OO. They had about 50% of the mortgage payed off, giving them about 70% of the equity in the old OO.

They needed a 100% mortgage on the new place.

The exposure they had to housing, in relation to assets and income to support the mortgages, was fcking insane.

In both cases the bloke (main mortgage payer) was glad when they sold the old OO.

In both cases, the woman thought that it was a good investment.

Edited by spyguy

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The big collapse happened in 2007.House prices in real terms all round the country are down 30-50% ( look at the front page graph ).

I think you are looking for something that might not come.

Saying that, London and the S.E. will have a BIG collapse, which should take down the asking prices outside london and wake up sellers to the fact that their house is now worth 2007 prices - 10% instead of 2007 prices + 30%

We are living through the crash, not waiting for it to start !!!

Thanks .

Unfortunately, we are in London/South East and we will not be able to move further north even if we want to. Jobs, schools and other factors will keep us tied down. We have good jobs, healthy deposit but the market is so overinflated that it feels like being robbed when vendors expect you to pay 25-30% over 2007 peak prices. Meanwhile, we are tired to pay someone else's mortgage year after year. What a situation to be in …….. ZIRP robbing our savings and LLs squeezing out hard earned money in rents. Makes me think is there any point in working??? We probably live in a society where hard work doesn't pay. What values do we pass on to our children?

Edited by Fairyland

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I'd guess they made their move ~2004-2009ish.

No, much worse than that, 2010, 2011 timescale. no chance of selling at fantasy prices, bought at silly 2007 prices.

They must now think they made the right decision.

I'd like to see them try and sell again now....

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Only problem is that your opinions contradict market data (LR and EAs). London is flat for last 12 month and it's falling a bit. The demand is off between 25 to 50%. And supply is a bit up. You are also contradicting economical theory of bubbles and market cycles. In general your opinions on HPC have same value as what you think about latest progress in nuclear fusion ...

http://landregistry.data.gov.uk/app/hpi/view?compare=1&from_m=5&from_y=2000&loc_0=Haringey&loc_1=Kensington+and+Chelsea&loc_uri_0=http%3A%2F%2Flandregistry.data.gov.uk%2Fid%2Fregion%2Fharingey&loc_uri_1=http%3A%2F%2Flandregistry.data.gov.uk%2Fid%2Fregion%2Fkensington-and-chelsea&m_hpi=1&source=preview_form&to_m=5&to_y=2015

My opinions are in line with market data and what EAs say (not that anyone truly believes what EAs say). We can all skew data to support our view. Using your own source:

http://landregistry.data.gov.uk/app/hpi/view?compare=1&from_m=5&from_y=2000&loc_0=Hackney&loc_1=Kensington+and+Chelsea&loc_uri_0=http%3A%2F%2Flandregistry.data.gov.uk%2Fid%2Fregion%2Fhackney&loc_uri_1=http%3A%2F%2Flandregistry.data.gov.uk%2Fid%2Fregion%2Fkensington-and-chelsea&m_hpi=1&source=preview_form&to_m=5&to_y=2015

and also

http://landregistry.data.gov.uk/app/hpi/view?compare=1&from_m=5&from_y=2000&loc_0=Islington&loc_1=Kensington+and+Chelsea&loc_uri_0=http%3A%2F%2Flandregistry.data.gov.uk%2Fid%2Fregion%2Fislington&loc_uri_1=http%3A%2F%2Flandregistry.data.gov.uk%2Fid%2Fregion%2Fkensington-and-chelsea&m_hpi=1&source=preview_form&to_m=5&to_y=2015

If looking for a London house price market direction indicator surely you would use Hackney, as it has been the area that has outperformed in London for the last few years. As someone else has said on this thread before "the higher they rise the harder they fall". So if Hackney falls I would take that as the market turn indicator, rather than Haringey or some other random suburb, which in this case supports your current view.

I do agree that supply seems up a lot since last year, but that seems to just be meeting the high level of demand and thereby keeping the pace of price growth a pretty muted compared to the previous couple of years.

I would like to know how I am contradicting economic theory of bubbles and market cycles? It is your opinion we are in a bubble. Who is to say that this is not the new norm?

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My opinions are in line with market data and what EAs say (not that anyone truly believes what EAs say).

....

It is your opinion we are in a bubble. Who is to say that this is not the new norm?

:lol::lol::lol::lol::lol:

You have to be in the top 5% of earners in the Uk to buy a first time buyers flat in London....No, it's not a bubble.

:D:D:D:D:D

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I don't agree that Jaegar is trying to stir controversy, no doubt what you are seeing where you are looking.

However my thoughts on the matter:-

Prices to the west are flat lining if not dropping by 25k on property that is reasonably priced, all the way from zone 2-4 (from the bits I have seen).

I suspect the east is still busy as people are chasing the 2 beds between 350-400k and IMO slightly blindly, I have looked at all sort of areas including Woolwich Arsenal and for the current conditions/likelyhood of being stabbed I really can't see the 100k 'discount' being worth it.

Correct me if I am wrong but we are not seeing:-

  • Sky high property
  • Rumblings of an overvalued stock and share market
  • China's current problems
  • US recovery in question
  • Problems in the EU with Greece
  • Issues with Russia
  • Massive UK debt from both a government and people's average debt
  • BTL margins have reduced and will continue to do so due to average house prices increasing
  • EA transaction volumes are down
  • Interest rate rise expected for 2016
  • Wage growth none to minimal

I guess people are just about holding in because of the interest rates, but I am really struggling to see how this will be sustainable despite:-

  • Mortgage payments being the same as rental in London, but admittedly you need a chunky deposit. However bringing the benefit of actually owning something
  • Massive demand in London
  • Young/older people desperate to get on the market
  • Low interest rates
  • Help to buy and associated schemes

I suspect there will be some areas that crash far more heavily than others e.g. the £1m Chinese tower blocks are more likely to plummet than a nice period property in a nice area.

ItalianV6, thanks for recognising that I am not trying to stir controversy, rather I feel it fair to everyone reading this thread that differing view points are voiced on here and only through that can we actually have a true and correct answer to the original thread title question. I'm sure everyone on here wants to know what house prices are doing in the whole of London and when would be the right time to purchase.

I agree with all the points you made about sky high property, overvalued stocks, Us recovery in question etc. However, you could have made pretty much the same list back in the summer of 2012 and I would have also agreed with the list then. And we all know that London prices have gone up by 30% since.

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My opinions are in line with market data and what EAs say (not that anyone truly believes what EAs say). We can all skew data to support our view. Using your own source:

http://landregistry.data.gov.uk/app/hpi/view?compare=1&from_m=5&from_y=2000&loc_0=Hackney&loc_1=Kensington+and+Chelsea&loc_uri_0=http%3A%2F%2Flandregistry.data.gov.uk%2Fid%2Fregion%2Fhackney&loc_uri_1=http%3A%2F%2Flandregistry.data.gov.uk%2Fid%2Fregion%2Fkensington-and-chelsea&m_hpi=1&source=preview_form&to_m=5&to_y=2015

and also

http://landregistry.data.gov.uk/app/hpi/view?compare=1&from_m=5&from_y=2000&loc_0=Islington&loc_1=Kensington+and+Chelsea&loc_uri_0=http%3A%2F%2Flandregistry.data.gov.uk%2Fid%2Fregion%2Fislington&loc_uri_1=http%3A%2F%2Flandregistry.data.gov.uk%2Fid%2Fregion%2Fkensington-and-chelsea&m_hpi=1&source=preview_form&to_m=5&to_y=2015

If looking for a London house price market direction indicator surely you would use Hackney, as it has been the area that has outperformed in London for the last few years. As someone else has said on this thread before "the higher they rise the harder they fall". So if Hackney falls I would take that as the market turn indicator, rather than Haringey or some other random suburb, which in this case supports your current view.

I do agree that supply seems up a lot since last year, but that seems to just be meeting the high level of demand and thereby keeping the pace of price growth a pretty muted compared to the previous couple of years.

I would like to know how I am contradicting economic theory of bubbles and market cycles? It is your opinion we are in a bubble. Who is to say that this is not the new norm?

Hackney is flat from November 2014. After it was the most HPI performing part of London (200% rise from 2009 to 2014). Growing faster even than Kensington and Chelsea. Now it has stopped. Kensington and Chelsea stopped in August 2014. Lambeth in September 2014.

London gross rental profit is about 30%/50% of e.g. Birmingham; about 3%.

Your idea of new norm contradicts the economical theory of bubbles and cycles.

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ItalianV6, thanks for recognising that I am not trying to stir controversy

You'd get more respect if you were thankingh Damik for recongnising you are not a troll.

I'd not be surprised if you and ItalianV6 posts are coming from the same PC.

Enjoy those heady london prices because you are about to experience a collapse in prices so BIG many a london property parasite will never recover from it.

You must be really desperate/terrified/stupid to come on here peddling your parasitic nonsense.

As far as I am concerned. you can take your tub of hair gel/nonsense posts and do one.

Edited by TheCountOfNowhere

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Could it be possible that LR prices are flat because of low sales volume? Otherwise they would have been in the negative territory.

There is no doubt there is a bubble. The question is how is it being sustained and what will burst it. Low sales may be a slow trigger?

Edited by Fairyland

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Could it be possible that LR prices are flat because of low sales volume? Otherwise they would have been in the negative territory.

We certainly say that from 2008-2012 with homeowners trading houses at silly price and first time buyers/probate buying at crashed prices.

It's a false market so buying into any of it, in london, in the S.E. or any of the shires is VERY VERY RISKY.

Have a look at the "are the shires crashing" thread to see what has been happening in the North East/West of the country. prices are still falling, have been for a long time now an din real terms down maybe 40-50% !!!!

That's what happens when you take away this London mega bubble trick down your legs effect. When the london mega bubble goes prices everywhere are toast, people will have to accept that 2004 valuation.

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Could it be possible that LR prices are flat because of low sales volume? Otherwise they would have been in the negative territory.

There is no doubt there is a bubble. The question is how is it being sustained and what will burst it. Low sales may be a slow trigger?

This is my thinking as well. BTW the London 2014/2015 flat line looks like the 2007/2008 one. It took Kensington exactly 12 months in 2007/8 to start falling.

Kensington is flat from August 2014. Another 2 months to go ... :wub::wub::wub:

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Kensington is flat from August 2014. Another 2 months to go ... :wub::wub::wub:

Oh I really hope you are right. I cannot wait for that to happen. I also agree that extremely low volume appears to prop up what otherwise is a very fragile market. Fewer properties sell but those that do sell, they seem to allow LR figures to stay relatively stable.

What is insane however is that properties are still selling in the mega hyperinflated bubble. Check this one out for example, a three bedroom maisonette in Hackney for £800k recently put under offer. Bought in 2007 for £385k I believe. What the hell is going on? Who is buying these places at these prices? And dont tell me its another 'cash' buyer (e.g. totally overleveraged elsewhere) ....

Anyways, just waiting for that supply glut of 54.000 flats to hit the prime market. It will be the property version on an RPG going off. Two months time sounds good to me. But to be honest I thought the exact same thing a year ago. Aaaargh. I am running out of patience.

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Oh I really hope you are right. I cannot wait for that to happen. I also agree that extremely low volume appears to prop up what otherwise is a very fragile market. Fewer properties sell but those that do sell, they seem to allow LR figures to stay relatively stable.

What is insane however is that properties are still selling in the mega hyperinflated bubble. Check this one out for example, a three bedroom maisonette in Hackney for £800k recently put under offer. Bought in 2007 for £385k I believe. What the hell is going on? Who is buying these places at these prices? And dont tell me its another 'cash' buyer (e.g. totally overleveraged elsewhere) ....

Anyways, just waiting for that supply glut of 54.000 flats to hit the prime market. It will be the property version on an RPG going off. Two months time sounds good to me. But to be honest I thought the exact same thing a year ago. Aaaargh. I am running out of patience.

My wife either ... :ph34r::ph34r::ph34r:

Edited by Damik

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My opinions are in line with market data and what EAs say (not that anyone truly believes what EAs say). We can all skew data to support our view.

Somehow I do not believe you:

Foxtons Streatham RM traffic for last 14 days: 60% (24/40) of price reductions

Somehow Foxtons stock is not selling very well ... :lol::lol::lol: ... no interest -> no viewing -> no offer -> price reduction

Edited by Damik

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Somehow I do not believe you:

Foxtons Streatham RM traffic for last 14 days: 60% (24/40) of price reductions

Somehow Foxtons stock is not selling very well ... :lol::lol::lol: ... no interest -> no viewing -> no offer -> price reduction

I find Foxtons stock the most overvalued of all, they truly do price themselves out of the market (or certainly the sellers that set the prices).

The Foxtons EA showed me a property that was £550k for a pokey two bed flat, when I mentioned I had seen another similar property for £525k which was bigger, with a garden, an extra bedroom but just around the corner, they pointed out that they had sold a flat next door to the one I mentioned for £540k with about 20sqm less, no garden e.t.c

I can't see how Foxtons sell anything let alone massively reduced volumes as per other EA's.

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My opinions are in line with market data and what EAs say (not that anyone truly believes what EAs say). We can all skew data to support our view. Using your own source:

http://landregistry.data.gov.uk/app/hpi/view?compare=1&from_m=5&from_y=2000&loc_0=Hackney&loc_1=Kensington+and+Chelsea&loc_uri_0=http%3A%2F%2Flandregistry.data.gov.uk%2Fid%2Fregion%2Fhackney&loc_uri_1=http%3A%2F%2Flandregistry.data.gov.uk%2Fid%2Fregion%2Fkensington-and-chelsea&m_hpi=1&source=preview_form&to_m=5&to_y=2015

and also

http://landregistry.data.gov.uk/app/hpi/view?compare=1&from_m=5&from_y=2000&loc_0=Islington&loc_1=Kensington+and+Chelsea&loc_uri_0=http%3A%2F%2Flandregistry.data.gov.uk%2Fid%2Fregion%2Fislington&loc_uri_1=http%3A%2F%2Flandregistry.data.gov.uk%2Fid%2Fregion%2Fkensington-and-chelsea&m_hpi=1&source=preview_form&to_m=5&to_y=2015

If looking for a London house price market direction indicator surely you would use Hackney, as it has been the area that has outperformed in London for the last few years. As someone else has said on this thread before "the higher they rise the harder they fall". So if Hackney falls I would take that as the market turn indicator, rather than Haringey or some other random suburb, which in this case supports your current view.

I do agree that supply seems up a lot since last year, but that seems to just be meeting the high level of demand and thereby keeping the pace of price growth a pretty muted compared to the previous couple of years.

I would like to know how I am contradicting economic theory of bubbles and market cycles? It is your opinion we are in a bubble. Who is to say that this is not the new norm?

To be fair, while all London prices are overheated and have been for years now, Hackney was behind so the hackney increases are a correction to some degree (ie in line with other crazy prices in London). Hackney's a lot nicer place to live than say Kensal rise etc, and close to the city.

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Oh I really hope you are right. I cannot wait for that to happen. I also agree that extremely low volume appears to prop up what otherwise is a very fragile market. Fewer properties sell but those that do sell, they seem to allow LR figures to stay relatively stable.

What is insane however is that properties are still selling in the mega hyperinflated bubble. Check this one out for example, a three bedroom maisonette in Hackney for £800k recently put under offer. Bought in 2007 for £385k I believe. What the hell is going on? Who is buying these places at these prices? And dont tell me its another 'cash' buyer (e.g. totally overleveraged elsewhere) ....

Anyways, just waiting for that supply glut of 54.000 flats to hit the prime market. It will be the property version on an RPG going off. Two months time sounds good to me. But to be honest I thought the exact same thing a year ago. Aaaargh. I am running out of patience.

You think that's mad, but check this one out. Must be the most overpriced sale in Hackney:

http://www.rightmove.co.uk/house-prices/detailMatching.html?prop=30843876&sale=52540265&country=england&referrer=soldPriceResults

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I find Foxtons stock the most overvalued of all, they truly do price themselves out of the market (or certainly the sellers that set the prices).

The Foxtons EA showed me a property that was £550k for a pokey two bed flat, when I mentioned I had seen another similar property for £525k which was bigger, with a garden, an extra bedroom but just around the corner, they pointed out that they had sold a flat next door to the one I mentioned for £540k with about 20sqm less, no garden e.t.c

I can't see how Foxtons sell anything let alone massively reduced volumes as per other EA's.

You're viewing first time buyer flats at 500K+ ?

What do you earn out of interest ?

Edited by TheCountOfNowhere

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You're viewing first time buyer flats at 500K+ ?

What do you earn out of interest ?

Yes, though would rather not share personal information on the forum.

But have a large deposit (self earned not parent funded/inherited) which brings me within 'affordability', however would much prefer for the market to correct itself and then I can put the funds to better use/without an increased debt burden. Also I don't really see above £500k as an option but had to explore the market in the lower £5's to see what it got.

Hence I am holding fire on a flat purchase for the next 2-3 months to see what happens, given little seems to be selling I am not exactly losing anything.

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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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