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Nine Hundred And Fifty Thousand


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HOLA441

Which is all very nice but if I earnt £250k a year I would a whole lot more for my money!!!

OK I'm playing devil's advocate, but I can see that this property might appeal to some people. You're basically getting the lifestyle of a well heeled English village/market town but in London. There are people who would probably kill to get their children into St Michael's CofE primary school. City types who work all hours would be able to have a semblance of family life as their commute would only be 30 mins or so. Crime (or anti-social behaviour, at least) is pretty much non-existent in that part of London also. Unlike similar places like Greenwich, it isn't an island in a sea of crud. To the north and west are equally well heeled Hampstead, and to the east the almost equally well heeled Muswell Hill. Southwards is a bit dodgy, but it's protected from that by a very steep hill, which in the words of a special constable I knew, 'the yobs are too lazy to walk up'.

Edited by Austin Allegro
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HOLA442

... a 'village' feel with several really good old pubs, historic churches, lots of little leafy lanes of pretty period houses

But this isn't one of those pretty period houses.

This post is peak-London for me. Some areas of London may not have peaked yet, but this house will never sell for more than £950K in next 15 years.

There are a unique set of circumstances that have resulted in this happening.

I thank the OP for posting it - it will become a meme for the London boom of 2014.

The punchline I'm expecting later is that it was bought blindly by a Singaporean investment syndicate with borrowing via some mortgage backed security that is ultimately owned by several UK banks - so UK tax payers lose out at every stage.

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HOLA443

But this isn't one of those pretty period houses.

This post is peak-London for me. Some areas of London may not have peaked yet, but this house will never sell for more than £950K in next 15 years.

There are a unique set of circumstances that have resulted in this happening.

I thank the OP for posting it - it will become a meme for the London boom of 2014.

The punchline I'm expecting later is that it was bought blindly by a Singaporean investment syndicate with borrowing via some mortgage backed security that is ultimately owned by several UK banks - so UK tax payers lose out at every stage.

I agree. I honestly think we're now at the top... give it a couple of months to sink in.... and watch people realise there is no greater fool, and yes they have just signed up for 25 years of excruciating (and indeed insurmountable) debt just to buy a tulip bulb.

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HOLA444

But this isn't one of those pretty period houses.

This post is peak-London for me. Some areas of London may not have peaked yet, but this house will never sell for more than £950K in next 15 years.

There are a unique set of circumstances that have resulted in this happening.

I thank the OP for posting it - it will become a meme for the London boom of 2014.

The punchline I'm expecting later is that it was bought blindly by a Singaporean investment syndicate with borrowing via some mortgage backed security that is ultimately owned by several UK banks - so UK tax payers lose out at every stage.

Two well off City types plus BOMAD from each of them would probably be able to afford this - especially if they factored in saving prep school fees by using the local primary. It would be nice to think this is a 'Harrods Broom Cupboard' moment, but sadly I doubt that it is.

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HOLA445

Only somebody earning £250k a year could get a mortgagre on this house. Is this the sort of place they would want to live in?

I never understand why lots of people on here always do that. Assume each house is going to a first time buyer. Not everyone needs to be earning £250k to get a mortgage on that house. What that does is underestimate the effect of all the props at the bottom of the market. That £950k house has probably been sold because of Osborne's £600k HTB2, even though the price is outside the scope of the scheme. The reality is probably that someone may have had a £300k mortgage on a property that has doubled in time and now been sold at £600k.. Someone has bought their £600k property so the vendor can step up to this one or there could be another property in between. HTB2 was to help "second steppers" but it also helps steps above. Whoever buys that property could be taking on a reduced mortgage amount and given low rates even if the mortgage amount is higher, the payments are likely to be less than they were when they bought their previous house e.g. a £350k mortgage now cheaoer than a £300k mortgage at previous higher rates. Low rates for 6 years has enabled people to pay off more of their mortgages.

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HOLA446

I never understand why lots of people on here always do that. Assume each house is going to a first time buyer. Not everyone needs to be earning £250k to get a mortgage on that house. What that does is underestimate the effect of all the props at the bottom of the market. That £950k house has probably been sold because of Osborne's £600k HTB2, even though the price is outside the scope of the scheme. The reality is probably that someone may have had a £300k mortgage on a property that has doubled in time and now been sold at £600k.. Someone has bought their £600k property so the vendor can step up to this one or there could be another property in between. HTB2 was to help "second steppers" but it also helps steps above. Whoever buys that property could be taking on a reduced mortgage amount and given low rates even if the mortgage amount is higher, the payments are likely to be less than they were when they bought their previous house e.g. a £350k mortgage now cheaoer than a £300k mortgage at previous higher rates. Low rates for 6 years has enabled people to pay off more of their mortgages.

Yes, that's how a pyramid scheme functions after all. But climbing the ladder through a property crash isn't a straightforward affair. You'd need to have bought the original £300k house in 2000 at the latest to see the kind of price doubling you describe by 2007, so it's unlikely they'd have been FTBs even then when ave. London salaries were <£25k in 1999. And how much lower were typical mortgage rates after 2008 than before, 1-2% maybe? It's only been since the introduction of FLS in 2012 that ultra-low fixed rate teaser deals have re-appeared. A £350k mortgage is still 10x the current ave London salary, hardly affordable.

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HOLA447

Yes, that's how a pyramid scheme functions after all. But climbing the ladder through a property crash isn't a straightforward affair. You'd need to have bought the original £300k house in 2000 at the latest to see the kind of price doubling you describe by 2007, so it's unlikely they'd have been FTBs even then when ave. London salaries were <£25k in 1999. And how much lower were typical mortgage rates after 2008 than before, 1-2% maybe? It's only been since the introduction of FLS in 2012 that ultra-low fixed rate teaser deals have re-appeared. A £350k mortgage is still 10x the current ave London salary, hardly affordable.

I never said the owner of the £300k was a FTB. It could 200-400-600-800-1000, 150-300-600-900 etc. Low rates have been available well before FLS for people with equity.

What does 10x average salary have to do with housing in the UK? It's joint incomes now. Halifax are happy to lend 4.3 times joint income. A couple earning £80k between them and a £350k mortgage is no problem. How else could house prices be so high?

Edit; missed the 150 out

Edited by Democorruptcy
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HOLA4410

Only somebody earning £250k a year could get a mortgagre on this house. Is this the sort of place they would want to live in?

Not necessarily true. You're assuming no saving nor equity gained from previous house sale.

I can see a couple earning close to 100k or even maybe 80k with some cash (say 350k) proceed from their sale of their flat can afford the 600k mortgage.

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HOLA4411

I don't really get all the comments suggesting they could have a farm across the Atlantic, a mansion in Liverpool, or stay in a Travelodge. If your life is in London (and it may surprise you, but there are people who think this is still the most amazing place in the country) then a modest house here where you can set down roots seems vastly preferable to any of those options.

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HOLA4412

I don't really get all the comments suggesting they could have a farm across the Atlantic, a mansion in Liverpool, or stay in a Travelodge. If your life is in London (and it may surprise you, but there are people who think this is still the most amazing place in the country) then a modest house here where you can set down roots seems vastly preferable to any of those options.

£950,000

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HOLA4414

%

I never said the owner of the £300k was a FTB. It could 200-400-600-800-1000, 150-300-600-900 etc. Low rates have been available well before FLS for people with equity.

What does 10x average salary have to do with housing in the UK? It's joint incomes now. Halifax are happy to lend 4.3 times joint income. A couple earning £80k between them and a £350k mortgage is no problem. How else could house prices be so high?

Edit; missed the 150 out

Well I'm not saying it's impossible, just unlikely. I still can't see a couple earning £80k between them and with £600k of equity from 15+yrs of hpi ever wanting to move into that. And I'd also dispute the idea that a 9x dual income mortgage is a cake walk, even at 4%.

How else could prices be so high? Asset prices around the world have been completely divorced from fundamentals by 6 years of ZIRP and QE. Stocks, bonds, real estate, gold... all bid up to the stratosphere by speculators and inside men with what is effectively free money. Why would London be any different from Dubai or Singapore?

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HOLA4415

%

Well I'm not saying it's impossible, just unlikely. I still can't see a couple earning £80k between them and with £600k of equity from 15+yrs of hpi ever wanting to move into that. And I'd also dispute the idea that a 9x dual income mortgage is a cake walk, even at 4%.

How else could prices be so high? Asset prices around the world have been completely divorced from fundamentals by 6 years of ZIRP and QE. Stocks, bonds, real estate, gold... all bid up to the stratosphere by speculators and inside men with what is effectively free money. Why would London be any different from Dubai or Singapore?

I started off by replying to this comment "Only somebody earning £250k a year could get a mortgage on this house", which I think is wrong. I would say it's far more likely that someone has bought that house with some equity from another sale. If someone is unlikely to use a wedge of equity to buy "that" do you think people earning £250k would buy "that"?

Re your disputing mortgages. Dispute away to your heart's content. On here it's 4.3 times dual income whether that's £80k, £100k or £250k

http://www.halifax.co.uk/mortgages/forms/minicalc/container.asp

I've posted links that prove the fact that lending multiples have picked up again and a greater share of mortgages are reverting to over 4 times joint income. House prices could NOT be so high if it weren't true. Every house is not bought by a speculator or inside man, the proof being that mortgage approvals have picked up.

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HOLA4416

I don't really get all the comments suggesting they could have a farm across the Atlantic, a mansion in Liverpool, or stay in a Travelodge. If your life is in London (and it may surprise you, but there are people who think this is still the most amazing place in the country) then a modest house here where you can set down roots seems vastly preferable to any of those options.

They wouldn't even have to go that far away to get somewhere lovely for half the price, it's just ludicrous snobbery about areas that aren't even very nice (I should know, I've just moved out of a booming Walthamstow - which I would argue is even less desirable than when I moved in except that then people wouldn't touch it with a bargepole).

This is 20 minutes away from Kings Cross by overground: http://www.rightmove.co.uk/property-for-sale/property-43774253.html?premiumA=true. Btw I think London is the most amazing city in the world, but the people buying there at the moment need mental help.

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HOLA4417

I think London is the most amazing city in the world, but the people buying there at the moment need mental help.

I'm tempted to print that and laminate it.... quote of the century!

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HOLA4418

Which is all very nice but if I earnt £250k a year I would a whole lot more for my money!!!

Most people buying housing don't think it costs them any money. You buy it, the price goes up, you make money on your investment. Every house on Rightmove might as well have £0 next to it.

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HOLA4419

I don't really get all the comments suggesting they could have a farm across the Atlantic, a mansion in Liverpool, or stay in a Travelodge. If your life is in London (and it may surprise you, but there are people who think this is still the most amazing place in the country) then a modest house here where you can set down roots seems vastly preferable to any of those options.

They haven't lived. ;)

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HOLA4422

For £950k, you can get the following houses/flats in other major cities:

A 4 bedroom luxury 171 square meter flat in a trendy part of Berlin, Germany:

http://www.rightmove.co.uk/overseas-property/property-30535524.html

A mansion in one of the most exclusive neighborhoods in South Africa, 10 minutes from Cape Town central business district, extremely low crime and trendy bars and world class views:

http://www.property24.com/for-sale/camps-bay/cape-town/western-cape/11014/101610316?Branded=true

7000 sq feet mansion in Boulder Colorado. Boulder is a tech hub with high salaries and excellent weather:

http://www.homes.com/property/962-white-hawk-ranch-dr-boulder-co-80303/id-500012356914/

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