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£700K To Spend On A 1-Bed In Elephant & Castle

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I know someone who has just bought there on the basis that it is ok now, and up and coming. It is definitely supposed to be. They have lived in central London for quite a while and did a lot of research.

so that's one vote!

The buyers exist, out there meeting higher and higher asking prices. They are the competition everywhere in the market. No one is dragging them into the banks forcing them to borrow or to meet such high asking prices.

It's the buyer's decision based on their own world-view. Just as it is a decision for those who refuse to buy and waiting for better value.

The very same people on the forum who continually extend sympathy and worries for such buyers/individuals paying ever higher silly prices (for year upon year...many of who now have lots of supposed equity)..... tend to be the ones who scoff that other HPCers are in denial (hoping for a crash), when prices go up even further in value each month/year.

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The buyers exist, out there meeting higher and higher asking prices. They are the competition everywhere in the market. No one is dragging them into the banks forcing them to borrow or to meet such high asking prices.

It's the buyer's decision based on their own world-view. Just as it is a decision for those who refuse to buy and waiting for better value.

The very same people on the forum who continually extend sympathy and worries for such buyers/individuals paying ever higher silly prices (for year upon year...many of who now have lots of supposed equity)..... tend to be the ones who scoff that other HPCers are in denial (hoping for a crash), when prices go up even further in value each month/year.

She doesn't know the area at all. Most of the replies have said don't even think of it. Can't help wondering whether the 'acquaintance' who suggested E&C is an EA...

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E&C was one of the few places I felt unsafe even during the day. The subway is like something out of the Equalizer. I'm sure you'd probably get used to it though.

If flats are now £700K there, I'd suggest any anticipated gentrification has been built into the price.

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I used to live just south of there in Kennington for a while. Sure, E&C was south-London rough, but I never felt particularly unsafe.

For a while the estate agents tried to market it as "South City". Now that they've levelled the huge Aylesbury council estate and moved the social tenants out maybe the gentrification will happen. A £700k flat suggests it will! It will lose its soul though.

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Think I would rather have this on an acre than a 1 bedroom flat in a slum.

YWVlMzY1YTEwMzg3ZWQzZGRkMjljNGVlMGRkOWVjNDmZX9mNravj0VwWF9XUBcb4aHR0cDovL21lZGlhLmRhZnQuaWUvcHJvcGVydHktaW1hZ2UvS2hkZWgydFRvTG9rSHVjN2pZTC1GeEEtUXNHQzRnRUxiUDNLYmlkemJMRnNQVEV3TWpRPS5qcGd8NjA5fHx8fHx8aHR0cDovL3d3dy5kYWZ0LmllL2kvd2F0ZXJtYXJrLnBuZz92PTF8fHw=.jpg

details

I can fathom how people don't believe that London has unsustainable high prices that will not collapse. Bubble deniers only need to look at the evidence.

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E&C was one of the few places I felt unsafe even during the day. The subway is like something out of the Equalizer. I'm sure you'd probably get used to it though.

If flats are now £700K there, I'd suggest any anticipated gentrification has been built into the price.

In fairness I believe the subway system is coming out. Which will mean that one bed will be worth £1m. I might put in an offer.

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E&C was one of the few places I felt unsafe even during the day. The subway is like something out of the Equalizer. I'm sure you'd probably get used to it though.

If flats are now £700K there, I'd suggest any anticipated gentrification has been built into the price.

I used to go to the Goose & Firkin with a bunch of mates on a Friday night for a few pints of Dog Bolter and a sing-along on the piano with a geezer called Frankie Boy, the absolute scariest piano playing Cockney thug you could imagine. On at least two occasions someone threw a brick through the window when we were in there and I've lost count of the number of fights there were inside and out. When you're 20 and full of yourself it's all a bit of a laugh but I can't believe anyone would be bonkers enough to sp*nk 700K on a flat in such a crap hole.

Now I think about it, wasn't Harry Brown filmed around there too?

http://www.imdb.com/...=nm_flmg_act_14

edit: somewhat surprised to find that Frankie Boy Flame (he seems to have dropped the Boy bit) is still going strong and still pretty scary - www.facebook.com/franky.flame.3

Edited by TheBlueCat

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She doesn't know the area at all. Most of the replies have said don't even think of it. Can't help wondering whether the 'acquaintance' who suggested E&C is an EA...

Regardless of the area, it's the entire tone. No hesitation in there about super-high property-prices.

£700,000 budget whilst blissfully dreaming about 1 bed flats. They are my enemy, my competition, yet for others, they're somehow victims we should carry on our shoulders immediately if prices ever soften... with excuses how they were misled ect.

Apparently there is a major redevelopment programme by Southwark council. Initial rental sorted out so we've got a bit of breathing space to look around different areas but an acquaintance has suggested here as a good location for us - professional couple, no kids (nor plans for any), budget 700K, 1 bed (if big enough) or 2 bed flat.

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Think I would rather have this on an acre than a 1 bedroom flat in a slum.

Not too sure. Think I'd prefer to pay a premium (but not current asking prices) to have something much smaller, but be nearer a main city.

Globally younger people seem to be heading to the cities. Where more of the jobs are I suppose, things to do, services... support like A&Es compared to places like that house.. although nearest one there seems to be Wexford... not that far a drive away. Jobs in area? Schools? Places nearby to go? Neighbours to keep an eye on your home whilst you're out/away?

I'm thinking more England.. but I just don't see the appeal of larger homes in isolated rural areas, on big grounds to maintain, with long windy drive just to get to the road, and at huge prices too. Other than to say to the world.. "Here's my mansion in big grounds, I made it as a success."

They look a bit like relics of a different era to me, such large rural houses. If budgets ever tighten up, can see local government cutting resources to rural infrastructure maintenance + private companies too including bus services.

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The rural bus services aren't for people living in £700k homes. They are for those living in £100k homes.

If you are rich you don't need those services.

I think that size of house is standard in most of the US for a normal sort of middle class family.

You don't need to go to Ireland for that of course.

Leicester: http://www.rightmove.co.uk/house-prices/detailMatching.html?prop=23681487&sale=48774344&country=england

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The rural bus services aren't for people living in £700k homes. They are for those living in £100k homes.

If you are rich you don't need those services.

I think that size of house is standard in most of the US for a normal sort of middle class family.

You don't need to go to Ireland for that of course.

Leicester: http://www.rightmove...country=england

At least US newbuilds said to be shrinking. >>The nation’s average home size, which peaked just above 2,500 square feet in 2007, is expected to shrink to 2,152 square feet by 2015. (WSJ January 18, 2012) & 'Many Americans, builders have learned, are fed up with pricey gas and lengthy commutes.' + 'not so much a matter of downsizing as "right-sizing," giving up big homes with unused space and buying a home that better fits their needs.'

Where they're not, it's suggested more houses being turned over to multi-generational family living, which makes a certain sort of sense to me. That's the only reason I'd ever think of such a large sized home, if it can be bought for a snip, and I suspect more price pressure is going to come on such larger homes, as more come to market.

The Ireland house is ugly to me. From outside it looks like a facility for low-category risk young-offenders, in my opinion. You can even see a warden walking behind the house to the other unnecessary sprawl building. Inside does my head in too. €595,000 and they claim there's been a HPC in Ireland.

The Leicester one, a lot more handsome a house, but so very pricey, but even then, better value that the ROI one imo.

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E&C is hardly unsafe, obviously £700k is a total joke and you wouldnt want to send your kids to the local schools, but we are talking about London here, not a ghetto in Los Angeles or Brazil. Nowhere in the city is _that_ bad.

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Besides, if you were a big enough mentalist to pay £700k for a flat there, you would presumably be in one of the new build blocks that are 2 minutes walk from the station and just off the main road/roundabout, which is about as safe an area as you can get really. Its not like theyre going to be living in the middle of one of the council estates.

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A 1 bed flat can be rented there for 1000 to 1500 £pcm

Marking the value as approx 150k to 300k

And they want to pay 700k for one, ergo they want to lose a shedload of money over the medium to long term

Woo hoo!

Edited by Si1

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A 1 bed flat can be rented there for 1000 to 1500 £pcm

Marking the value as approx 150k to 300k

And they want to pay 700k for one, ergo they want to lose a shedload of money over the medium to long term

Woo hoo!

How do you get to that figure? I am not saying it is wrong, more I want to understand.

BTW I think this are luxury apartments not a standard one so allegedly worth £700k

(Allegedly in this case means if you think slightly nicer walls and neighbours are worth £400k, IMHO I think you are on drugs if you think that).

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Well, it's got to be done on yield

£1k pcm = £12k per annum. £12k per annum = 8% yield @£150k

£1.5k pcm = £18k p/a = 6% yield @ £300k.

If you consider that that's gross, and there are voids and mortgage rates of around 4%, and service charge and letting agents fees, and profit and whatever else, 6% gross yield is pretty much a bare minimum. I would say.

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£700k for a 1-bed in spiffy E&C new-build isnt really the market figure (unless youre going for a penthouse or something), £700-800k seems to be about the going rate for a 2 bed in one of those developments.

http://www.rightmove.co.uk/property-for-sale/property-43656625.html

http://www.rightmove.co.uk/new-homes-for-sale/property-45427406.html?premiumA=true

etc

The rent for a 2 bed there would probably be around £2000-2500/month (so £24-30k a year)

http://www.rightmove.co.uk/property-to-rent/property-43140448.html

http://www.rightmove.co.uk/property-to-rent/property-41260343.html

http://www.rightmove.co.uk/property-to-rent/property-44445512.html

so the gross yields are higher than people are saying - 30k rent on a £750k property is 4% yield, £24k would be 3.2%

Whats going to eat into those yields are the service charges though, they're around £3500/year according to one of those above links. Although if they can get £30k/month on a £750k flat with a £3500 service charge, thats still a 3.5% net yield. Its not great, but its not quite as bad as people are making out

Edited by Smyth

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Maybe they saw "Elephant" and "Castle" and assumed it was near the Zoo and the Tower? :D

The tunnels around E&C roundabout are like a poorly made scale model of the Large Hadron Collider.

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£700k for a 1-bed in spiffy E&C new-build isnt really the market figure (unless youre going for a penthouse or something), £700-800k seems to be about the going rate for a 2 bed in one of those developments.

http://www.rightmove.co.uk/property-for-sale/property-43656625.html

http://www.rightmove.co.uk/new-homes-for-sale/property-45427406.html?premiumA=true

etc

The rent for a 2 bed there would probably be around £2000-2500/month (so £24-30k a year)

http://www.rightmove.co.uk/property-to-rent/property-43140448.html

http://www.rightmove.co.uk/property-to-rent/property-41260343.html

http://www.rightmove.co.uk/property-to-rent/property-44445512.html

so the gross yields are higher than people are saying - 30k rent on a £750k property is 4% yield, £24k would be 3.2%

Whats going to eat into those yields are the service charges though, they're around £3500/year according to one of those above links. Although if they can get £30k/month on a £750k flat with a £3500 service charge, thats still a 3.5% net yield. Its not great, but its not quite as bad as people are making out

net = gross - service charge.

Yeah right.

Agents fees and voids could knock £4k off easily, then interest costs, what 2% on half a million interest only is £10k, leaving net yield sub 2% on fairly optimistic assumptions. It's a play on price rises, nothing more.

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