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Wurzel Of Highbridge

Can Someone Please Remind Me..

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Can someone please remind me why properties in London are worth 18% more than 12 short months ago?

Did they all have a refurb's? Does everyone in London now get 50% off their grocery shopping?

Come on there must be a reason why someone would be willing and able to pay hundreds of thousands more than than they were 12 months ago.

[spelling]

Edited by Wurzel Of Highbridge

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Can someone please remind me why properties in London are worth 18% more than 12 short months ago?

Did they all have a refurb's? Does everyone in London now get 50% off their grocery shopping?

Come on there must be a reason why someone would be willing and able to pay hundreds of thousands more than than they were 12 months ago.

[spelling]

I saw a poster in an estate agenst window in the posher part of Edinburgh yesterday. It was a picture of the tail of a jet airliner and the slogan "The property market is taking off"

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Come on there must be a reason why someone would be willing and able to pay hundreds of thousands more than than they were 12 months ago.

Because other people are.

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It baffles me- maybe I am just a bit too thick to understand it...

1. UK has very old and stable property laws

2. Non-doms can live here without paying any taxes on money held offshore - they can even bring interest earned from offshore investments here without paying tax. Or just buy some property and sell it including antiques and paintings paying a marginal cost.

3. Property in popular safe haven post codes in London have launched into the stratosphere with rich people from China, Cyprus, Russia, Syria, Iraq, Libya all trying to hide their money somewhere to prevent confiscation for fraud (UK anti money laundering is only for the little folks)

4. Property surrounding these post codes are increasing in value so you can claim bragging rights

5. Rich people pay for goods and services so those earning cash from these services can afford to buy homes

6. The people stretching themselves to buy because of the rises are just the poor mugs who don't understand debt but want to live in London

7. When the s*it hits the fan - London will still retain a politcal power base with access to nuclear weapons, friends of USA ans sympathetic to the rich people's tax requirements

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I saw a poster in an estate agenst window in the posher part of Edinburgh yesterday. It was a picture of the tail of a jet airliner and the slogan "The property market is taking off"

Was the jet airliner from Malaysian Airways - a picture of MH370?

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Can someone please remind me why properties in London are worth 18% more than 12 short months ago?

Did they all have a refurb's? Does everyone in London now get 50% off their grocery shopping?

Come on there must be a reason why someone would be willing and able to pay hundreds of thousands more than than they were 12 months ago.

I see two broad camps- the group who are speculating on prices going up and hope to make a nice capital gain and the group who are frightened that prices will go up and are panic buying to 'get on the ladder'.

So the genius of Osborne is that he has been able to exploit both greed and fear with his Help to Buy scheme.

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1. UK has very old and stable property laws

2. Non-doms can live here without paying any taxes on money held offshore - they can even bring interest earned from offshore investments here without paying tax. Or just buy some property and sell it including antiques and paintings paying a marginal cost.

3. Property in popular safe haven post codes in London have launched into the stratosphere with rich people from China, Cyprus, Russia, Syria, Iraq, Libya all trying to hide their money somewhere to prevent confiscation for fraud (UK anti money laundering is only for the little folks)

4. Property surrounding these post codes are increasing in value so you can claim bragging rights

5. Rich people pay for goods and services so those earning cash from these services can afford to buy homes

6. The people stretching themselves to buy because of the rises are just the poor mugs who don't understand debt but want to live in London

7. When the s*it hits the fan - London will still retain a politcal power base with access to nuclear weapons, friends of USA ans sympathetic to the rich people's tax requirements

Fail!

1. UK has very old and stable property laws

> hey have not changed in the last 12 months.

2. Non-doms can live here without paying any taxes on money held offshore - they can even bring interest earned from offshore investments here without paying tax. Or just buy some property and sell it including antiques and paintings paying a marginal cost.

> Again not changed in the last year.

3. Property in popular safe haven post codes in London have launched into the stratosphere with rich people from China, Cyprus, Russia, Syria, Iraq, Libya all trying to hide their money somewhere to prevent confiscation for fraud (UK anti money laundering is only for the little folks)

> Some increased deman from here, but enough for property to really be worth 20% more than 12 months ago?

4. Property surrounding these post codes are increasing in value so you can claim bragging rights

> Hmm. Fail :)

5. Rich people pay for goods and services so those earning cash from these services can afford to buy homes

> Has this changed in the last 12 months?

6. The people stretching themselves to buy because of the rises are just the poor mugs who don't understand debt but want to live in London

> But would they really offer 20% more than last year?

7. When the s*it hits the fan - London will still retain a politcal power base with access to nuclear weapons, friends of USA ans sympathetic to the rich people's tax requirements

> Again this has not changed in the last year. If anything, after the Syria 'chickening out' the US are less friendly towards us.

No good reasons above for a property to appreciate 20% in 12 months.

Traditionally asset inflation has been driven by reducing lending standards, but I can't say I have noticed that with the exception of help-to-buy, which I doubt would drive a 18% increase in 12 months. 18% is a HUGE increase on assets that are already very expensive.

Interestingly the higher prices rise the exponentially more difficult it is to achieve percentage gains, I believe this is why if you look at London prices over the last 12 months they have actually gone exponential!!

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There seems no logical or technical explanation for why exactly the same properties on London could be worth 18% more than 12 months ago.

My conclusion is greed and fear, but where is the money coming from as gross lending is not rising? Could it be people repaying their mortgages at ultra low interest rates masking new jumbo mortgages that banks must be lending?

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There seems no logical or technical explanation for why exactly the same properties on London could be worth 18% more than 12 months ago.

My conclusion is greed and fear, but where is the money coming from as gross lending is not rising? Could it be people repaying their mortgages at ultra low interest rates masking new jumbo mortgages that banks must be lending?

I think you're over analysing. Thanks to Osborne London hpi has been on a rip for years, 12.3% to Dec 2013 alone (below). Add to that the upside kick that's just come in from HtB2, and I think 15% would be a reasonable expectation for 2014. Capital flight is the cherry on top, an additional 2-3% from China/Russia and you've got your headline figure.

article-0-1B9B53CE00000578-264_634x587.jpg

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Can someone please remind me why properties in London are worth 18% more than 12 short months ago?

Did they all have a refurb's? Does everyone in London now get 50% off their grocery shopping?

Come on there must be a reason why someone would be willing and able to pay hundreds of thousands more than than they were 12 months ago.

[spelling]

The demand-to-supply ratio has increased.

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Can someone please remind me why properties in London are worth 18% more than 12 short months ago?

Did they all have a refurb's? Does everyone in London now get 50% off their grocery shopping?

Come on there must be a reason why someone would be willing and able to pay hundreds of thousands more than than they were 12 months ago.

[spelling]

They're not worth that much more now. They were just undervalued a year ago. Of course.

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I see two broad camps- the group who are speculating on prices going up and hope to make a nice capital gain and the group who are frightened that prices will go up and are panic buying to 'get on the ladder'.

So the genius of Osborne is that he has been able to exploit both greed and fear with his Help to Buy scheme.

Don't forget cash buyers who don't really care if the market goes up or down, they just need a 'safe' place to park some of their cash! or get it out of their home country!

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Can someone please remind me why properties in London are worth 18% more than 12 short months ago?

Did they all have a refurb's? Does everyone in London now get 50% off their grocery shopping?

Come on there must be a reason why someone would be willing and able to pay hundreds of thousands more than than they were 12 months ago.

[spelling]

No one can afford to sell, hardly any property around so if you have to buy you pay more. in our area within a half mile radius, according to rightmove only two properties between £360K and £1.2m

Edited by arrgee1991

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Can someone please remind me why properties in London are worth 18% more than 12 short months ago?

18% measured in £?

How much has the pound been devalued in that time? Probably not 18% in one year. But it was more than that at the start of QE, so maybe that 18% is just catching up with ...

... hang on ...

... yeah, catching up with the bubble that caused all the trouble in the first place. Whoops!

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18% measured in £?

How much has the pound been devalued in that time? Probably not 18% in one year. But it was more than that at the start of QE, so maybe that 18% is just catching up with ...

... hang on ...

... yeah, catching up with the bubble that caused all the trouble in the first place. Whoops!

On 28th March this was where GBP was at since QE started March 2009

USD +18%

Yen +22%

Euro +8%

CAD +2%

AUD -18%

CHF -11%

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On 28th March this was where GBP was at since QE started March 2009

Whoosh!

I wouldn't propose to measure the £'s debasement by comparing it to other currencies with no intrinsic value. And its international strength appears to be substantially down to that "safe haven" status.

What you need to look at is the money supply. That gives a measure of debasement, stripping out artificial and unsustainable effects. And it shows that big bubble 2001-8 of double-digit real inflation masked in the RPI/CPI measures by the rise of cheap manufacturing in China et al.

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Can someone please remind me why properties in London are worth 18% more than 12 short months ago?

Did they all have a refurb's? Does everyone in London now get 50% off their grocery shopping?

Come on there must be a reason why someone would be willing and able to pay hundreds of thousands more than than they were 12 months ago.

[spelling]

Fear.

Anecdotal: one of our neighbours is buying a larger property. Family is growing, so they'll need a bigger place in 3-5 years. However they're going for it now "before it becomes too expensive".

He vigorously agrees that houses are overpriced, but his fear of being stuck in a 2-bedder with multiple rugrats trumps everything.

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Fear.

Anecdotal: one of our neighbours is buying a larger property. Family is growing, so they'll need a bigger place in 3-5 years. However they're going for it now "before it becomes too expensive".

He vigorously agrees that houses are overpriced, but his fear of being stuck in a 2-bedder with multiple rugrats trumps everything.

It's hard to argue (rationally) against this.

There is as much chance of a London correction as there is of it going another 30% and regions 100% over next few years - before topping out with socialised support (MIRAS etc.).

I would have said someone was bonkers to buy in 2010 and was spectacularly wrong. Fool me once ...

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