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mewParadigm

Has London Panic Buying Died Down?

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In today's Times property section there is a piece by Anne Ashworth, ramper extraordinaire, entitled, 'Has the market peaked?'

When you see the likes of this from the likes of her, you do think sentiment has begun to change.

Still seeing crazy APs in the areas I check, though. Two just lately in our immediate area (Kingston) both WAY more than any previous sold price for similar. Both vendors are of non Brit origin - one has been here just a few yrs and is now going home, the other has been here over 20 years and planning to downsize. 'If,' as he said to Mr B, 'someone will pay...'

But I did hear that the other is thinking of 'trimming her price' since presumably there has not been much interest, or at least nobody getting killed in the stampede to snap it up.

Edited by Mrs Bear

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Can offer anecdotal experience of a girl at work. Early 30's, first time buyer, can't be earning more than 50k, will only live in Barnes area and is looking at anything up to 550k. I haven't asked where the funding is coming from. I haven't bothered giving any HPC style advice and just bite my tongue and give helpful suggestions when she shows me flats like "Have you thought about where to park your car?", "how about service charges?" that sort of thing. The search started about 8 months ago at a budget of 400k for a 2 bed flat, with a garden, 2 bathrooms etc etc. We're now up to £550k, still 2 bedrooms, but the garden has gone, along with any hope of a balcony or an ensuite, and she's saying things like "I'm not being fussy am I, but I can't see to find anything I like, everything keeps going up?" Despite this, she thinks HPI is a good thing which is why she is buying as an "investment", yet she's unable to see that HPI keeps increasing her potential mortgage debt and pricing her out of anything she'd want to live in. All I hear is that prices are rising and good property is selling fast. At the moment.

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Can offer anecdotal experience of a girl at work. Early 30's, first time buyer, can't be earning more than 50k, will only live in Barnes area and is looking at anything up to 550k. I haven't asked where the funding is coming from. I haven't bothered giving any HPC style advice and just bite my tongue and give helpful suggestions when she shows me flats like "Have you thought about where to park your car?", "how about service charges?" that sort of thing. The search started about 8 months ago at a budget of 400k for a 2 bed flat, with a garden, 2 bathrooms etc etc. We're now up to £550k, still 2 bedrooms, but the garden has gone, along with any hope of a balcony or an ensuite, and she's saying things like "I'm not being fussy am I, but I can't see to find anything I like, everything keeps going up?" Despite this, she thinks HPI is a good thing which is why she is buying as an "investment", yet she's unable to see that HPI keeps increasing her potential mortgage debt and pricing her out of anything she'd want to live in. All I hear is that prices are rising and good property is selling fast. At the moment.

Couldn't you just be honest with her - she cannot afford to buy property in Barnes. If she won't live anywhere else she will have to rent?

Perhaps she could buy this studio for £275k and then admire Barnes from across the river and save the difference for her nights out!

http://www.rightmove.co.uk/property-for-sale/property-29446188.html?premiumA=true

I am in north east London - I dont see much evidence of price falls (at least not on places you would actually want to live in).

Edited by MARTINX9

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Couldn't you just be honest with her - she cannot afford to buy property in Barnes. If she won't live anywhere else she will have to rent?

Perhaps she could buy this studio for £275k and then admire Barnes from across the river and save the difference for her nights out!

http://www.rightmove.co.uk/property-for-sale/property-29446188.html?premiumA=true

I am in north east London - I dont see much evidence of price falls (at least not on places you would actually want to live in).

Tried that and I get a flat "I absolutely will NOT live anywhere else". Good luck with that one! She's currently renting, and there's something about needing a 2 bed to have a lodger help with the mortgage (yes I know). I totally get your studio logic (in her case) but I'm dealing with someone who has no clue about anything and has only seen HPI in her sentient lifetime. It's her problem not mine. Does give a good daily insight into what's going on though and the mindset of the sort of person buying into this right now.

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i think a lot of immigrants in london have the same mentality as this girl

they're new to this country and think that prices can only ever go up so panic about never being able to buy if they don't buy now

i suppose thats why those useless new build part ownership cages sell so well

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I think we have seen the top now. I don't think there'll be a massive crash in London, but the market may go sideways this year.

The main factor keeping this going is supply. The mortgage tightening is working a little.

In E8, where I live the supply is so low for houses (probably about 10 or so family homes max £1million) that people are are asking silly money. And in some cases they are getting it. Hackney is in a bubble of its own.

The sentiment is changing I think though, particularly at the £1.5m+ area that I'm looking at where buyers are more picky. I've had an agent call me regarding a house that was on for £1.2m that fell through (mortgage fell through - there's been a few of these). Note they only had one bidder at £1.2, and the rest were around 1.1....

So the issue is there is sometime that person who is willing to pay over the odds at the moment. It only takes one!

I earn a good six figure salary and have a pretty good 6 figure deposit, yet am struggling to buy a great home in Hackney. Who is buying this stuff? Is it people moving from West London with a lot of equity caused by foreign buyers buying into west London? I think it's just a ripple effect from the prime areas, and people moving from Islington etc.

I'm personally waiting - if something great comes along, I will accept paying a premium to live in a great house for the next 10-15 years. I won't buy any old rubbish at what is highly likely a peak level!

Houses like this at the top end of the hackney market are sticking hard (north facing garden, fairly busy road, inside needs a lot of re-doing):

http://www.zoopla.co.uk/for-sale/details/32507765?search_identifier=bbb7d0e16690ccbb7530c1d3b1f05c8e

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like you i'm constantly thinking who is buying this stuff? who is stupid enough to pay that price? where is the money coming from?

but they just keep coming

like you say it only takes one and a new high point is set

i'm assuming cash buyers and the bomad rich will take longer to adjust to the new reality of mmr and the end of ffl so we may see a couple more months of rises before the stats start to show falls

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It is the lack of supply in hackney, house prices just keep going up, phenomenal gentrification has resulted in a complete change in the make up of the residents, the hackney of now is unrecognisable, in many way it is a much better place to live let me rephrase that it is better in every way.

In many areas the pitbulls have been replaced with poodles.

The middle class moving in are so much nicer and friendlier, makes a change from the great unwashed.

Edited by macbeth79

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Can offer anecdotal experience of a girl at work. Early 30's, first time buyer, can't be earning more than 50k, will only live in Barnes area and is looking at anything up to 550k. I haven't asked where the funding is coming from. I haven't bothered giving any HPC style advice and just bite my tongue and give helpful suggestions when she shows me flats like "Have you thought about where to park your car?", "how about service charges?" that sort of thing. The search started about 8 months ago at a budget of 400k for a 2 bed flat, with a garden, 2 bathrooms etc etc. We're now up to £550k, still 2 bedrooms, but the garden has gone, along with any hope of a balcony or an ensuite, and she's saying things like "I'm not being fussy am I, but I can't see to find anything I like, everything keeps going up?" Despite this, she thinks HPI is a good thing which is why she is buying as an "investment", yet she's unable to see that HPI keeps increasing her potential mortgage debt and pricing her out of anything she'd want to live in. All I hear is that prices are rising and good property is selling fast. At the moment.

how can people earning 50k afford 550k mortgage ? i assume you are talking of a couple ?

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Getting lots of calls now from slightly more eager agents! They are trying for the "last hoorah" I think before it settles down!

I still don't see a big crash coming, but cooling/perhaps slight dip. Also it depends on which area you look at too as parts of East London may have over-shot but they were quite a bit cheaper than the rest of the market pre summer 2013.

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how can people earning 50k afford 550k mortgage ? i assume you are talking of a couple ?

Nope, I'm talkiing about a single person. I have no idea either how any of this stacks up, especially when they were moaning that their parents aren't helping either? I'm surrounded by this at work, people in their 30's with BTL, IO, Residential mortgage debt running easily into half a mill, and on sub 50k salaies. it's an HPC'ers nightmare/constant source of bemusement.

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Nope, I'm talkiing about a single person. I have no idea either how any of this stacks up, especially when they were moaning that their parents aren't helping either? I'm surrounded by this at work, people in their 30's with BTL, IO, Residential mortgage debt running easily into half a mill, and on sub 50k salaies. it's an HPC'ers nightmare/constant source of bemusement.

unbelievable !!!

earning less than 50k must be IO only surely ?

500k is what 1000 1100 io ?

utter madness , you have to blame the banks with that one lending to people who have no hope of ever repaying even if they did not default !!!!!

i think many bankruptcy order`s will be going through when we get a few interest rate rises, far simpler to walkaway .and start again

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This was said this when people bought in London in 2007. Probably best thing they ever did as prices are up by 30% in many areas. If you can borrow 500k at 4% when prices are going up by 8 to 10% (maybe more) then there is a good profit to be made and no rent to pay of a s21 once or twice a year. And if it all goes wrong just sell and there will probably still be a nice profit compared with renting.

No denying it that most people in London are quids in and some right now. My point was not about any potential gains from here, but simply that the I don't even understand how people are able to get the borrowing in the first place. Co-indidently I was told this morning that she has 190k deposit. Which still leaves a mortgage of 360k on a 50k salary or 7.2x single income. I also heard the words "I keep seeing the same properties online all the time, it's stuff that isn't selling, maybe people are waiting for the crash or something"... But she still wants to buy.

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Keep getting called by agents - 2 more today. They were surprisingly honest - interest is definitely waning and apparently "lots coming on to the market soon".

Definitely the last hurrah before the market either corrects or goes sideways....

Lack of supply and cheap/available credit have been driving this locally to me. Looks like both of those drivers are changing now!

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Zoopla starting to fill up with listings again in E8 - sellers hoping to cash in while they can, including this wreck back to the market again having been under offer twice before with Foxtons:

http://www.zoopla.co.uk/for-sale/details/31067123?search_identifier=bbb7d0e16690ccbb7530c1d3b1f05c8e

Listed summer 2013 with Currell for £900k, then Keatons £915k, and now Foxtons with a cheeky Foxtons price increase to boot.

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