19 year mortgage 8itch Posted January 15, 2015 Share Posted January 15, 2015 Couldn't agree more. My wife who is from Camden Town originally thinks I am crazy to want to spend my time sailing, travelling, doing adventurous stuff with the kids, sport etc. Its only about work and buying property! Maybe a little light relief of going to a museum and and overpriced and overcrowded posh cafe! Sounds like a real catch. Quote Link to comment Share on other sites More sharing options...
Andy T Posted January 16, 2015 Share Posted January 16, 2015 So my advice (which I am sure people dont need) is dont think about the London market the same way as the rest of the country. Ie inflation up - interest rates up - prices down etc etc etc as there will be a Russian oligarch standing behind you happy to park his money out of his country. I imagine that a Russian oligarch wouldnt even care if the values went down by 20% as his money in property in london is not taxed and is safe. You say 'London' as a catch all, but I don't see that foreign money and investors are buying all types of property, in all areas of London. Normal people have bought in London, at prices influenced by prime London, with assistance of heavy government props. Some of these will of been in rough or previously rough areas, ex-local authority, dumps, sheds, etc. I don't see how these 'normal' buyers are not going end up in negative equity when things change, even if they bought back in 2009. Foreign money isn't going to pick up the pieces and maintain values in rougher boroughs, in the absence of cheap mortgages and Help to Buy type props. Quote Link to comment Share on other sites More sharing options...
worried1 Posted January 16, 2015 Share Posted January 16, 2015 You say 'London' as a catch all, but I don't see that foreign money and investors are buying all types of property, in all areas of London. Normal people have bought in London, at prices influenced by prime London, with assistance of heavy government props. Some of these will of been in rough or previously rough areas, ex-local authority, dumps, sheds, etc. I don't see how these 'normal' buyers are not going end up in negative equity when things change, even if they bought back in 2009. Foreign money isn't going to pick up the pieces and maintain values in rougher boroughs, in the absence of cheap mortgages and Help to Buy type props. That is what I am seeing in my part of outer London - people not scared of borrowing £500k on a relatively tiny income and not really baulking at what houses cost. This is pocket money to the foreign investors, but has the ability to ruin a lot of normal people. Of course, most of them don't see that because they are too busy calculating what they will spend their 25% profit on when they sell in a year's time... The problem is that we still need a trigger. The talk of interest rates going up had already moved to 2016 before the inflation announcement this week, and massive multiple-mortgages still seem to be available despite MMR. Quote Link to comment Share on other sites More sharing options...
thehowler Posted January 18, 2015 Share Posted January 18, 2015 I think the foreign money as a driver is more myth than meaningful. It might pay for the glittering blocks along the riverfront but what's driving the city-wide rise has always been cheap money and ambitious couples - like the OP and partner - who are ready to take the debt on. When the banks take the easy money away, prices tank. It might be fair to say that property in the UK was undervalued in 97 and lawyers/agents were almost talking you out of bothering to buy, there was no property service industry like today. But rather than foreigners arriving with suitcases of cash to buy modest terraces in Acton etc, I see it as a long easy-credit binge from 2000-onwards to keep the economy chugging as the West declined. The chug hiccuped in 2008, first sign of the artifice/rigging exposed behind the scenes, and then they fired it up again. I feel as though we're getting close to another hiccup now, but there's still an awful lot of cheap money sloshing around. But I can see London crashing, just as it has at points over the last 100 years, always related to events and always fragile. You can't have an economic model that only pays out, it would be like a desert casino where nobody can lose as long as they put their chips on the table. Casinos need suckers. Even Tokyo crashed. London is no different, they can't take us back to an 80s style public sector state and preserve the common wealth, the property gains will be stripped away. Quote Link to comment Share on other sites More sharing options...
roblpm Posted January 23, 2015 Author Share Posted January 23, 2015 I think the foreign money as a driver is more myth than meaningful. It might pay for the glittering blocks along the riverfront but what's driving the city-wide rise has always been cheap money and ambitious couples - like the OP and partner - who are ready to take the debt on. When the banks take the easy money away, prices tank. It might be fair to say that property in the UK was undervalued in 97 and lawyers/agents were almost talking you out of bothering to buy, there was no property service industry like today. But rather than foreigners arriving with suitcases of cash to buy modest terraces in Acton etc, I see it as a long easy-credit binge from 2000-onwards to keep the economy chugging as the West declined. The chug hiccuped in 2008, first sign of the artifice/rigging exposed behind the scenes, and then they fired it up again. I feel as though we're getting close to another hiccup now, but there's still an awful lot of cheap money sloshing around. But I can see London crashing, just as it has at points over the last 100 years, always related to events and always fragile. You can't have an economic model that only pays out, it would be like a desert casino where nobody can lose as long as they put their chips on the table. Casinos need suckers. Even Tokyo crashed. London is no different, they can't take us back to an 80s style public sector state and preserve the common wealth, the property gains will be stripped away. Just to clarify as the OP - when we bought our first flat at £94k I think we just about had a joint income of £94k. When we bought the second flat at about £320k we only needed a £200k mortgage, actually I think my wife had stopped working but I was earning about £75k. So not exactly nutty multiples. My original point in this thread was that is it obviously easy to be overleveraged, but in a low interest, cheap money, asset inflation bubble if you want to keep up with the jones's you need a bit of leverage. We sold up, and are now completely debt free (actually I owe £320 on my amex credit card which I pay off every month, just use it to get airmiles!). We will never be able to move back to London. Luckily I dont particularly want to. My wife might want to though. Just saying that hpc (and myself) called it completely wrong on London over the last 10 years. Quote Link to comment Share on other sites More sharing options...
worried1 Posted January 27, 2015 Share Posted January 27, 2015 Just saying that hpc (and myself) called it completely wrong on London over the last 10 years. Totally agree. As someone who has been browsing here for about the same time, I often think that finding this site was one of the worst things that I did in hindsight! In reality, it wouldn't have made any difference. The reason that I found this site in the first place is that something seemed very wrong even back then. Whilst I was never the most 'bearish' on the site, a lot of the arguments really made (and still make) sense. It is the last 5 years that have baffled me the most. After the slight fall in prices in 2007-8, they quickly bounced back in 2009-10, and there was no way that I could see them doubling again from there by 2015 when they were already so over-valued. I can't see anything apart from hindsight that would make me feel differently if I has my time again. Similarly, I don't feel minded to buy into the market now in 2015, but I'll regret that if prices double again before 2020! Quote Link to comment Share on other sites More sharing options...
Fed_Up Posted January 27, 2015 Share Posted January 27, 2015 I wouldn't say HPC has been wrong exactly. Housing speculators were in for a fall but were then saved from a grazed knee by mummy government's apron strings and have been dangling there giggling away ever since, thinking they're invincible. Quote Link to comment Share on other sites More sharing options...
worried1 Posted January 27, 2015 Share Posted January 27, 2015 I wouldn't say HPC has been wrong exactly. Housing speculators were in for a fall but were then saved from a grazed knee by mummy government's apron strings and have been dangling there giggling away ever since, thinking they're invincible. Absolutely. HPC should have been right with assumptions based on any previous cycle. The government stepped in and did what they did, and now not only do those who benefitted feel invincible, but those who were cheated now feel even more desperation to 'get on the ladder'. All this whilst building the bubble so big that they can justify more and more crazy measures to stop it from bursting, and they will get increasing support because so many people have bought in. Clever really... Quote Link to comment Share on other sites More sharing options...
New_Paradigm Posted January 27, 2015 Share Posted January 27, 2015 worried1, it is a NEW PARADIGM Prices by 2020 are likely to double. Quote Link to comment Share on other sites More sharing options...
longgone Posted January 27, 2015 Share Posted January 27, 2015 worried1, it is a NEW PARADIGM Prices by 2020 are likely to double. good news then Quote Link to comment Share on other sites More sharing options...
worried1 Posted January 27, 2015 Share Posted January 27, 2015 good news then Great news for investors, developers, speculators, the banks and the government, very bad news for the rest of us. Quote Link to comment Share on other sites More sharing options...
longgone Posted January 27, 2015 Share Posted January 27, 2015 (edited) Great news for investors, developers, speculators, the banks and the government, very bad news for the rest of us. i have given up worrying about it , my savings have been rapped by this system already , may as well finish me off "the rest rest of us being" non home owners Edited January 27, 2015 by longgone Quote Link to comment Share on other sites More sharing options...
worried1 Posted January 27, 2015 Share Posted January 27, 2015 "the rest rest of us being" non home owners No, the rest of us includes most home owners as well. Anyone who is currently paying down a mortgage on a 2 bed flat and wants to move to a 3 bed house has been shafted as well. It is all very well making £200k free money, but that is no good when you have got to pay £400k more to get into the next house. Downsizers have done ok, but you assume that a lot of them are giving money to their kids to buy in at the bottom end. Quote Link to comment Share on other sites More sharing options...
WatchingFromTheHills Posted January 27, 2015 Share Posted January 27, 2015 OK. This is proof either of the continuing madness of the current economic climate, or that everyone on this forum is, has been and always will be wrong now and forever ... This is a half-decent terraced house in a part of SW19 I monitor regularly. This is how it's being marketed right now on Rightmove. For £1.25m. http://www.rightmove.co.uk/property-for-sale/property-49306169.html And here it is as it was sold last May - for £500k. http://www.rightmove.co.uk/house-prices/detailMatching.html?prop=50202734&sale=1238695&country=england As far as I can make out it's the same house!!! Unless I've got completely the wrong end of the stick, nothing has happened to it - nothing - but in the space of a year, it's grown £750k in value!! Even vendors bought it very cheap, for some reason, and even if they spent £300k doing it up, and even if £1.25m is wildly overpitching it, this is still madness!! Of course, the vendors may not get £1.25m, but if it is what it appears to be, it's a depressing example of people's expectations. For the record, the house overlooks a relatively busy road, on the other side of which is the main Wimbledon to Waterloo overland and District Line rail tracks. Quote Link to comment Share on other sites More sharing options...
New_Paradigm Posted January 27, 2015 Share Posted January 27, 2015 OK. This is proof either of the continuing madness of the current economic climate, or that everyone on this forum is, has been and always will be wrong now and forever ... This is a half-decent terraced house in a part of SW19 I monitor regularly. This is how it's being marketed right now on Rightmove. For £1.25m. http://www.rightmove.co.uk/property-for-sale/property-49306169.html And here it is as it was sold last May - for £500k. http://www.rightmove.co.uk/house-prices/detailMatching.html?prop=50202734&sale=1238695&country=england As far as I can make out it's the same house!!! Unless I've got completely the wrong end of the stick, nothing has happened to it - nothing - but in the space of a year, it's grown £750k in value!! Even vendors bought it very cheap, for some reason, and even if they spent £300k doing it up, and even if £1.25m is wildly overpitching it, this is still madness!! Of course, the vendors may not get £1.25m, but if it is what it appears to be, it's a depressing example of people's expectations. For the record, the house overlooks a relatively busy road, on the other side of which is the main Wimbledon to Waterloo overland and District Line rail tracks. That it is. They are wrong. Beautiful house. I bet it will be on the market for £2.5M in a couple of years. It just more than doubled in 8 months. It is a new paradigm. Quote Link to comment Share on other sites More sharing options...
longgone Posted January 27, 2015 Share Posted January 27, 2015 (edited) That it is. They are wrong. Beautiful house. I bet it will be on the market for £2.5M in a couple of years. It just more than doubled in 8 months. It is a new paradigm. i reckon 4m in 12 months time , new_paradigm is being very conservative with his pricing we will make an agent out of you yet mate 230k profit a month is the norm now lol beautiful house do me a favour , it`s a first time buyer house parading as someone dream home that is a dream house , not that thing http://www.zoopla.co.uk/new-homes/details/35020739#7x37KwQxuqTPZ1Mm.97 per sqft the mansion is actually cheaper funny thing is you could build the mansion for 600-800k depending on spec Edited January 27, 2015 by longgone Quote Link to comment Share on other sites More sharing options...
worried1 Posted January 27, 2015 Share Posted January 27, 2015 OK. This is proof either of the continuing madness of the current economic climate, or that everyone on this forum is, has been and always will be wrong now and forever ... This is a half-decent terraced house in a part of SW19 I monitor regularly. This is how it's being marketed right now on Rightmove. For £1.25m. http://www.rightmove.co.uk/property-for-sale/property-49306169.html And here it is as it was sold last May - for £500k. http://www.rightmove.co.uk/house-prices/detailMatching.html?prop=50202734&sale=1238695&country=england As far as I can make out it's the same house!!! Unless I've got completely the wrong end of the stick, nothing has happened to it - nothing - but in the space of a year, it's grown £750k in value!! Even vendors bought it very cheap, for some reason, and even if they spent £300k doing it up, and even if £1.25m is wildly overpitching it, this is still madness!! Of course, the vendors may not get £1.25m, but if it is what it appears to be, it's a depressing example of people's expectations. For the record, the house overlooks a relatively busy road, on the other side of which is the main Wimbledon to Waterloo overland and District Line rail tracks. That is one of the best yet. There have been quite a few examples of houses doubling in a year with a cheap refurb done, or adding 50% with no refurb at all, but 150% with no refurb done is a new one. Something is a little wrong though because I can't imagine that house in Wimbledon, even a s**tty part of it, going for £500k in 2014, the market was too mad then. However, I think that this could actually be described as a new paradigm in a way. Prices compared to income have never been this high, government incentives to buy, foreign investment and interest rates all at crazy values. In. Any normal cycle, we'd have had a crash years ago. I also have sympathy with the view that there could be more rises yet, but everything is cyclical. Eventually the government will run out of money, the far eastern economies will falter further or other hotspots will start occupying London's position as investors favourite. Of course, there might be others to step in to buy the 1 bed flats in Kennington that will be worth several million by then, but I am not sure who it is yet. Quote Link to comment Share on other sites More sharing options...
New_Paradigm Posted January 27, 2015 Share Posted January 27, 2015 However, I think that this could actually be described as a new paradigm in a way. Prices compared to income have never been this high, government incentives to buy, foreign investment and interest rates all at crazy values. In. Any normal cycle, we'd have had a crash years ago. You named it! I also have sympathy with the view that there could be more rises yet, but everything is cyclical. Eventually the government will run out of money, the far eastern economies will falter further or other hotspots will start occupying London's position as investors favourite. Of course, there might be others to step in to buy the 1 bed flats in Kennington that will be worth several million by then, but I am not sure who it is yet. Absolutely, don't have any doubt! Worried1, I think we are finally in the same vibe! Quote Link to comment Share on other sites More sharing options...
silver surfer Posted January 27, 2015 Share Posted January 27, 2015 (edited) However, I think that this could actually be described as a new paradigm in a way. Prices compared to income have never been this high, government incentives to buy, foreign investment and interest rates all at crazy values. In. Any normal cycle, we'd have had a crash years ago. I also have sympathy with the view that there could be more rises yet, but everything is cyclical. Eventually the government will run out of money, the far eastern economies will falter further or other hotspots will start occupying London's position as investors favourite. Of course, there might be others to step in to buy the 1 bed flats in Kennington that will be worth several million by then, but I am not sure who it is yet. Why make it all so complicated? Mortgages have never been cheaper, so houses have never been so expensive. What's difficult about that? Mortgages are now pretty much at rock bottom, so houses aren't going to get that much more expensive (ignore a few streets in central London that everyone gets worked up about but are actually irrelevant to the mainstream of British property). Bad news for BTL. Mortgages are unlikely to get significantly more expensive in the next three to five years, so houses aren't going to imminently crash. Mortgages will likely have a trend line that slowly rises after that, for maybe the next 25 or 30 years. That's a reasonable first approximation if you look at the history of base rates from the end of second world war to now. At which point we'll be back to where we were in the mid 70's to mid 90's, which will then, once again, make houses a great investment. So the moral of the story is kick back and rent until about 2045 or 2050, then urge your kids/grandkids to buy. If you really, really want to be an owner occupier, then okay it's your money, but think of it as more akin to say owning a boat or some other self indulgent money pit, and just get the smallest cheapest property that you, or more likely your partner, can live with. Edited January 28, 2015 by silver surfer Quote Link to comment Share on other sites More sharing options...
cool_hand Posted February 6, 2015 Share Posted February 6, 2015 Most of us will be dead by 2045 you nit twit. I want to have a life before I die a but government policy is F***CKING US ALL IN THE *SS. Quote Link to comment Share on other sites More sharing options...
Recommended Posts
Join the conversation
You can post now and register later. If you have an account, sign in now to post with your account.