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rogersv

London Property Prices Will Stop Rising ?

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Hi, one conundrum for you guys.

London HAS or HAS NOT a property bubble ?. After reading articles from both sides for the last 2 years in the London property market, here two examples:

Business Insider:

These charts show how London's property bubble may burst at any moment
http://www.businessinsider.com.au/hsbc-london-house-price-and-earnings-charts-2015-12

Absolutely the opposite ...

Will UK Interest Rate Rises Crash House Prices?
This just seems unsustainable but with an increasing immigration, house shortage, help-to-buy scheme with governments borrowing a lot of money, its just doesn't really looks it can't stop. But none of us can´t afford to buy in the next 5 years with headlines saying that prices could soar 50% in the next 10 years.
Thanks
Roger

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its just a spectulave market for investors and as we know they blow bubbles, interest is in housing, its a fad and what is important is that the price relative to incomes so assume prices will rise but wages will rise faster when the fad shifts to something else because its not like the people comming to the uk have any cash is it? not many of them are in a position to enter this market, most of the buyers are cash rich and as we know, a fool and his money...

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Hi Roger.

Roll-dee-roll.

Firstly, it's guys and gals. (Winkie and fru-gal et al).

Secondly, 50% over 5 years is around 4.2% compound which is much less than previously and is based on assumptions that have been made on the previous few years.

Thirdly, the shortage of properties - within 10 miles of 'London', as at 0100/2015/12/20 there are 42,053 properties for sale on prime location.com. that's not a lot (?). And some more 10's of thousands of new build places coming online in the next few months.

Fourthly, immigration- of course, all our new guests will be able to afford £450k for a 1-bed flat!

Fifthly, investors-has the pound just buckled? Are other countries now pulling in their tendrils and hunkering down for a global crash? The percipient seem to be....

Sixthly, when doctors, bankers, lawyers and others on £80k+ per annum have to house share to be within 50 mins of London workspace, of course we can support another 50% increase.

As our esteemed friends across the pond would say... "Do the math"

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Hi Roger.

Roll-dee-roll.

Firstly, it's guys and gals. (Winkie and fru-gal et al).

Secondly, 50% over 5 years is around 4.2% compound which is much less than previously and is based on assumptions that have been made on the previous few years.

Thirdly, the shortage of properties - within 10 miles of 'London', as at 0100/2015/12/20 there are 42,053 properties for sale on prime location.com. that's not a lot (?). And some more 10's of thousands of new build places coming online in the next few months.

Fourthly, immigration- of course, all our new guests will be able to afford £450k for a 1-bed flat!

Fifthly, investors-has the pound just buckled? Are other countries now pulling in their tendrils and hunkering down for a global crash? The percipient seem to be....

Sixthly, when doctors, bankers, lawyers and others on £80k+ per annum have to house share to be within 50 mins of London workspace, of course we can support another 50% increase.

As our esteemed friends across the pond would say... "Do the math"

5 years of 4.2% compound interest works out to a 22.8%

you need about 8.447% PA to get a 50% increase in 5 years.

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Sorry, mis read that is right 50% over 10 years is nothing special only 4.2%.

I don't think they are going up 50% anyway, we are looking at a meltdown at some point soon.

where is the money going to come from to do this, they system is broke.

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Roger – the short answer is it has and prices have stopped rising. Asking prices that is, which will show up in selling price indices soon, which will accelerate price falls in 2016.

See for yourself what's happening to asking prices with the Property Tracker tool applied to Rightmove listings. Here's a couple of encouraging reductions I've found today:

A newbuild in King's Cross http://www.rightmove.co.uk/new-homes-for-sale/property-50864770.html - £800,000 on 29 Nov > £700,000 today

A four bedroom house requiring total modernisation in Deptford http://www.rightmove.co.uk/property-for-sale/property-50857768.html - £700,000 in July > £650,000 in August > £550,000 in September > £520,000 in November > £500,000 today

Shame these reductions haven't yet brought us to sensible levels, but they show that the mania phase is levelling off and sellers are losing pricing power as the pool of buyers thins out. Reality beckons.

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Good spot and agreed. So purchased for £728,000 inc stamp duty. Bet they've put a lot of money into that renovation, which has taken a year. Say £150k - £200k? And they want someone to shell out £1,153,750 inc stamp duty for it! Just incredible. No wonder they came down so sharply from £1.3m.

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Good spot and agreed. So purchased for £728,000 inc stamp duty. Bet they've put a lot of money into that renovation, which has taken a year. Say £150k - £200k? And they want someone to shell out £1,153,750 inc stamp duty for it! Just incredible. No wonder they came down so sharply from £1.3m.

According to Zoopla you could have bought a house in 1999 in that road for £149,000. In 96 it was £75K and people say property is not unaffordable

http://www.zoopla.co.uk/house-prices/london/drakefell-road-se4/?num_months=240&sd=desc&so=last_sale_date&page_size=&pn=2

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its just a spectulave market for investors and as we know they blow bubbles, interest is in housing, its a fad and what is important is that the price relative to incomes so assume prices will rise but wages will rise faster when the fad shifts to something else because its not like the people comming to the uk have any cash is it? not many of them are in a position to enter this market, most of the buyers are cash rich and as we know, a fool and his money...

fads only last a few weeks, months, maybe a couple of years, this fad has been rolling for the past 30 years. owning a home should not be considered a fad.

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£2,550,000 today (24 March)

shoulda bought on 11 Jan i guess

Clearly 11 Jan was the agent saying "let's try a lower price to see if can get some interest, may even start a bidding war"

4 weeks later, still no interest, so sellers return to the emotional comfort blanket of a higher price.

Edited by Mikhail Liebenstein

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