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crashmonitor

Uk Ripple Effect Illustrated By Hometrack Index.

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A bit late because this is the February report.

But it shows not a single city north of Nottingham, excepting Aberdeen, above the 2007 peak...not Sheffield, Leeds or Manchester.

I am very familiar with Nottingham having just sold...but until the ripple hit at the end of last year the market had been f%%ked for the previous decade like so many northern cities. A ripple that had previously undone the Home Counties and then moved onto Northampton finally hit Nottingham.

The ripple may fade as it moves north, can't see northerners paying 400k for God forsaken crap Cambridge style, now 50% above 2007 levels. That begs the question what are the good folk of Cambridge on and do those f%%k wits know what they are doing. Indeed a ripple is supposed to fade, but for some reason the wave increased as it passed over Cambridge surpassing the epicentre of London.

https://www.hometrack.com/uk/insight/uk-cities-house-price-index/

Edited by crashmonitor

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Unless that ripple begins to implode at the centre.

Luckyone: My expectation is that this market segment will behave in the same fashion as any other market which has topped out. Supply will increase, volume will decrease for quite a while before prices begin to crumble.

Many of us think that the entire market pricing structure is driven by the high priced segment, as all other properties are priced based on compromises versus the ideal (location, size, commuting etc). When the top end crumbles, everything else will follow.

There have been a lot of discussions on this site related to the fact that the poor market fundamentals will require a catalyst before prices resume their logical downward path. The new property tax regime, along with the decoupling of mortgage rates from the Base Rate, will, in hindsight, prove to be the catalysts.


Like that guy in Japan, early 90s, who delayed buying, and few years later, bought swish place in downtown Tokyo, at same price he nearly buckled into paying for place hours commute away in nowhere-place.

Have higher-stamp-duty. And some C.24. And more MMR. Fewer proceed-able buyers in the market. Owner side looks to be coming under siege.

With the exception of foreign buyers for I haven't got enough info to have a view on the current flows in - (and coming attempts to sell). Apart from looking up info of one buyer in 2014 who paid £2m+ using a lender in Channel Islands. Significant changes in 2012 were not to cool buyer demand at higher prices, despite higher costs. Perhaps it will snap back with a shock. Cause and effect cycles - negative feedback amplification.

2012
There are two aspects with respect to property related taxes :

- The new stamp duty regime
- The cap on tax relief of 25% of gross income

There are three aspects to the new stamp duty regime :

- The 15% stamp duty being imposed on properties valued over £ 2 million held in offshore vehicles after Budget Day
- The Chancellor's warning that he will impose retroactive and large annual fees to properties held in offshore vehicles before Budget Day
- The new 7% stamp duty on properties valued over £ 2 million

This is the opening salvo. There really isn't much logic to the £2 million barrier with respect to the 15% stamp duty on properties held in offshore ownership vehicles as well as the fees imposed on existing structures.

The behavioural effects on the market are not certain but I can see the non-dom universe looking at the changes in the non-dom tax regime (the previous changes with respect to income as well as these changes with respect to property) and seeing that the financial advantages of remaining in the UK are dwindling. For the non-oligarch cohort, the decision to remain in the UK versus repatriating becomes increasingly difficult.

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A bit late because this is the February report.

But it shows not a single city north of Nottingham, excepting Aberdeen, above the 2007 peak...not Sheffield, Leeds or Manchester.

I am very familiar with Nottingham having just sold...but until the ripple hit at the end of last year the market had been f%%ked for the previous decade like so many northern cities. A ripple that had previously undone the Home Counties and then moved onto Northampton finally hit Nottingham.

The ripple may fade as it moves north, can't see northerners paying 400k for God forsaken crap Cambridge style, now 50% above 2007 levels. That begs the question what are the good folk of Cambridge on and do those f%%k wits know what they are doing. Indeed a ripple is supposed to fade, but for some reason the wave increased as it passed over Cambridge surpassing the epicentre of London.

https://www.hometrack.com/uk/insight/uk-cities-house-price-index/

Cambridge is mostly foreigners and Londoners. Local paper had some stats a few months back showing the percentage of locals is falling.

One of their articles...

http://www.cambridge-news.co.uk/Net-migration-Cambridge-rest-UK-8211-fuelling/story-26824882-detail/story.html

130 people did move in from Manchester in 12 months though!

I do know one guy who bought in Cambridge (arbury, sorry, orchard park) in the last year. He is of the view cambridge is where London was 15/20 years ago and his 250/300k flat will be worth the best part of a million in a decade or so...I wouldnt pay that to overlook the A14 sound barrier...

Instinctively that seems insane to me. Cambridge doesnt have the silly money banking stuff. Then again, maybe neither San-francisco/silicon valley, and that area went from being a backwater to most expensive in US, so what do I know.

Also know of a brother and sister who inherited some ex-LA semi in Trumpington. sold for 600k to two foreign (indian?) doctors. Seems insane to me. I recall during the Crash a similar semi in Trumpington sold for £138k at auction.

If you want to get out of London though, but commute in, where do you go? Luton/Slough/Wycombe/Aylesbury/Reading are really quite heavily Islamic nowadays, might put off people raising kids/looking at schools. Harlow/Stevenage/Crawley/Guildford/MK new towns/not 'cultural' Colchester is a bit rough. Chelmsford or Maidstone as costly as cambridge, without the cultural stuff. Northamptonshire for some reason typically costs 50% more for season tickets to London despite being similar time to commute as Cambridge.

If you want to leave London but want the catchet of living somewhere, you're limited to Cambridge/Brighton/Oxford really.

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Also crashmonitor, you know we've clashed so many times on you liking to use 2007 prices as the sort of baseline for value.

Yes many years have passed, without HPI in some North areas on top of the great 2007 value (but mad HPI in others including parts of South Manchester leaving 2007 prices way behind).

Want to give us an idea what you sold your house for, up and around Nottingham way...?

The great housing value.... wasn't it a bungalow?

-------------------------------------------------------------

Contractor forum from last year....

Sept 2015 (BTL Tax Relief Change)

If I had any BTL properties, I'd suck it up. I see property as long game.
-----
+1. Its not too late to get in. If I had any money I would. Its a moral outrage that young people are denied house buying opportunities. But they don't vote. They just whine on social media. So f**k em.
-----
^ This. Make money, help your own family. Fook the whining selfie-stick holding iCrap generation. We are replacing them with useful immigrants anyway
-----

What amazes me though is how many poor feckless renting contractors on here now.

When I started posting in the late 90s on CUK everyone was loaded and looking to buy loads of property.
-----
The people who say they cant afford to buy are generally referring to London, honing in on one of the most expensive cities in the world so Im not surprised.

I have Buy to Let properties up North that have not risen in value since 2005, you can buy a nice 3 bed new build Semi for about £130k. There is no "bubble" and people saying they cant afford to buy are generally incredibly selective about where they want to live.

I get pretty miffed with BTL being the root of all evil. Its only an issue in London, so if you are going to penalise for second homes or investment properties then be selective. Because I tell you know, if you start penalising people buying cheap second homes to let in areas being gentrified that enable other people who wouldnt be able to buy, to instead privately rent, then where are they going to live? The govt will have a much bigger issue on their hands.
-----

Did you know there are places in Britain that are neither London nor "up north"? You seem a bit confused by that point. Most of the UK is way too expensive; it's not a London problem.

And did you also know that £130K is still a lot of money for the average person?


-----

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Cambridge is mostly foreigners and Londoners. Local paper had some stats a few months back showing the percentage of locals is falling.

One of their articles...

http://www.cambridge-news.co.uk/Net-migration-Cambridge-rest-UK-8211-fuelling/story-26824882-detail/story.html

130 people did move in from Manchester in 12 months though!

Thought it would be more, what with AstraZeneca closing up parts of its site in Alderley Edge (South Manchester / Cheshire borders), and taking operations down to Cambridge.

Was also hoping that would see prices around Alderley Edge cool... not so much, although you can rent the house where Alan Turning lived and died. Became a rental on last purchase at £925,000 in 2014.

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If you want to get out of London though, but commute in, where do you go? Luton/Slough/Wycombe/Aylesbury/Reading are really quite heavily Islamic nowadays, might put off people raising kids/looking at schools. Harlow/Stevenage/Crawley/Guildford/MK new towns/not 'cultural' Colchester is a bit rough. Chelmsford or Maidstone as costly as cambridge, without the cultural stuff. Northamptonshire for some reason typically costs 50% more for season tickets to London despite being similar time to commute as Cambridge.

If you want to leave London but want the catchet of living somewhere, you're limited to Cambridge/Brighton/Oxford really.

With the choice of the list you gave I can see why oxford is as expensive as London, despite a 2hr plus commute on sardine packed trains, sad state of affairs indeed!!

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Cambridge is mostly foreigners and Londoners. Local paper had some stats a few months back showing the percentage of locals is falling.

One of their articles...

http://www.cambridge-news.co.uk/Net-migration-Cambridge-rest-UK-8211-fuelling/story-26824882-detail/story.html

130 people did move in from Manchester in 12 months though!

I do know one guy who bought in Cambridge (arbury, sorry, orchard park) in the last year. He is of the view cambridge is where London was 15/20 years ago and his 250/300k flat will be worth the best part of a million in a decade or so...I wouldnt pay that to overlook the A14 sound barrier...

Instinctively that seems insane to me. Cambridge doesnt have the silly money banking stuff. Then again, maybe neither San-francisco/silicon valley, and that area went from being a backwater to most expensive in US, so what do I know.

Also know of a brother and sister who inherited some ex-LA semi in Trumpington. sold for 600k to two foreign (indian?) doctors. Seems insane to me. I recall during the Crash a similar semi in Trumpington sold for £138k at auction.

If you want to get out of London though, but commute in, where do you go? Luton/Slough/Wycombe/Aylesbury/Reading are really quite heavily Islamic nowadays, might put off people raising kids/looking at schools. Harlow/Stevenage/Crawley/Guildford/MK new towns/not 'cultural' Colchester is a bit rough. Chelmsford or Maidstone as costly as cambridge, without the cultural stuff. Northamptonshire for some reason typically costs 50% more for season tickets to London despite being similar time to commute as Cambridge.

If you want to leave London but want the catchet of living somewhere, you're limited to Cambridge/Brighton/Oxford really.

They could come to sunny Birmingham! 49 minutes on the HS2. I've lived here for years and not been stabbed. I did once get beaten unconscious and rolled under a parked car though.

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Also crashmonitor, you know we've clashed so many times on you liking to use 2007 prices as the sort of baseline for value.

Yes many years have passed, without HPI in some North areas on top of the great 2007 value (but mad HPI in others including parts of South Manchester leaving 2007 prices way behind).

Want to give us an idea what you sold your house for, up and around Nottingham way...?

The great housing value.... wasn't it a bungalow?

-------------------------------------------------------------

Well I did do a topic on this...bought for 242.5k in Q1 2012 and sold out for 275k at asking. Very much down to market conditions that have prevailed in the last few months, would have struggled to break even up to the middle of last year.

Would have probably been around 260k in 2007. That pretty much backs up the Hometrack figures showing a 4% post peak price for Nottingham that has been turned around from a sub peak price this time last year.

I don't feel as confident as you that this ripple is somehow going to die, the crazy prices in the south, most especially Cambridge (ex local authority at half a million), are bound to have some knock on effect. And I'm a VI in prices not going up now, just have to be cautious about the nonsense that has occurred down south. There is a big difference in sellinmg a bungalow in a quarter of an acre on a well regarded leafy lane to a one bed drugs den in Poplar for the same money imo. The crazy people live down south not in Nottingham.

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It used to be second homes that forced locals out...now its people paying London prices for things 50 miles out.

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Cambridge is mostly foreigners and Londoners. Local paper had some stats a few months back showing the percentage of locals is falling.

One of their articles...

http://www.cambridge-news.co.uk/Net-migration-Cambridge-rest-UK-8211-fuelling/story-26824882-detail/story.html

130 people did move in from Manchester in 12 months though!

I do know one guy who bought in Cambridge (arbury, sorry, orchard park) in the last year. He is of the view cambridge is where London was 15/20 years ago and his 250/300k flat will be worth the best part of a million in a decade or so...I wouldnt pay that to overlook the A14 sound barrier...

Instinctively that seems insane to me. Cambridge doesnt have the silly money banking stuff. Then again, maybe neither San-francisco/silicon valley, and that area went from being a backwater to most expensive in US, so what do I know.

Also know of a brother and sister who inherited some ex-LA semi in Trumpington. sold for 600k to two foreign (indian?) doctors. Seems insane to me. I recall during the Crash a similar semi in Trumpington sold for £138k at auction.

If you want to get out of London though, but commute in, where do you go? Luton/Slough/Wycombe/Aylesbury/Reading are really quite heavily Islamic nowadays, might put off people raising kids/looking at schools. Harlow/Stevenage/Crawley/Guildford/MK new towns/not 'cultural' Colchester is a bit rough. Chelmsford or Maidstone as costly as cambridge, without the cultural stuff. Northamptonshire for some reason typically costs 50% more for season tickets to London despite being similar time to commute as Cambridge.

If you want to leave London but want the catchet of living somewhere, you're limited to Cambridge/Brighton/Oxford really.

For Luton you can add massive amounts of eastern European's as well

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There seems to be a lot of BOMAD buying (or at least looking) in Milton Keynes for some reason.

In Leighton Buzzard it's the London diaspora.

My local EA in MK tells me that the market has died since April deadline and they anticipate it being dead for a year.

Oddly enough I'm not seeing any huge increase of rental properties on the market here yet but maybe the April deadline LL purchasers have not got around to it yet or they bought with tenants in situ.

Edited by Flopsy

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