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Fairyland

London House Prices Could Fall By More Than 30Pc

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This morning I posted the same link in the other thread - Falling prices, freebies and finite renters. Predicted fall was 10% over next year. Clicked the same link again and the article had some changes. It got bit more bearish - http://www.bloomberg.com/news/articles/2016-07-18/buy-a-london-home-win-a-parking-space-as-developers-seek-buyers

London homebuilders are offering to pay sales taxes, gift 20,000 pounds ($26,800) of furniture and the chance to win a free parking space as Britains vote to leave the European Union damps demand.

Brexit will damage the U.K. economy and residential property values in London could fall by more than 30 percent, Societe Generale SA analysts including Marc Mozzi wrote in a note to clients on Monday. U.K. homebuilder sales will drop by 5 percent, according to Barclays Plc analyst Jon Bell.

Get ready for 30% falls. Edited by Fairyland

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So....just as easy to make money from doing nothing as to lose money without doing anything......easy come, easy go. ;)

Edited by winkie

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30% is just the froth when you consider the average wage multiples to purchase even the most basic shelter, either house prices will fall to much, much lower or wages will have to rise significantly.

I wonder which one it will be. ;)

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30%? That's a couple of years of growth. Just a year in some areas. E.g. Merton was up 30% in a year http://www.homesandproperty.co.uk/property-news/buying/london-house-prices-2015s-top-ten-fastest-rising-boroughs-a93736.html

Of course, prices increasing 30% in a year barely raises an eyebrow now in London, but the thought of them dropping back a year is a disaster. ;)

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This morning, on Bloomberg, an analyst was suggesting more Funding for Lending is needed :rolleyes:.

Expect any announcement to be before the next MPC vote - the FLS tapering begins on Aug 1st

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Got to love this line,

"The U.K. capital’s housing market faces an oversupply of apartments that Londoners can’t afford and fewer landlords want after tax changes made owning real estate less attractive".

However last weeks Home Affairs Committee report on proceeds of crime concluded that,

"the London property investment market are making a safe haven for laundering the proceeds of crime. It calls for much stronger supervision of agents, buyers and sellers. It also says that the key tool for detecting suspicious financial activity across the financial services sector and connected industries, such as real estate, is overloaded to the point of being "completely ineffective"."

http://www.parliament.uk/business/committees/committees-a-z/commons-select/home-affairs-committee/news-parliament-2015/proceeds-of-crime-report-published-16-17/

Hammond was in the past lukewarm on issue such as this but once he see all that tax slipping away he'll no doubt that a greater interest. And it will be the sense of greater regulator exposure that scares away the bubbly money.

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Daily Mail/TIM reporting it now:

http://www.thisismoney.co.uk/money/mortgageshome/article-3695278/House-prices-dip-2-6k-Brexit-vote-says-Rightmove.html

Seems to be on syndication. The hand of government?

Looking at the DM, a whole 26 comments on it, it's amazing how the masses just ignore any negative house price reports. If this article would have been forecasting 30% hpi the numbers of comments would already be in the many hundreds.

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This morning, on Bloomberg, an analyst was suggesting more Funding for Lending is needed :rolleyes:.

If they fund a million, can buy a million pound property that was half a million last week. ;)

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Looking at the DM, a whole 26 comments on it, it's amazing how the masses just ignore any negative house price reports. If this article would have been forecasting 30% hpi the numbers of comments would already be in the many hundreds.

A lot of the articles on the main DM site about HPI get comments that go against the narrative and nearly all highly rated comments want a crash.

This Is Money isn't really visited much, if they feature this article on the main site it'll get loads of comments.

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Got to love this line,

"The U.K. capital’s housing market faces an oversupply of apartments that Londoners can’t afford and fewer landlords want after tax changes made owning real estate less attractive".

However last weeks Home Affairs Committee report on proceeds of crime concluded that,

"the London property investment market are making a safe haven for laundering the proceeds of crime. It calls for much stronger supervision of agents, buyers and sellers. It also says that the key tool for detecting suspicious financial activity across the financial services sector and connected industries, such as real estate, is overloaded to the point of being "completely ineffective"."

http://www.parliament.uk/business/committees/committees-a-z/commons-select/home-affairs-committee/news-parliament-2015/proceeds-of-crime-report-published-16-17/

Hammond was in the past lukewarm on issue such as this but once he see all that tax slipping away he'll no doubt that a greater interest. And it will be the sense of greater regulator exposure that scares away the bubbly money.

That's probably a genuine threat .. but I'm sure we'll get a prize for the conflict of interest in investigating our own corrupt property market while it funds our trade deficit but not our tax base. Damn that one is balanced on a knife edge - did he go to Eaton too? hope it's a better free prize than last time.

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Remember, if it rose 50%, then a 30% fall is back where you started.

One of us blatantly can't do percentages and I'm 100% sure it isn't me.

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One of us blatantly can't do percentages and I'm 100% sure it isn't me.

Well, 33% - were you quibbling about the 3% or something else?

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One of us blatantly can't do percentages and I'm 100% sure it isn't me.

I was wondering if this was just a really clever comment.....

Because if the duke can't do percentages and the wig can, then the statement is bang on.

But, if the duke can do percentages and the wig can't, the statement is still... bang on! :P

So, as there was nothing wrong with the dukes post (apart from 3%, well 3.3`%) then in the wig's own words, the wig can't do percentages! Just let every BTL'er I have ever met! ;)

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Daily Mail/TIM reporting it now:

http://www.thisismoney.co.uk/money/mortgageshome/article-3695278/House-prices-dip-2-6k-Brexit-vote-says-Rightmove.html

Seems to be on syndication. The hand of government?

Rics also found that interest from potential buyers was fading at the fastest rate since 2008.

I'm not seeing any sign of that in areas I track, but could get interesting if so.

BTLer double-down and even more mad-gainz forever HPI chasing has delayed that point which I believe will begin to impact on prices.

The 2007/08 credit crunch came on the supply of credit side. My bet is the imminent credit crunch will come with very little demand on the mortgage borrowing side.

The crunch is going to come from the buyer side.

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