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funinhounslow

FT.com "Think hard before buying a London property"

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Logged into FT.com for the first time in years and was greeted with this...

https://www.ft.com/content/922574d8-5cc4-11e7-b553-e2df1b0c3220

Making arguments we're all familiar with, but interesting that the FT is now saying that London property is overpriced and not to be touched with a bargepole  

Significantly the comments seem in the main to be in agreement which is interesting.

One more straw onto the camel's back...

 

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If you want it, want to live there and can afford to buy it why not......just don't buy if you expect to make a short-term gain.;)

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33 minutes ago, winkie said:

If you want it, want to live there and can afford to buy it why not......

Because you could easily lose hundreds of thousands of pounds and end up significantly poorer for the rest of your life?

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36 minutes ago, Dorkins said:

Because you could easily lose hundreds of thousands of pounds and end up significantly poorer for the rest of your life?

Life is full of risks....you pays your borrowed money you take your chance.....others would prefer to leave that risk to others to play.....;)

 

 

Edited by winkie

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25 minutes ago, winkie said:

Life is full of risks....you pays your borrowed money you take your chance.....others would prefer to leave that risk to others to play.....;)

 

 

Yes but when the FT is saying "the value of the capital’s market is very difficult to rationalise" it must surely have a significant effect on overall sentiment? This isn't some click bait article in the Mail, it's a serious article from a credible source. 

 

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That's sentiment for you... doesn't matter as most of London cannot afford London, those who are in at a late stage are running for the hills. Next step is the increased council taxes and inheritance.

i remember Blair tried to change the council tax values from 1991 to 2001... it was met with negativity and it was buried.

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56 minutes ago, funinhounslow said:

Yes but when the FT is saying "the value of the capital’s market is very difficult to rationalise" it must surely have a significant effect on overall sentiment? This isn't some click bait article in the Mail, it's a serious article from a credible source. 

 

Their data is worth accessing.

To be fair,they're ten years late stating the obvious.Credible?Meh.

Edited by Sancho Panza

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4 hours ago, winkie said:

Life is full of risks....you pays your borrowed money you take your chance.....others would prefer to leave that risk to others to play.....;)

 

The southern market is bubblemania. Every aspect of the market from a purchasers perspective is in bubble territory.

FTB need to borrow 300K and find 30k for deposit.

Mover uppers needs to find another 200k to move from a 2 bed to a 3 bed and 400k to move from a 3 to a 4 bed.

And this is all in the last 5 years.

The risk is now too high, its now cheaper to stay put and rent than to take on ridiculous amounts of debt.

The only part of the market that is moving is the owners who own outright, die and the relatives need to sell for probate.

The softening of prices will soon become a crash as the last fool buys.

Edited by GreenDevil

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I could never understand why Dublin and Belfast sank so much after the GFC but London... just... sort of 'burped', then continued its upward HPI spiral. London's really not that great. Yes I get the banks are there etc. but really? And the tubes are ridiculously overcrowded compared to ten years ago/ you only notice after you leave then visit again. 

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6 hours ago, Thorn said:

I could never understand why Dublin and Belfast sank so much after the GFC but London... just... sort of 'burped', then continued its upward HPI spiral. London's really not that great. Yes I get the banks are there etc. but really? And the tubes are ridiculously overcrowded compared to ten years ago/ you only notice after you leave then visit again. 

Foreign money.

 

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14 hours ago, maverick73 said:

That's sentiment for you... doesn't matter as most of London cannot afford London, those who are in at a late stage are running for the hills. Next step is the increased council taxes and inheritance.

i remember Blair tried to change the council tax values from 1991 to 2001... it was met with negativity and it was buried.

The fact that many in London can't afford to live in London without massive subsidies either hidden or open from the banking system, the state or inheritance rather gives the game away. If property taxes in London truly reflected current property prices I am sure it would start to go down the Detroit road pretty fast. For those with eyes to see some of the trends that sank Detroit are already there in the London set up.

Edited by stormymonday_2011

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59 minutes ago, stormymonday_2011 said:

The fact that many in London can't afford to live in London without massive subsidies either hidden or open from the banking system, the state or inheritance rather gives the game away. If property taxes in London truly reflected current property prices I am sure it would start to go down the Detroit road pretty fast. For those with eyes to see some of the trends that sank Detroit are already there in the London set up.

Could you elaborate, I understand what you are saying, but could you give examples of the trends

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34 minutes ago, Talking Monkey said:

Could you elaborate, I understand what you are saying, but could you give examples of the trends

Rising crime, mayor playing identity politics, rising demands on local authorities with diminishing funds to meet liabilities, huge dependence on the single industry of financial services.

London's main asset is that it is the political centre so it can gerrymander national priorities to suit its own interests though obviously at the expense of Birmingham, Manchester, Liverpool, Sheffield and all points north and west etc. Take a look at the historical employment trends in Brum to see how it has suffered at the hands of the policies of the capital since the 1980s.

The problem for London like the rest of the UK is that the factors that have fed its property ponzi have all reinforced each other cheap money, mass immigration, foreign speculators could all have a compound negative impact if they start to go into reverse. For example it is economic migrants who work and take on debt who push up house prices. If they quit because of declining real wages and drops in sterling then that will impact the market more than immigrants who hope just to survive on benefits. These are issues which the BOE cannot finesse through interest rate policy and QE unless all other Central Banks play the same game because if they go it alone sterling is inevitably going to continue to decline further and that ultimately is where the judgment of the UK ponzi is going to get passed.

Edited by stormymonday_2011

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3 minutes ago, stormymonday_2011 said:

Rising crime, mayor playing identity politics, rising demands on local authorities with diminishing funds to meet liabilities, huge dependence on the single industry of financial services.

London's main asset is that it is the political centre so it can gerrymander national priorities to suit its own interests though obviously at the expense of Birmingham, Manchester, Liverpool, Sheffield and all points north and west etc. Take a look at the historical employment trends in Brum to see how it has suffered at the hands of the policies of the capital since the 1980s.

Financial services is definitely in decline in terms of numbers working in London, a lot of the big banks are making some serious efforts to move headcount out of London, then there is automation/tech added in.

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13 minutes ago, the_duke_of_hazzard said:

And BTL. Can't lose innit.

Well IO mainky. Be it OOO (now gone) or BTL (going)

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16 hours ago, Dorkins said:

Because you could easily lose hundreds of thousands of pounds and end up significantly poorer for the rest of your life?

Exactly 

4 hours ago, spyguy said:

Foreign money.

 

+ Cantillion effect also of being located next to the money printing hose.

If you job is handing out printed money hand out some to yourself

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1 hour ago, stormymonday_2011 said:

The fact that many in London can't afford to live in London without massive subsidies either hidden or open from the banking system, the state or inheritance rather gives the game away. If property taxes in London truly reflected current property prices I am sure it would start to go down the Detroit road pretty fast. For those with eyes to see some of the trends that sank Detroit are already there in the London set up.

Maybe, I guess after the Help-To-Buy scheme ends, it will be interesting to see, what happens to London. European jobs will be moved to accessible locations, as will job holders. So either assets will be rented, if demand is present, or sold off as the new tax rules will come into effect over the next 3 years. As for market crashes, well that depends on how to compete with the countries neighbours and maintain friendship with the ally / allies, and the ability for the pound to maintain status as a reserve currency, which is at risk of being removed.  I'm unsure of the impact to asset values, as the depending factor is how far is the Bank of England willing to defend the pound, because when Black Wednesday happened, the decisions were made by the government. 

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8 minutes ago, Talking Monkey said:

Financial services is definitely in decline in terms of numbers working in London, a lot of the big banks are making some serious efforts to move headcount out of London, then there is automation/tech added in.

Ive an ongoing argument about the South - both London and regional towns.

Im northern and worked in the South for a few years, 20 years ago.

London and the South were mainly financial service plays. Finance jobs boomed from the early 80s til 2008.

It was finance that provided the majority of the private sector jobs in the South - be it life insurers, back office processing or the hq of a bank or BS.

Since 2008 these jobs have been more than decimated. Some are bust. Some have been shutdown by regulators mainly life insurers/with profit ponzies. Most have been automated.

Finance has gone from generating a lot of high paying jobs to a few low paying ones.

The job losses and income reduction in the southern financial services far exceed the manufacturing losses in the midland/north in the late 70s/early 80s.

If it was not for tax credirs the south would be long bust by now

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22 minutes ago, stormymonday_2011 said:

Rising crime, mayor playing identity politics, rising demands on local authorities with diminishing funds to meet liabilities, huge dependence on the single industry of financial services.

London's main asset is that it is the political centre so it can gerrymander national priorities to suit its own interests though obviously at the expense of Birmingham, Manchester, Liverpool, Sheffield and all points north and west etc. Take a look at the historical employment trends in Brum to see how it has suffered at the hands of the policies of the capital since the 1980s.

Id not sat gerrymander.

Just overly centralised.

Throw a bruck in london and its more likely to hit soneine whos income comes from ukgov.

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24 minutes ago, stormymonday_2011 said:

Rising crime, mayor playing identity politics, rising demands on local authorities with diminishing funds to meet liabilities, huge dependence on the single industry of financial services.

London's main asset is that it is the political centre so it can gerrymander national priorities to suit its own interests though obviously at the expense of Birmingham, Manchester, Liverpool, Sheffield and all points north and west etc. Take a look at the historical employment trends in Brum to see how it has suffered at the hands of the policies of the capital since the 1980s.

The problem for London like the rest of the UK is that the factors that have fed its property ponzi have all reinforced each other cheap money, mass immigration, foreign speculators could all have a compound negative impact if they start to go into reverse. For example it is economic migrants who work and take on debt who push up house prices. If they quit because of declining real wages and drops in sterling then that will impact the market more than immigrants who hope just to survive on benefits. These are issues which the BOE cannot finesse through interest rate policy and QE unless all other Central Banks play the same game because if they go it alone sterling is inevitably going to continue to decline further and that ultimately is where the judgment of the UK ponzi is going to get passed.

The 90s crash saw the biggest falls where there was the largest debt.

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