London property selling like “hot cakes”

[hurlerontheditch]

 

[Aidan Ap Word]

Am particularly liking:

Quote

 

Under "Downward forces align", UBS writes:

Stretched affordability, high levels of supply at prime price points, and numerous changes to stamp duty have all taken their toll, at a time where Brexit uncertainties linger.

 

Brexit mentioned at the end of the list, as opposed to the start. The drip-drip of realisation in the MSM?

[zugzwang]

Baking bad.

 

[winkie]

Where and what are they buying??

[Saving For a Space Ship]

hot cack

[flb]

They're building flats in this area and selling them for 580k (2 bed). It's a bit of a joke, really - I can't imagine many couples being able to afford those (unless they already own something or they've inherited whatever) And what about single people?

I'm not sure you could call 580k -> 350k a correction, but that's what should happen here, in my opinion.

What's really shocking for me is that some people are buying those flats. They're utter shit, like 60 sqm...and some people think it's a good idea to stick probably over 600k in them (remember stamp duty and the rest of the expenses). How this makes sense to the buyers is beyond me.

That aside, the market is kind of ... frozen. It's not the prices (those play a part as well, of course), it's the uncertainty (most of that caused by TM's government and their negotiations around Brexit). I walk past an EA office every day and in the past 3-4 months I've seen the prices change on a few properties...twice (as in, reduced...but not by much). 3 years ago people were buying them off the plan.

[hurlerontheditch]

23 minutes ago, flb said:

They're building flats in this area and selling them for 580k (2 bed). It's a bit of a joke, really - I can't imagine many couples being able to afford those (unless they already own something or they've inherited whatever) And what about single people?

I'm not sure you could call 580k -> 350k a correction, but that's what should happen here, in my opinion.

What's really shocking for me is that some people are buying those flats. They're utter shit, like 60 sqm...and some people think it's a good idea to stick probably over 600k in them (remember stamp duty and the rest of the expenses). How this makes sense to the buyers is beyond me.

That aside, the market is kind of ... frozen. It's not the prices (those play a part as well, of course), it's the uncertainty (most of that caused by TM's government and their negotiations around Brexit). I walk past an EA office every day and in the past 3-4 months I've seen the prices change on a few properties...twice (as in, reduced...but not by much). 3 years ago people were buying them off the plan.

This is what I’m seeing. A lot of sold signs on places in the run up to Xmas. Buyers will buy whatever they can get their hands on with whatever debt they can get access too. A lot have never seen a price reduction / correction.  

 

Unfortunately I think this will continue and stop the falls some on here predict ever happening 

[flb]

15 minutes ago, hurlerontheditch said:

Unfortunately I think this will continue and stop the falls some on here predict ever happening 

In my opinion this can't continue. Prices are already too high in London - so high that quite a few Londoners are moving out of London. I don't make predictions and I'm not some sort of internet prophet, but I fail to see how a couple on average salaries could buy a flat without significant external help (inheritance, help from their parents etc).

If I'm wrong, I'm wrong, but prices around here are absurd from my point of view.

Edited January 2, 2019 by flb

[hurlerontheditch]

6 minutes ago, flb said:

In my opinion this can't continue. Prices are already too high in London - so high that quite a few Londoners are moving out of London. I don't make predictions and I'm not some sort of internet prophet, but I fail to see how a couple on average salaries could buy a flat without significant external help (inheritance, help from their parents etc).

If I'm wrong, I'm wrong, but prices around here are absurd from my point of view.

They are absurd. Yet they keep being purchased. It’s depressing !

[flb]

4 minutes ago, hurlerontheditch said:

They are absurd. Yet they keep being purchased. It’s depressing !

I don't know how. Unless they're being bought by BTL landlords who have the cash.

You'd probably have to earn 150k in a couple to be able to afford it. While it's not that difficult to make that amount in London, it's not really easy enough to explain the amount of 550-600k flats being sold. Rich parents or inheritance, probably.

[winkie]

13 minutes ago, hurlerontheditch said:

They are absurd. Yet they keep being purchased. It’s depressing !

 Not for those that sold it......depressing for the ones that bought it?.......?

[Captain Kirk]

1 hour ago, flb said:

I don't know how. Unless they're being bought by BTL landlords who have the cash.

You'd probably have to earn 150k in a couple to be able to afford it. While it's not that difficult to make that amount in London, it's not really easy enough to explain the amount of 550-600k flats being sold. Rich parents or inheritance, probably.

https://www.helptobuy.gov.uk/equity-loan/london-help-to-buy/

Quote

The home you want to buy must be newly built with a price tag of up to £600,000.

 

[flb]

5 minutes ago, Captain Kirk said:

 https://www.helptobuy.gov.uk/equity-loan/london-help-to-buy/

 

...and what do you do after the first 5 years, when you have to start paying for the other 20-40% too?

I'm aware of the HTB thing, but you'd still need quite a bit of income to deal with it later down the road, when the monthly payments would rocket. If interest rates also go up, I'd say you're going to regret it (well, not you personally)

I think HTB is a scam, but I can see how some people would go for it. 

[Captain Kirk]

Just now, flb said:

...and what do you do after the first 5 years, when you have to start paying for the other 20-40% too?

I'm aware of the HTB thing, but you'd still need quite a bit of income to deal with it later down the road, when the monthly payments would rocket. If interest rates also go up, I'd say you're going to regret it (well, not you personally)

I think HTB is a scam, but I can see how some people would go for it. 

Agree, HTB is horrendous, but there are people that just don't care because they believe the value will have gone up loads in 5 years time. Given it's government policy to inflate prices with HTB (as bragged about in in parliament and the lords) you can hardly blame them.

[flb]

I don't blame them. Good for them if they trust the government and the economy. I think they're making a mistake. But then again, I thought people who were buying houses for 400k (now worth 750k - this is Pinner) were making a mistake too

[dugsbody]

2 hours ago, flb said:

They're building flats in this area and selling them for 580k (2 bed). It's a bit of a joke, really - I can't imagine many couples being able to afford those (unless they already own something or they've inherited whatever) And what about single people?

There are hundreds of thousands of couples who work in London who jointly earn more than £100k. If they've jointly saved £1500 pm for 5 years then they have £100k deposit without BOMAD. £480k mortgage for 35 years at 1.8% is £1540 pm which would be less than the rent that couple would be paying for the same property. 

Check what 6% repayment rate over 25 years does. Suddenly you've doubled the monthly repayments which definitely isn't affordable anymore. Low interest rates and extended mortgage terms have been THE driver behind pushing prices up over the last decade and before, globally.

Edited January 2, 2019 by dugsbody

[ebull]

Last gasps of the undead.

Who's up for a flash mob event of playing the Eagles singing Desperado at top volume every week for the foreseeable [until it really goes down].

Hot cakes  ....???

mmmmm yes please I like hot cake.

[longgone]

2 hours ago, flb said:

I don't blame them. Good for them if they trust the government and the economy. I think they're making a mistake. But then again, I thought people who were buying houses for 400k (now worth 750k - this is Pinner) were making a mistake too

can`t argue with that basic terraces near me were 300k ish and even lightly less in bad condition now they are 650k + 

Thanks HPC and HTB probably never own anymore than a flat now. 

 

[South Lorne]

 

 

...buyers from Germany...?

 

 

Quote

 

Germany: In any bear market, there is always one market that gets hit the hardest (after the dot com bust, for example, it was arguably the FTSE which took almost two decades to claw back its 1999 level). What will it be this time around? Take a look at Germany’s DAX. It has already been one of the most miserable performers of any developed country index. It is down 22pc from its 2018 peak, compared with a European average of 16pc.

 

Even worse, almost half its members are in some form of crisis, from the auto-makers to Deutsche Bank, to industrial giants such as Bayer. Its giant car manufacturers account for 30pc of the index, and the chemicals companies for another 20pc, and those are both very challenging industries.

 

Over this bear market, investors will come to realise how hollowed out and backward-looking the German industrial machine has become.

A bear market is never much fun for anyone. It exposes a lot of flawed business models, over-hyped trends, and inept, incompetent management. Companies that were unsustainable get found out, banks that have over-stretched themselves run into trouble, and central banks have their nerve and skill tested along with ordinary investors. This one won’t be any different. It promises to be a rough ride – and it is only just starting.

https://www.telegraph.co.uk/business/2018/12/28/bear-market-coming-five-possible-victims/?li_source=LI&li_medium=li-recommendation-widget

 

 

[spyguy]

11 hours ago, hurlerontheditch said:

This is what I’m seeing. A lot of sold signs on places in the run up to Xmas. Buyers will buy whatever they can get their hands on with whatever debt they can get access too. A lot have never seen a price reduction / correction.  

 

Unfortunately I think this will continue and stop the falls some on here predict ever happening 

Am I the only person who read the FTAV post?

The writer is taking the p1ss - London property is piling up unsold.

Markets can crash in two ways -  prices andor transactions.

Outside of London youve seen prices pretty static for 10 years but the number of transaction being about 1/3 of what youd expect. Eventually those low transaction hit prices as people have to quit property positions - probate etc etc.

Indeed the stability of uk property over the last 10 years has been anything but as the 60+ cohort has been doubling, tripling quadrupling their property exposure. All at vast leverage - IO BTL

London/Se is special - especially leveraged, especially hot (foreign buyers), especially expensive. This wony pan out esp. with the ending of QE/ZIRP.

 

 

 

 

 

 

[hurlerontheditch]

42 minutes ago, spyguy said:

Am I the only person who read the FTAV post?

The writer is taking the p1ss - London property is piling up unsold.

Markets can crash in two ways -  prices andor transactions.

Outside of London youve seen prices pretty static for 10 years but the number of transaction being about 1/3 of what youd expect. Eventually those low transaction hit prices as people have to quit property positions - probate etc etc.

Indeed the stability of uk property over the last 10 years has been anything but as the 60+ cohort has been doubling, tripling quadrupling their property exposure. All at vast leverage - IO BTL

London/Se is special - especially leveraged, especially hot (foreign buyers), especially expensive. This wony pan out esp. with the ending of QE/ZIRP.

 

 

 

 

 

 

True

[Captain Kirk]

6 hours ago, spyguy said:

Am I the only person who read the FTAV post?

I can't get past the registration page without nodding off.

6 hours ago, spyguy said:

The writer is taking the p1ss - London property is piling up unsold.

I'm glad about that.

Edited January 3, 2019 by Captain Kirk

[iamnumerate]

This is quite interesting

Quote

London property listings currently stay on the market for 128 days on average -- more than four months -- before they sell. That's up from an average of 77 days back in 2016, says the report

I can believe it, I know 2 houses near me that went on the market last spring and neither have sold yet - one was for 3 times that they paid in 2001 - and prices were expensive then!

[Trump Invective]

Apparently the scam is to keep sold properties listed, switch and sell. Interesting, but not exactly indicative of a collapse

[DonJop12]

My LISA bonus arrived today. ?

London property is still unaffordable and seemingly used as the world's reserve currency. ?