Hpc-immune Areas

[rockdoctor]

Last HPC in London:

[Rachman]

I'll go for the same as I have been saying since Summer 2004

Best will be prime London, especially houses, prime stockbroker belt, old money areas outside big cities (like Ben Rhydding, Bowdon etc.), prime retirement places where the local economy is fed by tourism and little local manufacturing.

Worst will be two bedroom flats all over provincial cities that are not in the CBD or one core area (already tanking everywhere), newbuild houses on crap estates with little offroad parking or privacy (who actually wants to live in a 14 foot wide three storey 'townhouse' in Milton Keynes), executive flats in old industrial towns will be given over to renting to chavs and will go to seed very quickly and I am sorry, but the bottom of the market in old industrial towns (the core terraced houses) will suffer if buy to let is made unattractive and credit is tightened - which will hurt those on low wages who have bought disproportionately (well them and just about every 20-25 year old Asian lad I know who has bought as a B2L on a personal mortgage using money that was lent by family).

[Cuckoo]

Last HPC in London:

where did this come from. pretty interesting data, it speaks volumes if accurate.

[Broken Fan]

where did this come from. pretty interesting data, it speaks volumes if accurate.

theres a little sign down the bottom saying halifax building society..... so it probably all just VI spinn....

[Cuckoo]

theres a little sign down the bottom saying halifax building society..... so it probably all just VI spinn....

it does bear out the "flight to quality" argument though, or the fact that "better" areas hold their value more robustly.

i would suggest that in any future "crash" , similar patterns would be followed, albiet taking into account areas which have gentrified since 95 and others which have lost their way somewhat. One could probably extrapolate and build a composite forecast map for the "2010" crash if you had the time and inclination!

However these maps don't give a detailed picture of individual variations within areas nor are we told what the basis for the figures are , i'm presuming averge price of completed sales.

[Guest Cletus VanDamme]

Last HPC in London:

Thanks rockdoctor, very useful.

Let's compare this to my list:

Highgate: +31.9%

Hampstead: +18.8%

Chiswick: +25%

Notting Hill: +37.8%

Chelsea: +59.8%

Kensington: +41.7%

Some crash eh?

[Fancypants]

(well them and just about every 20-25 year old Asian lad I know who has bought as a B2L on a personal mortgage using money that was lent by family).

very common in my experience!

[BufferBear Bitcoin Bull]

Thanks rockdoctor, very useful.

Let's compare this to my list:

Highgate: +31.9%

Hampstead: +18.8%

Chiswick: +25%

Notting Hill: +37.8%

Chelsea: +59.8%

Kensington: +41.7%

Some crash eh?

This data is from the Halifax and was orignally posted by zzg133, I believe. The figs. are not adjusted for inflation. In any event, prime areas will fall but not at the same rate and other areas will crash again. The figs. from the data are not really indicative of the falls that I witnessed at first hand working in a county court dealing with repo hearings and so on. Some properties lost 40%+ (real) off their 'value' over the years and they were not only studios! The areas I refer to include SW11, SW12, SW13, SW14, SW15, SW16, SW17, SW18, SW19

very common in my experience!

Colleague of my husband (Asian) has been given 50k and been loaned a further amount.

VanDamme Cletus: Bear or Bull - neither. You want to be a bear but you sound like a bull. Confidence is needed but maybe the Barbican just ain't gonna happen.

Edited September 8, 2006 by Buffer Bear

[CrashDive]

"Hpc-immune Areas"

No such animal...

Edited September 8, 2006 by CrashDive

[Lionel Richtea]

theres a little sign down the bottom saying halifax building society..... so it probably all just VI spinn....

What, all of it? Even the bits that have dropped a load? How on earth do you explain how a VI would manipulate these figures?

Very interesting data.... looks like the east is screwed.

WRT the topic for the thread - would be easier to ask which areas will drop then look at the rest as being less at risk. For me, Newcastle is due an almighty correction.

[Broken Fan]

What, all of it? Even the bits that have dropped a load? How on earth do you explain how a VI would manipulate these figures?

Very interesting data.... looks like the east is screwed.

WRT the topic for the thread - would be easier to ask which areas will drop then look at the rest as being less at risk. For me, Newcastle is due an almighty correction.

Yeah just being a bit p1ss takey with the VI spin bit( being uber-ursine every mention of B Socs EAs Gov'rnt should be followed chants of VI spin).

But yes a surprising chart and interesting one. The chart's not inflation adjusted and it would be good to see different time periods 90-92. Also it would be interesting to see volume transactions too. I have e feeling that thjese places are very permanently settled and very little moving in and out occours esp at the mid to top end. Plus most of the p[eople who live in those places are so insulated from normal economic cycles and events they wouldnt know what reduced price meant if it bit them.Still though I think most of London is not as immune as a people would like to believe.

WRT Newcastle, you are probably correct. So many of these places have London type prices with nothing supporting them other than Government gravey, and of course the ubiquitous MEW/shopping. There is something in this boom that is not reflected in the mere prices of property*, compared to the last. In the last boom whole swathes of the country were untouched, even parts of london. This time there is not an area that hasnt been picked over for the last bit of HPI. Every half @rsed barn and outside crapper has been converted to some s*****y magnolia/ granite loo seat, magazine dream type abode. With every man and his dog and his wifes dog at it. When the crash comes it's going to be sore. Still though we will be left with a greatly improved housing stock.( and I don't mean those persimmon type newbuild, ghettos of the future)

*Disclaimer: None of this opinion is based on hard facts just feeling, and not great feeling at that, too young to remember the last boom properly.

[Guest grumpy-old-man]

Yeah just being a bit p1ss takey with the VI spin bit( being uber-ursine every mention of B Socs EAs Gov'rnt should be followed chants of VI spin).

But yes a surprising chart and interesting one. The chart's not inflation adjusted and it would be good to see different time periods 90-92. Also it would be interesting to see volume transactions too. I have e feeling that thjese places are very permanently settled and very little moving in and out occours esp at the mid to top end. Plus most of the p[eople who live in those places are so insulated from normal economic cycles and events they wouldnt know what reduced price meant if it bit them.Still though I think most of London is not as immune as a people would like to believe.

WRT Newcastle, you are probably correct. So many of these places have London type prices with nothing supporting them other than Government gravey, and of course the ubiquitous MEW/shopping. There is something in this boom that is not reflected in the mere prices of property*, compared to the last. In the last boom whole swathes of the country were untouched, even parts of london. This time there is not an area that hasnt been picked over for the last bit of HPI. Every half @rsed barn and outside crapper has been converted to some s*****y magnolia/ granite loo seat, magazine dream type abode. With every man and his dog and his wifes dog at it. When the crash comes it's going to be sore. Still though we will be left with a greatly improved housing stock.( and I don't mean those persimmon type newbuild, ghettos of the future)

*Disclaimer: None of this opinion is based on hard facts just feeling, and not great feeling at that, too young to remember the last boom properly.

Broken Fan, what a great answer, obviously not born from experience, but you have listened somewhere along the line. I have said it a few times already (although it didn't get flagged on the HPI Cliches thread ), a high percentage on here are too young to remember the last crash in the 90's, & therefore feel safe & secure as they have obviously bought in the "best" area. I think the user jp1 said exactly this earlier in this thread. (page 1)

The thing that gets me is that if you have people on here that are being warned, giving them a head start on this crash & they still don't think it's goping to happen (although secretly I believe that even the most bull-sh1t bull's are having second thoughts now ), then what chance does wayne & waynetta have in cracksville, UK

Edited September 9, 2006 by grumpy-old-man

[Guest Cletus VanDamme]

VanDamme Cletus: Bear or Bull - neither. You want to be a bear but you sound like a bull. Confidence is needed but maybe the Barbican just ain't gonna happen.

Pretty accurate description A few years back I was bearish, but am becoming bullish by resignation really.

If I stretched myself I could get a 1 bed flat in the Barbican. A few months ago I though the prices were ridiculous, but now I'm wondering that prices there will hold pretty steady no matter what happens to the economy (barring complete economic meltdown), so maybe I will take a punt after all. The Halifax chart has given me some encouragement that the 'best' areas maybe are immune.

[cynic]

Pretty accurate description A few years back I was bearish, but am becoming bullish by resignation really.

If I stretched myself I could get a 1 bed flat in the Barbican. A few months ago I though the prices were ridiculous, but now I'm wondering that prices there will hold pretty steady no matter what happens to the economy (barring complete economic meltdown), so maybe I will take a punt after all. The Halifax chart has given me some encouragement that the 'best' areas maybe are immune.

I think immunity will depend on how wild the local HPI has been.

For 18 years and with the crash occuring during the middle of that phase I lived in Putney in a street of small but "sought after" houses. A neighbour not known for her canniness managed to complete the sale of her house smack at the top and just before the winds of change. About a year later when everyone knew a crash had occurred (it takes a while for the penny to drop as is evidenced here every day) I'd say our local values had fallen by roughly 1/3, an estimate reflected by those who were getting valuations on similar properties even though none had actually sold. If the Putney figures are fair - and I don't impute any fiddling to the Hali - I think changes like gentrification/right-to-buy/home improvements (I think this could have been a BIG one) will put a distortion on the figures which could easily render like-for-like comparison almost impossible. If we go into the next phase of this luncacy with less money to spend, an abandonment of home-as-temple-to-consumerism and even de-gentrification as the middle-age range of Londoners begin to realise what a hell-hole they're living in then I think you can take plenty of those areas supposdely protected by 'quality' out of that category. It's my belief that a genuine like-for-like will show falls everywhere - even Mayfair as 'investors' realise the changing market temperature - though of course it depends on the severity of the crash. If somebody has paid a 'mad' price pre crash, it won't be anything like as mad afterwards and by the same token, if the pre-crash price was 'fair' then the price of such a property could weather the storm.

[doogie]

Last HPC in London:

Interesting map, but remember the crash didn't start in 1988 in most of these areas. Indeed, prices rose by as much as 40% in many London areas during the period from 1988-1990.

On an anecdotal level, my cousin bought her 2 bed/2 bathroom flat in prime Belsize Park for £105,000 in 1993. It had previously been sold for £180,000 in 1989.

So I think it is safe to say that in a crash, nowhere is immune.

[Sledgehead]

I have a similar anecdotal from a couple who had a 1 bed flat in highgate. She was a lawyer, he was an account exec. with a ad major. They sold up to travel. Although we are no loneger in contact I remember he being distinctly negative about property and, perhaps more tellingly, it took him ages to take the plunge again.

What all this does indisputably show is that bull markets are likely to go on longer in markets where price discovery is poor. Those caught up in the bull are likely to disbelieve any bearish stories and believe only bullish ones. Nobody has the benefit of proper data like that seen in stock markets. Of course the same could be said of bear markets in such asset classes.

[JustYield]

Last HPC in London:

Funnily enough the blue bits are what I think are "London".

JY

[bajista]

Yes. Great map. But would be good to compare with interest rates and inflation for the 7 year period. Otherwise people might start believing that some property will continue to go up 40% during this HPC! I suspect pretty much everything dropped in real terms and that would mean that the over 40% nominal drops were astronomical in real terms

For example: if interest rates were 15% in 1988/90 and went down to 10ish by 1995, the average would have been about 12%. But since I can't recall the exact numbers, it would be good if someone who does could post them.

Anyway on that assumption, a property that was 100k in 1988 would have been worth about 45k in real terms by 1995- assuming that prices were unchanged.

So a 100k property that appears on the map as going up 40% in nominal terms went up 4.75% p.a. And thus was worth in real terms about 63k by 1995.

But horror! A 100k property that went down 40% would have been worth just 33k by 1995 in real terms. **** is that right? No wonder the canny investors put their money in the stockmarket in the 1990s! It is more scary than I remembered.

[JustYield]

I also have a friend who was virtually bankrupted buying a flat in Notting Hill in late 1989 that he sold about three years later for a mega-loss (in those days). He didn't buy again until a year or two ago.

Sheeeeze kebab - really got shaken out of his position didn't he? What's the notional profit on the place now?

Moral: make sure you can afford it and sit tight if necessary.

JY

Edited September 9, 2006 by JustYield

[Roman Abramovitch]

Will Tony Blair recoup the cost of his property in Connaught Square,London??????

[Cuckoo]

Moral: make sure you can afford it and sit tight if necessary.

JY

very very true. never never nver sell property once you've bought it! It can only go up later!

[Gone baby gone]

The only crashproof area I can think of is inside the minds of the property bears...

[misfit]

I do not think there will be any areas unaffected by the realignment even in London

[Smell the Fear]

I do not think there will be any areas unaffected by the realignment even in London

I agree - the problem is one of excessive debt, and it has permeated every nook and cranny of the property market and society. Some areas will fall less than others, because the people living there will be either too rich to even notice or able to sell other assets (e.g. BTLs in dodgy part of town) in order to avoid repossession. But there will be victims, so prices will fall everywhere.

Will Tony Blair recoup the cost of his property in Connaught Square,London??????

Here's hoping he will have to put in several years of dull, repetitive speeches to pay for that.

[Rachman]

I agree - the problem is one of excessive debt, and it has permeated every nook and cranny of the property market and society. Some areas will fall less than others, because the people living there will be either too rich to even notice or able to sell other assets (e.g. BTLs in dodgy part of town) in order to avoid repossession. But there will be victims, so prices will fall everywhere.

You are right there, but the excessive debt catalyst won't be mortgages or at least not those used to buy houses, it's all the other crap people have financed - tellies, holidays, profligate spending etc. They are at much higher rates and they will find that without rising prices they can't refinance it out of increasing equity at low rates and will even find small rises in rates a problem to their already 15-20% credit card rates as 0% deals disappear.