Wandsworth - House Sold Dec 05 At £500k

[Frizzers]

Well, mate, I sympathize. I really do. And you have fallen victim to the injustices this property bubble is causing. Does that sound ridiculous? Injustices? I don't know.

I am waiting for things to turn as everyone says they eventually will. But I can't help thinking we're going to need some disaster like a currency or stock market crash or several bad years in the City to make things turn.

[Rachman]

I've never seen a period in the property market when there been so little to buy (in London and surrounds), and money so free. I just don't believe (or maybe want to believe) it can possibly get worse.

And there you go - people with high incomes can afford to move and pay for it - those who don't can't afford to move because of cost to change and taxation on moving - so even with X00K of equity, they can't move, which reduces supply which forces up prices. You (we [well I didn't]) voted for them, vote them out for increased liquidity (though God knows what state the coffers are in after they have been pillaged for nearly 10 years).

[CheapAsChips/Houses]

What a right royal sh1tty year it's been!!! One day your ticking along getting on with life, and the next your whole life's upside down.

Thats just the problem. People thinking that you absolutely HAVE to own the home you live in. Personally I find it quite liberating knowing I have a significant amount of money in the bank, I don't owe a single pound to anyone, and when the market finally turns and banks are no longer handing out money left right and centre, I will be in such a privileged position that I could be choosey of which house I buy.

[Bungalow Builder]

General view amongst property professionals (ie architects & surveyors) uis that London will go on rising (?slowly) until 2012 and then drop after the olympics - apparantly that's what happens with all olympic cities.

[polarbear]

General view amongst property professionals (ie architects & surveyors) uis that London will go on rising (?slowly) until 2012 and then drop after the olympics - apparantly that's what happens with all olympic cities.

Have to disagree with you there Bill.

Was talking to a friend whose family have been very big in London commercial property since the 1960's. He was asking the old man if it was a good time to move. Now don't forget this guy is about as VI as it gets, but he has also seen three cycles scome and go. His advice was "I wouldn't buy anything now unless I had something to sell. I think you will find some bargains around this time next year."

In other words, he is not predicting a crash, but saying you are better off biding your time.

Although prices may not go down 20% immediately I think you will find a buyers market returning next year. This means you could make a low offer on a house you want and have it accepted, rather than pay over the asking for something that isn't exactly what you want just to get back in.

[Bungalow Builder]

Have to disagree with you there Bill.

Was talking to a friend whose family have been very big in London commercial property since the 1960's. He was asking the old man if it was a good time to move. Now don't forget this guy is about as VI as it gets, but he has also seen three cycles scome and go. His advice was "I wouldn't buy anything now unless I had something to sell. I think you will find some bargains around this time next year."

In other words, he is not predicting a crash, but saying you are better off biding your time.

Although prices may not go down 20% immediately I think you will find a buyers market returning next year. This means you could make a low offer on a house you want and have it accepted, rather than pay over the asking for something that isn't exactly what you want just to get back in.

I agree with you - however it is not a view shared by the big developers & agents - & i'm not talking spin - it's their view.

I have been predicting a drop for 5 years abd I have been completely wrong. You only have to read things like the goldman sachs average salaries of 320k to realise what is driving the market.

[ARIMA]

I love these people who have no idea of how the City and the pay packets work too - I am assuming L has no experience of them.

I work with investment bankers all day - they are not as herdlike as the people here think (they are making similar decisions, but I don't belive it's because of a herd mentality) - there's a reason why some of them get massive bonuses, because they know what they are doing - one of the guys I work with is just taking on £3M of mortgage debt in the UK - but given his earnings, it's like you or I taking on £50K. He'll pay it off with next year's bonus. Is he bothered about property falling - er no. Is he piling money into the UK property market (other than his house) - er yes, but not into newbuild flats or large 'sink style modern estates' - he owns several London townhouses and 's*****y' postcode flats. He's not going to be crying into his Petrus, put it that way.

Most of the midlevel associates and junior directors and directors I work with all day are big into property and NONE are getting out or reducing their exposure. They are getting into prime London and the Home Counties and are leveraging up to do it where necessary.

Is Isaac Newton buying too?

[Austin Allegro]

Fulham came down significantly in 2005. A friend wanted to upgrade his one bedroom flat on Parsons green for a bigger house in Fulham in 2004 but could not afford to - but could in 2005.

Another anecdote - a girl at work bought a unit off plan in May this year at the new development in Borough (Tabbard Square). She paid £450k for a 2 bedroom flat in the highrise building.

She is about to complete, and she has already been offerred £650k!! Thats £200k in less than 6 months on a £10k deposit!! I don't even want to work out what that means as an annual return.

My entire credibility is at stake as I am the only one of my friends and work collegues who believe there will be a crash. Junior guys in my team are buying and laughing at me. I am getting married in June next year, and it will be the shortest wedding in history if I don't agree to buy straight afterwards. I can afford to buy - I earn in the region of £100k with a hefty deposit, but I think I should be getting more than a 2 bedroom flat in an OK part of London. I am honestly distraught - the crash will come too late for me, especially if the USA lower rates as most economists think they will.

I would be happy to rent the next 10 years if that is how long it takes, but it is not easy being the only perceived fool amongst everyone you know.

My heart bleeds for you. On just £100k a year, I really don't know how you manage. If I were you I'd just put my head in the oven and end it all....

Seriously though, financial disputes are one of the most common reasons for marital strife. If your fiance/e doesn't share

your views in this area I'd say it's a more worrying sign than house price rises. My ex simply could not understand why I lived in a small rented flat - she bought at the trough in '96 with her then partner, and just had no concept of the reality of property prices in London. When I got dumped, one of the reasons was that 'she didn't like my flat'! That just proved we weren't compatible to be honest....

[Bobbins]

I can afford to buy - I earn in the region of £100k with a hefty deposit, but I think I should be getting more than a 2 bedroom flat in an OK part of London.

I do find it incredible that someone who earns £100k per annum with a large deposit will only get a two bedroom flat in a centralish, but edgy part of town - say for example North Kensington

Back in 1999, not so long ago when average salaries where only 20% less than today, you could get a 4 bed house in Fulham, and have change for a bottom of the range Porsche.

Given your healthy financial circumstances, I do wonder what propspect a key worker, or the hundred of thousands of workers earning £30-40k in London will ever have of owning anything.

It's not just bad luck or bad timing, it's a national disgrace.

[Smell the Fear]

The areas favoured by the bonus crew mirror the volatility of their employment market. Prices in K&C took a major battering a few years ago when the City took a downturn post 9/11. The press were reporting drops of 20%+.

This bonus frenzy at the moment isn't reflected London-wide, where prices are up around 9% or so yoy, and this is skewed upwards by the big money areas seeing large increases.

Given the short-term nature of City employment, the next downturn in financial markets will see prices in top areas drop sharply as the constant stream of large bonuses required to amintain prices dries up.

[polarbear]

I do find it incredible that someone who earns £100k per annum with a large deposit will only get a two bedroom flat in a centralish, but edgy part of town - say for example North Kensington

Back in 1999, not so long ago when average salaries where only 20% less than today, you could get a 4 bed house in Fulham, and have change for a bottom of the range Porsche.

Given your healthy financial circumstances, I do wonder what propspect a key worker, or the hundred of thousands of workers earning £30-40k in London will ever have of owning anything.

It's not just bad luck or bad timing, it's a national disgrace.

Couldn't agree more. I think this is the real indicator of a bubble. Unfortunately low wage professions have often found it hard to buy, but if someone on £100k can only get a 2 bedroom in a dodgy area the top has to be in sight.

Bad enough in London, but who is going to buy all those £300-400k flats in Bristol, Newcastle,Manchester. How many people earn £100k there?

[Bobbins]

I know it's a bit early, but what's the view in the city about 2007.

If 2007 is similar to 2006, will bonuses be just as big next year?

[Rachman]

I know it's a bit early, but what's the view in the city about 2007.

If 2007 is similar to 2006, will bonuses be just as big next year?

In terms of M&A, I have work out of my ears till the end of Q2 2007 already - with equity markets rising, the fabled dual exit strategy is being pursued vigorously (and wasting lots of money on IPO work for things that just won't happen, but it's fees for the banks.....) - debt markets are staurated with money they have to lend - terms are still easy and the LBO market's still on a surge - but I don't think I should be drawn into a discussion of whether or not I think they are good value at the moment or where the private equity shops are unlocking value....

Not bad, though a big bomb (either in London or in the equity markets) could wipe that out - same as any other year.

[Guest Cletus VanDamme]

Most of the midlevel associates and junior directors and directors I work with all day are big into property and NONE are getting out or reducing their exposure. They are getting into prime London and the Home Counties and are leveraging up to do it where necessary.

Got to agree.

The chances of a HPC in London next year are approximately zero.

London STRs and others who want to get back in at the price they exited will in my view be waiting until 2012 at the earliest.

[polarbear]

Got to agree.

The chances of a HPC in London next year are approximately zero.

London STRs and others who want to get back in at the price they exited will in my view be waiting until 2012 at the earliest.

Cletus while I agree that the market is hot on the ground right now, I think it actually makes a crash more likely.

What we have now is a "perfect storm" of bonuses, immigration, cheap money and of course speculation which has created incredibly inflated prices. But that means its going to be very hard for prices to stay up there, let alone get better. As soon as we see any change it will have a negative effect. E.g bonuses next year slightly lower than this, small IR rise, immigration topping out. We have to distinguish between what is happening now to cause high prices and the trend in the future.

A lot of people are instinctively nervous that we are at the top of the cycle. I'm sure you saw the YouGov poll showing 28% of Londoners expecting a crash within 18 months, more than the rest of the country. Also from the same report "the London market was shown to have seen the greatest impact as a result of November's rate rise with 35% delaying house purchase plans".

It really remind me of the dot com bubble- as we neared the top there was a real polarisation of views with each incremental rise confirming the bull's opinions, but actually making the bursting of that bubble ever more likely.

[Bobbins]

Got to agree.

The chances of a HPC in London next year are approximately zero.

London STRs and others who want to get back in at the price they exited will in my view be waiting until 2012 at the earliest.

I agree with you - on one proviso, that economic conditions remain positive.

However, if I'm not mistaken aren't you the CVD that wanted to STR in 2004, only to be persuaded not to by your partner. My guess is that your forecast is not so smart after all.

The trouble with you bulls, is that you fail to bring life experiences to your decision making, and can't see past the end of your nose.

Two months before the dot com crash, many analysts were issuing research notes proclaiming it was different this time, only for their companies to reap the rewards as greedy investors piled in. I bet you were one of them. Tulips/radio/stock market 1929&1987/housing market 1989/dot com - any similarities you can think of? Go on try harder - There you go, you got it right, they were all massive speculative bubbles that ended in tears.

Get real and realise that the economy is like the weather in very slow motion. One day it's sunny, but you never know what's around the corner.

You, like other bulls base your forecast on what's happening today, and give no thought to the future. You have the forecasting skills of a sheep - hey it good today, so it will be tomorrow.

Back in 2004 when you wanted to STR. Hey it's bad today, it'll be bad tomorrow - wrong. Thank god for you, that you at least have a smarter partner.

Based on your views in 2004 - I think I ignore this one.

[Guest Cletus VanDamme]

I agree with you - on one proviso, that economic conditions remain positive.

However, if I'm not mistaken aren't you the CVD that wanted to STR in 2004, only to be persuaded not to by your partner. My guess is that your forecast is not so smart after all.

The trouble with you bulls, is that you fail to bring life experiences to your decision making, and can't see past the end of your nose.

You are correct that I was considering STR in 2004.

I have only seen rises since then.

So I base my current prediction on past experience.

The same bears that are saying 'any day now' were suggesting that the decision to buy in 2004 was not such a good move. So I equally take their predictions with the same pinch of salt as you take mine.

[Bobbins]

You are correct that I was considering STR in 2004.

I have only seen rises since then.

So I base my current prediction on past experience.

The same bears that are saying 'any day now' were suggesting that the decision to buy in 2004 was not such a good move. So I equally take their predictions with the same pinch of salt as you take mine.

This site seems to be frequented by people who see nothing but a crash, and those who see nothing but everlasting property growth (well in London anyway). I find very few people on this site with more balanced point of view.

Even if you thoroughly believe it, I think its an easy thing to say that bonuses are being paid London property can only grow through. I'm sure you're right, the risks of a slowdown let alone a crash seems a while off.

But the London property market is not built on bonuses alone. The first sniff that the property market in London may have peaked and you'll get a rush of properties to the market. Bonuses are propping up the market, but what happens if we get a quick couple of interest rate rises in the first Q, we get an Al-Qaeda attack, bird flu in humans, US dramatically slowing etc etc.

There can't be anFTB in London who's worried that he/she are buying at the top. I've seen sentiment change in London. As quickly as it turns to a buying market it can reverse to a sellers one.

What get me is that nobody is pricing in risk in the housing market. The housing market is in unchartered waters, and yet investors are still going in feet first and investing £400k for 3.5% yields. A fall of 20-30% is always a possibility in the housing market and yet given this level of risk, investors are willing to accept 3.5% yields.

If I was investing in a risky stock market, I'd be willing to invest money with the knowledge of losing 20%, if the was a possibility of significant yields.

The City of London, whether it is insurance, investment banking etc is based on risk, and people are investing like risk has never existed.

You're probably right, and there's little chance of HPI calming down in London - but that tells me risk is not a word in your dictionary

[niceandpolite]

This site seems to be frequented by people who see nothing but a crash, and those who see nothing but everlasting property growth (well in London anyway). I find very few people on this site with more balanced point of view.

Even if you thoroughly believe it, I think its an easy thing to say that bonuses are being paid London property can only grow through. I'm sure you're right, the risks of a slowdown let alone a crash seems a while off.

But the London property market is not built on bonuses alone. The first sniff that the property market in London may have peaked and you'll get a rush of properties to the market. Bonuses are propping up the market, but what happens if we get a quick couple of interest rate rises in the first Q, we get an Al-Qaeda attack, bird flu in humans, US dramatically slowing etc etc.

There can't be anFTB in London who's worried that he/she are buying at the top. I've seen sentiment change in London. As quickly as it turns to a buying market it can reverse to a sellers one.

What get me is that nobody is pricing in risk in the housing market. The housing market is in unchartered waters, and yet investors are still going in feet first and investing £400k for 3.5% yields. A fall of 20-30% is always a possibility in the housing market and yet given this level of risk, investors are willing to accept 3.5% yields.

If I was investing in a risky stock market, I'd be willing to invest money with the knowledge of losing 20%, if the was a possibility of significant yields.

The City of London, whether it is insurance, investment banking etc is based on risk, and people are investing like risk has never existed.

You're probably right, and there's little chance of HPI calming down in London - but that tells me risk is not a word in your dictionary

I totally agree. The point is that things are more risky at these valuations..but that doesn't mean that they won't rise. It is probable that they will rise more slowly, however.

There seems to be some doubt as to whether the prices in K&C have really risen 25%in 2006..well, trust me, they have. Search for houses on primelocation in w11 between £1m and £2m. Answer=none, except for the end down by the west cross route and it's associated council estates. I've been looking for a while, and have a good deposit...things have gone from about £800 sq/ft for notting hill houses without much of a garden to £1050 ish for the same. A 4 bedroomer with a lawned garden/communal garden is changing hands for around £1100 to £1200. 'Celebrity' houses 5000 sqft and ludicrous interiors more than that. As a result K&C is getting away from 'normal' people on £100k a year who will push stuff up in wandsworth etc. No one talks about Belgravia and Mayfair property on here do they?...Well, back in the early 90's there were a few from my industry who owned there, but now is super rich and foreign (or both) only. I expect the garden squares of Notting hill to be viewed in the same way in 20 years time.

Nowhere is immune from a bird flu attack, which of course, in it's worse possible incarnation could cause a total civilisation melt down, but that can't be a part of a normal discussion on prices now, except for what i said at the beginning about risk. It will be irrelevant in the case of a bomb or plague whether stuff goes down 40% or 80%...much more important whether you have have tinned food and a way of defending it!!!

Edited February 6, 2007 by niceandpolite

[uncle_monty]

A further anecdotal: I FTBd in Dec 05. Was fortunate to find a 3 bed flat in prime central London for well under £400k. By Dec 06 it had increased by 30% (proved by 3 sales of much small 2 beds in the £450-470k range). One flat was bought and sold again in 3 months for a £80k gain! I looked at this flat and it was in pristine condition, so the flipper did not simply repaint and put down some parque. They just sold it on!

My take on London property is that it will take till May/June for the bonus froth to clear. The picture will be clearer then, especially since by then we will have a lot more clarity on the direction of interest rate policy.

Right now London property (prime central and attractive suburbs) is untouchable. We'll see if this remains the case in 2008 over the second half of this year.

[Bidin'matime]

One flat was bought and sold again in 3 months for a £80k gain!

That's what we want to hear - anyone who still denies that this is a bubble is just stupid. And if it was so good, why did the flipper sell it? He probably bought another one and spent all his profit on this, and stands to lose it all again when the bubble bursts.

Those who have sold will inevitably get stick from those who have not, while the bubble expands further, but when it goes pop, the boot will be on the other foot. Watch prices fall back to year 2000 levels...

[Frizzers]

Neighbour selling ex-council flat in Fulham - offers well over asking, gazumping, selaed bids, the lot. It is mental.

[TeddyBear]

back to Wandsworth. Just been sent details of a 2 bed maisonette on for 290K on the edges of Wandsworth. It's nothing special, not a total flip job, just new but cheapest IKEA kitchen by the looks of things. A search on nethousprices, which only goes up to Oct 2006 shows that no maisonette has sold for more than 225K on this street ever.

It's all so crazy, as if people are just plucking prices out of the air and shoving them on houses knowing that easy credit will allow prices to keep going up and up so EAs and vendors keep pushing to see just how high they can go.

[sunama]

In London at least, I predict that this will continue. In fact, with so much International money in London I think that we have not come close to the peak.

I predict that while other regions in the UK are declining, London will keep on rising. At some point though, this will stop and London will begin to follow the other regions - declines or stagnation.

I still believe that there is still money to be made in the London property market.

Up North though, things are different and I can see stagnation already setting in. Whether this will be followed by further stagnation or falls, we shall need to wait and see. UK wide HPI is currently being driven mainly by London, though there have been some arguments to suggest that London is just "catching up".

[bear call spread]

In London at least, I predict that this will continue. In fact, with so much International money in London I think that we have not come close to the peak.

Have to agree with this.