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More London Madness


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well ive just look at and seen 2 properties dropping in price in NW london,EA tells me the guy is facing repo in the next 28 days and needs to sell. Guy wanted 189 for 1 bedroom flat EA phoned up and said hell take £160.

So, not on Rightmove. Where then? I'd like to see some evidence that these flats really exist.

I'd definately put in a bid... B)

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I'd definately put in a bid...

I'd like to point out the irony of this thread.

In response to a post ostensibly offering evidence of falling prices and impending crash, there are already multiple expressions of interest in even just the hint property below market value.

There is a long, long queue for property in London, and anything other than a very localised fall in value just can't happen for the foreseeable future.

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The very fact that you write such a statement speaks volumes about your naivety.

I'll ask again. Care to provide evidence?

What is about to drive a universal fall in London property value?

Please refer to my post regarding positive influences in the London market.

Feel free to refute my points, and provide evidence to support your contrary argument.

I look forward to hearing your case.

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I'll ask again. Care to provide evidence?

What is about to drive a universal fall in London property value?

Please refer to my post regarding positive influences in the London market.

Feel free to refute my points, and provide evidence to support your contrary argument.

I look forward to hearing your case.

You'll have a long wait . . .

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As Iam beginning to realise the London boom should be put in context,it largely missed out on the madness that saw a doubling of prices in some parts of the provinces between 2002-2004.What focused my mind was the report that television's Ben Fogle had just sold his prime Notting Hill flat for 500k,bought for 325k in 2001.I thought f**k ,I made more than 175k on a mere 77K outlay in the East Midlands.Yep,prices have done nothing for three years here,but they did a hell of a lot better than that when they were rising.I reckon London is playing catch up and prices may not be as stupid as recent increases suggest.

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As Iam beginning to realise the London boom should be put in context,it largely missed out on the madness that saw a doubling of prices in some parts of the provinces between 2002-2004.What focused my mind was the report that television's Ben Fogle had just sold his prime Notting Hill flat for 500k,bought for 325k in 2001.I thought f**k ,I made more than 175k on a mere 77K outlay in the East Midlands.Yep,prices have done nothing for three years here,but they did a hell of a lot better than that when they were rising.I reckon London is playing catch up and prices may not be as stupid as recent increases suggest.

I have to agree with this 100%

I moved to NI from SE London in 2002

HPs in NI have outperformed Greater London pretty much yoy since i moved; but as we are seeing now it is catch up time

now i am not saying that a) this is justified and B) there's not gonna be a crash

but what's happening in London / Greater London is catch up on some level

edit - whenever i put b and then a bracket i allways get a face with shades on!

Edited by prophet-profit
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'Mathematical terms'? What about reality?

You may believe in logic, reason and theories. I believe in demand outstripping supply by tenfold. I believe in the City's status as the leading financial centre of the world. I believe in annual bonuses of £20bn being pumped into the market. I believe in the Olympics in 2012. I believe in Heathrow terminal 5 bringing 60% more traffic to the capital. I believe in runway 3 in 2017. I believe in large scale immigration and foreign investment. I believe in the prodigious ongoing program of residential and commercial regeneration and development. I believe in a burgeoning transport and social infrastructure.

We are talking about the London market, and this is the real world, my friend.

'Mathematical terms'? How quaint.

Some very good points Massive and some very valid ones.

But they too are only theoretical. There are many variables that can effect your outlook.

Im sure the Japanese felt the same once upon a time and probably the Germans too.

Frankfurt and Paris will rival London as financial centres offering a cheaper alternative.

the olympics.... last time I visited Sydney they were running at a loss just maintaining the place and making the stadium smaller as no-one wanted to use it. the so called olympic villages were over half empty. Greece had huge debts for the olympics last time round and is still paying the price. yes it will cause a boom, but the fall out after is going to come at a huge cost.

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I'll ask again. Care to provide evidence?

What is about to drive a universal fall in London property value?

Please refer to my post regarding positive influences in the London market.

Feel free to refute my points, and provide evidence to support your contrary argument.

I look forward to hearing your case.

You wrote

anything other than a very localised fall in value just can't happen for the forseeable future

I suppose it depends on how you define the forseeable future but you seem to dismiss any of the external factors that could have a negative impact on London property values.

You dismiss the fact that a downturn on the stock market would turn off your city bonus tap quicker than you could say "Thames Water".

Like others you have jumped on the bandwagon that thinks turning part of East London into a white elephant theme park will somehow provide any real growth or prosperity while dismissing the costs which are already spiralling out of control. It'll all have to be paid for you know - Oh never mind just stick all the cost on the collective national slate.

You believe whatever figure you like for T5. I can tell you that Heathrow is full: limited by runway capacity. All the terminals in the world wont increase the rate at which or the amount of hours in the day that aeroplanes there can land or take off. The only way to increase capacity (apart from mixed mode operation) is to use larger aircraft or build another runway.

A third runway - well 2017 is a long way off and thats a very earliest date. These things tend to take very much longer in reality you know.

You seem to have swallowed all the government spin about growth as truth. Do you really not see that most of the growth in this country over the last 5 years has been consumer based fuelled by debt? Are you unable to draw any parallels at all with what has happened in the US regarding their property boom, lax lending criteria and subsequent crash? We have gone down the same roads as they have, do you honestly think that the 5th largest economy in the world will now escape a similar outcome despite our debt bubble being much larger (pro rata) than theirs?

As someone else wrote in referral to your, "I believe" post, your attitude displays classic bubble mentality. Things have been going on like this for so long that they cant possibly change. You are focussed on the bubble while remaining blinkered to the wider picture. I reckon the signs of whats coming are there if you look for them. Of course, theres none so blind as those who don't want to see.

Finally your OP was naive because you fail to acknowledge that any unforseen shock could de stabilise our "house of cards" property market. Unforseen shocks tend, by their very nature to be unforseen and shocking.

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£160k for a 1-bed flat is a steal

:lol::lol::lol:

Relative to financial suicide, long term financial disability looks appealing I suppose.

Sorry for the selective quote, but really, listen to what you've just said and think how long it takes you to save 1000 pounds

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There are many variables that can effect your outlook.

Im sure the Japanese felt the same once upon a time and probably the Germans too.

Frankfurt and Paris will rival London as financial centres offering a cheaper alternative.

the olympics.... last time I visited Sydney they were running at a loss ... Greece had huge debts for the olympics last time round and is still paying the price.

Yes, these are sensible considerations.

I believe the next few years to be relatively secure for the capital, but the risk of losing our financial hub to another trade centre is of course a real possibility.

It's hard to say how the Olympic affair will look after the fact, but I think it's undeniable that regeneration will certainly ride the Olympic wave for the next 5 years.

One really has to appreciate that the influence of current factors will persist for many years to come, and even accounting for a pessimistic view, when real evidence is examined the balance of influence is overwhelmingly positive.

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One really has to appreciate that the influence of current factors will persist for many years to come, and even accounting for a pessimistic view, when real evidence is examined the balance of influence is overwhelmingly positive.

Says who?

Oh, I see. Its just your opinion based on your bubble mentality.

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Guest grumpy-old-man
Yes, these are sensible considerations.

I believe the next few years to be relatively secure for the capital, but the risk of losing our financial hub to another trade centre is of course a real possibility.

It's hard to say how the Olympic affair will look after the fact, but I think it's undeniable that regeneration will certainly ride the Olympic wave for the next 5 years.

One really has to appreciate that the influence of current factors will persist for many years to come, and even accounting for a pessimistic view, when real evidence is examined the balance of influence is overwhelmingly positive.

I really am lost for words as you are an intelligent poster. :unsure::unsure:

Edited by grumpy-old-man
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You dismiss the fact that a downturn on the stock market would turn off your city bonus tap quicker than you could say "Thames Water".

Like others you have jumped on the bandwagon that thinks turning part of East London into a white elephant theme park will somehow provide any real growth or prosperity while dismissing the costs which are already spiralling out of control.

You believe whatever figure you like for T5. I can tell you that Heathrow is full: limited by runway capacity. All the terminals in the world wont increase the rate at which or the amount of hours in the day that aeroplanes there can land or take off. The only way to increase capacity (apart from mixed mode operation) is to use larger aircraft or build another runway.

A third runway - well 2017 is a long way off and thats a very earliest date. These things tend to take very much longer in reality you know.

your attitude displays classic bubble mentality. Things have been going on like this for so long that they cant possibly change.

Finally your OP was naive because you fail to acknowledge that any unforseen shock could de stabilise our "house of cards" property market. Unforseen shocks tend, by their very nature to be unforseen and shocking.

Johnny Cash, thank you for your reply.

I don't dismiss the significant contribution of the stock market, in fact I pretty much stated this as a major driving force behind high end prices. Of course a downturn in the market could affect bonuses, but do we have reason to believe such bonuses are likely to fall, or maintain similar levels? In the current climate, I suggest the latter.

I haven't jumped on the Olympic bandwagon. It's simply another factor that is encouraging regeneration and development. Are you denying this?

The whole point of Terminal 5 is the Airbus A380. So yes, larger aircraft. And yes, eventually another runway, too. Just because it's a long way off, doesn't make it inconsequential.

As for the bubble mentality, you are mistaken. Things must inevitably change. Just not yet, and not for the foreseeable future (that being the next few years).

And as for the 'unforeseen shock', for goodness sakes! Yes, city bonuses could evaporate. Yes, terrorists could destroy Heathrow. Yes, an asteroid could slam into the square mile... A degree of caution is always wise, but I hope you see what I'm saying here - we can all play the 'what if' game. If I want to pluck 'possibilities' out of the air, then I can do so too.

My references are real and quantifiable - they exist now, and they will exist in the future.

Are you honestly telling me that city bonuses will dry up, the Olympics have no effect on regeneration, Heathrow traffic will not increase, and a mysterious shock event will bring down the house?

I do hope you're not a betting man, Johnny Cash. Or perhaps you are, and you simply long to see the dealer go bust too?

Edited by Massive
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Guest grumpy-old-man
Johnny Cash, thank you for your reply.

I don't dismiss the significant contribution of the stock market, in fact I pretty much stated this as a major driving force behind high end prices. Of course a downturn in the market could affect bonuses, but do we have reason to believe such bonuses are likely to fall, or maintain similar levels? In the current climate, I suggest the latter.

I haven't jumped on the Olympic bandwagon. It's simply another factor that is encouraging regeneration and development. Are you denying this?

The whole point of Terminal 5 is the Airbus A380. So yes, larger aircraft. And yes, eventually another runway, too. Just because it's a long way off, doesn't make it inconsequential.

As for the bubble mentality, you are mistaken. Things must inevitably change. Just not yet, and not for the foreseeable future (that being the next few years).

And as for the 'unforeseen shock', for goodness sakes! Yes, city bonuses could evaporate. Yes, terrorists could destroy Heathrow. Yes, an asteroid could slam into the square mile... A degree of caution is always wise, but I hope you see what I'm saying here - we can all play the 'what if' game. If I want to pluck 'possibilities' out of the air, then I can do so too.

My references are real and quantifiable - they exist now, and they will exist in the future.

Are you honestly telling me that city bonuses will dry up, the Olympics have no effect on regeneration, Heathrow traffic will not increase, and a mysterious shock event will bring down the house? I do hope you're not a betting man.

we will be the first country in history to have one of the following outcomes:

It will be cancelled. :D

we will change the date as it's not ready. :D

we will be at war (although this could be any year really ;) )

or the pole reversal people get it right & it won't matter anyway. :o

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we will be the first country in history to have one of the following outcomes:

It will be cancelled. :D

we will change the date as it's not ready. :D

we will be at war (although this could be any year really ;) )

or the pole reversal people get it right & it won't matter anyway. :o

I have a terrible feeling you may be proved right on more than one count!

Not that any of these outcomes will affect the next 5 years, of course.

Edited by Massive
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Guest Cletus VanDamme

Gosh, this chap Massive is more bullish about London than me!

I think he's right though, no crash in London unfortunately until 2012.

Yet thinking a bit further afield - Berlin and Frankfurt have a lot to offer, and Frankfurt is often seen as a rival to London in terms of the European financial hub, yet you can buy a flat in either of these two major cities for less than 70K! Go figure.

Frankfurt has some great museums and has a lot more culture than you'd expect. Berlin is a lovely city.

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Yet thinking a bit further afield - Berlin and Frankfurt have a lot to offer, and Frankfurt is often seen as a rival to London in terms of the European financial hub, yet you can buy a flat in either of these two major cities for less than 70K! Go figure.

Frankfurt has some great museums and has a lot more culture than you'd expect. Berlin is a lovely city.

Go figure.

Think really hard, now.

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People seem to have a lot of faith in city bonuses.

During the US mini recession in 2001/2 following dotcom and 9/11 wages at US investment banks were frozen for three years. Across the board. And this was while the firm was still making $1b a year.

If US goes into recession this year or next (as many commentators predict) and stays there, city bonuses will evaporate. They are extremely fickle things.

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People seem to have a lot of faith in city bonuses.

They are extremely fickle things.

Indeed, but they are only one factor amongst many.

There are so many overwhelmingly positive influences, that any negative forecast must necessarily discount or discredit the majority of them. And that's just unrealistic.

No amount of pessimism, statistical analysis, or bloody-minded naysaying will alter the facts as they stand. And it is these facts that drive the market, not opinions and wishful thinking.

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Indeed, but they are only one factor amongst many.

There are so many overwhelmingly positive influences, that any negative forecast must necessarily discount or discredit the majority of them. And that's just unrealistic.

No amount of pessimism, statistical analysis, or bloody-minded naysaying will alter the facts as they stand. And it is these facts that drive the market, not opinions and wishful thinking.

It is cheap credit that has pushed up property (land) prices in London and everywhere else.

The real debate then is where next for cheap credit?

Without it London prices will fall along with everywhere else.

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As Iam beginning to realise the London boom should be put in context,it largely missed out on the madness that saw a doubling of prices in some parts of the provinces between 2002-2004.What focused my mind was the report that television's Ben Fogle had just sold his prime Notting Hill flat for 500k,bought for 325k in 2001.I thought f**k ,I made more than 175k on a mere 77K outlay in the East Midlands.Yep,prices have done nothing for three years here,but they did a hell of a lot better than that when they were rising.I reckon London is playing catch up and prices may not be as stupid as recent increases suggest.

This argument about London playing catch up is flawed...............as London rising LESS than everywhere else between 2001 and 2006 hides the fact that it rose a lot MORE than everywhere else between 1995 and 2001......albeit having slumped more in the early 90s.

Even taking the whole period 1995 to 2006 London rose more than other areas with a few excpetions such as Cornwall.

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One really has to appreciate that the influence of current factors will persist for many years to come, and even accounting for a pessimistic view, when real evidence is examined the balance of influence is overwhelmingly positive.

What you say makes sense, but as you rightly point out the positives reflect gains for the short-term. I think the value added to the East End market from the Olympics regeneration, Cross-Rail, East End Line extensions, Euro-star (Stratford) are currently priced into the market. Further value (or should that be ramping?) will be made as these come online, but the potential gains I believe are small for any new investment. Against these positives I believe you will still have one of the largest unemployment rates in the UK, a large ethnic demographic that is mostly reliant on benefits and low income which exacerbate the wealth divide, an increasing supply of new build flats, and no foreseeable industry (service or otherwise) to take the slack if/when the City takes a downturn. London is currently seen as the financial capital of the world but what can one read into the hue and cry from the New York exchange and its supporters? Does it aim to fight back? It will certainly have more reason if in the midst of a recession and a poor dollar. Frankfurt too is interesting for the reasons that have been said: the low cost of living for employees, the low cost of commercial property, and an optimal time-zone that supports the potential boom markets of Asia. Do these factors appeal to the banks who might just be thinking beyond the current boom times in the UK?

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