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bomberbrown

Could The London Property Market Be Cooling?

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http://property.timesonline.co.uk/tol/life...icle1998829.ece

Buyers are no longer willing to pay silly money, so a neighbouring council estate, a railway line or a noisy road is making a difference again. Buyers are not losing confidence yet, just becoming fussier.”

And when the cheap credit drys up, people won't even be able to pay silly money to put a roof over their head. Ha!

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If you are hoping for a crash this year in London then think again.

The economy is sound(ish).

Employment figures look OK.

Inflation is up a bit (official and unofficial) but not a great deal.

Exchange rates look steady.

Stock market steady.

Lack of planning approvals and pent up demand for houses will keep London up there as one of the most expensive places to live in the world (where its been for the last 20 to 30 years).

I cant see any major changes in the forseeeable future.

Was bomber brown a footballer?

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If you are hoping for a crash this year in London then think again.

The economy is sound(ish).

Employment figures look OK.

Inflation is up a bit (official and unofficial) but not a great deal.

Exchange rates look steady.

Stock market steady.

Lack of planning approvals and pent up demand for houses will keep London up there as one of the most expensive places to live in the world (where its been for the last 20 to 30 years).

I cant see any major changes in the forseeeable future.

Was bomber brown a footballer?

No its a nickname I got in the army (surname's Brown).

If you are alluding that London is somehow immune from a downturn in the housing market then you are very much deluded (IMO) and we'll have to agree to disagree on that one. London is gradually becoming a place to live for the extremely wealthy or those dependent on benefits. It's not a complete sh1thole yet........ but its heading that way.

The fact that I have a reasonable job and a Housing Association flat affording me to save a considerable amount of money every month (for a deposit) is the only thig keeping in London right now.

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No its a nickname I got in the army (surname's Brown).

If you are alluding that London is somehow immune from a downturn in the housing market then you are very much deluded (IMO) and we'll have to agree to disagree on that one. London is gradually becoming a place to live for the extremely wealthy or those dependent on benefits. It's not a complete sh1thole yet........ but its heading that way.

The fact that I have a reasonable job and a Housing Association flat affording me to save a considerable amount of money every month (for a deposit) is the only thig keeping in London right now.

Nowhere is immune to fundamental economics.

What I'm saying is that I cant see a crash in London happening in the immediate future.

The economy is good.

http://news.independent.co.uk/business/new...icle2723224.ece

Employment levels are low.

People around the world want to get a posting to London to catch the buzz.

Industry wants a base there.

Land is scarce / planning restrictions terrible plus the constant pressure of willing buyers.

all adds up in my view to property remaining out of many peoples pockets for many years.

Edited by expatowner

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Nowhere is immune to fundamental economics.

What I'm saying is that I cant see a crash in London happening in the immediate future.

The economy is good.

Employment levels are low.

People around the world want to get a posting to London to catch the buzz.

Industry wants a base there.

Land is scarce / planning restrictions terrible plus the constant pressure of willing buyers.

all adds up in my view to property remaining out of many peoples pockets for many years.

Sounds like we're partying like it's 1989 ;-)

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If you are hoping for a crash this year in London then think again.

The economy is sound(ish).

Employment figures look OK.

Inflation is up a bit (official and unofficial) but not a great deal.

Exchange rates look steady.

Stock market steady.

Lack of planning approvals and pent up demand for houses will keep London up there as one of the most expensive places to live in the world (where its been for the last 20 to 30 years).

I cant see any major changes in the forseeeable future.

Was bomber brown a footballer?

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Nowhere is immune to fundamental economics.

What I'm saying is that I cant see a crash in London happening in the immediate future.

The economy is good.

Employment levels are low.

People around the world want to get a posting to London to catch the buzz.

Industry wants a base there.

Land is scarce / planning restrictions terrible plus the constant pressure of willing buyers.

all adds up in my view to property remaining out of many peoples pockets for many years.

The only bit I can agree with in your post is the part I've put in bold.

* The economy is built on credit.

* The real employment levels are masked by the increase in public sector employees and incapacity benefitted people and the other 8 million 'economically inactive' people in the UK.

* 7 people were either shot or stabbed to death in as little as 2 days last weekend. It's great living here. <_<

* What industry wants a base here? Finance. Thats about it.

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Could we put our differences down to pessimism and optimism?

I think London is a great place to live and work.

Loved every minute of my 10 years or so there.

Edited by expatowner

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If you are hoping for a crash this year in London then think again.

The economy is sound(ish).

Employment figures look OK.

Inflation is up a bit (official and unofficial) but not a great deal.

Exchange rates look steady.

Stock market steady.

Lack of planning approvals and pent up demand for houses will keep London up there as one of the most expensive places to live in the world (where its been for the last 20 to 30 years).

I cant see any major changes in the forseeeable future.

Was bomber brown a footballer?

Several of the experienced commentators such as Marc Faber; Jim Puplava, Frank Barberra, Bob Hoye etc. are expecting a global financial crises in the next few months. If this occurs, there will be some kind of sell of in the London markets. Jim Puplava compares it to 1987. Some of the commentators are comparing the Chinese situation to that of the US before the 29 Wall Street Crash.

There is a lot of levereged investment into mortgage backed funds on the global markets. Many of these mortgages, held by those funds, are sub-prime. If a big global correction does occur, it will affect the City of London. There will be less in the line of bonuses and a lot less liquidity around. There will be a lot less 'silly money' going into the market. This will likely cause the housing market to stall and then fall. Once prices start to fall BTL investors will head for the exit and cause the crash to step up a gear.

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If you are hoping for a crash this year in London then think again.

The economy is sound(ish).

Employment figures look OK.

Inflation is up a bit (official and unofficial) but not a great deal.

Exchange rates look steady.

Stock market steady.

Lack of planning approvals and pent up demand for houses will keep London up there as one of the most expensive places to live in the world (where its been for the last 20 to 30 years).

I cant see any major changes in the forseeeable future.

All the things you say above (apart from the first line) are absoloutely true.

All the things you say above (apart from the first line) were absolutely true of Dublin six months ago.

Coz you and all the other smug Londoners / Dubliners know that prime residential property in a capital city can never crash.

http://www.rte.ie/business/2007/0430/houses.html

House report shows sharp Dublin drop

Property website Daft.ie says asking prices for houses have been slowing, with some sectors of the market showing drops of more than 10% in the last six months.

The site's latest report says asking prices in April were just 2.1% ahead of the same month last year, when price inflation was 13.5%.

It said the upper end of the Dublin market had been hardest hit, with asking prices in Howth and Malahide down more than 10% in the last six months, and prices in Rathmines, Rathgar and Ranelagh dropping 12.6%

The last six months collective mania in London is coming to an end, and the drop is going to be all the more amusing for us provincials after the slighlty patronising guff about how London is so different and special.

Prime London, like prime Dublin, is going to fall off a cliff.

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Could we put our differences down to pessimism and optimism?

I think London is a great place to live and work.

Loved every minute of my 10 years or so there.

We could. I'm not completely dumbing London down and its because of its vibrancy that I moved here 9 years ago. However, I think you'd have to be blind not to notice how much London is slowly going down hill. I visited my old local area of Lower Clapton, Hackney recently and it was nothing like I remember it when I first lived there 9 years ago. Filthy disgusting deprived and rundown area is how I'd describe it now. Apologies to Hackney residents.

I hate to use this phrase because I don't regard it as a completely 'white' phenomena, but it sums up whats been happening in London over the past 10 years, but 'white flight' has been going on and before we know it London will be sole home to the filthy rich and the benefit claimants/immigrants.

You're right, that does sound pessemistic but I make no apologies for it.

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Ok, my comments on your points...

If you are hoping for a crash this year in London then think again.

The economy is sound(ish).

The UK economy is built on London, which is built on the explosive growth in financial engineering. In America, banks found ways to apparently increase returns without increasing risk, mostly though the use of CDO's, credit derivatives and related structures. This industry is now getting itself into very big trouble with the US mortgage bust, and it's already starting to drag London down. We won't escape a US credit crunch.

Employment figures look OK.

Employment is a lagging indicator, if you look at history, unemployment is at it's very lowest just before a recession, so your point is bad news, not good news. If unemployment was high and the housing market was doing well I'd be more optimistic about it.

Inflation is up a bit (official and unofficial) but not a great deal.

Exchange rates look steady.

Stock market steady.

What really matters is the supply of credit to the market, and this is beginning to contract.

In America credit spreads have started to widen, that will force credit spreads to widen over here.

Lack of planning approvals and pent up demand for houses will keep London up there as one of the most expensive places to live in the world (where its been for the last 20 to 30 years).

The cost of housing is measured by rents, not asset prices. In the same way if you get a train to work, your cost of transport is measured by the price of the train fare, not the price of the train. You can look at the ONS statistics yourself, rents are rising at 3.2%.

I used to rent a 2 bed apartment in London for £325 a week, 6 years later you can still rent similar properties in the same area for £350.

So the "housing shortage" argument is nonsense, sadly repeated so often that many people believe it.

I cant see any major changes in the forseeeable future.

Watch what is happening in America...

Was bomber brown a footballer?

Haven't got the foggiest.

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Ok, my comments on your points...

The UK economy is built on London, which is built on the explosive growth in financial engineering. In America, banks found ways to apparently increase returns without increasing risk, mostly though the use of CDO's, credit derivatives and related structures. This industry is now getting itself into very big trouble with the US mortgage bust, and it's already starting to drag London down. We won't escape a US credit crunch.

So your arguement can be distilled down into if a crash happens in the US then it must happen here? Is that correct?

What really matters is the supply of credit to the market, and this is beginning to contract.

In America credit spreads have started to widen, that will force credit spreads to widen over here.

Credit is still loose in Britain.

the "housing shortage" argument is nonsense

Housing shortages obviously have an impact on prices.

I dont know how you can argue otherwise.

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The cost of housing is measured by rents, not asset prices. In the same way if you get a train to work, your cost of transport is measured by the price of the train fare, not the price of the train. You can look at the ONS statistics yourself, rents are rising at 3.2%.

http://business.timesonline.co.uk/tol/busi...icle2013128.ece

The continued outperformance of prime property in London is masking softer performance in the south-eastern suburbs. Lettings data from the agent Knight Frank, also released today, shows that rents have increased 12.2 per cent in a year in London, boosted by higher prices in Canary Wharf and Wapping.

Not saying they're more accurate than the ONS statistics, just giving another information source.

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Housing shortages obviously have an impact on prices.

I dont know how you can argue otherwise.

Apparently there isn't a housing shortage. Several people have said that it's been "debunked" here many times before, so it must be true.

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Apparently there isn't a housing shortage. Several people have said that it's been "debunked" here many times before, so it must be true.

Yawn. Rents haven't gone up in London for about 7 years. So the "shortage" hasn't affected rental prices.

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Yawn. Rents haven't gone up in London for about 7 years. So the "shortage" hasn't affected rental prices.

Where are these statistics showing that rents haven't gone up in London? As far as I can see rents have gone up, not in lnie with house prices but they've still gone up. And there are a lot of people who'd happily rent with friends and share houses but would want to buy on their own.

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Apparently there isn't a housing shortage. Several people have said that it's been "debunked" here many times before, so it must be true.

Serious question. If there was a housing shortage, how many properties would you expect to find listed for sale on a website like Rightmove in any given day? An extenstion to this question is how many places for sale would you expect a local EA to have on their books at any given time?

People are hardly walking into EA's:

Buyer: "You got any houses for sale today mate?"

EA: "Nah sorry, we had one in half an hour ago but we sold it straight away. Try again tomorrow."

;)

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Housing shortages obviously have an impact on prices.

I dont know how you can argue otherwise.

Quite (but only if you believe there is a shortage). But equally so:

Housing shortages affordability obviously has an impact on prices.

I dont know how you can argue otherwise.

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Where are these statistics showing that rents haven't gone up in London? As far as I can see rents have gone up, not in lnie with house prices but they've still gone up. And there are a lot of people who'd happily rent with friends and share houses but would want to buy on their own.

There are no objective stats. I've just lived in various areas of London and observed. Rents seemed really really high 7 years ago. Have a look on findaproperty on the internet archive if you don't believe me.

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Serious question. If there was a housing shortage, how many properties would you expect to find listed for sale on a website like Rightmove in any given day? An extenstion to this question is how many places for sale would you expect a local EA to have on their books at any given time?

People are hardly walking into EA's:

Buyer: "You got any houses for sale today mate?"

EA: "Nah sorry, we had one in half an hour ago but we sold it straight away. Try again tomorrow."

;)

About as many as there are? Maybe even a few more? If you're looking in a particular area for a particular type of property with a particular budget (even a realistic one) then that immediately knocks out the vast majority of properties available. Of the few that are left some will have obvious things wrong with them or are overpriced. And the handful in that area that are actually nice and reasonably priced will have the other dozen people with your requirements fighting over them viciously, or more usually someone else will already have got in to view it in the two nanoseconds between it coming on the market and you ringing the agent and got it under offer . . .

If you don't give a damn what sort of property you buy, where it is or how much you pay for it then I agree, there's no shortage at all.

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There are no objective stats. I've just lived in various areas of London and observed. Rents seemed really really high 7 years ago. Have a look on findaproperty on the internet archive if you don't believe me.

Fair enough, I'm too young to have been watching the market that thoroughly for that long, I've tracked rents and prices for the properties I'm familiar with for the last few years and rents seem to have gone up as well, but I've nothing over a 7 year timescale.

So 7 years ago rents were really high and property prices really low, now property prices are really high and rents not much lower, pool things together and there's a bit of a shortage.

Who knows, it's all anecdotal. I can only go from my own experiences searching for property and how hard it is to find anything and how bitterly contested anything nice was. I think shortages are less critical in 1 & 2 bed flats as well, which the rental market is weighted towards far more heavily.

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Guest Cletus VanDamme
I hate to use this phrase because I don't regard it as a completely 'white' phenomena, but it sums up whats been happening in London over the past 10 years, but 'white flight' has been going on and before we know it London will be sole home to the filthy rich and the benefit claimants/immigrants.

You're right, that does sound pessemistic but I make no apologies for it.

Eh, you must be living in a different London!

The white flight has been going the other way in recent years. Witness the transformation of places such as Shoreditch, Hoxton, London Fields. OK, physical I still think they're dumps, but the middle class have been steadily moving back in.

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Guest d23
Yawn. Rents haven't gone up in London for about 7 years. So the "shortage" hasn't affected rental prices.

not sure I agree with that

I've been renting in London during that time and my rents have definitely gone up, no question

I've been living in Shoreditch / Brick Lane / Stoke Newington tho, all of which are areas that have experienced a pretty booming 7 years but even so I think you'd be hard pressed to find Londoners who are paying the same rent they were 7 years ago.

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