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Will London Prices Follow The Slump Some Other Areas Are Seeing?

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Looking at the Barnard Marcus auction, seems swathes of the South East, South and Greater London are still selling and selling what I would call at premium prices.

The question on this thread and the poll is, Will London follow down those areas that are slumping, some of which are showing significant losses even on 2003 Land Reg figures?

Discuss and vote, please.

Edited by The Last Bear

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Given I own in London with no need to trade up the ladder further I'm very much hoping not, so objectivity is going to be tough.

As far as I can be objective though, I'd say if the financial markets have really serious job losses then everywhere will, and whatever happens lots of East London (particularly the identikit new builds with no local infrastructure) and most "up and coming" areas will suffer.

Beyond that I think it won't do well and will stay pretty slow, but while there's still the earning potential there is here and while there's still nowhere near enough property for all the people who want to live here (with almost no potential to build any more anywhere people actually want to live) it won't do as badly as other areas.

EDIT - definitely can't imagine they'll fall as far as to show significant losses on 2003 levels though, barring complete financial armageddon in which case we're all ******ed anyway.

Edited by Benedict

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Given I own in London with no need to trade up the ladder further I'm very much hoping not, so objectivity is going to be tough.

Given that I rent in London with no need to purchase, objectivity is going to be easy. :)

Yes, London is in line for big falls. Prices are insane. Rents are dirt cheap in comparison (although "cheap" in London is a comparative term.) I think it'll take another 6-9 months to kick in hard, but it will happen.

I remember the denial stages on the last crash (yes, I was living in London for that one too), so this time will not "be different." Oh, and I was called wrong by all my friends who bought just before the last crash, so I'm used to getting abuse from those in denial. :)

Nomadd

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Is it going to fall as far as the rest of the country?

I'd say no; the fundamentals are better.

But then I would, as I own, so I rather hope it won't*. Just as those who don't own say 'yes' the fundamentals are no different, because they desperately hope it will.

*Or at least, I desperately hope that the up and come area where I live won't return to being a dump. Which it may if the crash - if we have one - is deep and bad enough.

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Is it going to fall as far as the rest of the country?

I'd say no; the fundamentals are better.

But then I would, as I own, so I rather hope it won't*. Just as those who don't own say 'yes' the fundamentals are no different, because they desperately hope it will.

*Or at least, I desperately hope that the up and come area where I live won't return to being a dump. Which it may if the crash - if we have one - is deep and bad enough.

Thanks for the posts and votes everyone.

I voted for falls by mid 2009 btw.

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It depends really on how many people living in London see a small window of opportunity to cash in and swap a small overpriced terraced house for something much bigger in the South West, Midlands or East Anglia. If the price difference has increased, it's a very attractive option IF you can sell your London home.

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Good to see objective posting in this thread.

FWIW I agreee that the 'fundamentals' of credit, speculation and sentiment in London are stronger than elswhere because wages are higher, all the banks and foreign money are there and , well, its London!

Will at fall as far as the rest of the country? Why not? If the same forces that have inflated the rest of the housing stock have been much stronger in London surely thier removal by the credit crisis will mean that there is actually further to fall?

Thats not to say mayfair will be priced the same as moss side or anything but if HPI has run REALATIVELY faster in London why should the reverse not be true in the downswing?

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Mid '09 or thereabouts, assuming the current credit situation continues to keep the kittens' head underwater until the Autumn - if this years' buying season (spring/summer) is a total disaster, then we'll start to see the traditionally expensive bits go for a slide.

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I thought the anecdotals on here included reports of big price falls in London area!

Just another thought, but could it be that the category of people who are most vulnerable in a crash - recent first-time buyers who've over stretched themselves to get on the property ladder, have been largely priced out of the London market for several years?

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As a priced-out Londoner, I guess I'm hoping for a big drop. London certainly has the same phenomenon of estate agents offices full of bored EAs and absolutely no buyers/sellers being reported in other areas.

Edited by Variously

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London will fall the same if not more than anywhere else

Reasons;

City will lose thousands of jobs, bonuses will be subdued for years

eastern europeans will start drifting home - fewer jobs, continued collapse of the £, improving prospects back home

Look at the current price v rentable value of any property in London, even interest only the rent will cover only 60% - 70% of the mortgage = unsustainable

Stock is growing rapidly with all estate agents, some people will have to sell and set a new price level - divorce, death etc

BTL repos will go through the roof later in the year everywhere especially London

I think the same thing happened in the US, falls everywhere except NY then it hit there

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Good to see objective posting in this thread.

FWIW I agreee that the 'fundamentals' of credit, speculation and sentiment in London are stronger than elswhere because wages are higher, all the banks and foreign money are there and , well, its London!

Will at fall as far as the rest of the country? Why not? If the same forces that have inflated the rest of the housing stock have been much stronger in London surely thier removal by the credit crisis will mean that there is actually further to fall?

Thats not to say mayfair will be priced the same as moss side or anything but if HPI has run REALATIVELY faster in London why should the reverse not be true in the downswing?

Depends what the HPI is composed of, at a guess it's mostly:

Wage inflation + drift in the supply / non speculative demand relationship + genuine improvements to the housing stock + speculative investment

It's the speculative element that's going to be going into reverse most dramatically, along with potentially some of the supply / non speculative demand element if immigration goes significantly into reverse.

So if London's had higher HPI from speculation it'll have a bigger HPC to compensate. I'd say that wage inflation in London has been bigger though, supply growth has been tighter (and is likely to stay tighter), non speculative demand growth has been higher from UK people coming to work here but may also have been higher from immigration that will reverse. Whether those factors have been sufficiently different to the rest of the UK to explain the difference in HPI is hard to tell, but I'd imagine they go some way towards accounting for it.

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There is a housing shortage in London. At the moment. Employment is high.

What happens to prices depends on what happens in the wider economy. Major recession will reduce the housing shortage, and those poxy prison cells, sorry studio flats will become unloved and unloveable.

Equally, I don't think London prices are (were?) that much higher the rest of the country. As I've posted elsewhere, if you want a nice house in the country it will cost you a million. Wherever it is. If you live in town, you want a nice Georgian/Victorian townhouse. If in the country, an acre or two with 5 beds. IMO these are equivalent properties. It'll cost you a million or more.

Places like Cambridge, Oxford, Brighton, Guildford - all London prices. Folkestone and Hastings, even...

On a long-term basis, London has always cost more than the rest of the country. Recently it hasn't - which is why I don't think the downside in the London market will be anything like the rest of the country.

(Yes, I know prices are much cheaper in Burnley than London, but that's not my point.)

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This thread has been scuppered by trolls.

London is ALREADY leading the falls - and will be the epicentre of the crash - watch the parting non doms and the lily livered bankers selling up - it will all be in full swing by summer 2008.

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London is ALREADY leading the falls - and will be the epicentre of the crash - watch the parting non doms and the lily livered bankers selling up - it will all be in full swing by summer 2008.

Hear, hear. Dr House.

I notice nothing riles the bulls more than the prospect of price falls in the capital.

Take a look at Halifax, Land Registry and Rightmove since the crunch. London is LEADING the crash. The YOY figures are obscuring this.

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I think they are falling right now and not far behind the rest of the country.

Looking at the 'one' (admitedly) docklands property I've managed to check (rise of 2.7% over 2004 price so call it a fall of at least 30% from peak 2007) and looking at property snake (21 pages in sw6, up to 18% reductions) I'd say they're coming down with a big bang and right now.

STR'ed in London so can't be trusted to be fully objective...

Edited by williamdb

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http://news.bbc.co.uk/1/shared/spl/hi/in_d.../county37.stm?q

Scroll to the bottom. Your own area of Lambeth is down 10.7%. Thamesmead is doing well in comparison.

I think Telometer is in Southwark (please correct me if I'm wrong about your location) which is a small consolation at the moment, since it has only dropped (nominally) by 2%, so far.

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Given that I rent in London with no need to purchase, objectivity is going to be easy. :)

Yes, London is in line for big falls. Prices are insane. Rents are dirt cheap in comparison (although "cheap" in London is a comparative term.) I think it'll take another 6-9 months to kick in hard, but it will happen.

I remember the denial stages on the last crash (yes, I was living in London for that one too), so this time will not "be different." Oh, and I was called wrong by all my friends who bought just before the last crash, so I'm used to getting abuse from those in denial. :)

Nomadd

Wholeheartedly agree.

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The trolls are hanging on to their last bastion of hope, London.

Well here's some anecdotal for you trolls.......my house mate's brother is a 'property developer' and his finance company has told him to sell ALL of his property's due to the inevitable downturn in the market. They are telling him sell them ASAP hence house mate, a photographer has been down this week to photo all the properties in the portfolio in all their glory and subsequently they are on the market as of this week......there are 7 of these property's and they are all in South West London.

Time to suck more lemons trolls, the crash is fast approaching uncomfortable levels the desperate ramping has ended, and now alas the denial phase for London is about to terminate just as it has for the rest of the UK, soon your will be in capitulation and acceptance then your misery will be complete, shall I have sympathy, well for the unaware and hard struggling family's who simply tried to do the best they could under impossible circumstance, yes very much so....for the trolls and rampers... :lol:

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The trolls are hanging on to their last bastion of hope, London.

Well here's some anecdotal for you trolls.......my house mate's brother is a 'property developer' and his finance company has told him to sell ALL of his property's due to the inevitable downturn in the market. They are telling him sell them ASAP hence house mate, a photographer has been down this week to photo all the properties in the portfolio in all their glory and subsequently they are on the market as of this week......there are 7 of these property's and they are all in South West London.

Time to suck more lemons trolls, the crash is fast approaching uncomfortable levels the desperate ramping has ended, and now alas the denial phase for London is about to terminate just as it has for the rest of the UK, soon your will be in capitulation and acceptance then your misery will be complete, shall I have sympathy, well for the unaware and hard struggling family's who simply tried to do the best they could under impossible circumstance, yes very much so....for the trolls and rampers... :lol:

You're preaching to the converted here, Fernando. See my London STR thread.

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Actually I do wonder about how the inevitable BTL crash will effect London.

My landlord is am imdb listed actor/producer, with a flat near Canary Wharf. He's currently subsidising my rent to the tune of 150gbp a month. Not knocking him, and he's been involved in a couple of reasonably ethical "buzz" films.

Now I wonder how many people in London of a similar ilk in the capital have invested in the Northern BTL towns, most probably MEWing their London places once there's enough equity.

I've sort of got the feeling there'll be a reverse crash effect, drops in Northern BTL's throwing London landlords into -ve equity. Once this happens, they could dump their own places onto the market, depressing London in a big way.

Seems to me that most of the macroeconomic decisions in the UK are made to deal with the economy in the South East. But I think the linkage to the rest of the country caused by the rampant HPI that has occured down there will actually have a rebound effect.

Similar things seem to be occuring with the Dublin money that ploughed into Manchester and latterly Liverpool.

I'm sure the reflective bubble that has increased more in the regions will pop more severely. But I would suggest for this reason that London will have a surprisingly big downturn. Especially if London's main breadwinner of the City also siezes up.

***Rioja typing correction whilst listening to Trent Reznor***

Edited by shippers

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  • 292 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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