Paddles Posted March 19, 2008 Share Posted March 19, 2008 http://business.timesonline.co.uk/tol/busi...icle3579150.ece This is significant. Very very very very very significant. "Prime London" ain't quite so prime after all..... Savills fears City bonus impact on propertyJames Rossiter, Property Correspondent Savills, the property agency, has given warning of sharp price falls for multi-million-pound Central London flats and houses this year and next, reversing a forecast made last autumn. Fears that City banking bonuses for the coming year will be a fraction of the last £7.4 billion annual payout is expected to put a further chill on demand for central London housing in the £1 million to £5 million bracket. House prices in this price bracket have already fallen on average 1.5 per cent during the first three months of this year. Those price falls come after a decline of 2 per cent during the last three months of 2007, according to Savills. The property agency expects prices to continue falling quarter-on-quarter for the whole of 2008, ending down 4 per cent for the year. Last September, as the credit crunch began to unfold, Savills predicted prime Central London house prices to recover in the second half of 2008 and forecast a 5 per cent rise over the year. Until last summer Savills had expected price rises of about 14 per cent during 2008 for prime Central London. Worst affected this year will be flats in the Kensington, Chelsea and Notting Hill areas in the £1 million to £2 million price bracket. This was the favoured purchase for young bankers, but many are now more worried about keeping their jobs than the size of their bonus at the end of 2008, according to Lucian Cook, director of Savills residential research. Flats in this price bracket have already fallen by 2.7 per cent between January and March. If that rate of decline continues, a flat valued at £2 million in January could end up selling for £200,000 less at the end of December. Mr Cook said: “When we did our forecast in September we were looking at the credit crunch having a minimal impact with bonuses only being marginally affected in the short term. Now we believe it will have a deeper longer impact and that will inevitably affect the London market for City buyers.” Prices of homes in the £5 million-plus bracket, so-called super-prime, rose 1.7 per cent over the first quarter as the sector’s reliance on cash-rich overseas buyers meant that it remained immune to the credit crunch The Centre for Economic and Business Research, an independent think-tank, this week upped its forecast of City job losses to 10,000, a rise of 1,500 from their previous update in January. Quote Link to comment Share on other sites More sharing options...
thecrashingisles Posted March 19, 2008 Share Posted March 19, 2008 http://business.timesonline.co.uk/tol/busi...icle3579150.eceThis is significant. Very very very very very significant. "Prime London" ain't quite so prime after all..... But that will only affect the little people in the "£1 million to £5 million bracket". Real prime London is safe. Quote Link to comment Share on other sites More sharing options...
Converted Lurker Posted March 19, 2008 Share Posted March 19, 2008 the big falls for me in that London will be the 900K Fulham 3/4 bed suddenly being worth 500K, still fortunes but... Quote Link to comment Share on other sites More sharing options...
grey shark Posted March 19, 2008 Share Posted March 19, 2008 This is significant. Very very very very very significant. "Prime London" ain't quite so prime after all..... No sh1t , tell us something we don't know Quote Link to comment Share on other sites More sharing options...
miko Posted March 19, 2008 Share Posted March 19, 2008 http://business.timesonline.co.uk/tol/busi...icle3579150.eceThis is significant. Very very very very very significant. "Prime London" ain't quite so prime after all..... The bonus payments this year are for 2007, and things only got bad in September onwards, so most of the profits were for the good times pre September, we are in for a very bad year, I wonder what the bonus payments will be like next year and what affect that will have on london property . Quote Link to comment Share on other sites More sharing options...
eric pebble Posted March 19, 2008 Share Posted March 19, 2008 (edited) But that will only affect the little people in the "£1 million to £5 million bracket". Real prime London is safe. B0ll0cks.... It'll go down too as the über-rich get the f0ck out of this hell-hole of a country...... Edited March 19, 2008 by eric pebble Quote Link to comment Share on other sites More sharing options...
@contradevian Posted March 19, 2008 Share Posted March 19, 2008 The bonus payments this year are for 2007, and things only got bad in September onwards, so most of the profits were for the good times pre September, we are in for a very bad year, I wonder what the bonus payments will be like next year and what affect that will have on london property . The "good times" being selling toxic sludge as AAA rated securities to bigger fools? Quote Link to comment Share on other sites More sharing options...
D'artagnan Posted March 19, 2008 Share Posted March 19, 2008 Agreed. And it proves that EA's are not perma-bulls as many on here would have you believe. When the game is up, best to get it over with nice and quick so you can start again! J Quote Link to comment Share on other sites More sharing options...
bricksandmorter Posted March 20, 2008 Share Posted March 20, 2008 Fears that City banking bonuses for the coming year will be a fraction of the last £7.4 billion annual payout is expected to put a further chill on demand for central London housing in the £1 million to £5 million bracket. House prices in this price bracket have already fallen on average 1.5 per cent during the first three months of this year. Oh dear, would the majority actually feel sorry for them, I doubt it very much. They have helped create the outrageous price increases within London and all of the country commutable areas surrounding anyway, its an inherent part of the priveledges of living there (there are none in my opinion but I am sure they see it that way). Hopefully out of all this it will give the UK a firm kick up the butt and make all of the aspiraitonals realise that theres more to life than an overinflated income and overpriced designer properties and get on with living. Quote Link to comment Share on other sites More sharing options...
Dr Nick Riviera Posted March 20, 2008 Share Posted March 20, 2008 While some economists might count the number of sofa sales as a barometer to gauge the economy, I’d use Kensington to gauge HPI. Kensington is where it starts and where it all finishes when central London rises it sends ripples to neighbouring boroughs – London - The SE - UK. We’ve had the ripple effect and now we’ll probably get the domino effect. Seriously though there’s some fact to what I’m saying. Quote Link to comment Share on other sites More sharing options...
Mr Yogi Posted March 20, 2008 Share Posted March 20, 2008 Agreed. And it proves that EA's are not perma-bulls as many on here would have you believe. When the game is up, best to get it over with nice and quick so you can start again!J Quite. Estate agents are always put in the VI camp when in actual fact they have no vested interest in a rising property market, simply a busy one. Their interest is in selling houses quickly and at minimum cost to themselves. Estate agents will be playing a major role in the next year or so talking down the market in order to generate activity - and commissions! Quote Link to comment Share on other sites More sharing options...
DblEntry Posted March 20, 2008 Share Posted March 20, 2008 While some economists might count the number of sofa sales as a barometer to gauge the economy, I’d use Kensington to gauge HPI.Kensington is where it starts and where it all finishes when central London rises it sends ripples to neighbouring boroughs – London - The SE - UK. We’ve had the ripple effect and now we’ll probably get the domino effect. Seriously though there’s some fact to what I’m saying. Agreed. Middle class professionals only live in Clapham/Wandsworth/Putney because they can't afford to live in Chelsea and Kensington. As soon as prices start to fall in the Chelsea/Kensington it will have a very obvious ripple effect through all of 'prime' South West London. Why by a house for £1m in Nightingale Triangle if you can get one in Chelsea? This will then impact upon areas like Dulwich which are known for being the next stop once SW4/11/12 becomes too expensive. Yes I am South London centric because that is where I have always lived! Quote Link to comment Share on other sites More sharing options...
red Posted March 20, 2008 Share Posted March 20, 2008 top end stuff sure coming down around my way... if you have property bee, try this: http://www.rightmove.co.uk/action/publicsi...Search/svr/2012 The Bishops Avenue, Hampstead Garden Suburb, N2 0EE7 bedroom detached £7,500,000 An imposing and substantial 7 bedroom detached residence situated in this internationally renowned location. The property has been recently refurbished throughout and offers stunning immaculatet accommodation extending to 7754 sq ft including an indoor swimming pool complex . Additionally the pr... * Price changed: from '£8,750,000' to '£7,500,000' * Brief Description changed: An imposing and substantial 7 bedroom detached residence situated in this internationaly internationally renowned location. The property has been recently refurbished throughout and offers first class family stunning immaculatet accommodation extending to 7754 sq ft including an indoor swimming pool. pool complex . Additionally the property benefits from a large rear g... pr... 1st Mar 2008 19:42:04 * Price found: £8,750,000 * Title found: The Bishops Avenue, Hampstead Garden Suburb, N2 0EE * Subtitle found: 7 bedroom detached * Brief Description found: An stunning substantial residence situated in this internationaly renowned location. The property has been recently refurbished throughout and offers first class family accommodation extending to 7754... * Agent found: Godfrey And Barr * Agents Location found: Hampstead Garden Suburb * Agents Telephone found: 08452172957 * Status found: Available Quote Link to comment Share on other sites More sharing options...
Mikhail Liebenstein Posted March 20, 2008 Share Posted March 20, 2008 Agreed. And it proves that EA's are not perma-bulls as many on here would have you believe. When the game is up, best to get it over with nice and quick so you can start again!J Although I am not currently planning on buying, I had been round to see a few properties just keep an eye on the market. I have been shown a few by Savills, and I can confirm that I have on a few occasions heard the agents utter bear talk - in one case in front the seller. Nothing really bearish or doom laden, but subtle, matter of fact and actually numerically accurate. A simple statement that the land registry figures are down x% since the peak last august. Other agents haven't been this realistic and I am still hearing some of the smaller local EAs and Foxton's talking complete rubbish, presumably to impress the seller who they have got on their books with a massively overinflated valuation. If you watch a lot of these properties subsequently they stay on 12-15 weeks and then get pulled off and moved to a new agent or a multi agent agreement. I suspect the reason for this is that Savills is a large agency and perhaps actually bothers to carry out training for it's staff - recent classes probably include topics like "how to sell a house in a falling market" and "the art of lowering seller's expectations". This probably is the right strategy over time, perhaps they will fail to win a few properties for their books to the like of Foxton's, but I guess getting the sale and commission is what counts. Better to get 10 sales from 20 properties on your books than 0 from 100. I am sure the other agents will change their approch as the alternative is to go out of business. Generally sellers also get to find out who is actually selling and who isn't and start to go to the successful agents once they have realigned their expectations. Quote Link to comment Share on other sites More sharing options...
Dr House Posted March 20, 2008 Share Posted March 20, 2008 Worst affected this year will be flats in the Kensington, Chelsea and Notting Hill areas in the £1 million to £2 million price bracket. This was the favoured purchase for young bankers, but many are now more worried about keeping their jobs than the size of their bonus at the end of 2008, according to Lucian Cook, director of Savills residential research. This is KEY. The flats they are talking about here are usually 2 bedders in a large old building with communal "challenges", surround noise and no outside space. Basement flats tee'd up for £1m is where the insanity has reached - but: THE ONLY PEOPLE WHO BUY THESE DO SO FOR STATUS, NOT FOR PRACTICALITY OR RAISING A FAMILY. ie they are the City/ big business single or dinky muppets whose salaries will crash imminently. This single phenomenon IMHO is the butterfly's wings of the biggest crash the UK has seen, probably including the 90s. Quote Link to comment Share on other sites More sharing options...
Paddles Posted March 20, 2008 Author Share Posted March 20, 2008 honestEA in a couple of threads in anecdotals has said the same thing.He also mentioned that the large chains will get the repo work and that some branches have 80% of their book being repos.---Tahmesmead area. It's the Freakonomics story; when the EA making 2% commission on a sale realises that a sale at £180,000 instead of £200,000 makes them, personally, only 10% less, they will be very quick to petition the seller to lower their expectations. Quote Link to comment Share on other sites More sharing options...
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