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We undertake research into the movement of Notting Hill house values and below is a link to our latest graph and index. The graph and index use pounds per square foot at the date of exchange and appears to replicate the market and the volatility very well. It is interesting to note our graphs show a much greater fall from the peak and subsequent re-bound. Notting Hill is very dependent upon the fortunes of the City.

http://www.johndwood.co.uk/pdf/notting_hill_july_2010.pdf.pdf

James Wyatt F.R.I.C.S.

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We undertake research into the movement of Notting Hill house values and below is a link to our latest graph and index. The graph and index use pounds per square foot at the date of exchange and appears to replicate the market and the volatility very well. It is interesting to note our graphs show a much greater fall from the peak and subsequent re-bound. Notting Hill is very dependent upon the fortunes of the City.

http://www.johndwood.co.uk/pdf/notting_hill_july_2010.pdf.pdf

James Wyatt F.R.I.C.S.

Broadly speaking, is there much difference in £ per square foot between flats and houses ?

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We undertake research into the movement of Notting Hill house values and below is a link to our latest graph and index. The graph and index use pounds per square foot at the date of exchange and appears to replicate the market and the volatility very well. It is interesting to note our graphs show a much greater fall from the peak and subsequent re-bound. Notting Hill is very dependent upon the fortunes of the City.

http://www.johndwood.co.uk/pdf/notting_hill_july_2010.pdf.pdf

James Wyatt F.R.I.C.S.

James, if you don't mind my asking: why do you post on here? You get more grief than thanks for your efforts. Do you think you'll drum up trade through these posts? These questions are sincerely asked.

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James, if you don't mind my asking: why do you post on here? You get more grief than thanks for your efforts. Do you think you'll drum up trade through these posts? These questions are sincerely asked.

To create backlinks?

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Flats versus Houses

There can be circa 25%-30% difference between flats and houses depending upon location (houses in streets, which comprise of flats, tend to transact at a discount).

Why Post

The reason is simply to help people and give them a realistic view of what is happening in the market. Our indices have shown much greater volatility and are far more representative of the general market as they use actual transactions.

James Wyatt FRICS

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  • 3 weeks later...

Random ridiculousness, Notting Hill Style.

Price reduction, from 1,000,000 to 999,950. Knocking a whopping 50 quid off the asking:

Avondale Park Gardens, London, W11

22029_HOL050054_IMG_00_0000.jpg

History
Fri Aug 13 21:58:23 2010
* Price changed: from '£1,000,000' to '£999,950'
Tue Jul 27 14:37:55 2010
* Price changed: from '£1,100,000' to '£1,000,000'
Tue Jun 8 00:13:20 2010
* Price found: £1,100,000
* Status found: Available

Fun fact: these used to be council houses, back in the day.

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  • 1 month later...
  • 2 weeks later...
  • 3 months later...

24% reduction from asking price: http://www.rightmove.co.uk/property-for-sale/property-25532821.html

2 bedroom flat for sale £475,000
Notting Hill, London, W11
History
Sat Nov 6 19:06:55 2010
* Price changed: £560,000 £475,000
Fri Oct 1 22:25:15 2010
* Price changed: £625,000 £560,000
Thu Jul 15 22:38:21 2010
* Price found: £625,000
* Status found: Available

20% reduction from asking price. Same block, different flat: http://www.rightmove.co.uk/property-for-sale/property-30438047.html

2 bedroom maisonette for sale £475,000
Campden Hill Towers, Notting Hill
History
Sun Jan 23 00:11:21 2011
* Price changed: £500,000 £475,000
* Status changed: Available Under offer
Mon Dec 27 16:54:18 2010
* Price changed: £475,000 £500,000
Tue Nov 2 23:24:59 2010
* Price changed: £520,000 £475,000
Fri Oct 1 22:25:32 2010
* Price changed: £575,000 £520,000
Sun Sep 12 12:32:19 2010
* Price changed: £595,000 £575,000
Thu Jul 15 22:38:51 2010
* Price found: £595,000
* Status found: Available
Edited by darwin
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  • 1 month later...

Looks like this is a developer who ran out of luck.

2 refurbs, both in the same house up for auction:

3-bedroom flat, St Quintin Avenue, W10. Guide Price £270,000 http://www.rightmove.co.uk/property-for-sale/property-29185189.html

2-bedroom flat, St Quintin Avenue, W10. Guide Price £170,000 http://www.rightmove.co.uk/property-for-sale/property-29185159.html

The 2-bedroom flat is let on an AST dating from 27.10.2010 but IIRC, these flats have been on the market for much longer than that. The 3-bedroom flat is still being marketed by Marsh & Parsons with an asking price of £385,000.

No doubt that these flats will shift at auction, but it's very telling that they haven't sold on the open market. In the crazy times these flats would have sold in, like, a week.

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  • 6 years later...

Amazing to look back on this thread from a decade ago.  Prices dropped hard in 2009 - but also only briefly.  They powered up to new record levels (of price - and perhaps insanity) because of offshore fortunes being laundered over the internet into what became called "Prime Central London" or "PCL".  It never had that name before and the borrowing from butchers' language may be a clue.

Using history as a guide, any financial phenomenon that gets a new monicker (and particularly a TLA or THree Letter Acronym( we are closer its than its beginning.  Think TMT (Telecom Media Technology) stocks in 1999/2000.  CDOs in 2006/7.

What TLAs do we see now?

First, I expect Bitcoin (BTC) will not break above $20,000 and will drop at least 60% by 2019.

Second, I expect PCL (and especially K&C) will drop hard.  Multiple factors are in play - somewhat ad libbing:

(1) go out in South Kensington - the biggest "buy to leave" area in town - and restaurants and bars have closed everywhere.  Walton Street was full of energy 10 years ago; now it's a ghost town.  The old stalwart La Brasserie on Fulham Road has shuttered after decades.  The Chanel shop next door has also closed - imagine, Chanel has closed!  So many houses are vacant that there aren't enough customers to pay the rents.  People won't pay up to live in dead areas.  The overclass don't buy these houses to live there.  At some point, if all the bars & cinemas have been turned into luxury apartments, there's no point living there as there's nowhere to go out.  The trend contains the seeds of its own end.

(2) Post-Grenfell there is now a Labour MP for the first time ever in Kensington.  The Tory council have learned that if you continue to sell houses offshore to people who don't vote, all you are left with is Labour voters.  The new MP is going to upend planning and consents; the Royal Borough will be repurposed so it serves everyone.  This is an epochal shift.

(3) The Government & London Mayor both understand that we need to fix the housing market and action is being taken.  The Tories understand that if they don't fix housing, we're going to elect Corbyn.  Sadiq Khan understands that Labour need to fix housing so Labour voters will continue to support him.

(4) Global crackdown on tax evasion and money laundering.  Not much is said about this but it's being spearheaded by the OECD.  The Gulf kingdoms are introducing VAT to hold off the threat of put on the OECD & G20 Black List of uncooperative jurisdictions.  The EU already put the UAE there as a warning shot.

(5) With oil permanently below $100 and the squabbles in the GCC, the oil nations have switched from pushing out dollars to sucking them in.  There's a slow hissing sound of deflation in anywhere that benefited from oil prices.  Talk to anyone in London whose business sells to people from the oil states: 2017 was a terrible year and it's getting worse.

(6) Over 200 apartment blocks with apartments over £1m are coming on to the London market.  There's a huge overhang which, at peak sales volumes from a few years ago, represents 20 years of supply of "luxury apartments" coming onto the market at once.

(7) The dodgy money that needed to leave the ex-USSR states has mostly gone and there is no new money waiting to leave; sanctions make it harder too.  Talk to anyone who works in the property business in Knightsbridge and you won't wait long until they tell you it's trading at 40% below peak, in tiny volumes; and if you're a buyer, how many do you want?

(8) The squeeze on UK incomes means that people are moving out rather than paying ever-increasing rents.  It's polluted and at times dangerous in central London.  It's clean and safer in the 'burbs and transport is so good that you can be in the centre of down quickly from anywhere.

(9) There is a mini exodus of EU workers from London; it's being blamed on Brexit but it's actually down to EURGBP.  With EURGBP at 0.70, you could come here from recession-mired Club Med or Eastern nations, get paid high British wages, learn skills, make an international network of friends and send money home.  It was like being paid to be at university.  But with EURGBP nearer parity and rents/food soaring, that merry-go-round is broken.  The Continental economy is starting to pick up after years of the Great Recession (which still, 10 years on, nobody dares label "Depression").  It makes sense to go home.  You can buy a house in Romania or Slovakia for a year--or-two's rent in London.

(10) Buy To Let tax changes mean BTL landlords need more income to break even.  But people are broke or leaving.  If they put rents up, they have a void.  They therefore have to sell.

(11) Robotisation and Artificial Intelligence are going to put holes in the high-wage sectors.  This means either fewer workers in total; or workers on lower average wages.  They won't be able to afford current rents in current numbers.  Who will BTL'ers let to if jobs don't pay big salaries any more?

(12) Interest Rates are headed up globally.  If houses are priced like bonds, then this means prices have to decline - at least in real terms.  If rents are going down, prices have to decline - in nominal terms.  I think rates will rise far further than anyone can imagine; inflation is going to be made to burn off the debt and leverage in the system.  Central Bankers everywhere are desperate for inflation so they can normalise policy.

In short, all London Superbubble demand factors are impaired - cyclically and maybe secularly.  All London supply factors are improved, secularly and in some cases structurally.

If "nobody rings the bell at the top", I'm not sure I agree.  Russia's annexation of Crimea a few years ago appeared to be it.  The sanctions that followed were, I think, the catalyst for the turn in PCL - but it's not a sudden, dramatic crash.  Ever since then, rents and prices have steadily been marked down.  It's a gentle, consistent slide.

I checked a few estate agents on Ladbroke Grove recently and I saw prices that reminded me of this thread.  Prices in the windows are beginning to look quite similar to those quoted above, nearly 10 years ago.  Rents are definitely a LOT cheaper.  Two years ago, you'd be paying £550-600 a week for a pleasant but not enormous 2-bed.  You're now seeing rents at £450 or even £390.

So, I expect 10 or more years of house price normalisation and everyone will look back on this period of madness and wonder what on earth we were playing at - where it became more important to look after a global overclass that doesn't live here, doesn't pay tax and doesn't vote than to look after our own people.  And that, my friends, will be the end of that.

Amazing to look back on this thread from a decade ago.  Prices dropped hard in 2009 - but also only briefly.  They powered up to new record levels (of price - and perhaps insanity) because of offshore fortunes being laundered over the internet into what became called "Prime Central London" or "PCL".  It never had that name before and the borrowing from butchers' language may be a clue.

Using history as a guide, any financial phenomenon that gets a new monicker (and particularly a TLA or THree Letter Acronym( we are closer its than its beginning.  Think TMT (Telecom Media Technology) stocks in 1999/2000.  CDOs in 2006/7.

What TLAs do we see now?

First, I expect Bitcoin (BTC) will not break above $20,000 and will drop at least 60% by 2019.

Second, I expect PCL (and especially K&C) will drop hard.  Multiple factors are in place:

(1) go out in South Kensington - the biggest "buy to leave" area in town - and restaurants and bars have closed everywhere.  Walton Street was full of energy 10 years ago; now it's a ghost town.  The old stalwart La Brasserie on Fulham Road has shuttered after decades.  The Chanel shop next door has also closed - imagine, Chanel has closed!  So many houses are vacant that there aren't enough customers to pay the rents.  People won't pay up to live in dead areas.  The overclass don't buy these houses to live there.  At some point, if all the bars & cinemas have been turned into luxury apartments, there's no point living there as there's nowhere to go out.  The trend contains the seeds of its own end.

(2) Post-Grenfell there is now a Labour MP for the first time ever in Kensington.  The Tory council have learned that if you continue to sell houses offshore to people who don't vote, all you are left with is Labour voters.  The new MP is going to upend planning and consents; the Royal Borough will be repurposed so it serves everyone.  This is an epochal shift.

(3) The Government & London Mayor both understand that we need to fix the housing market and action is being taken.  The Tories understand that if they don't fix housing, we're going to elect Corbyn.  Sadiq Khan understands that Labour need to fix housing so Labour voters will continue to support him.

(4) Global crackdown on tax evasion and money laundering.  Not much is said about this but it's being spearheaded by the OECD.  The Gulf kingdoms are introducing VAT to hold off the threat of put on the OECD & G20 Black List of uncooperative jurisdictions.  The EU already put the UAE there as a warning shot.

(5) With oil permanently below $100 and the squabbles in the GCC, the oil nations have switched from pushing out dollars to sucking them in.  There's a slow hissing sound of deflation in anywhere that benefited from oil prices.  Talk to anyone in London whose business sells to people from the oil states: 2017 was a terrible year and it's getting worse.

(6) Over 200 apartment blocks with apartments over £1m are coming on to the London market.  There's a huge overhang which, at peak sales volumes from a few years ago, represents 20 years of supply of "luxury apartments" coming onto the market at once.

(7) The dodgy money that needed to leave the ex-USSR states has mostly gone and there is no new money waiting to leave; sanctions make it harder too.  Talk to anyone who works in the property business in Knightsbridge and you won't wait long until they tell you it's trading at 40% below peak, in tiny volumes; and if you're a buyer, how many do you want?

(8) The squeeze on UK incomes means that people are moving out rather than paying ever-increasing rents.  It's polluted and at times dangerous in central London.  It's clean and safer in the 'burbs and transport is so good that you can be in the centre of down quickly from anywhere.

(9) There is a mini exodus of EU workers from London; it's being blamed on Brexit but it's actually down to EURGBP.  With EURGBP at 0.70, you could come here from recession-mired Club Med or Eastern nations, get paid high British wages, learn skills, make an international network of friends and send money home.  It was like being paid to be at university.  But with EURGBP nearer parity and rents/food soaring, that merry-go-round is broken.  The Continental economy is starting to pick up after years of the Great Recession (which still, 10 years on, nobody dares label "Depression").  It makes sense to go home.  You can buy a house in Romania or Slovakia for a year--or-two's rent in London.

(10) Buy To Let tax changes mean BTL landlords need more income to break even.  But people are broke or leaving.  If they put rents up, they have a void.  They therefore have to sell.

(11) Robotisation and Artificial Intelligence are going to put holes in the high-wage sectors.  This means either fewer workers or workers on lower wages.  They won't be able to afford current rents in current numbers.

(12) Interest Rates are headed up globally.  If houses are priced like bonds, then this means prices have to decline - at least in real terms.  If rents are going down, prices have to decline - in nominal terms.  I think rates will rise far further than anyone can imagine; inflation is going to be made to burn off the debt and leverage in the system.  Central Bankers everywhere are desperate for inflation so they can normalise policy.

In short, all London Superbubble demand factors are impaired - cyclically and maybe secularly.  All London supply factors are improved, secularly and in some cases structurally.

If "nobody rings the bell at the top", I'm not sure I agree.  Russia's annexation of Crimea a few years ago appeared to be it.  The sanctions that followed were, I think, the catalyst for the turn in PCL - but it's not a sudden, dramatic crash.  Ever since then, rents and prices have steadily been marked down.  It's a gentle, consistent slide.

I checked a few estate agents on Ladbroke Grove recently and I saw prices that reminded me of this thread.  Prices in the windows are beginning to look quite similar to those quoted above, 10 years ago.  Rents are definitely a LOT cheaper.  Two years ago, you'd be paying £550-600 a week for a pleasant but not enormous 2-bed.  You're now seeing rents at £450 or even £390.

So, I expect 10 or more years of house price normalisation and everyone will look back on this period of madness and wonder what on earth we were playing at - where it became more important to look after a global overclass that doesn't live here, doesn't pay tax and doesn't vote than to look after our own people.  And that, my friends, will be the end of that.

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2 hours ago, Sneaker said:

(6) Over 200 apartment blocks with apartments over £1m are coming on to the London market.  There's a huge overhang which, at peak sales volumes from a few years ago, represents 20 years of supply of "luxury apartments" coming onto the market at once.

Thank you for that very informative post Sneaker.

The part above that I have quoted you on is what I feel will have a massive affect on the London Market. It is not just in the bracket over £1M that London is saturated with apartment blocks. Go anywhere in the capital and there is block after block of new build (all the same apartments) that are now coming up for completion. I drive through the Royal Docks in East London, a few years ago there were a few blocks around that you could see from the road. Now you cannot see these blocks as the whole place has been built over with block after block of the same thing hemming them in. 

This is a totally different price bracket. 1 beds from £350k 2 beds from £450k but that is still a lot of money for FTB's , we all know that the BTL is finished as rents would not cover the costs on these places. I cannot see that there are enough people earing enough money to fill all of these units and it is the same thing across the capital. For these to fill up either by buyers or renters the wages need to increase or the prices need to fall. No one can see any wage increases so it must follow that with this massive oversupply the prices must fall.

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1 hour ago, Insane said:

[...] No one can see any wage increases so it must follow that with this massive oversupply the prices must fall.

Cheers mate.  On wage inflation, multiple factors need considering, such as:

  1. National Living Wage going up...
  2. ... which makes robotisation / automation more attractive - it's getting cheaper and cheaper.
  3. EU workers leaving ... means UK employers will have to pay more to find workers.
  4. Shortage of doctors & nurses in the NHS - because GBP is weak so we can't attract them like we used to.  This means GBP wages will have to go up.

So for jobs that can't be automated, wages will have to go up.  That's good.  But for jobs that can be automated, wages can't go up.  That's bad ... unless governments decide to tax robots.  The purpose of an economy is to keep humankind going, not to reward digital/robotic asset owners while everyone else just sits around.

But think of this: if robots take millions of jobs, who will companies sell to?  Workers spend their incomes, generating someone else's incomes.  If that stops, there will be no economy.  And rich people don't spend in proportion to rising wealth: they don't buy more haircuts and there's only so many holidays you can fit into one year.

In economic terms, the marginal utility of an extra unit of income is greatest in the hands of the poor.  It is lowest in the hands of the rich.

The problem that western governments need to fix is therefore how to get more money into the hands of the poor.

Trickle-down economic experiments haven't worked.  Wealth inequality is escalating.  Digital business owners are getting unbelievably wealthy; they have done nothing wrong, but everyone else needs a chance.  That's why social tensions are rising and politics is getting fractious and ugly.

Unless governments work out how to address the gulf of wealth inequality, deeper social unrest is brewing.  And doing that means tackling housing, robotisation and wealth distribution.   There are no other answers.

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Totally agree with the jobs being destroyed by robots and I do not know how they are going to deal with it.

On the point of wages yes some skills where there is a shortage will see rises . As for national living wage rising that is irrelevant for the London property market , anyone on the national living wage has been priced out of London property for so long if they were ever priced into it in the first place and a small rise in it is not going to price them in.

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The thing that amazes most is that people have come to believe that "London property has always been expensive".  Trust me, in the 1970s it wasn't.  In the 1980's it rose and was a bit expensive in the early 1990's - but on a price/earnings multiple, nothing like what we see now.  By the mid 1990's you couldn't give London property away.  Central London apartments were 3 or 4 times a graduate salary.  No way on earth was that expensive.  By 2000, it was starting to feel a little out of the ordinary.  But it held reasonably steady until 2007, when it took off into orbit in the spring.  And we are where we are now, where even paying rent is a problem for many people.

But by no means has London property always been so astronomically expensive that even highly paid professionals are struggling.  It is simply an aberration caused by ZIRP, QE and the entire world being to pile into London over the internet via tax havens.  It is an entirely new phenomenon.  And successive governments just sitting there watching on while a social catastrophe unfolds across the nation is simply unforgivable.

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4 minutes ago, Sneaker said:

The thing that amazes most is that people have come to believe that "London property has always been expensive".  Trust me, in the 1970s it wasn't.  In the 1980's it rose and was a bit expensive in the early 1990's - but on a price/earnings multiple, nothing like what we see now.  By the mid 1990's you couldn't give London property away.  Central London apartments were 3 or 4 times a graduate salary.  No way on earth was that expensive.  By 2000, it was starting to feel a little out of the ordinary.  But it held reasonably steady until 2007, when it took off into orbit in the spring.  And we are where we are now, where even paying rent is a problem for many people.

But by no means has London property always been so astronomically expensive that even highly paid professionals are struggling.  It is simply an aberration caused by ZIRP, QE and the entire world being to pile into London over the internet via tax havens.  It is an entirely new phenomenon.  And successive governments just sitting there watching on while a social catastrophe unfolds across the nation is simply unforgivable.

Agreed 

But if people were not around back then they are not going to compare it with what we have now. People will take in far more from what they hear and see around them now to what someone else tells them about the past. 

In 1993 I paid £50,000 for a 1 bed river front flat in Surrey Quays. Totally luxury block with swimming pool ect. In 1988 someone else had paid £150,000 for that same flat. We had some quite high inflation between 1988 and 1993 so in real terms you would have maybe needed £200,000 to match £150,000 in 1988. Let's say I paid 25% of the 1988 price.

When recalling this a while back to a work colleague (who was late 30's) and would have been still in primary school in 88 and in the middle of secondary school 93 I could tell he was not taking it on board. A little while later I found the advert (in my keep for ever papers) which drew me to buy that flat. 

I then took the advert to work and showed him. Knowing that block and that the same kind of flat would now be around £400k he read the advert and was shocked. He even admitted that when I had told him about the flat the first time without the advert he thought I was making it up. 

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  • 1 month later...
On 1/6/2018 at 5:46 PM, Sneaker said:

The thing that amazes most is that people have come to believe that "London property has always been expensive".  Trust me, in the 1970s it wasn't.  In the 1980's it rose and was a bit expensive in the early 1990's - but on a price/earnings multiple, nothing like what we see now.  By the mid 1990's you couldn't give London property away.  Central London apartments were 3 or 4 times a graduate salary.  No way on earth was that expensive.  By 2000, it was starting to feel a little out of the ordinary.  But it held reasonably steady until 2007, when it took off into orbit in the spring.  And we are where we are now, where even paying rent is a problem for many people.

But by no means has London property always been so astronomically expensive that even highly paid professionals are struggling.  It is simply an aberration caused by ZIRP, QE and the entire world being to pile into London over the internet via tax havens.  It is an entirely new phenomenon.  And successive governments just sitting there watching on while a social catastrophe unfolds across the nation is simply unforgivable.

Any other thing that might make London rents higher?  BTW IIRC prices in 2000 were high in most of London, nothing like now though.

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  • 1 month later...
On 06/01/2018 at 6:02 PM, Insane said:

if people were not around back then they are not going to compare it with what we have now

Not sure I agree!  Just a few minutes on this excellent Forum will show you otherwise.  And the internet let's you find out for yourself.

So I'd say, sure, people who are intellectually lazy might believe that what we have now has always been the case.  But the average person on this forum is far from intellectually lazy.  Otherwise they wouldn't be here.

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9 minutes ago, Sneaker said:

So I'd say, sure, people who are intellectually lazy might believe that what we have now has always been the case.  But the average person on this forum is far from intellectually lazy.  Otherwise they wouldn't be here.

But from our population how many people are on this Forum ? 

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