Monday, Oct 09, 2006

Is there no end in sight for increased London prices?

Firstrung: London house prices continue relentless march upwards - haart estate agents

The latest data from haart estate agents reveals that the average London house price has risen to its highest level yet, exceeding a quarter of a million pounds as the gap between supply and demand widens due to shortage of stock. The average price of a property increased by 1% in September to 250,907 from 248,580 in August, placing the increase in prices since the start of the year at just over 6%.

Posted by converted lurker @ 04:43 PM (497 views)
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9 Comments

1. Cstanhope707 said...

Perhaps we should have a Windfall Tax on all those property owners who are making a killing thanks to the Tax Payer funded Olympics...

Monday, October 9, 2006 06:08PM Report Comment
 

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4. Hyrax said...

Lets see...Average House price for buyers in London 250,907. Projected interest rate at 5.25% is 1097 per month. Median UK Wage (2004-2005) 22,500, DUAL income household 45,000, after tax at say 30% is 31,500 or 2,625 per month.
That takes us 41.7% of takehome on mortgage interest payment, remainder disposable income, say 764 for each person per month, oops minus 100 each council tax (maybe a little less in Westminster)....664, running a car each at 2000 a year is another 167 each a month...or other commuter transport..thats 497 each person remaining as disposable or 124 a week. Lunch out 5 days a week for a 5 a day..final disposable income 99 a week each, thats almost 19.80 a day!! Luxury!! We can worry about the 250k principle later......time for a holiday, now where did I put that credit card?

Tuesday, October 10, 2006 01:44AM Report Comment
 

5. the bald man said...

Hyrax.. Great illustration of why the market is so unrealistic. What about repayment of capital ? Could always remortgage to pay for the holiday .

Tuesday, October 10, 2006 10:43AM Report Comment
 

6. talking rot said...

Steady Bald Man

Let's not forget Hyrax's couple probably had a lot of equity in the home they sold in order to buy the 250K.

Tuesday, October 10, 2006 12:30PM Report Comment
 

7. Stuandcathy said...

major flaws in your illustration Hyrax...
1) you compare average London price with average UK wage. Wages in London are way higher than the UK as a whole (approx 40k, so nearer 80k dual income).
2) Many couples in London do not own 1 car, let alone 1 each.
3) Council tax paid on the property, not a tax on each person. 100 each would be a total bill of 2,400, double what most councils charge on a 250k property (I know, I live in one)
4) an interest only mortgage payment of 1,097 is way less than the average rent in London of about 1,600 per month. Even a repayment mortgage on a 250k house is less than the average rent.

Tuesday, October 10, 2006 02:31PM Report Comment
 

8. tyrellcorporation said...

Did you assume two wage earners in London just bring in 45k!!! A receptionist in Central London can be on 25k! Most professional couples I know who live/work in London earn a combined 80k minimum.

Trouble is that London distorts the whole country's housing market... I just can't compete with Champagne Charlies - or even Magners Malcolms for that matter...

Tuesday, October 10, 2006 02:37PM Report Comment
 

9. Nohpc said...

When the london market takes off it really takes off but when it crashes it crashes the hardest. No sight of a crash in london any time soon though especially with the olympics coming up prices should continue to rise up till 2012. Maybe HPC everywhere in the UK apart from London?

Thursday, October 12, 2006 06:50AM Report Comment
 

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