Thursday, Mar 12, 2015

Beeb said it so it must be true!!!

BBC News: London house prices continuing to fall, says Rics

House prices in London are moving in the opposite direction to the rest of the UK - they are falling, according to surveyors.
Mortgage refinancing is becoming an issue with more and more people.

Posted by tom101 @ 11:01 AM (8848 views)
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22 Comments

1. Jmzr said...

maybe this is it...maybe this is the start of the 50% crash you've all been promising for the last decade...?!!

or maybe it's not.....and houseprices will not crash at all....

and in 10 years, you'll all still be saying the same tripe whilst the rest of us have our mortgages paid off...

Thursday, March 12, 2015 12:15PM Report Comment
 

2. khards said...

They said that prices in Enfield have been hit particularly hard and expect further falls :-)

Thursday, March 12, 2015 12:43PM
 

3. taffee said...

people say its just London that's not the whole market...well it does tend to lead things

what people also don't know is that over 25% of all mortgage money in the uk is held in London
add south east and probably the figure is around 50% of all mortgage money held in what even
the bulls accept is a price bubble

apparently no-one is bothered about this excess these days

Thursday, March 12, 2015 01:25PM Report Comment
 

4. sneaker said...

How many times do I have to say "Russian sanctions, oil price crash, offshore oligarchs, dirty money and tax havens"?

Let me put it in simpler terms: it should never have gone so high, just like the NASDAQ in 2000 and U.S. Real Estate in 2006.

Or even simpler still: MUAHAHAHAHAHHAHHAHAHAHAHAHA

Thursday, March 12, 2015 05:15PM Report Comment
 

5. taffee said...

Prices have eclipsed Tokyo in parts during their madness after which prices fell as much
As 90%

Take a look at property in Mayfair and Belgrade on right move.there is a section on the
Page saying property sold nearby.....which goes back to the 90s....you can see just how
High they have gone and how far they could fall

Thursday, March 12, 2015 05:26PM Report Comment
 

6. taffee said...

That's Mayfair and Belgravia of course! ..damned predictive text

Thursday, March 12, 2015 05:28PM Report Comment
 

7. landofconfusion said...

"Take a look at property in Mayfair and Belgrade"
"That's Mayfair and Belgravia of course! ..damned predictive text"

Seems pretty predictive to me. ;-)

Thursday, March 12, 2015 07:04PM Report Comment
 

8. taffee said...

Lol...incidentally hmg(her majesty's government) comes up as omg which of course is oh my god!

Friday, March 13, 2015 07:48AM Report Comment
 

9. hpwatcher said...

But not Enfield - prices there are ''going to the moon''

Friday, March 13, 2015 08:02AM
 

10. sneaker said...

@taffee - what measure are you using to compare London and Tokyo? Am interested to learn.

Saturday, March 14, 2015 07:53AM Report Comment
 

11. taffee said...

Talking versus wages..there was a great article which suggested prices in parts of London
Versus wages was now in excess of tokyo bubble..but unfortunately cannot find it

These two articles are useful though
http://investmentwatchblog.com/the-experience-of-real-estate-bubble-crash-in-1997-in-hong-kong/

http://housingjapan.com/2011/11/10/a-history-of-tokyo-real-estate-prices/

Think hong Kong hit 14x average earnings and tokyo 18 x though some were higher...parts of London towards
30 times have earnings..... others as low as 10-14....

Saturday, March 14, 2015 08:31AM Report Comment
 

12. sneaker said...

I see your argument taffee and it's a good observation.

But doesn't mortgage cost/serviceability come into it?

i.e. mortgage interest as a fraction of take-home pay is the key in the short-term (which of course leads to ructions when the rates regime changes). So if mortgage rates from (say) 8% which they were in the late 90's to 1% today, house PRICES adjust until mortgage affordability is roughly the same.

My view is that the London house-price bubble can come to end through any of a number of factors
1. if growth returns to the EU, there will be an *exodus* of non-British workers ... reversing the pressure on housing & rents
2. the UK adopts an Australian-type rule, where non-UK citizens are allowed to buy UK property but are only allowed to buy from or sell to a UK citizen - we're already talking about Australian-style immigration rules, so don't rule it out
3. interest rates in the US or EU start to go back up - which they will do at some point
4. if UKIP have any governmental influence after the upcoming May General Election - not a high probability but can't be ruled out

These are just factors to watch out for in the future.

Factors that we have already seen (as I have no doubt said before) are
1. oil price collapse - hurts Russia and the Gulf oil-states
2. Russian sanctions
3. Putin requiring the Russian mega-rich to bring money back home (or face jail or execution)
4. Chinese corruption crack-down
5. Chinese economic slow-down
6. OECD crack-down on offshore money-flows
etc.

I strongly suspect that the London house-price bubble will be viewed in a few years' time as being as foolish as the bubble in NASDAQ stocks in 2000, US real estate in 2006 and oil in 2014.

Saturday, March 14, 2015 12:35PM Report Comment
 

13. taffee said...

Good observations there....know a few people in estate agency and one reason for lack of supply is people inability to move.

Often as a result of the next step out of reach because prices have risen so much....no longer fitting in to mortgage criteria and forbearance with Lenders reluctant to force sales or repossess

I think what could happen is prices start to fall and accelerate as falls trigger one issue on top
Of another

I remember dotcom boom and lack of sellers was a lot of the problem and it just fell as the
Rally was exhausted...there were plenty of sellers on the way down though!

Buy to let is the elephant in the room...as it makes no sense without capital growth....landlords
Start selling and supply could spiral falls could trigger renters to buy so adding to btl woes

Saturday, March 14, 2015 12:58PM Report Comment
 

14. libertas said...

House prices are soaring priced in Euros.

I believe personally that prices would be rising nominally had it not been for a collapsing Euro. We are importing deflation, but expect the impending rate cut to curb Sterling appreciation against the Euro and associated deflation to cause nominal price increases. Folk will go bonkers crazy once rates are at zero or below.

We have no trade restrictions against cut price imports from Europe. Brexit or rate cuts are our only chance. Expect hearing about the dumping of goods on the UK market and what they plan to do about it.

Saturday, March 14, 2015 03:49PM Report Comment
 

15. Libertas said...

London IS NOT Tokyo.

Tokyo has a collapsing birth rate and population. London's population is soaring. Up some 20% since 1980.

Saturday, March 14, 2015 03:50PM Report Comment
 

16. libertas said...

London IS NOT Tokyo.

Tokyo has a collapsing birth rate and population. London's population is soaring. Up some 20% since 1980.

Saturday, March 14, 2015 03:50PM Report Comment
 

17. taffee said...

Well it started(population decline)after the credit bubble made owning a property a pipe dream for the youngsters
And people thought they couldn't afford to have kids

Saturday, March 14, 2015 04:15PM Report Comment
 

18. Captain Tightwad said...

After the BoE embarked on ZIRP and QE, a lot of foreign money rushed into London property to take advantage of the weak £ and the expectation of BoE-funded asset bubbles. The London bubble appears to have reached its limits and is starting to deflate.

The ECB has been ZIRPing for ages and has just kicked off its own QE. Lots of people are now anticipating asset bubbles in Europe, and the Euro is dropping like a stone. Wouldn't a property speculator now want to sell up here and buy in on the Continent?

Saturday, March 14, 2015 06:36PM Report Comment
 

19. mister ed said...

@13

I’m glad to see the crystal ball is working well once more.

Sure, prices would be rising if they weren’t stagnant or falling.
And there would be far fewer crimes if fewer people broke the law.
And I’d be able to see perfectly clearly without spectacles if I weren’t short-sighted.
It stands to reason, dunnit?

Sunday, March 15, 2015 02:35PM Report Comment
 

20. mister ed said...

@14
Whoops, single cause fallacy strikes again.

The collapse in Japan’s house prices was due to the collapse of a bubble economy based on, er, artificially high house prices (and therefore debt) and cross-company shareholding that pumped up stock prices to unsustainable levels. Sound familiar?

The population decline didn’t happen until after the bubble burst, and so has very little to do with the fall in property prices.

Sunday, March 15, 2015 02:36PM Report Comment
 

21. bidin'matime said...

@ sneaker #11 - you could add to this the new CGT charge on non-domiciled owners of UK residential property: at present, unless they live in the UK, they don't pay CGT at all - from April they will pay CGT on the rise in value of any UK residential property, unless they live in it (and pay UK income tax etc).

Unfortunately this wont include gains prior to April 2015, but it will start to bite - and will be a disincentive to future investment.

Sunday, March 15, 2015 06:21PM Report Comment
 

22. Huckerbey said...

I'd love to believe this, but I'm keeping an eye on Islington, Walthamstow and NW6 and seeing nothing but gentle asking price increases.

Thursday, March 19, 2015 02:32PM Report Comment
 

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