London property prices-Its bonkers

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    London property prices-Its bonkers

    I thought the London property market was being massively inflated by prices in the desirable areas like Kensington and Chelsea.

    Not so it appears.

    A flat in the same road as my own has just been marketed at £265K. After being on the market for around a week it has gone under offer for £320K!!!

    That's for a 1 bed, GF, garden flat in N London. Friends searching in S London report the same thing, everything being snapped up above asking price.

    Surely this is not sustainable?

    #2
    Originally posted by DNM2012 View Post
    Surely this is not sustainable?
    Of course it's not, since the 80's we have had 2 bubble bursts, and now it looks like a third is on it's way via your post.

    I was not so stupid to pay the inflated prices last time and lived in a carravan for a short while till the prices came down, but also got a repossessed house at half the previous selling price.
    Next door were not so intelegent, they had their house repossessed because they paid too much for it and had to leave, but still owed the inflated price once evicted.

    Last time the bubble burst, Brown, or whoever was the chancelor at the time, injected money somewhere, and the T.V. reports were coming back "My mortgage payments have reduced since his actions" Which means they could sell their houses for more than they paid for them because of reduced payment, so the Governmant perpetuated the sale of overpriced houses.

    Key workers cannot afford to Live in high priced areas of London as of 2012. Key workers are those we cannot do without.

    All it takes is for everyone to say, no, we are not paying these stupid prices for 4 walls and a roof. I did.
    But I must admit, I too was a money grabber and sold my ex-repossessed for 3 times what I bought it for.
    But it gave me a second hand Rolls Royce, something I could not have had normaly.

    No it is not sustainable, but when all the key workers cant afford to travel into london, guess who will be doing the jobs, and living in 5 to a room, and the Government send Child support to their children who do not live in this country.

    see http://www.youtube.com/watch?v=CVriot01C9U

    Comment


      #3
      I agree with what you say.
      This is a very recent upturn in my area though, prices have remained pretty level round here since I bought 2 years ago.
      Suddenly there is a massive spike. I know this is talked about, but is the first time I have seen the evidence locally.
      I'm hearing its foreign investors snapping up anything and everything, pushing up the prices.
      I certainly would be priced out of the market now if I was buying.

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        #4
        Demand is high for properties under 400K and there is very little on the market. In West London there are 33 buyers registered for each 1 bed flat at my local agency.

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          #5
          On this specific example:

          It's a price range that is affordable to many.
          Buy outside London and you'll have to do a nightmarish commute everyday and pay £5k per year for the privilege.

          London is where the money and jobs are, and it is a world city. You pay for that accordingly.

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            #6
            Originally posted by jjlandlord View Post
            London is where the money and jobs are, and it is a world city. You pay for that accordingly.
            I had a good paid job and could afford a house, and it was not in London. As I said, 4 brick walls, some timber beams and a roof is all a house is.

            Can the person who cleans the filth and mess left on the strees and tubes afford a £ 300,000 house, cleaners, postmen, nurses to keep you alive, delivery drivers supplying ALL the goods you require, etc, etc, etc. Answer is mostly a No.

            We do not know the motives of the foreign investors, do they have no perception of money or do they KNOW house prices will increase to even more unsutainable levels, and are buying now before we bankrupt ourselves.

            If they know more than we do and are snapping up houses before the next increase, then we have to be worried.
            If they are snapping them up to put in migrant workers, the we have to be worried.

            Comment


              #7
              They're (foreign investors) snapping them up because London is seen as a 'status symbol' place to live, or at least own property, and because London property is seen as a safe place to store wealth.

              Best way to sort it would be punitive tax rates for the non-domiciled, but that is a tricky thing to try and do in a globalised world. If you drive the money out of London it goes somewhere else which is to our disadvantage.

              However, as you say, when the people that keep the city running can't afford to live in it something has gone wrong. Normally market forces would correct such an anomaly, for example the price of labour would increase as the poorest workers were displaced, but various political and economic factors are delaying that from happening atm. Eventually it will though.
              I'm not a lawyer, what I say is the truth as I understand it. I offer no guarantee except good intentions.

              Comment


                #8
                One fallacy is to believe that house prices should be so that everyone can afford to buy one. This has never been the case.

                Before saying that prices are inflated or unsustainable, how much would the same property cost in Manhattan, Paris, Tokyo, Singapore, etc.?
                I have a feeling that it would be in more or less the same range.
                Are the prices in all these cities also inflated and unsustainable?

                Comment


                  #9
                  Idealism is never fallacious, lots of things that have never been the case should be. The Landlord-Tenant relationship, where the tenant is compelled to rent by economic circumstance, is fundamentally an abusive one IMO. A necessary evil perhaps, at least atm, but what it does in the final analysis is transfer wealth from the poorer to the richer.

                  People at the bottom end of the scale in those other cities aren't being displaced en masse by changes in the welfare structure, amongst other things. What you have going on in London is the displacement of the poorest workers at the same time the property prices are rising. It does happen to a certain extent in all cities yes, as a consequence of globalisation, but the disparity between London and the rest of the country is particularly acute, as is the disparity in wealth between the rich and the poor within London.

                  The basic reality is an increase in the wealth gap, to describe concern over that as fallacious is a fallacy, I think , the London property market is simply the most tangible example of a far more widespread problem. Social inequality always brings with it social unrest, and the wealth gap in this country is widening fast, at the same time social mobility is dropping. It isn't a recipe for long term stability, or prosperity, for the masses at least.
                  I'm not a lawyer, what I say is the truth as I understand it. I offer no guarantee except good intentions.

                  Comment


                    #10
                    I recently looked at renting a 2 bed, 110sqm apartment in Shanghai recently. Location was not perfect and you could call it a mid-range apartment. Rental was 8000rmb, about £800/month, but the selling price of another identical one that I saw in the same block was 5 million RMB, about £500,000! That's a rediculously low yield of less than 0.02%! Clearly Shanghai's value bubble is under pressure.

                    The purpose of my example being that London's current prices are still relatively 'cheap' compared with those out here in Shanghai, Singapore, Hong Kong, etc. most average Asian's can only dream of owning their own apartment, and if they do buy one, the whole family chips in to just round up a deposit on top of a 40 year mortgage.
                    London is still seen as relatively safe for those with plenty of cash from their good businesses or senior level expats wanting to invest in Blighty.

                    Comment


                      #11
                      Originally posted by monkeysee View Post
                      If you drive the money out of London it goes somewhere else which is to our disadvantage.
                      Erm, no, it means British people can afford to buy their own home in their own country.
                      It is a disadvantage to let all our property be bought by foreigners.

                      Comment


                        #12
                        If you only look at one tiny facet of a much larger machine that is true, economies are far more complicated beasts though.

                        Besides I was agreeing with you that the situation isn't a good one, what I was saying is that you can't use blunt force instruments when dealing with this kind of thing, you have to be surgical. A blanket ban on foreigners owning property in London would cost millions (at least) in lost tax revenue and impaired job creation etc, that has to be balanced against the potential social benefits.
                        I'm not a lawyer, what I say is the truth as I understand it. I offer no guarantee except good intentions.

                        Comment


                          #13
                          Originally posted by ram View Post
                          It is a disadvantage to let all our property be bought by foreigners.
                          Yeah, Spain should kick out the hundred of thousands of Brits, and so should the French, Cypriots, etc.

                          Then back to square one.

                          Comment


                            #14
                            Originally posted by monsterp View Post
                            Rental was 8000rmb, about £800/month, but the selling price of another identical one that I saw in the same block was 5 million RMB, about £500,000! That's a rediculously low yield of less than 0.02%!
                            Ahem.


                            Less than 2%.
                            There is a fine line between irony and stupidity. If I say something absurd please assume that I am being facetious.

                            Comment


                              #15
                              doobrey,

                              Oops yes, cheers! Move that decimal point another place... So 1.9% is still a crap yield.

                              PS don't bother thinking of buying anything out here, foreigners aren't allowed to move their profits out of China after they sell...

                              Comment

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