How far will prices fall in London?

chewmylegoff

Conrad wrote: »

But I'm no bull, I'm an optimistic pessimist:cool: . Mortgage lending is still far to low to reverse the falls, but that could change very quickly. Just seen a 2 bed house that has a gross yield of about 9%. Cash in the Bank earns about 2%, mmmmmm

you're not comparing like with like.

firstly you can get 5% on cash still, so 4% net of BR tax or 3% net of upper rate tax.

secondly, the gross yield on a property is not a return, it's a gross return before all costs. 9% gross, even if you had no costs whatsoever would only be 5.4% after 40% tax.

plus you need to account for the hassle factor - if you put your money in the bank all you have to do is move it occassionally. it doesn't ring you up and demand a new sofa.

penguine

I think the majority of house sales this year have been voluntary. Once we start to get distressed sales, the true nature of the HPC will start to become clearer. And with the sale prices now available on the internet, each distressed sale will bring down the prices of other similar properties selling in the same area.

confused31_2

pickledpink wrote: »

That's a skewed article; it's recent roadworks which are slowing the traffic.

And why are you going on about the fact I can drive to the West End from Dulwich in 10 minutes? I've done it many times - at night.

most people dont work nights, but i suppose with your job you have to work nights, where you going to visit a client????:p

confused

pickledpink

penguine wrote: »

I think the majority of house sales this year have been voluntary. Once we start to get distressed sales, the true nature of the HPC will start to become clearer. And with the sale prices now available on the internet, each distressed sale will bring down the prices of other similar properties selling in the same area.

I think you'll find that repossessions have soared this year already.

lostinrates

chucky wrote: »

in addition there is much more foreign investment in property in London than anywhere in the UK - will they be desperate too?

I believe that a number of foreign investors will be wanting to withdraw from UK. Not all, not 50% worth (yet) but probably enough to make an impression on the figures.

chucky

lostinrates wrote: »

I believe that a number of foreign investors will be wanting to withdraw from UK. Not all, not 50% worth (yet) but probably enough to make an impression on the figures.

with the current value of the pound - it makes good sense to them to invest in the UK.

also rental yields in London are historically better than most European cities.
in addition, due to the size of London there are more opportunities to maximise and diversify these yields.

geoffky

how many of you who say you will not see 40to50% drops are under 40..this is all new to you and your brain cant picture it because in your world it has not happened before..for us that have been round the block a few times well its just like last time only is different this time and it wont happen here ect ect.....you aint seen nothing yet...

StevieJ

geoffky wrote: »

how many of you who say you will not see 40to50% drops are under 40..this is all new to you and your brain cant picture it because in your world it has not happened before..for us that have been round the block a few times well its just like last time only is different this time and it wont happen here ect ect.....you aint seen nothing yet...

At the risk of repeating myself, at what level were interest rates last time you saw house prices fall? and for that matter what are they now?

Zelie

geoffky wrote: »

how many of you who say you will not see 40to50% drops are under 40..this is all new to you and your brain cant picture it because in your world it has not happened before..for us that have been round the block a few times well its just like last time only is different this time and it wont happen here ect ect.....you aint seen nothing yet...

That's an interesting point. I think a lot of people (vendors especially ) have a mental stumbling block over such huge drops in price. I can remember recession in the 80s-ish but have no idea what the specifics of pricing was. Having seen drops of up to 25% in the area of London I'm looking at I'm already having problems picking my jaw up off the ground. 50% seems unfathomable (although something I'd love to see!).

StevieJ

penguine wrote: »

I think the majority of house sales this year have been voluntary. Once we start to get distressed sales, the true nature of the HPC will start to become clearer. And with the sale prices now available on the internet, each distressed sale will bring down the prices of other similar properties selling in the same area.

Where are the distressed sales coming from, with interest rates at historic lows and govt mortgage subsidy for people made redundant?