Housing market slowed to a crawl in London?

beccad

JayZed wrote: »

Gazump, I agree with beccad, you may need to be flexible on location in terms of how far out you go. I live in zone 3/zone 4 borders in North London, and by tube it would take me about 45 mins to most places in the West End or the City. I commute by scooter, though, which makes it about 25-30 mins. Anywhere within Zone 2 is going to be fairly expensive.

In North London, for a FTB you may want to look at flats on the Harringay Ladder (close to Harringay and Hornsey overland trains, which are very quick into Kings Cross and Moorgate. I used to live there and it's not a bad area, still a bit gritty but you've got gentrified Crouch End a short walk away, and more importantly fantastic kebabs on Green Lanes.

A bit further out you could look at Bounds Green, Bowes Park, or possibly some of the nicer parts of Wood Green (all on the Piccadilly line; Bounds Green/Bowes Park are also on the overland).

We're in the latter area you mention, just north of Wood Green itself and it's actually quite nice, although WG itself is a bit rough and ready. Although lots of East London is like that too...

I've no idea what to do about the damp patch - we only discovered it because we re-painted and the paint on this one particular bit of wall just won't dry out. It's not wet to touch, but it's darker than the rest of the wall and obviously looks damp. I presume we'll need to get some sort of damp specialist out to look at it.

I'm so clueless about these things :rotfl:

princeofpounds

Is it just this time of the year?

No. Although there are seasonal effects, these are relatively small in nature and if you compare year-on-year volumes are still very low.

Transactions happen when there is an intersection of the bid price (what buyers are willing to pay) and the ask price (what sellers are willing to sell for). There are psychological aspects to these prices but also importantly practical ones.

On the buying side, mortgage finance has been and continues to be very restricted. You try going out there and finding a 5x salary mortgage, even with an ok deposit. It's very hard. So even though the interest rate might be very affordable the actual quantity of money available is low.

On the selling side, interest rates are historically ridiculously low. This provides an incentive to retain property - if it's costing you so little, why get rid of it? And surely if mortgages are so cheap the house should be kept for a higher price? And it also removes many of the forced sales from job losses etc. that would normally occur.

So buyers are having their bid held down and sellers believe that they can hold their ask high. Result, fewer transactions.

More technically:

MV = PT
M= money supply
V = velocity of money ciruclation
P = average price level
T = volume of transactions.

Assuming V is constant (which is probably not exactly true, but assume that people are just as willing to exchange cash for housing as they were before) and P has gone down a bit, but not that much, whereas M has absolutely collapsed in terms of new mortgages granted. This means T must collapse.