London property bubble 'about to burst'

Flight2quality

rizla01 wrote: »

Simple answer!

GULLIBLE!

Sorry if that sounds harsh but I suggest that you look to BOTH sides of the coin before coming to any conclusions and if you MUST quote American Scaremongerers (With a vested interest in preaching such drivel) then at least research the preacher.

I also suggest looking at both sides of the coin. Watch that video and tell me where he is wrong, it is playing out exactly as he has always said.

The reason I think Mike Maloney is right when he predicted we would get big deflation around the world is because every asset class is going down compared to currency. This is true monetary deflation.

Stocks and markets are going down all around the world, real estate is going down all around the world, even commodities are going down all over the world.

If you disagree by all means lets hear why?

The next thing Mike Maloney predicts is all around the world turning up the currency expansion to fight the deflation. I think he is spot on, but it could take a little while. They wont call it QE3 or whatever, they will cover it over. It is happening with this half a trillion being created out of thin air in Europe, operation twist in the USA is just a way to cover up more currency expansion.

Get-real-buy-real

Flight2quality wrote: »

So no matter what prices are in London they will never be overvalued? How stupid is that.

There are easy ways to measure over or undervalued, just compare with average wages for one. Wages in London are going down house prices are still way about their long term ratio to wages.

You can never say it is not possible for house prices in London to be over valued. Yes it is possible and yes they are over valued now.

The cuts to benefits being talked about are looking more likely every day.

There is no doubt that the huge benefits being paid to so many families in London is propping up rents and house prices.

Its not a question of 'if' but 'when' these props are taken out, then prices will come down.

sabretoothtigger

London is an international city, land prices wont always relate to the rest of the uk especially with the financing bubble still fully subsidised

They wont call it QE3 or whatever, they will cover it over

Various USA schemes are already in progress and we have restarted QE here just recently

Get-real-buy-real

sabretoothtigger wrote: »

London is an international city, land prices wont always relate to the rest of the uk especially with the financing bubble still fully subsidised

Various USA schemes are already in progress and we have restarted QE here just recently

Yes the currency abuse is getting turned up all around the world to fight the deflation that is picking up speed. As debts get written off or defaulted on like Greece et al. outstanding revolving credit is collapsing which is real monetary deflation.

QE 3,4 and the rest whatever its called to cover it up, it will happen all around the world to fight the deflation. Ending in big then hyper inflation.

For now get out of debt, pay off your mortgage because deflation is here for a while yet. Debts are going up against everything else.

At the end of the deflation just before the big inflation caused by the base currency increase, is the time to get out your mortgages and buy real estate when its near the bottom.

But we are not there yet. London property prices will fall along with most of the rest of the world.

sabretoothtigger

Hyper relates to absolute collapse in value. Just 30% annually will be enough to change policy in this country I believe

pay off your mortgage because deflation is here for a while yet

Its not here or house prices would fall. We have 5% inflation and half a percent interest. Mortgages fixed to that low rate will be great as inflation increases

worldtraveller

Prices also dipped in London by 1.6% in October, although they were still up 0.3% for the year.

I know, I know, it's only a month, but....

quantic

My old boss sold his 3 bed flat in London in 2006 and bought a 6 bedroom barn conversion with its own fields and stables and worked remotely instead. At the time (I was very naive to how it all worked - being only 20) I couldn't understand how it was possible. I do get that people make more money in London etc, but salaries for my job are only about 20% more than here but house prices are about 4 times more. Crazy.

rizla01

Rabrevlis wrote: »

The real madness is the government paying up to 4grand per week for low income families to live in London. This has just pushed and held up high rents and house prices.

Not if but when the cuts come in, millions will have to move away from nice area and into cheap areas.

bloomberg.com/news/2011-11-28/home-prices-fall-with-worse-to-come-as-confidence-ebbs-hometrack-says.html

The number of potential buyers registering with real-estate agents, an indicator of demand, fell for a fourth month, decreasing 2.2 percent from October, Hometrack said. It predicted the lowest level of housing turnover in 40 years and said this will continue in 2012.Values in London were unchanged for a second month. Nevertheless, Donnell said that “looking ahead it is unlikely that London will escape the impact of the continued turmoil in the financial markets.”
“When prices start to fall in the capital, so the scale of headline price falls will start to accelerate,” he said.

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Maybe next year they will be reporting lowest levels of housing turnover in 50+ years. Amazing when you think there were a lot less houses 50 years ago.

NOT an indicator of bad things to come.

The number of new applicants falls at this time EVERY year.

Property sales will pick up again just after Xmas (2-4 Wks)and then die back till around Easter, when there is always a huge surge. This is nothing new.

The Government are obviously very mindfull of the impact that forcing L/Ls to sell stock would have on the values of property and it isn't going to be an easy decision for them to make.

We should wait & see, rather than use conjecture based on supposition.

rizla01

Not Quite.

The 'lowest number of house sales in 40 years' is a prediction!

drc

In January 2012, the housing benefit caps for existing tenants will come into effect.

It's interesting to see that because of the way areas were assessed for local housing allowance (LHA), some areas quite a bit out from what is normally perceived as Central London will see a big cap. For example, if you look on the LHA website and you click on the maps, "Inner North London" which includes places like most of Golders Green, Highgate, Archway, Hampstead Garden Suburb are going to see big caps.

For example, the 2 bed rate for this area (NW11) in Nov 2010 was £330 per week. The new rate for a 2 bed in the Inner North London area is £290 so a cut of £40 per week. The 3 bed rate drops from £440 to £340, so £100 less per week. I can imagine this would affect quite a lot of people living in these outer suburbs who thought the caps would not affect them that much. In my opinion, this is definitely going to affect rents and house prices although it will take time for these changes to come through.