London's property boom over?

drc

Tippytoes wrote: »

Supply and demand will always determine price.

Too many people, not enough homes.

Nope. Ability to pay will always determine price.

SecondLegDownIsTheBigOne

FTBFun wrote: »

US: lots of land
Ireland: not many people

Not comparable in the slightest. Obviously though you've just created this character to irritate people so I expect some more rubbish in response.

Angry much? I don't aim to irritate anyone, irritating you I will consider a bonus.

By your argument the US and Irish property booms should never have happened, but they did. Could that be because it is a function of available credit and not land?

Obviously, your character just creates irritation.

the_flying_pig

the rhetorical question, "Why are we slamming doors in the faces of international buyers who have built London into what it is?" is one of the funnier things i've read in some time.

Jimmy_31

Tippytoes wrote: »

Supply and demand will always determine price.

Too many people, not enough homes.

Not enough jobs.

chewmylegoff

Phil_Spencer wrote: »

It is these prime London properties which have kept averages stable. If prices at the top end start to slide, it surely follows that poperties in the price brackets below will do the same.

Add to the mix that the FTB stamp duty break is coming to an end and a price correction looks highly likely.

given that there has been a clear disconnect between central london prime, and the rest of property in london over the past few years, with central london prime (where most of the £2m+ properties are) increasing by 10%+ a year right through the recession and since, i rather doubt that we are suddenly going to see the two markets reconnect as a result of a slow down in the increase of value of £2m+ houses.

i really don't think you're going to see any sort of tangible impact on the price of a 3 bed house in outer london somewhere as a result of changes in stamp duty for £2 million houses (expect in places where a 3 bed house costs £2 million, of course).

RenovationMan

Yes, I'd imagine that most people will now be put off buying due to the new stamp duty changes.

I know that most of us on here will now be lowering our sights to buy at £1,999,999.99 to beat the tax man.

Timberrrrrr! :rotfl:

FTBFun

SecondLegDownIsTheBigOne wrote: »

Angry much? I don't aim to irritate anyone, irritating you I will consider a bonus.

By your argument the US and Irish property booms should never have happened, but they did. Could that be because it is a function of available credit and not land?

Obviously, your character just creates irritation.

I'm not arguing that the housing boom in the UK wasn't partly fueled by credit, and it is fairly obvious that was the case in the US and Ireland.

However, when it came to the credit crunch, because the US and Ireland are much less densely populated than the UK and consequently land is at less of a demand, when it came to the retraction this was substantially worse in the US and Ireland than in the UK.

HAMISH_MCTAVISH

SecondLegDownIsTheBigOne wrote: »

By your argument the US and Irish property booms should never have happened, but they did. Could that be because it is a function of available credit and not land?
.

Both a genuine supply and demand imbalance, and a credit boom, can cause prices to rise dramatically.

The only way to tell which it is is to look at what happens once the credit boom ends.

In the case of Ireland and the USA, we now know it was a credit driven bubble.

In the case of the UK, we now know it was primarily a genuine supply shortage.

As shown by the following stats....


Empty houses as a percentage of total houses:

Ireland: 17% and rising

USA: 13% and rising

UK: 3% and falling rapidly



Current price falls from peak price:

Ireland: 50%

USA: 39%

UK: 11%


All three nations removed two thirds of lending, had record low interest rates, liquidity schemes, bank bailouts, help for homeowners, expansion of central bank asset sheets, etc.

Two of those nations house prices fell off a cliff and kept falling, whereas prices in the UK dipped before recovering rapidly to within 10% or so of peak.

Even a blind man can see that we obviously did not have a bubble in house prices at all, just a genuine shortage of housing.

Otherwise prices here would have tanked like they did in Ireland and America.

HAMISH_MCTAVISH

Phil_Spencer wrote: »

It is these prime London properties which have kept averages stable.

Absolute rubbish.

Prime London mansions have next to zero impact on the major average house price indices.

If you can explain the technical process through which a minor dip in a few mansion prices constituting less than a quarter of a percent of sales will impact the national hedonic and repeat sales regression indices in any noticeable way, I'm all ears.

If prices at the top end start to slide, it surely follows that poperties in the price brackets below will do the same.

Just 0.2% of property sales are £2m plus.

So 99.8% of property chains are completely unaffected.

Add to the mix that the FTB stamp duty break is coming to an end and a price correction looks highly likely.

Yawn....

You lot have been clutching at every straw that comes along for the last 3 years to explain how this next thing will cause prices to crash.

Yet prices remain higher now than they were then.:)

CRASH_BANG_WALLOP

HAMISH_MCTAVISH wrote: »

we obviously did not have a bubble in house prices at all

classic :rotfl::rotfl::rotfl: