London after the Olympics?

JonnyBravo

brit1234 wrote: »

Troubled buy to let investors who bought at inflated peak prices on a dream that East London would stop being a poo hole and have now felt realism and remortgaging concerns perhaps.

Absolutely.
They will need to deleverage their over indebted portfolios as the margin calls start to come home to roost. The added drain of the OptionARM implosion will further realise the foreign money drought as the Russians stop buying all of the property. As the uber bull perma props finally crumble interest rates will rise to realistic levels and repossessions will be cleared out leading to a 50% fall by Christmas. Or even 70%.
It is written in the stars.

RickRule

chewmylegoff wrote: »

Who exactly is it that you think will be leaving London in droves and therefore freeing up all of this supply?

Oh I don't know how about the thousands of people involved with the Olympics, but yes you are right there are not that many people involved it is such a small event. Silly me.

chewmylegoff

RickRule wrote: »

Oh I don't know how about the thousands of people involved with the Olympics, but yes you are right there are not that many people involved it is such a small event. Silly me.

sorry, i don't really understand. are you suggesting that all of the people that are involved in the olymipics, workers, spectators and competitors, are all some sort of temporary migrant population which has moved into the area and bought houses, thus driving house prices through the roof, and that they will all be selling up and leaving immediately afterwards? is that your theory?

Graham_Devon

RickRule wrote: »

How much will prices fall after everyone goes home and all this extra supply comes available and all the demand has gone away.

The supply of homes from the olympic village will be project managed.

By this, it will be managed in such a way as to not effect the "natural market" The problem is, if you are project managing something to not effect a "natural market" then theres nothing natural about it.

Anyway, I digress.

The aim will be to sell these over (up to) 8 years. Homes will be released as other homes are sold. So 3,000 new homes won't just appear on rightmove overnight.

These are basically taxpayers assets, so a lot of security will be paid for, by the taxpayers, to maintain and secure the empty homes. Oe of the reasons (or excuses) for delaying the sale of some of the property is that the current setup will need to be changed in order to make them homes. I.e. they need partition walls moving around and kitchens put in, which will take some time over 3,000 properties. However, that leaves the question as to how it's not possible to do this in a timely manner, but was possible to do all they did for the olympics so quickly.

The point I'm making is that these homes will be drip fed to the market in order to support values in the city. They will basically directly undersupply the demand, therefore directly hold the values up.

The bigger homes and penthouses will be completed and sold first, as they have the highest value, and you are more likely to get the highest value before the local housing authority have housed people in the other flats. Also you have the olympic buzz, so the initial sell off may actually increase local average prices...which is great as you can sell the lower end flats for more (as you've increased the price....but remember, this is all about not effecting the natural market!)

This isn't just heresay, it was on a programme around 2-3 years ago now revolving around the olympic village, as there was a lot of concern for property prices in the area. Things may have changed now, but I highly doubt it.

My honest guess, or gut feeling is that not all will be sold or rented to the public and many will end up in investors hands (converted to cmmerical), especially if the prices do fall. You may see a lot of empty flats. It happened here with a development, with empty flats (and roads going to nowhere...they literally just end, it's pretty amusing!) as prices were falling and the extra supply would have created a further problem.

These flats were then handed over to a local HA and are now used as council type flats. But the roads to nowhere remain. All the mains are there too...water, electric etc. It will be taken up one day, when prices rise I guess.

chewmylegoff

the olympic village houses were sold several years ago to some kind of joint venture between some qataris and a housing association, and as far as i can remember they only plan to sell a relatively small minority of the houses. a few thousand extra homes in east london is hardly going to create an oversupply of property in london.

Graham_Devon

chewmylegoff wrote: »

the olympic village houses were sold several years ago to some kind of joint venture between some qataris and a housing association, and as far as i can remember they only plan to sell a relatively small minority of the houses. a few thousand extra homes in east london is hardly going to create an oversupply of property in london.

Was it?

What do you mean by several years ago? The programme was on roughly 2-3 years ago.

Mindyou, having said that, I often think something was a couple of years ago, but it was actually around 5 years ago! Thinking about it, it must have been earlier, as my son wasn't even known of, let alone born.

If this is the case, I wonder why the olympics website itself state the accomodation will be split into 2,800 homes?

chewmylegoff

by "several years" i may mean about 2, but it definitely has been pre-sold (at significantly less than it cost to build mind you). the olympics website is just telling you what is going to happen to it i think - the olympic village isn't actually going to be handed over to the developers until 2013, and it will be a while before anyone can live there as they have gone and built all of the flats without kitchens, which i think is pretty clever.

Graham_Devon

chewmylegoff wrote: »

by "several years" i may mean about 2, but it definitely has been pre-sold (at significantly less than it cost to build mind you). the olympics website is just telling you what is going to happen to it i think - the olympic village isn't actually going to be handed over to the developers until 2013, and it will be a while before anyone can live there as they have gone and built all of the flats without kitchens, which i think is pretty clever.

Yes, as I said, one of the excuses for not selling them quickly was that they had to refit. Just find it bizaree the build could be done so quickly, but the refit needs time.

If it's 2 years ago, then yes, things could have significantly changed since I saw the programme. Even at the time I couldn't see such a project offering 2800 homes. It just seemed so far fetched in that it was just what was needed....so it probably wouldn't happen! Cynical I know, but it's all I see. Every housing "good intention" seems to get changed several times and ends up nothing like the original intention.

Wonder what's going to happen to them for the time before being handed over? Seems such a waste.

Either way, I believe there is absolutely no chance this will effect London values, it simply won't be allowed to.

chewmylegoff

here we go - only 12 months ago so my exaggeration was even worse.

http://www.standard.co.uk/olympics/olympic-news/olympic-village-sold-to-qatari-firm-for-557m-6432234.html

Graham_Devon

chewmylegoff wrote: »

here we go - only 12 months ago so my exaggeration was even worse.

http://www.standard.co.uk/olympics/olympic-news/olympic-village-sold-to-qatari-firm-for-557m-6432234.html

Cheers. Definate change to the programme I saw. They were taxpayer assets at that point, and we going to continue to do so, providing affordable houses as part of the Olympics legacy!

Instead, I see the taxpayer only lost £175m. Described as a fantastic deal! I'd love to know what a poor deal is!

I see the majority will now be rented, so I guess the Olympics site isn't exactly lying when it says "rented and for sale". Rather avoids suggesting that most will be rented via a private, foreign company.