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Debate House Prices
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When will the correction come to house prices?
Comments
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Outside of London along the Thames. Not in London as there is the Thames Barrier which means it isn't possible to flood.
The whole premise of the movie plot is based on blowing up the Thames Barrier.
Let us say there is a cabal of bankers and property developers that think the Thames Barrier is on its design limit, so decide to get out of the flood area before it happens. So they sell to Middle Eastern and Chinese buyers into investing in the dud areas, and they use the money to buy and build on higher ground. And then blow the Thames Barrier. Lots of special effects.
007 finds out what happened. Preferrably we find the conspirators in the Bahamas, and they transport them to Saudi Arabia, where the investors take turns in renditioning them to get the money back. Snuff movie on bankers and developers, a guaranteed hit.0 -
Only took 4/5 years to reverse. The market is very different to the 90s and has reversed from the 07/08 falls.
But people had to wait 10 years to sell at the same nominal house price at which they bought. Which, for people buying in London, is I assume (can't easily find the figures) far longer than most people would want to own a property before upsizing or moving.0 -
True, but all these things could be reversed (certainly the latter three, but even the first is possible but admittedly more unlikely). As I said, I'm not a crashist by natural inclination but the "it's different this time" refrain always sounds very worrying....very different from the 90s
huge increase in population
0.5% bank rate
QE
HTB etc0 -
But people had to wait 10 years to sell at the same nominal house price at which they bought. Which, for people buying in London, is I assume (can't easily find the figures) far longer than most people would want to own a property before upsizing or moving.
We had a crash in 2007/8, and for most of the country, we're still a bit below that level 7 years later. It will probably be 10 years before all of the mainland is back to that level in nominal terms, and some of it still won't be in real terms.
London has a million more people than it did in the early 90's crash.
No surprise it recovered a lot quicker this time.“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
alexanderalexander wrote: »I'm not a crashist by natural inclination but the "it's different this time" refrain always sounds very worrying....
Every crash and recovery plays out differently. There aren't any two that were identical in scale, duration or cause.
So it always is different.
That there will be another crash eventually is almost certain. But that it will be different to the last one is equally certain.“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
HAMISH_MCTAVISH wrote: »We had a crash in 2007/8, and for most of the country, we're still a bit below that level 7 years later. It will probably be 10 years before all of the mainland is back to that level in nominal terms, and some of it still won't be in real terms.
London has a million more people than it did in the early 90's crash.
No surprise it recovered a lot quicker this time.
There's some truth in that of course, but it's far from the whole story imho. The extent to which London property is much more frequently bought purely as a financial investment (both through foreign owners and BTL) compared to the early 90s is also a big factor..
That factor also makes London prices much more volatile than the UK as a whole imho. In the same way that we have recently had a boom largly confined to London, we could equally imho have a similarly localised crash if the investment money heads for the exits en masse. I don't see what would cause that at the moment, but to dismiss the possibility would imho be naive at best.0 -
There's some truth in that of course, but it's far from the whole story imho. The extent to which London property is much more frequently bought purely as a financial investment (both through foreign owners and BTL) compared to the early 90s is also a big factor..
That factor also makes London prices much more volatile than the UK as a whole imho. In the same way that we have recently had a boom largly confined to London, we could equally imho have a similarly localised crash if the investment money heads for the exits en masse. I don't see what would cause that at the moment, but to dismiss the possibility would imho be naive at best.
Foreign purchases now are no higher than the 90s though.0 -
There's some truth in that of course, but it's far from the whole story imho. The extent to which London property is much more frequently bought purely as a financial investment (both through foreign owners and BTL) compared to the early 90s is also a big factor..
That factor also makes London prices much more volatile than the UK as a whole imho. In the same way that we have recently had a boom largly confined to London, we could equally imho have a similarly localised crash if the investment money heads for the exits en masse. I don't see what would cause that at the moment, but to dismiss the possibility would imho be naive at best.
Scotland voting to leave the UK and then the UK leaving the EU is one plausible scenario. But of course it depends on many other factors, such as what happens within the EU itself over the next few years.0 -
Foreign purchases now are no higher than the 90s though.
My understanding is they're quite a bit higher. Something like 30% of all prime central London property is bought by non UK residents and 20% of all inner London new builds are sold to non UK residents according to Knight Frank. That's a sizeable chunk of the market, and the numbers of transactions being made by non resident buyers is imho far more significant than the overall ownership rates.
Even without this, btl is certainly much more prevailant than was the case 20 years ago, so I don't think that there's much doubt that a) the portion of properties bought for reasons other than principle occupation by their owner is much higher than 20 years ago, and b) that this is more of an issue in London than elsewhere (that said, I don't have the figures for that second point, so am happy to be corrected if appropriate).0 -
, but it's far from the whole story imho.
No, I really don't think it is.
The population of London has increased by over a million people in just 10 years, and is currently growing at twice the rate of the rest of the UK.
London adds an additional 1.3% of population every year, compared to 0.7% for the rest of the UK.
It now has 8.3 million people, and is on track to reach 10 million in the next 15 years.
And whilst adding that 100K+ people a year, it only built 17K houses last year.
That's simply nowhere near enough.
http://www.theguardian.com/housing-network/2013/oct/25/green-belt-london-boris-johnsonJohnson appears to have little interest in, or understanding of, London's housing problems. He has called for 40,000 homes to be built for each of the next 10 years, including significant numbers of affordable homes, but only 17,000 homes were built in London last year, in total, and just 6,000 of these were built by housing associations and councils.
London has little more than 3,000 hectares of brownfield land and even building at high densities will still leave the capital about 100,000 short of Johnson's 10-year target.
But even if the mayor reached his target, 40,000 a year is simply not enough to deal with future demand and the current backlog.
Back in 1981 London's population was 6.8 million.
It's now 8.3 million and set to grow to 10 million by 2030, an increase of 106,000 people every year.
As always with British housing, the main issue is simply a massive shortage of houses, all the talk of foreign investment/HTB, etc, is a red herring.
The Russian Oligarchs buying penthouses in Mayfair and leaving them empty much of the time really has almost no bearing on the supply or price of 2 bed flats in the boroughs ordinary people are looking to inhabit.
It's a distraction from the real issue, which is that London needs around 800,000 new houses built in it's green [STRIKE]belt[/STRIKE] noose over the next 15 years if it's to keep up with population growth and tackle the backlog.
That's double the current plans, and the current plans are failing miserably to deliver even half of what they call for.
It is always all about supply and demand. There is nothing else.
So anyone wanting London prices to fall had better start campaigning for an awful lot more housebuilding than is currently being delivered.“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0
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