London Has Peaked

hpifever

http://www.home.co.uk/company/press/the_central_london_house_price_bubble_bursts.htm

Philuk

onthehill wrote: »

Prime can be ignored for the vast majority of discussions about london property and where prices might be going. I am sick of papers writing about it as if it were london. Sometimes it is not clear until you are well into an article that they are actually wittering on about prime, very often from a barely subbed press release from a prime estate agent. It is another planet.

The probleme is that prime has become half of London thanks to a triple digit increase in the last 5 years, Islington is out of touch, Hampstead area, Vauxhall, Battersea, Chiswich and Wimbledon/Richmond to name a few are all out of sight for everyone bare the 1 or 2% earner.

I am not saying all those area are pointing south, just that the buyers in South Kensington or Belgravia are also to be found in other desirable area not traditionally considered prime. So it is actually sensible to look at what is happening in the places where they are most concentrated even if most of us won't hunt for a property there.

And I am not even mentioning the ripple effect.

cells

Philuk wrote: »

The probleme is that prime has become half of London thanks to a triple digit increase in the last 5 years, Islington is out of touch, Hampstead area, Vauxhall, Battersea, Chiswich and Wimbledon/Richmond to name a few are all out of sight for everyone bare the 1 or 2% earner.

I am not saying all those area are pointing south, just that the buyers in South Kensington or Belgravia are also to be found in other desirable area not traditionally considered prime. So it is actually sensible to look at what is happening in the places where they are most concentrated even if most of us won't hunt for a property there.

And I am not even mentioning the ripple effect.

you don't need to be in the 1-2% of earners, hell many of the top 2% probably couldn't afford to buy a house they would consider nice in those places

To afford a house in those areas or areas similar to them, you just need to have had a house in those areas in the past

So if Islington hampstead vauxhall battersea chiswic wimbledon richmand hackney etc had 1,000,000 owners two decades ago

Thats 1,000,000 families who can afford those prices


Most buyers of expensive homes probably fund it through the sale of expensive homes. There is of course a need for new entrants to balance old exit-ers but that might be as low as 2% of sales


also high rents due to a massive shortage of new builds in London has enabled the lower end to be linked to annual rents x 20 to give 5% yeilds. With annual rents at £25k its no surprise the low end stuff in expensive areas are costing £500k and anything better than the low end costs more. Plus this is normal, 5-6% yeilds are pretty much standard for the low end stuff up and down england

Of course where rents are £10k a year houses are a lot cheaper than where they are £25k a year rents

setmefree2

London house prices falling at fastest rate in seven years, according to ONS figures

London house prices are falling faster than at any time since the slump triggered by the collapse of Lehman Brothers in 2008, according to latest official figures.

The average cost of a home in the capital slipped £9,000 to £490,000 in February, the lowest level in almost two years. It was the sixth monthly fall since prices peaked at £514,000 in August, today’s data from the Office for National Statistics reveals.

Prices in the capital are still up 9.4 per cent year-on-year but this marks a dramatic slowdown since the annual rate peaked at 20.1 per cent in May last year. If the pattern of monthly declines continues then London will be in negative year-on-year territory within months for the first time since prices started to recover in the spring of 2009 when the Bank of England slashed its interest rate to an emergency level of 0.5 per cent.

http://www.standard.co.uk/news/london/london-house-prices-falling-at-fastest-rate-in-seven-years-according-to-ons-figures-10175981.html

onthehill

Yes, but note that that standard article is all about the notorious "average".

Can you explain what that article is actually saying?

If anything?

setmefree2

A report yesterday indicated stamp duty changes have resulted in higher value properties changing hands at a far lower pace in London.
Under tax changes in December, those buying a house for £937,000 or more face a higher stamp duty bill.
In the first quarter of 2015 there were 638 prime London transactions, down from 949 in the same period a year earlier, commercial property firm DTZ said - a fall of a third.

http://www.thisismoney.co.uk/money/mortgageshome/article-3038168/House-price-growth-continues-slow-9-000-monthly-fall-London-means-capital-no-longer-boasts-highest-annual-rise.html

setmefree2

onthehill wrote: »

Yes, but note that that standard article is all about the notorious "average".

Can you explain what that article is actually saying?

If anything?

The average house price in London in August 2014 was £514,000. It is now £490,000. A fall of £24,000 or just under 5%.

If the rate of decline in house prices stays the same then in a few months year on year we will be into negative territory - that is house prices will be falling in London year on year.

onthehill

I'm sorry, you have blatantly ignored my question.

You are talking averages.

Can you tell me where this average area is in London?

Since this article gives me no real information, and you haven't added to it, I can only conclude that it is an "average" - ie meaningless.

Drops in the prices of massively expensive prime properties will warp any average.
It is also the case that lots of 2 bedroom flats (glass boxes) are being built in London (some in bizarre places - I saw one yesterday between an industrial estate and a railway line) - this will lower the "average" while not necessarily impacting on the price of houses in London.

setmefree2

onthehill wrote: »

I'm sorry, you have blatantly ignored my question.

You are talking averages.

Can you tell me where this average area is in London?

Since this article gives me no real information, and you haven't added to it, I can only conclude that it is an "average" - ie meaningless.

Drops in the prices of massively expensive prime properties will warp any average.
It is also the case that lots of 2 bedroom flats (glass boxes) are being built in London (some in bizarre places - I saw one yesterday between an industrial estate and a railway line) - this will lower the "average" while not necessarily impacting on the price of houses in London.

All true............ obviously....

onthehill

OK.

All the best

It does by the way strike me that the standard of journalism on house prices is peculiarly appalling. I always thought that a basic discipline of journalism was to ask questions, at least pre-analyse "facts" before chucking them at the poor reader. Otherwise what's the point of their pieces - they are adding absolutely no value. I may as well ask my pet terrapin what is going on.