London Has Peaked

lisyloo

I would like to see people who don't need to be there moved out.
It annoys me when there is an outrage about moving those who don't contribute, yet people like me who sometimes work at 4am have to travel.

We could manage much higher density in London. It's sparsely populated compared to places like Hong Kong or Bangkok.

alberty

padington wrote: »

The clever money will continue to buy the thing they don't make anymore, London land.

Even future technology I imagine will only make things worse. If the world could teleport instantly, London would become even more populated not less. It's possible things could get even more crazy than even I am imagining.

I said this before but didn't get a rise out of anyone.. housing-tunnels! :j

cells

chucknorris wrote: »

The reninal market really is that good in London, but I do tend to rent at slightly under the market rent, this gives me a wider choice of tenant, and obviously helps to avoid voids.

I am certainly not planning to spend most of it by the time I am 70 (just as well because I don't think that I could spend it in 13 years anyway). Obviously it is possible my health may not last but I am hoping (and planning) to be a very fit 70 year old. I will probably be doing my first triathlon next year, as I am likely to retire this December, and I will finally have the time to train in all 3 disciplines.

I rent out (primarily 3 bed flats) in inner London and always have voids between tenants. Not long mind 2-4 weeks is typical. I don't see how you can avoid that unless you have tenants stay many many years.

regarding heath it is a lottery. I know of two people in their 30s who have gone to their GPs with complaints of pain and within 3 months they were dead. I think all of us young or old should routinely remind ourselves how finite life really is.

cells

chucknorris wrote: »

It is about 4.73% per annum, but with inflation so low, that IMO is an astronomical rate to be sustained for 15 years. Especially when you consider they already seem to be pushing the boundaries of affordability now, even with my most optimistic head on, I just can't see it happening. Also we are probably due a market correction within that 15 year timeframe.

The only limit to what London prices can achieve are rents vs the return on alternative investments like savings accounts and the stock market.

by that metric I would not think it crazy that London could fall to 3% yields ( which would take prices up ~60% on top of any rent price inflation)

padington

The best long term outcome for london is that prices don't go up at all like these current extremes and we relax our planning laws to incentivise building quality affordable low or high rise whenever the opportunity arrises. If we can keep building so prices only go up at the rate of inflation, London will become a rare well managed mega city. Maybe aim for a low rise ring right around the whole outer edge of London.

'Bussing' workers in from Birmingham is just a waste of resources. We need to make homes where the jobs are.

Thrugelmir

cells wrote: »

by that metric I would not think it crazy that London could fall to 3% yields

Unless you understand the concept of risk in all it's guises. That's a sure way of getting your fingers burnt. As the only thing you can predict with certainty is uncertainty.

chucknorris

cells wrote: »

The only limit to what London prices can achieve are rents vs the return on alternative investments like savings accounts and the stock market.

by that metric I would not think it crazy that London could fall to 3% yields ( which would take prices up ~60% on top of any rent price inflation)

That is one scenario, there are others too, only a fool doesn't consider all the possibilities. That scenario is an optimistic one, IMO far too optimistic, especially as it:


a) Discounts a market correction within the 15 year timeframe.
b) Ignores the affordability for owner occupiers, and assumes property is valued only as an investment.
c) Assumes that the Gov would sit by and passively watch this happen, I'm not saying that they wouldn't. But Gov intervention would become more of a risk (intervention could be subtle, just simply something that dampens prices).

There are also pessimistic scenarios and others in between. As Thrug was saying above, risks need to be considered. I don't make plans on optimistic assumptions, I would rather tread more carefully and be prepared to be pleasantly surprised.

chucknorris

cells wrote: »

I rent out (primarily 3 bed flats) in inner London and always have voids between tenants. Not long mind 2-4 weeks is typical. I don't see how you can avoid that unless you have tenants stay many many years.

regarding heath it is a lottery. I know of two people in their 30s who have gone to their GPs with complaints of pain and within 3 months they were dead. I think all of us young or old should routinely remind ourselves how finite life really is.

It sounds to me like you re-market your properties at the maximum possible rent, if you routinely have voids. I prefer to market my properties under the market rent, it doesn't necessarily cost anything (i.e. a 4 week void is equivalent to a 7.7% decrease in the rent). It also gives me a wider choice of tenant, which I consider very important. I always strive to build up a good relationship with my tenants, that doesn't mean that I roll over for them, but I don't expect them to roll over for me either, mutual respect is the goal. Our tenants do tend to stay on, last month a long standing tenant moved out after 11 years. I also think that it is very good for the existing tenants to show the prospective tenants the property, because the prospective tenants can ask them about both the property and us, if you have voids, then this isn't possible. They do also occasionally give us great feedback too about the potential tenants (both good and bad).

Of course health is a lottery, but you can do things to increase your odds, I don't smoke, eat extremely healthy and exercise regularly (walking, swimming, cycling and running). But I am retiring very soon, probably this December, for the very reason that health is a lottery, i.e. I don't know how many years I have left. Additionally I can still afford to live very well without working any longer. My whole attitude to work and retirement changed 2 years ago when my dog was diagnosed with cancer, I realised that no one can guarantee that they will not suffer a terrible death, and that things can change very quickly, this underlined the importance of getting the most out of life while you can to me. But at the same time, it would be idiotic to plan to spend my wealth by the time I am 70, the best plan is to amass enough wealth to last you for a long life, and this is what I have done.

mystic_trev

Bubble_and_Squeak wrote: »

i'm calling April as the peak of the london property price bubble.

Which April? 2030 ?

Not a squeak from Bubble

padington

When it comes to the relationship between price and yield, you need to consider how properties are going to become a million pound death tax free wrappers soon. This may change the relationship somewhat as the up to 1 million pound homes become to enjoy a new purpose.