London Has Peaked

lisyloo

but what is the difference between a speculator and an investor, is there a difference?

I was interested and the result seems to be that an investor takes risks based on fundamentals, whereas a speculator makes more risky gambles based on other factors e.g. predicting the effects of sentiment around the mansion tax or stamp duty.

You don't tend to get many speculators in housing because of the high transactional costs.
If you want to speculate over an election, terrorist event, budget changes then these thing tend to be short term, so it's more applicable to equities.

I'd say chucknorris was an investor, but if I have £4m+ I don't think I'd even be reading what people were saying about me (I probably would for light entertainment).

remorseless

lisyloo wrote: »

I was interested and the result seems to be that an investor takes risks based on fundamentals, whereas a speculator makes more risky gambles based on other factors e.g. predicting the effects of sentiment around the mansion tax or stamp duty.

You don't tend to get many speculators in housing because of the high transactional costs.
If you want to speculate over an election, terrorist event, budget changes then these thing tend to be short term, so it's more applicable to equities.

I'd say chucknorris was an investor, but if I have £4m+ I don't think I'd even be reading what people were saying about me (I probably would for light entertainment).

Totally... I think that analysis would be true for investing (even Google says so, so must be true).

Though I think in place like London, Sydney, etc real estate has really lost its meaning and countries like the UK, Australia, NZ, Canada, etc have transformed the real estate market into a trading market.
I guess this has also created supporting jobs out of thin air, like real estate agents fees, checks, yearly lease, blah blah

In these countries I don't know how much we can predict from past performance as it seems to defy odds and patterns... look at Sydney, the bubble was meant to deflate 10 years ago. Maybe it's not a bubble, maybe it's just a new reality.

You don't see the same behaviour everywhere though. In many other countries real estate is just that, real estate.

If I were chucknorris I would give a rat behind what people thought about me! Obviously, I am not an expert

missyrichards

I do feel sorry for people trying to buy a first property now in London and the South East. If I was young and unable to buy a first place I think I would try and get a well paid job abroad and hopefully come back and buy outright. I know people who are working in Hong Kong and UAE who are planning on doing just that.

chucknorris wrote: »

That isn't entirely true, it is also great for people who have worked in London for years, then later decide to downsize to somewhere like Surrey (or even cheaper areas).

That is probably the plan for us when we retire. We were going to move house now but I think it would be better to hold onto the house we have as it will probably increase in value.

remorseless wrote: »

In these countries I don't know how much we can predict from past performance as it seems to defy odds and patterns... look at Sydney, the bubble was meant to deflate 10 years ago. Maybe it's not a bubble, maybe it's just a new reality.

I knew people in Sydney who were saying the same about a crash there. I have been expecting there to be a crash here for years now but maybe it just won't happen.

cells

London is becoming the premium brand car

You can buy a new car for £8k, £18k or £80k. They all do pretty much the same thing but the premium brand one costs a lot more. There are buyers for premium cars as there are and will be for premium locations/homes

cells

cells wrote: »

London is becoming the premium brand car

You can buy a new car for £8k, £18k or £80k. They all do pretty much the same thing but the premium brand one costs a lot more. There are buyers for premium cars as there are and will be for premium locations/homes

If you multiply by 20x you get a relationship of sorts between cars and homes

small budget cars £6k. Small budget home £120k
Premium car £30-80k. Premium house £600k-£1.6m
Extra premium cars £100-500k. Extra premium homes £2-10m

lisyloo

I do feel sorry for people trying to buy a first property now in London and the South East.

If I were young the I'd be looking for a career that wasn't London centric.
That's difficult for some e.g. if you want to get into fashion or ballet, but for the majority of teachers, doctors, nurses, teachers, hairdressers, builders, then I'd be lokoing for somewhere else.
When I'm retired and not dependent on work income then I will be looking for somewhere else to live - possibly outside the UK.

remorseless

cells wrote: »

London is becoming the premium brand car

You can buy a new car for £8k, £18k or £80k. They all do pretty much the same thing but the premium brand one costs a lot more. There are buyers for premium cars as there are and will be for premium locations/homes

I think that would be applicable if there was the option of 'choice'.
Folks in London (like many other cities) are just not be able to buy because there is nothing affordable.

It's not about deciding whether to live in townhouse in Zone 1 or a flat in Zone 3...is that even in Zone 4 a small dump is unaffordable unless you're on a pretty high wage.

Maybe it's more like having a decent credit card or having to resort to pay day loans... by choice, not many would choose the latter!

lisyloo

Folks in London (like many other cities) are just not be able to buy because there is nothing affordable.

How long before those without London centric jobs decide to look elsewhere?

It's not about deciding whether to live in townhouse in Zone 1 or a flat in Zone 3...is that even in Zone 4 a small dump is unaffordable unless you're on a pretty high wage.

You can live somewhere a bit grim like Luton. There are £100K flats in Luton. Yes it's a bit grim and there is a commute (not brilliant but not horrendous either). So it is possible, for 2 people not on brilliant wages.

Personally we have a London centric job and can't find anything we want to buy although I might be prepared to make more sacrifices if I was "getting on the ladder".

wotsthat

lisyloo wrote: »

If I were young the I'd be looking for a career that wasn't London centric.
That's difficult for some e.g. if you want to get into fashion or ballet, but for the majority of teachers, doctors, nurses, teachers, hairdressers, builders, then I'd be lokoing for somewhere else.
When I'm retired and not dependent on work income then I will be looking for somewhere else to live - possibly outside the UK.

We spend a lot of time talking about house prices on here and probably over-emphasise the cost of accommodation in the decision making process of young people.

If I'm 21 and living in London I might not be thinking too much further than finishing my graduate recruitment programme. I doubt I'd be worrying about whether I should move to Corby, Kettering or Redditch because houses are cheaper. London is the coolest city in the world so forget that idea.

remorseless

lisyloo wrote: »

How long before those without London centric jobs decide to look elsewhere?

You can live somewhere a bit grim like Luton. There are £100K flats in Luton. Yes it's a bit grim and there is a commute (not brilliant but not horrendous either). So it is possible, for 2 people not on brilliant wages.

Personally we have a London centric job and can't find anything we want to buy although I might be prepared to make more sacrifices if I was "getting on the ladder".

Flats maybe cheaper but the commute is unsustainable:

Luton (LUT) to London Thameslink
Days/Months
7 Days £98.10
1 Month £376.80

£376/month is a lot of dosh... a couple would spend £752 on transport a month!!!

When we talk about London, do we mean within the TfL radius? There are direct trains to Margate too...