London Has Peaked

cells

Crashy_Time wrote: »

Most people flocking to London are trying to make money, they don`t have any money, that is why most people have an I.O mortgage there. It is going to be fun watching as the bubble mania plays out, especially with this little online comedy venue to drop into as it all implodes.....:money:

If I were you I would ask myself why my predictions have not come true yet. Everything you post could have been said by your clone in every year since then and you would have clearly been wrong.

Also a crash at this point would just take London to where it was about 2-3 years ago. At that time in 2012 were you saying London is good value buy now?

You probably need 3 house price crashes of 25% each to get to where your daydreams are.

cells

Crashy_Time wrote: »

Most people flocking to London are trying to make money, they don`t have any money, that is why most people have an I.O mortgage there. It is going to be fun watching as the bubble mania plays out, especially with this little online comedy venue to drop into as it all implodes.....:money:

Also at £260 per week (£13,500) in housing benefit avaibile to a single person renting a one bed flat in inner London.....It doesn't matter that they are poor the state will pay their London bills

Of course this is something that should change but doesn't look likely. If a proper benefit cap for all was introduced it would slow/stop London population growth and potentially stop London HPI and rent price inflation

chucknorris

Crashy_Time wrote: »

Or maybe JJ the Debtcorn is in denial about how much rents really cost?

Maybe, I can't comment because I don't know anything about his finances, but what I do know is that the taxable rental profit in our annual tax returns is significant (much more than an average professional salary). So perhaps it is you (rather than JJ), who misunderstands the profit that property can produce. That is why I haven't rushed to sell, as you keep advising me to do, because our properties produce a damn good profit. The other side of the coin of course is that we'll have to sell eventually, if we want to spend the money, and that time is approaching, but hasn't quite arrived yet, but it is getting close (due to my age, rather than a feeling of impending doom about the market).

Generali

chucknorris wrote: »

Maybe, I can't comment because I don't know anything about his finances, but what I do know is that the taxable rental profit in our annual tax returns is significant (much more than an average professional salary). So perhaps it is you (rather than JJ), who misunderstands the profit that property can produce. That is why I haven't rushed to sell, as you keep advising me to do, because our properties produce a damn good profit. The other side of the coin of course is that we'll have to sell eventually, if we want to spend the money, and that time is approaching, but hasn't quite arrived yet, but it is getting close (due to my age, rather than a feeling of impending doom about the market).

You can take comfort from the fact that if property prices fall, the prices of other assets are likely to fall too. As a result, you will probably still be able to provide yourself with a similar income from the smaller asset value.

chucknorris

Generali wrote: »

You can take comfort from the fact that if property prices fall, the prices of other assets are likely to fall too. As a result, you will probably still be able to provide yourself with a similar income from the smaller asset value.

I think you are right, not getting too freaked out would be the way to go, after all, there isn't any point in worrying about what isn't under your own control. As you say, if a downturn happens, then it will hit other assets too, so there isn't anywhere to hide. Moving into cash, would be far too wimpish for me, and just accepting defeat, I don't think I will ever do that, not this side of being aged 80 anyway. So best just think that my income hasn't taken (much of) a hit, what goes down will most likely go back up again, as long as you don't panic and sell, no harm done.

Crashy_Time

cells wrote: »

If I were you I would ask myself why my predictions have not come true yet. Everything you post could have been said by your clone in every year since then and you would have clearly been wrong.

Also a crash at this point would just take London to where it was about 2-3 years ago. At that time in 2012 were you saying London is good value buy now?

You probably need 3 house price crashes of 25% each to get to where your daydreams are.

Looks like my prediction from the FTSE thread just came true :T Careful what you wish for! :money:

MARTYM8`

Crashy_Time wrote: »

Most people flocking to London are trying to make money, they don`t have any money, that is why most people have an I.O mortgage there. It is going to be fun watching as the bubble mania plays out, especially with this little online comedy venue to drop into as it all implodes.....:money:

It is as you say the availability of money that primarily drives house prices – not primarily the supply of people. London’s population now is just above its peak in 1939 – and there are more properties now than there were then.

If it was just about people then London house prices would have risen in line with general inflation since 1939. That isn’t the case.

No idea what will happen to London prices in the next 5 years – but I expect it will be more closely linked to the strength of the global economy and the banking system than the arrival of more low wage migrants. Even in London there is a limit to how many first time buyers can afford to spend £300,000 to buy a one bed flat without a substantial subsidy or mortgage – and newly arrived people on low wages probably aren’t among them.

Jason74

Crashy_Time wrote: »

Looks like my prediction from the FTSE thread just came true :T Careful what you wish for! :money:

Just goes to show that even a stopped clock's right twice a day

Crashy_Time

MARTYM8` wrote: »

It is as you say the availability of money that primarily drives house prices – not primarily the supply of people. London’s population now is just above its peak in 1939 – and there are more properties now than there were then.

If it was just about people then London house prices would have risen in line with general inflation since 1939. That isn’t the case.

No idea what will happen to London prices in the next 5 years – but I expect it will be more closely linked to the strength of the global economy and the banking system than the arrival of more low wage migrants. Even in London there is a limit to how many first time buyers can afford to spend £300,000 to buy a one bed flat without a substantial subsidy or mortgage – and newly arrived people on low wages probably aren’t among them.

Agreed. If the global debt bubble pops, London property pops. The debt bubble is popping as we type.

Jack_Johnson_the_acorn

Crashy_Time wrote: »

Or maybe JJ the Debtcorn is in denial about how much rents really cost?

The cheapest rent in Hoylake for a 3 bed property is currently up for £825. My mortgage is currently £519, so you are partly right, I am wrong about the monthly rent cost as I underestimated the cost by £150 per month, I am in fact saving £300pcm