London house prices continuing to fall, says Rics

Loughton_Monkey

Killerseven wrote: »

its obvious london is way overvalued, the question of crashing is a matter of when not if.

So easy to say, but so wrong.

Unless there is fiddling of the figures, which I doubt, then the values shown in Land Registry are highly accurate statements of the true value. By definition, people have literally paid those prices and so that fixes the value beyond all shadow of doubt.

Of course, a house is a commodity and an investment that will continually rise and fall in value as the amount buyers are willing to pay will rise and fall, based on several other factors.

The price may well change downwards over time, depending upon all these factors. So will the value of your pension (if you have one). To wish for a "crash" in house prices is almost certainly a wish that your retirement fund gets a commensurate crash in value.

One thing that surprises is me is what appears to be extremely short memories. Only 7 years ago (if you remember) we went through a house price crash (inevitably in conjunction with all those other nasty implications from which we are 'just about' recovering. Only recently has GDP, stock markets, and house prices, come back to pre-crash levels.

Why, oh why, so many people seem to want the same again so soon is beyond me. Unless, of course, you believe in a phenomenon that has (to my knowledge) never happened before..... that of houses crashing in pure isolation on their own, with no prior or later consequences at all.

Killerseven

Loughton_Monkey wrote: »

So easy to say, but so wrong.

Unless there is fiddling of the figures, which I doubt, then the values shown in Land Registry are highly accurate statements of the true value. By definition, people have literally paid those prices and so that fixes the value beyond all shadow of doubt.

Of course, a house is a commodity and an investment that will continually rise and fall in value as the amount buyers are willing to pay will rise and fall, based on several other factors.

The price may well change downwards over time, depending upon all these factors. So will the value of your pension (if you have one). To wish for a "crash" in house prices is almost certainly a wish that your retirement fund gets a commensurate crash in value.

One thing that surprises is me is what appears to be extremely short memories. Only 7 years ago (if you remember) we went through a house price crash (inevitably in conjunction with all those other nasty implications from which we are 'just about' recovering. Only recently has GDP, stock markets, and house prices, come back to pre-crash levels.

Why, oh why, so many people seem to want the same again so soon is beyond me. Unless, of course, you believe in a phenomenon that has (to my knowledge) never happened before..... that of houses crashing in pure isolation on their own, with no prior or later consequences at all.

Markets always correct in the end.

London is still overvalued compared to everything else.

Can you show me one thing that has gone up the same rate every year that London has? Oil? No. Commodities? No. Any paper investments? No. Exactly, nothing.

Either everything else has to shoot up to match Londons gains, or London has to come back down to match everything else. I know which I think is more likely.

System

Killerseven wrote: »

Either everything else has to shoot up to match Londons gains

Why's that?

padington

1) Every London property will in effect shorty be able to run as a guest house for at least three months a year shortly.
2) Londons super structure will be greatly improved with the advent of the 24 hour tube very soon.
3) EU is begining a QE programme which will result in more loose money flowing through London banks, which will mean happy London Bankers as well as extra money looking for a safe haven
4) The dollar is 'pounding' ahead and looks like it might continue. London property will start looking like a 'buy' for those in dollars.
5) The London population is booming, possibly by more than anyone quite knows.
6) All indications seem to be we are entering into a good economic phase with lowering unemployment and increasing wage rises.
7) The cultural pull of London is mighty strong and growing. We are in the worlds bucket list and rising to the top of it.
8) We are literally refusing a hord of Chinese tourists to enter, when the rules are relaxed the retail tills will be ringing even louder.
9) We're failing to build property in London and will continue to fail. The supply and demand ratio is on a one way street.
10) Interest rates look like they may stay for a long long while yet. It's a race to the bottom. at the moment, not the top.
10) Every time a city doubles in size it increases its ability to do just about everything by 15%. That includes ability to attract workers. Cultural activities and even general efficiency. Humans work and play better when they are close to each other. Bitterly obvious but true. This dynamic is only going to get better and better for London.

Betting against London is a very dangerous thing to do. Some months the prices will go up and some down but betting there will be many many down months ahead, right now with no obvious black swan events is pure gambling and a bet the London house casino will be more than prepared to take from you in rent and a future larger price tag than what may be on offer today.

zagubov

London has benefited by the other British cities being neglected. The UK governement seems incapable of encouraging the country to have multiple centres. Not even sure it wanted London to be a centre. It nearly met the same fate as Birmingham.

Generali

Killerseven wrote: »

Can you show me one thing that has gone up the same rate every year that London has?

Shares in Berkshire Hathaway. Up 10,000% or so in 50 years.

Generali

zagubov wrote: »

London has benefited by the other British cities being neglected. The UK governement seems incapable of encouraging the country to have multiple centres. Not even sure it wanted London to be a centre. It nearly met the same fate as Birmingham.

That is outrageous! Labour Governments basically decided that they didn't want Birmingham to be an economic success as it was playing badly against their voting heartlands in the North so simply banned the expansion of the economy.

Birmingham itself was second only to London for the creation of new jobs between 1951 and 1961. Unemployment in Birmingham between 1948 and 1966 rarely exceeded 1%, and only exceeded 2% in one year. By 1961 household incomes in the West Midlands were 13% above the national average, exceeding even than those of London and the South East.Declaring the growth in population and employment within Birmingham to be a "threatening situation", the incoming Labour Government of 1964 sought "to control the growth of office accommodation in Birmingham and the rest of the Birmingham conurbation before it got out of hand, in the same way as they control the growth of industrial employment". Although the City Council had encouraged service sector expansion during the late 1950s and early 1960s, central government extended the Control of Office Employment Act 1965 to the Birmingham conurbation from 1965, effectively banning all further office development for almost two decades.

How could anyone think that was a good idea? It reminds me of these whinging idiots that are envious of the success of London. As Lord Coe said when London won the Olympics, where else are you going to have it, Poole?

ging84

Next month foreign nationals will have to pay capital gains tax on property

I suspect the incoming change has slightly increased supply over the past 6-12 months, and will have dampened price rises slightly but that effectively comes to an end in a couple of weeks, it will be interesting to see how much of a difference we see in the next few months.

lisyloo

We're failing to build property in London and will continue to fail

I don't get this - because I live in London and see loads of new property being built and up for sale, but I'm sure you had a valid point, so did you mean

we're failing to build enough
we're failing to build in pime central london
we're failling to build enough affordable accomodation
or something else?

As an example here's some new builds (all below £250k)

Bromley-by-bow (ex engineering works)
Greenwich kidbrooke village
houslow regeneration
Limehouse
Croydon saffron square
woolwich
hackney matchmakers wharf
Lewisham (from £180k)
Stanmore
Bow

padington

lisyloo wrote: »

I don't get this - because I live in London and see loads of new property being built and up for sale, but I'm sure you had a valid point, so did you mean

we're failing to build enough
we're failing to build in pime central london
we're failling to build enough affordable accomodation
or something else?

As an example here's some new builds (all below £250k)

Bromley-by-bow (ex engineering works)
Greenwich kidbrooke village
houslow regeneration
Limehouse
Croydon saffron square
woolwich
hackney matchmakers wharf
Lewisham (from £180k)
Stanmore
Bow

The official statistics say britains population is expanding by a new London borough every three years.

http://www.standard.co.uk/news/london/london-population-boom-number-living-in-the-capital-set-to-hit-alltime-high-within-weeks-9957804.html

If new homes aren't built to rent to poorer workers ( and instead deposit boxes in the sky are built ), new comers will either go elsewhere ( which they're not doing because job opportunities in Euro land isnt great and employment here is good - if you can't speak English but are trusted, you can earn £10 an hour cleaning, so even the wife can bring home the bacon ) or they will nest in large groups in small houses. That will allow them to push up rent prices by demand ( they get paid less but happy to have two couples in a two up two down, which breaks the previous norm and gives new comers more buying power) which in turn has consenquences on the demand side of London housing on property for normal people as it increases available yield.

The middle classes and above love the dynamic because they become richer every which way, so not a dynamic that will easily change ... Until new comers call it a deal breaker and start walking, however we're nowhere near that yet, they are jumping the gates, literally.

Old comers could cause problems to this status quo but that requires them to vote Labour on mass but most are working so hard or as high as a kite and labour have done such a useless job making the link, it doesn't look like that's going to p*ss on the fireworks.

Also labour have been pretty HPI positive in past form and jury is out if Ed really is hoping to win many elections by devaluing the price of Londons most important asset after its people ? I would argue the proof is already in the pudding.

Expect prime to burn and cheap side to boom. Especially if Ed doesn't get a majority for the latter.