train crash waiting to happen in London property

NorthFin

I read a stat in the FT yesterday that absolutely blew my mind.
There are now 54,000 homes planned or under construction “in the priciest areas of the capital”. Most will cost “close to or above the £1m mark” and most are two-bed flats.
Here’s the mind-blowing bit: in the same areas last year, just 3,900 homes were sold for more than £1m.
That would put potential supply at almost 14 times annual demand.
Welcome to the train crash about to happen that is high-end, new-build property in London…

http://moneyweek.com/the-train-crash-waiting-to-happen-in-new-build-property/

Who’s going to buy these flats?


That picture just sums it up, they are building these £1M 2 bed flats in areas where those are the kind of peple have lived for years. Little old lady with a shopping bag, normal people, who can enver afford £1M property.

Families don’t want two-bed flats. ‘Normal’ people can’t afford £1m-plus properties. Even buy-to-let won’t work – factoring in service charges, you’d have to be taking in £40,000 a year in rent to make a £1m property worthwhile. That’s a lot for a two-bedder.

NorthFin

Forget ‘Occupy’ – this is ‘Unoccupied’

I’ve lived in London most of my life. I can remember Arabs in the 1970s buying huge swathes of South Kensington, Bayswater and Paddington. In the 1980s the Japanese came, in the 1990s the Americans. In the 2000s it was the Russians and then the Chinese.
I don’t know who’ll be next, but someone will come along. There are a lot of people in the world.
But in most cases, they actually lived in the houses they bought! That’s the big disconnect we have today. And it can’t last.
Take the recently completed Vauxhall Tower by Vauxhall Bridge. It is Britain’s tallest residential building – 50 storeys high – and it holds 223 flats. But drive past at night and there are absolutely no lights on.
This is becoming a big social problem. London property is already unaffordable for most locals. The average wage in London is just above £40,000. The average London house price is £580,000. Anger about this is mounting every day – and it only increases when people see so many flats sitting there unoccupied.
So the idea that 54,000 new-build flats are going to be flogged off to foreigners, then allowed to sit empty is just absurd.

padington

NorthFin wrote: »

Forget ‘Occupy’ – this is ‘Unoccupied’

I’ve lived in London most of my life. I can remember Arabs in the 1970s buying huge swathes of South Kensington, Bayswater and Paddington. In the 1980s the Japanese came, in the 1990s the Americans. In the 2000s it was the Russians and then the Chinese.
I don’t know who’ll be next, but someone will come along. There are a lot of people in the world.
But in most cases, they actually lived in the houses they bought! That’s the big disconnect we have today. And it can’t last.
Take the recently completed Vauxhall Tower by Vauxhall Bridge. It is Britain’s tallest residential building – 50 storeys high – and it holds 223 flats. But drive past at night and there are absolutely no lights on.
This is becoming a big social problem. London property is already unaffordable for most locals. The average wage in London is just above £40,000. The average London house price is £580,000. Anger about this is mounting every day – and it only increases when people see so many flats sitting there unoccupied.
So the idea that 54,000 new-build flats are going to be flogged off to foreigners, then allowed to sit empty is just absurd.

Really, I see it as our saving grace we have something to sell to the world. Vauxhall was the biggest sh*t dump London has ever known, now it's a money making cash cow which is begining to look really quite nice.

The only issue for me is that the tories pulled the need to built a percentage of affordable accommodation which was a great idea which meant local people were more directly franchised in to the benefits of these schemes.

Also, often the reason why they are left empty at first is because the first people who essentially 'crowd funded' the project are from Hong kong etc or the hope is to sell to people from Hong kong etc who hold a belief that the best price is obtained from selling something 'new' and are waiting to sell the place to the first customer.

It's just an cultural difference that a global city like London needs to get used to.

We could not play the game and leave the place a wasteland like it was and let people squat the land like they did but building up and using our global pull and pulling in the taxes & using them to turbine housing projects for people elsewhere is a pretty good solution if you ask me.

The germans wouldn't get upset about Mercedes that were bought and not used much. They would just celebrate that they can make cars that the world wants.

Given our dangerous rocketing national debt problem we need to use Churchillian tactics to get out of this mess. Selling deposit boxes in the sky to the world to keep their wealth until they want to cash out, is one of them.

Putting on the best parties to get people excited enough to want to buy into 'team GB' is another.

The next trick will be to work out how we can export the Magic en masse.

mystic_trev

NorthFin wrote: »

http://moneyweek.com/the-train-crash-waiting-to-happen-in-new-build-property/

That'll be the same Dominic Frisby who wrote this in 2009.:rotfl:


The housing crash is not over

http://moneyweek.com/what-we-can-learn-from-the-last-housing-crash-14794/

antrobus

mystic_trev wrote: »

That'll be the same Dominic Frisby who wrote this in 2009.:rotfl:


The housing crash is not over

http://moneyweek.com/what-we-can-learn-from-the-last-housing-crash-14794/

Contains the following predictions;

Even if we do see inflation, as I believe we will, it will only manifest itself in the price of essential, imported items such as food, metals and energy....

and

What’s more there will come a time – and that time may not be far away – when Mr Market will force higher interest rates if our government is to be able to sell gilts to fund our huge deficit.


So that would be a 0-2 record.:)

padington

The art world creates its own spin doctors through self Interest
( artists, collectors and agents cloaked under the anonymous web) No doubt it happens here too from those unaware its a hidden board.

Thrugelmir

NorthFin wrote: »

Here’s the mind-blowing bit: in the same areas last year, just 3,900 homes were sold for more than £1m.
That would put potential supply at almost 14 times annual demand.

What's the correlation between sales and demand?

Not as if houses change ownership every week.

Builders are building because there's an interest in owning property in London. More than likely from overseas from the Middle East or Asia.

Generali

antrobus wrote: »

Contains the following predictions;

Even if we do see inflation, as I believe we will, it will only manifest itself in the price of essential, imported items such as food, metals and energy....

and

What’s more there will come a time – and that time may not be far away – when Mr Market will force higher interest rates if our government is to be able to sell gilts to fund our huge deficit.


So that would be a 0-2 record.:)

To be fair, isn't that 1-1? We did see inflation in commodities.

cells

NorthFin wrote: »

I read a stat in the FT yesterday that absolutely blew my mind.
There are now 54,000 homes planned or under construction “in the priciest areas of the capital”. Most will cost “close to or above the £1m mark” and most are two-bed flats.
Here’s the mind-blowing bit: in the same areas last year, just 3,900 homes were sold for more than £1m.
That would put potential supply at almost 14 times annual demand.
Welcome to the train crash about to happen that is high-end, new-build property in London…

http://moneyweek.com/the-train-crash-waiting-to-happen-in-new-build-property/

Who’s going to buy these flats?


That picture just sums it up, they are building these £1M 2 bed flats in areas where those are the kind of peple have lived for years. Little old lady with a shopping bag, normal people, who can enver afford £1M property.

Families don’t want two-bed flats. ‘Normal’ people can’t afford £1m-plus properties. Even buy-to-let won’t work – factoring in service charges, you’d have to be taking in £40,000 a year in rent to make a £1m property worthwhile. That’s a lot for a two-bedder.

The reality is the average borough in London builds only about 600 new homes a year

While the population of London grows by 100,000 a year

Thrugelmir

cells wrote: »

The reality is the average borough in London builds only about 600 new homes a year

Isn't that down to land availability?

More are made from conversion of existing use i.e. redundant commercial premises.

Generali

cells wrote: »

The reality is the average borough in London builds only about 600 new homes a year

While the population of London grows by 100,000 a year

That's presumably only the 32 boroughs. These days Guildford is as much a part of London as Wimbledon, culturally and economically.