London is a joke (moan)

AdrianC

There are NINE zones of Tube fare, y'know.

Cornucopia

AdrianC wrote: »

There are NINE zones of Tube fare, y'know.

But not on Overground.

It's one of the things people have been grappling with for decades when planning to live in the London suburbs - whether it is worth paying more to secure a place on the Tube map, or whether the Overground is good enough.

Digsby

Cornucopia wrote: »

I'd certainly be interested in any trends the data suggests.

I sold a property in London at the beginning of the year. As a landlord, the property was empty for most of the period it was on the market, although the mortgage payment was not huge.

I reduced several times in order to attract a buyer, although I probably wouldn't have gone any lower than the final price that was agreed. I would have re-let it instead.

So, that's the other side of the coin from sellers-in-residence who can't or won't reduce. LL's who often have the option of swapping over to a letting.

I've done a little bit of work aggregating some numbers:

21 Feb 2015	1159	41	£1,146,155.00		£27,955.00
01 Mar 2015	1119	27	£638,400.00		£23,644.44
08 Mar 2015	1140	23	£670,095.00		£29,134.57
14 Mar 2015	1136	23	£930,900.00		£40,473.91
21 Mar 2015	1113	40	£1,097,900.00		£27,447.50
28 Mar 2015	1149	30	£1,313,606.00		£43,786.87
03 Apr 2015	1151	12	£244,900.00		£20,408.33
10 Apr 2015	1155	62	£1,900,155.00		£30,647.66
17 Apr 2015	1168	45	£748,795.00		£16,639.89
24 Apr 2015	1199	29	£713,900.00		£24,617.24
01 May 2015	1254	14	£285,200.00		£20,371.43
08 May 2015	1241	28	£711,550.00		£25,412.50

Each line covers a 7 day period from the date of the 1st column. The 2nd column is the number of listings on that date (de-duped), 3rd column is the number of price reductions, 4th column is the total amount reduced and the last is the 4th over the 3rd so the average reduction.

As a percentage of the price itself on a property level, reductions are typically about 6%.

I don't think any conclusions in terms of trends can be drawn from this though, theres just not enough data yet. But it's interesting, and demonstrates that there is relatively low activity in terms of reductions - but without more historical data it's hard to see what this says about the state of the market at the moment.

The next couple of weeks will be interesting to see if a downwards trend in reductions takes hold after the election or if they return to their April levels.

Jhoney_2

Two things that stand out are 1) the old 10% sales barter average remains true in current times. 2) Reductions are only being considered by 1-5% of vendors despite the market falling etc as per your previous data/analysis.

As an annual figure I would expect columns 3 and 5 to fall as a percentage, although col 5 may increase slightly due to the £1m+ house buying frenzy over the summer in London.

There is also allegedly a drop in supply of homes going on the market which is causing fear (RICS and others) of further price rises. I think they are being a bit dramatic tbh, but throwing it out there anyway.

Great piece of work Digsby, btw!.

Digsby

Jhoney wrote: »

Reductions are only being considered by 1-5% of vendors despite the market falling etc as per your previous data/analysis.

The numbers are a bit misleading in that respect. About 40% of current listings were added before I started collecting the data, and I can't know the number or extent of reductions for those listings (that happened before February).

So 60% of listings have been added since Feb. If I look at just those "new" listings:

The average initial price is £516k, and the average current price is £511k, so current prices across the market are just shy of 1% lower than the initial price.

2% have had price increases and 18% have had price reductions. Of the reduced listings, the average initial price is £530k and the average price reduced to is £497k (about 6% reduced as I say - the increases average 7%).

21% of them (the total listings, not just the reduced ones) are currently SSTC. The average initial price of those is £439k and the average current price is £436k. So interestingly, the average reduction of SSTC listings is only about 0.5% against an overall average of 1% and an average of 6% among those that have been reduced.

So this suggests that the reductions that are happening aren't attracting much demand.

One way of looking at it might be to say that the reductions aren't deep enough, another might be that in the price bracket where the most demand lies (£300-500k) reductions aren't needed because of that demand, and only sellers above that price bracket are needing to reduce because of lesser demand at that end of the market (due to affordability constraints), which is borne out by the fact that reduced properties typically have a higher than average price.

My working theory is that there is upwards price pressure at the lower end of the market and downwards price pressure at the higher end of the market. It has been the case for some time now that in London, a lot (a don't have numbers to hand and might have changed since I last looked) of the price inflation has happened in flats rather than other types of properties.

Where that ends up if it carries on is an interesting question - we couldn't get to a situation where a flat or a terrace is the same price as a detached: we value (maybe) terraces over flats and (definitely) detached over terraced, so that price strata has to be maintained somehow.

AdrianC

Digsby - do you have a figure for average time-from-going-on-market-to-sale, and time-from-going-on-market-to-reduction?

Because I look at your figures above, and I'm struck that in the month with the MOST reductions, it was barely over 5% of properties being reduced, and the average seems nearer half that number.

Digsby

Not to hand sorry. At some point I'll get this all in a format where I can do that kind of off the cuff analysis quickly and easily but not there yet.

I do have this though - this is the number of reductions by age in weeks (so 0 is less than a week) by the number of listings of the same age:

0: 1/77 (1.30%)
1: 4/132 (3.03%)
2: 9/73 (12.33%)
3: 5/60 (8.33%)
4: 3/52 (5.77%)
5: 7/42 (16.67%)
6: 15/43 (34.88%)
7: 23/52 (44.23%)
8: 11/40 (27.50%)
9: 19/51 (37.25%)
10: 7/35 (20.00%)
11: 15/38 (39.47%)
12: 10/34 (29.41%)

So for example 1.3% of the 77 listings less than a week old have been reduced, and 29.41% of those that are 12 weeks old have been reduced.

caronoel

benn25 wrote: »

Ill tell you what...London postcode prices are !!!!ing me right off.

Im not even looking to buy till the end of the year but ive been looking at the various sites over the last 3 months to see whats around for my budget.

The answer is practically jack diddly (!!!!!!!) squat!

Im looking at prices in the region of 170 to 180 and need something close to work as Im not and have never been keen on living far from work. Anyway, theres me thinking I could get something half decent for the money.

Wow! You think you can get something decent in London for £170-180

Where do you plan to live? 1994?

Dhrucku

Look, let me break this down for you.

Living in London is great, but the prices are astronomical so unless you're planning to win the lottery, forget it.

I'm not totally sure of what kind of income you're on so I will say the following; I work in London and am by no means tempted to buy within London (Zones 1 - 6).

I've seen some absolutely great properties on the SouthEastern Line coming into London (Swanley, Ebbsfleet, Gravesend etc) all of which get me to London in 40 minutes, which is nothing in terms of a commute. I've heard that the Ebbsfleet Line even gets you into London in 19 minutes so rethink the transport strategy and comfort when you consider transport an issue.

South Eastern areas are going to give you more bang for you buck. house prices will increase (maybe even exponentially) when ignorant commuters / Londoners / foreign investors realise that living in the South East is actually viable and extends the footprint of London.

I can't wait to get on the property ladder here as I'm currently on several waiting lists for the new builds because I know that it will be a great decision.

Simple common sense and forward - thinking shows:
Property in general is going up due to the Demand/Supply model-->London is getting congested which will push people out of London-->Buyers will want to buy "out" of London which actually brings them closer to London due to the congestion effect within London (e.g. tube cross London takes 45 minutes). Once London reaches saturation, watch the property prices around the SouthEastern regions rocket.

If you disagree with me, please let me know as I'd be interested as to why.

Cornucopia

I don't disagree. However, I think the high cost of commuting those longer distances will remain a disincentive to live further out.

I don't know whether you've been to Ebbsfleet, but the area needs substantial work to restructure and rebuild it (from being previously industrial and non-trendy docks). I don't know what the local plan is, but the area has not seen significant development since well before HS1 was opened.

I assume that the HS1 trains stop at Higham, which would possibly be a better option, though it is another 5-10 minutes down the lines. The price of an HS1 season ticket to London is over £400 per month, though.