London property prices to fall 30%....

chucknorris

chappers wrote: »

Similar, being in the building trade the first port after work, was always the pub, followed by the weekend. I've lost count of the number of times I popped in for a quick one on a Friday night and finally made it home on a Sunday afternoon.
To be honest midweek drinking has been a rarity for me for the past couple of years and I've never been much of a drinker at home, unless we have guests, its always been about the pub for me.
Rugby days at the weekend are the big ones for us and then it can be carnage or people round for dinner then its usually 2 bottles of vino plus per man, maybe a bottle of port and a bottle of whisky or brandy.

You should consider doing what I did, and start keeping a diary of your alcohol units, then feed them into a longevity model, that allows you to include lifestyle choices (such as alcohol units consumed). Apart from the alcohol I scored well, I exercise a lot (running, swimming, cycling and hiking), my diet is very good (I eat plenty fruit and veg, I don't eat much processed food, and I only eat red meat 2 or 3 times a week). I don't smoke and my family history is reasonably good for longevity and being free of medical problems. So my alcohol consumption stood out like a sore thumb.

The difference for me (according to the model) was that if I continued the way that I was going, I would only have less than 20 years to live (I'm 57), but if I cut down to under 21 units (per week), that increases to over 30 years. I used the worst model that I could find (for motivation), so I don't really 100% buy into the numbers as presented, but the trend is undeniable.

Generali

chucknorris wrote: »

No, my current gross yield is only about 3.75%, but as I said above, that doesn't mean anything (in terms of profitability). The 7.5% is very meangingful, it is my ROI (return on investment, funny Gen mentioned that above, as I am actually giving a lecture which covers ROI on Monday) on the equity that would be released when selling.

But as I said above, there is something to be said about accepting the reduction in income as payment for a less hassled lifestyle. It was only this morning that I said to my wife before she left for work 'if we completely sold up our income would drop by over £50k', she answered 'so it is a no brainer then'. But I don't think it is, but we wouldn't completely sell up anyway, she is 11 years younger than me and wants to keep her properties for longer.

What I am having to do, and it isn't an easy transition for me, because it doesn't come naturally to me, is to accept that I now have to switch from being an investor to much more of a spender. It should be easy, but after many years of investing for my future, I am only just starting to come to terms that that job has now been done, and it is time to move on and retire and start spending it. I have always worked hard (and played hard too), but I am now about to enter a different phase of my life.

In terms of the property, I am far from being a doomster but I do wonder how much further property can rise in London when a two bed flat in Wimbledon costs half a mil and a three bed terrace in WEST NORWOOD costs £650k.

I get that Hackney and Peckham have gotten expensive: they're central and they have simply been re-rated. I can honestly think of no good reason for anyone to want to pay a million US dollars to live in West Norwood.

chucknorris

Generali wrote: »

In terms of the property, I am far from being a doomster but I do wonder how much further property can rise in London when a two bed flat in Wimbledon costs half a mil and a three bed terrace in WEST NORWOOD costs £650k.

I get that Hackney and Peckham have gotten expensive: they're central and they have simply been re-rated. I can honestly think of no good reason for anyone to want to pay a million US dollars to live in West Norwood.

I really do think we are at or very near the limit for real time London property prices (not nominal). My wife disagrees, but I think she is guilty of being over optimistic, and not being open minded, of course I would like (real time) prices to increase, but what I want is irrelevant.

Generali

chucknorris wrote: »

I really do think we are at or very near the limit for real time London property prices (not nominal). My wife disagrees, but I think she is guilty of being over optimistic, and not being open minded, of course I would like (real time) prices to increase, but what I want is irrelevant.

As the old saying goes, Leave 10% on the table for the next guy.

The problem then is really what do you do with the money if you do sell? After years of ZIRP and QE, most assets are looking somewhere between toppy and stupidly priced (IIRC a third or a quarter of our main bond benchmark index has a negative yield: you are paying the Government to lend them money!).

I'd be pretty wary of buying annuities as I suspect that much more ZIRP and a chunk of the insurance industry is bust.

Setting yourself up as a developer might be a pretty good plan as long as you genuinely add value. I'd be looking outside London probably. Maybe a hell hole that's going to be near but not on Crossrail so could benefit from a halo effect. Every chancer is going to have bought into Crossrail suburbs.

Or you could always invest in a small chain of drying out clinics. I reckon you could drum up a few of us on here!

chucknorris

Generali wrote: »

As the old saying goes, Leave 10% on the table for the next guy.

The problem then is really what do you do with the money if you do sell? After years of ZIRP and QE, most assets are looking somewhere between toppy and stupidly priced (IIRC a third or a quarter of our main bond benchmark index has a negative yield: you are paying the Government to lend them money!).

I'd be pretty wary of buying annuities as I suspect that much more ZIRP and a chunk of the insurance industry is bust.

Setting yourself up as a developer might be a pretty good plan as long as you genuinely add value. I'd be looking outside London probably. Maybe a hell hole that's going to be near but not on Crossrail so could benefit from a halo effect. Every chancer is going to have bought into Crossrail suburbs.

Or you could always invest in a small chain of drying out clinics. I reckon you could drum up a few of us on here!

I couldn't live in London again (I currently live in Dorking), it would have to be somewhere quite rural (but near a reasonably large town). It would also be primarily about building a home for us, and only secondly selling it and taking (the tax free) gains onto the next project. The trouble with being married is that I have to get her indoors to agree, and her comment was 'I really don't want to be moving home every few years'. But I might be able to do it twice or even a third time (so every 10 years?). The risk would be low, because it would always be a home (and tax free if subsequently later sold) rather than a speculative development.

Imagine what the Xmas party at the drying out clinic would be like, it would probably take until the following Xmas to get over the hangover.

CLAPTON

chucknorris wrote: »

I really do think we are at or very near the limit for real time London property prices (not nominal). My wife disagrees, but I think she is guilty of being over optimistic, and not being open minded, of course I would like (real time) prices to increase, but what I want is irrelevant.

unless the 2-300,000 new arrivals in London per annum all sofa surf, one would expect them to have some impact on the price of rents and houses

chucknorris

CLAPTON wrote: »

unless the 2-300,000 new arrivals in London per annum all sofa surf, one would expect them to have some impact on the price of rents and houses

I just can't see how prices can go much higher in real terms, someone has to be able (and want) to buy them. But I must admit, I didn't expect them to get this high either, so who am I to call it a (real time) peak. Look at bubbles, he felt the need to disappear after incorrectly calling the London Peak last April (I think).

CLAPTON

chucknorris wrote: »

I just can't see how prices can go much higher in real terms, someone has to be able (and want) to buy them. But I must admit, I didn't expect them to get this high either, so who am I to call it a (real time) peak. Look at bubbles, he felt the need to disappear after incorrectly calling the London Peak last April (I think).

if the demand increases due to increased numbers of people and the supply is fairly static, how can the price not rise?

chucknorris

CLAPTON wrote: »

if the demand increases due to increased numbers of people and the supply is fairly static, how can the price not rise?

Maybe Gov. intervention of some sort or perhaps matching the demand from people arriving in London, people will also start to move out?

I don't know, but I think that there just has to be a limit as to what people will want to or can pay, rather than buy somewhere else. I am in the fortunate position where I actually want prices to rise, but I don't think that they will (by much), so I want history to prove me wrong.

Generali

chucknorris wrote: »

I couldn't live in London again (I currently live in Dorking), it would have to be somewhere quite rural (but near a reasonably large town). It would also be primarily about building a home for us, and only secondly selling it and taking (the tax free) gains onto the next project. The trouble with being married is that I have to get her indoors to agree, and her comment was 'I really don't want to be moving home every few years'. But I might be able to do it twice or even a third time (so every 10 years?). The risk would be low, because it would always be a home (and tax free if subsequently later sold) rather than a speculative development.

I know the area very well and I suspect that there are plenty of places around there which are quite ripe for a bit of additional development. Those places like Effingham Jctn and on that train route for example. There's lots of land and lots of building already. Maybe infill between those places like Cranleigh and Ewhurst or along the A281. Let's face it, nobody's going to notice another house in Rudgwick or somewhere.

chucknorris wrote: »

Imagine what the Xmas party at the drying out clinic would be like, it would probably take until the following Xmas to get over the hangover.