"Thousands" of London flats to come to the market

Graham_Devon

This is based on research results. Though it appears that foreign investors may well be starting to walk away from the London housing market. It also appears that some are hoping to simply break even.

Thousands of unbuilt flats and apartments could come back on to the London property market over the next two years as foreign investors seek to cut their losses, according to a new study.

In their latest report on the residential market, researchers at estate agent Cluttons said a large volume of newbuild stock was flowing on to the off-plan resales market, “as buyers, particularly those of an international flavour, try to exit the market as currency advantages, especially for those from emerging markets, fade”.

Cluttons’ head of research, Faisal Durrani, said he had seen figures suggesting 60,000 residential properties were due to be finished in London during 2016 and 2017, and said that about half of these were likely to be owned by overseas investors who would return them to the market.

http://www.theguardian.com/business/2015/dec/14/60000-london-flats-back-onto-market--estate-agent-cluttons

cells

With build rates in London running at less than 25k units a year how are 60k off plan units going to sell in 2016-2017?

What is more concerning is how will the stamp duty of ~£30k for a £500,000 property impact on transactions and prices in London. The same properties were trading at £250,000 and paying only £2.5k stamp duty just a few years ago so its a >10x increase in stamp duty

I dont know which way its going to go, my first thought is that it will put a lot of people off but then again stamp duty going from £2.5k to £15k didn't seem to put many people off

Graham_Devon

cells wrote: »

With build rates in London running at less than 25k units a year how are 60k off plan units going to sell in 2016-2017?

The guesstimate is around 30,000 will come to market.

The issue here is that these are not your run of the mill flats. I don't think it's going to make much difference to the supply side of things in London (as in the supply of properties people can actually buy as accommodation)

The issue here is that these are high end investment apartments. They are designed with the foreign investor in mind and marketed as such. Gold leaf used in the bathrooms etc.

It has the hauntings of 2007 all over it. All bought off plan, all with the same aim, buy them, sit on them, sell them for a profit. It's a store for wealth. But the best they hope for now is to break even.

In that case, who are these properties going to be sold to? Who can afford them other than the very foreign investors who are trying to sell them? The majority of these will be out of reach for most in London.

So what happens to them? It would take a spectacular crash in the top end property sales for these to be affordable to those earning even large sums of cash in London.

Seems London itself has an issue - with it's intent and focus on building swish high end apartments for the foreign mega rich it has, once again, run away with itself and created it's own problem.

martinsurrey

Graham_Devon wrote: »

The guesstimate is around 30,000 will come to market.

The issue here is that these are not your run of the mill flats. I don't think it's going to make much difference to the supply side of things in London (as in the supply of properties people can actually buy as accommodation)

The issue here is that these are high end investment apartments. They are designed with the foreign investor in mind and marketed as such. Gold leaf used in the bathrooms etc.

It has the hauntings of 2007 all over it. All bought off plan, all with the same aim, buy them, sit on them, sell them for a profit. It's a store for wealth. But the best they hope for now is to break even.

In that case, who are these properties going to be sold to? Who can afford them other than the very foreign investors who are trying to sell them? The majority of these will be out of reach for most in London.

So what happens to them? It would take a spectacular crash in the top end property sales for these to be affordable to those earning even large sums of cash in London.

Seems London itself has an issue - with it's intent and focus on building swish high end apartments for the foreign mega rich it has, once again, run away with itself and created it's own problem.

so you think 30k of the 50-60k new builds in London over 2 years are going to be resold off plan AND that they are all gold leaf properties...

The article got a few things right, the total number of properties and roughly the percentage of foreign buyers, however not all of them are BTL and even fewer of them are buy to leave.

You are looking at maybe 2-3% of that as the top end all singing and all dancing trophy properties.

wotsthat

Graham_Devon wrote: »

In that case, who are these properties going to be sold to? Who can afford them other than the very foreign investors who are trying to sell them? The majority of these will be out of reach for most in London.

So what happens to them? It would take a spectacular crash in the top end property sales for these to be affordable to those earning even large sums of cash in London.

Some super-rich foreigners might not get what they paid for their super-prime off-plan apartment?

I'll add it to the list of first world problems I'm currently losing sleep over.

Generali

Graham_Devon wrote: »

The guesstimate is around 30,000 will come to market.

The issue here is that these are not your run of the mill flats. I don't think it's going to make much difference to the supply side of things in London (as in the supply of properties people can actually buy as accommodation)

The issue here is that these are high end investment apartments. They are designed with the foreign investor in mind and marketed as such. Gold leaf used in the bathrooms etc.

It has the hauntings of 2007 all over it. All bought off plan, all with the same aim, buy them, sit on them, sell them for a profit. It's a store for wealth. But the best they hope for now is to break even.

In that case, who are these properties going to be sold to? Who can afford them other than the very foreign investors who are trying to sell them? The majority of these will be out of reach for most in London.

So what happens to them? It would take a spectacular crash in the top end property sales for these to be affordable to those earning even large sums of cash in London.

Seems London itself has an issue - with it's intent and focus on building swish high end apartments for the foreign mega rich it has, once again, run away with itself and created it's own problem.

It's hard to see the problem for the UK's economy if a bunch of rich foreigners lose some money.

FWIW, I think that London house prices are very high and probably riding for a fall. A load of rich, foreign criminals trying to launder money through the London housing market are hard for me to feel sorry for.

Rich2808

I wouldn't be surprised if in 30 years a lot of these new build luxury flats end up as slum social housing. They are generally of such poor quality build and awful soundproofing.

buglawton

Of course it's pure coincidence that this happened just as the Govt starts to target BTL owners:
http://www.thisismoney.co.uk/money/buytolet/article-3352735/Britain-s-biggest-buy-let-tycoons-strike-deal-sell-900-strong-property-empire-Kent-Arab-investors-250m.html

So... approx 900 BTL houses in Kent to be sold as a job lot to a group of Arab investors. They will run the 900+ properties as a pure business (so wont;t be affected by the recent tax rule changes that hit mortgaged individual landlords). And due to their international scale, may be able to reap further tax benefits (think Amazon) and of course remit the profits back abroad.

So much for tenants who thought it clever to gloat at the demise of the small BTL investor then.

I believe that there will be 1000s of the more highly mortgaged London properties coming on the market due to the tax changes - and there will be international investors of a larger scale ready & willing to mop them up.

Garethgrew

Graham_Devon wrote: »

The guesstimate is around 30,000 will come to market.

The issue here is that these are not your run of the mill flats. I don't think it's going to make much difference to the supply side of things in London (as in the supply of properties people can actually buy as accommodation)

The issue here is that these are high end investment apartments. They are designed with the foreign investor in mind and marketed as such. Gold leaf used in the bathrooms etc.

It has the hauntings of 2007 all over it. All bought off plan, all with the same aim, buy them, sit on them, sell them for a profit. It's a store for wealth. But the best they hope for now is to break even.

In that case, who are these properties going to be sold to? Who can afford them other than the very foreign investors who are trying to sell them? The majority of these will be out of reach for most in London.

So what happens to them? It would take a spectacular crash in the top end property sales for these to be affordable to those earning even large sums of cash in London.

Seems London itself has an issue - with it's intent and focus on building swish high end apartments for the foreign mega rich it has, once again, run away with itself and created it's own problem.

I'll tell you who is going to be living there in the future Squatters.

The foreign owners will want to sell but can't no matter how much they lower their asking prices.

Garethgrew

buglawton wrote: »

Of course it's pure coincidence that this happened just as the Govt starts to target BTL owners:
http://www.thisismoney.co.uk/money/buytolet/article-3352735/Britain-s-biggest-buy-let-tycoons-strike-deal-sell-900-strong-property-empire-Kent-Arab-investors-250m.html

So... approx 900 BTL houses in Kent to be sold as a job lot to a group of Arab investors. They will run the 900+ properties as a pure business (so wont;t be affected by the recent tax rule changes that hit mortgaged individual landlords). And due to their international scale, may be able to reap further tax benefits (think Amazon) and of course remit the profits back abroad.

So much for tenants who thought it clever to gloat at the demise of the small BTL investor then.

I believe that there will be 1000s of the more highly mortgaged London properties coming on the market due to the tax changes - and there will be international investors of a larger scale ready & willing to mop them up.

Great, the losses all go overseas then. When these properties become full of squatters who can't afford the high rents....

PasturesNew

There won't be squatters. Firstly they're residential and squatters can't squat in residential, so they target commercial. Secondly, these flats will have an entire ground floor that is a 24 hour monitored and manned concierge service.