London house prices: more problems in the new-build sector

AG47

London house prices: more problems in the new-build sector

There has been a huge response to my article on London house prices from last week. MoneyWeek readers seems to be genuinely split on this one. Half think that London is so fabulous and so much in demand that prices can’t ever fall much – or for long. The other half are totally convinced that a crash is on the way.

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However, for me the most interesting of the comments on the matter come from those with some knowledge of the new-build sector in London.
I hear constantly that too much is coming on too fast (this round of supply will peak later this year) and that sales (both first and second hand) are running into trouble at a good number of new developments.

Reader John D thinks he sees the same thing: don’t forget about all the foreign off-plan purchasers, he says. “When the flats are finished they will have to pay the bulk of the purchase price. With the collapse of emerging currencies that final payment will be much higher than they expected.” So they’ll be selling up before they have to pay the balance of the price.

Another reader tells us he has already seen that happening with flats in the tower at Saffron Square. The number of off-plan resales he says is already “staggering”.

http://moneyweek.com/merryns-blog/london-house-prices-more-problems-in-the-new-build-sector/

sann420

There are/were a lot of extremely over priced new builds that should have gone to working/middle class young locals that ended up in the hands of foreign investors. Those investors were basically scammed and when they try to sell these properties I think they will struggle.