What's the future of London with the ridiculous house prices?

chucknorris

movilogo wrote: »

People are taking longer duration mortages. Effectively most of the buyers will pay mortgage for 50-60 years before they could own their houses. So, effectively these buyers are turning to perpetual renters. We are in the footstep of inter-generational mortgages.

There is a big difference between the situation that you describe as perpetual renting associated with being mortgaged and actual renting. Not only due to any equity, but also due to the fact that after decade(s) the mortgage payment will probably be very low, when compared to the market rent.

These are our mortgage payments (first) compared to the rents (second):
£120 - £1,800
£130 - £2,100
£115 - £1,400
£115 - £1,367
£140 - £1,300
£0 - £1,300
£0 - £1,700
£0 - £2,200
£0 - £1,650 (estimated, this is our home)

caronoel

chucknorris wrote: »

There is a big difference between the situation that you describe as perpetual renting associated with being mortgaged and actual renting. Not only due to any equity, but also due to the fact that after decade(s) the mortgage payment will probably be very low, when compared to the market rent.

Sadly this nuance is lost on many, including the entire population of HPC.

Okrib

brit1234 wrote: »

The future is huge falls in prices in Earls Court. Article in Evening Standard tonight "Earls Court sales dry up as market gets jitters" It says the second stage of the Lillie Square development isn't selling. The main development on the Earls Court exhibition center isn't even building yet they are still demolishing.

Yes the prices are crazy high right now in the area but there is a huge oversupply in the pipeline. They haven't even got started on the West Ken Estate redevelopment. Nine Elms close by is getting all the news about buyers pulling out and not selling but focus is turning to Earls Court.

I’ve got to pull you up on that. I live in the local area and also work in property locally. The fact that sales in Lillie Square are struggling is totally separate to the general market sentiment here. They are aimed at a very different buyer to your traditional buyer of classic period conversions.





Period conversions in Earls Court are going for very strong prices, indeed records are constantly being set for best in class flats – for instance 3 newly redone flats on Coleherne Road (not the nicest road) in a converted building were agreed at record prices within a week of going on sale.





Lillie Square – and the whole Earl’s Court development – will be a huge boost for property prices in the area. You can’t compare something like Nine Elms with something like Lillie Square, the latter is in an area with well established prices, huge demand and right next to Chelsea!

westernpromise

Okrib wrote: »

I’ve got to pull you up on that. I live in the local area and also work in property locally. The fact that sales in Lillie Square are struggling is totally separate to the general market sentiment here. They are aimed at a very different buyer to your traditional buyer of classic period conversions.

I recall something similar in and near Maida Vale. Around 1989 a development called Carlton Gate went up, which was a Colditz-like block of small, not very well built flats. It had all the lifestyle marketing with posters of Little Venice (2 miles away) etc, but when all’s said and done, it was on the wrong side of the Harrow Road, and it took years to sell, bankrupting several developers. When Paddington Basin was redeveloped nearby from 2000 or so we saw the same thing, with quasi-Docklands blocks going up and being offered at double the price of nearby period conversions. They took a long time to sell, and when they come up nowadays, they do not fetch any premium over similar-size flats in white stucco buildings. The developers haven’t gone bust this time, but anyone who bought one of those places has had to wait quite some time to get their money back.

My impression is that this was not foreseen, perhaps because Paddington is a west London knockoff of Limehouse and there are no period conversions in Limehouse to queer the developers’ pitch.

cells

westernpromise wrote: »

It’s an interesting point but I’m not sure that follows. Suburban London houses with garages and front and back gardens don’t lend themselves well to multiple occupancy. The type of place that does is a bit more inner-city, typically is a terrace with minimal garden space and one room per floor, so it’s easily subdividable and doesn’t have a lot of unrentable space that nonetheless needs to be maintained.

This must limit the scope for the workers to HMO suburban houses. If they are forced further out of London by price, you would I think see higher inflation in places like north Finchley than in say Mill Hill, which is close nearby, but doesn’t have much of the right sort of housing stock.

I dont think there is any real difference in the HMO-ability of a 3 bed terrace in say Hackney than a 3 bed semi in say Enfield. Yes there is the gerden to tend to and yes most renters wont touch it and the landlord will need to do a bit of gardening in-between tenancies but Both could house 4 workers.

Over the last 15 years inner London has increased in price moreso than outer London as sharers with 3-4-5 wages have kept mostly to inner London. Closer to work and cheaper transport costs.

If London continues to boom and create lots of jobs and house building still stays too low then its simple math that will dictate more workers per home. The question will be are these workers willing to move further out in London or cram even more into inner London. From my experience inner London is already really crammed with a lot of flats and homes living rooms used as bedrooms so I think over the years the sharers will expand slowly from inner London to zone 3 areas. Maybe the zone 4 and zone 5 will be safe for a long while yet until zone 3 resembles zone 2 now

brit1234

Okrib wrote: »

I’ve got to pull you up on that. I live in the local area and also work in property locally. The fact that sales in Lillie Square are struggling is totally separate to the general market sentiment here. They are aimed at a very different buyer to your traditional buyer of classic period conversions.

Period conversions in Earls Court are going for very strong prices, indeed records are constantly being set for best in class flats – for instance 3 newly redone flats on Coleherne Road (not the nicest road) in a converted building were agreed at record prices within a week of going on sale.

Lillie Square – and the whole Earl’s Court development – will be a huge boost for property prices in the area. You can’t compare something like Nine Elms with something like Lillie Square, the latter is in an area with well established prices, huge demand and right next to Chelsea!

Both sales of large expensive houses and luxury investor flats are drying up. The big London central house sales were drying up 9 months ago with stamp duty changes, sanctions and the money already here or being moved else where better value. The outer area luxury flats drop in sales is far more recent in the last few months with far east money controls, weakening currency and economic turbulence.

Sentiment is changing, new stamp duty changes in 5 weeks and removal of landlord tax subsidies in 2017 will dent demand and increase supply. %0,000 flats with no one buying will reduce prices, in addition foriegn investors selling up as they are will also increase supply and drop prices.

If the foreign demand was enough to cause price ripples going out through London surly it can go the other way if demand drops off the cliff. Remember there are Chinese investors who have reserved flat blocks in outer towns like Reading, if they are defaulting/pulling out in London I can't see them not doing the same in the outer towns especially when they have been mislead about areas and transport links/times.

Watch this space.

cells

brit1234 wrote: »

Both sales of large expensive houses and luxury investor flats are drying up. The big London central house sales were drying up 9 months ago with stamp duty changes, sanctions and the money already here or being moved else where better value. The outer area luxury flats drop in sales is far more recent in the last few months with far east money controls, weakening currency and economic turbulence.

Sentiment is changing, new stamp duty changes in 5 weeks and removal of landlord tax subsidies in 2017 will dent demand and increase supply. %0,000 flats with no one buying will reduce prices, in addition foriegn investors selling up as they are will also increase supply and drop prices.

If the foreign demand was enough to cause price ripples going out through London surly it can go the other way if demand drops off the cliff. Remember there are Chinese investors who have reserved flat blocks in outer towns like Reading, if they are defaulting/pulling out in London I can't see them not doing the same in the outer towns especially when they have been mislead about areas and transport links/times.

Watch this space.

K&C is up 70% over the last 6 years
Haringey is up 73% over the last 6 years
Virtually the same

The stamp duty for the average terrace is now K&C £285k vs £20k for Haringey

Prices have risen just as much in Z1 ultra prime as they have in Z2 not so prime. The higher stamp duty taxes in Z1 seem not to have put pressure on prices but there does seem to be a drop in transactions within Z1 suggesting people are paying more but are moving less

cells

The truth about London is that its economy has performed amazingly over the last 20 years going from 20% of the whole of the UK economy to 30% now. Some sectors of London are booming if you are in those sectors London does not look all that expensive whereas if you are part of the normal sectors then you are being left behind.

The negative of all this is that there has been and will continue to be big changes in who lives where in London. The positive of the London boom is that it writes a big cheque each year to fund the rest of the UK

westernpromise

Meanwhile, the bad news for the short speculators continues to pile up:

http://www.telegraph.co.uk/property/house-prices/house-prices-make-biggest-leap-in-14-years/

CLAPTON

cells wrote: »

The truth about London is that its economy has performed amazingly over the last 20 years going from 20% of the whole of the UK economy to 30% now. Some sectors of London are booming if you are in those sectors London does not look all that expensive whereas if you are part of the normal sectors then you are being left behind.

The negative of all this is that there has been and will continue to be big changes in who lives where in London. The positive of the London boom is that it writes a big cheque each year to fund the rest of the UK

basically many londoners are now poorer