London property market bubble?

chucknorris

padington wrote: »

Oh Jesus, you really are a horrible piece of work.

Bore on.

LOL. Really from the 'Wood Green' bore of the forum.

padington

chucknorris wrote: »

LOL. Really from the 'Wood Green' bore of the forum.

No mention of the Isle of Man yet ?

*Snore*

chucknorris

padington wrote: »

No mention of the Isle of Man yet ?

*Snore*

No because there isn't any relevance, unlike you I don't bring up the IOM unless it is relevant to the thread or a post in the thread, but you actually start boring threads on Wood Green.

Generali

cells wrote: »

That's because you have made up your mind its a bubble and are ignoring the very good evidence I put forward to you

Also clearly be definition I am correct. Prices are higher now in London than they were 10,000 years ago. I know you are suggesting prices have overshot a bit but worse case I'm right for 9,997 years.

Anyway why I feel London is fair prices now is vecuase London has finally recovered in population to have a persons per house density a little over rUK. 5 years ago 10 years ago 15 years ago London had less people per house than rUK so clearly it was underpriced back then as how can you justify a capital city having less people per home than the rest of the nation

So are you saying that London prices were below where they should have been for 2000 years or are you agreeing that prices in London are, for some reason, well above long term averages?

chucknorris

Generali wrote: »

So are you saying that London prices were below where they should have been for 2000 years or are you agreeing that prices in London are, for some reason, well above long term averages?

Whichever way it gets spinned, there is no doubt in my mind that London prices are exceptionally high right now.

Filo25

Generali wrote: »

So are you saying that London prices were below where they should have been for 2000 years or are you agreeing that prices in London are, for some reason, well above long term averages?

Sorry to butt into this one Generali, but it is a topic that interests me.

Is there really a contradiction here though?

What I mean by that is that prices can be perfectly fair for current market conditions, which happen to be highly favourable for high house prices, and can also have been fairly priced at much lower prices in different market conditions in the past.

Low interest rates have been a huge benefit for prices alongside growth in demand for living in London and the South East.

You can look at low interest rates as being the big driver for the overseas investment in London property (lack of attractive alternative relatively secure investment options), its also fuelled BTL purchases, if your interest rates are decreasing you can afford a lower rental yield, and its made mortgages for buyers in general much more affordable if they have the equity to buy. If you combine all that with the slowdown in sales, restricting supply you are going to see prices forced upwards.

The environment will obviously get much more difficult as the rate decreases unwind, but I don't think anyone is now seriously expecting that to happen anytime soon or expecting rapid increases when it does start to happen.

In the same way that average wages are higher now than they ever have been historically, that doesn't mean that everyone was underpaid in the past.

cells

Generali wrote: »

So are you saying that London prices were below where they should have been for 2000 years or are you agreeing that prices in London are, for some reason, well above long term averages?

No I suspect London was priced fairy for most of its existence. Its easy to say prices were too low but if you were standing in central London in the early 1940s with bombs falling down you may well have thought houses were worth close to nothing.

Anyway read my second post on the subject. London especially inner London was very undervalued in the mid 1990s due to 40 years of population decline and 40 years of mass house building (mostly subsidised) so much so that Hackney was cheaper than Enfield!

It is of course subjective on what a fair price is but we know inner London was very cheap in the mid 1990s. At some stage it went from very cheap to cheap, then from cheap to affordable then from affordable to ok price then from ok price to a bit pricy etc etc

I think we are at about a norm now. The previous 20 years was varying degrees of cheap. The next 20 years might become varying degrees of v.expensive depending on what happens to population growth an London GDP

cells

chucknorris wrote: »

Whichever way it gets spinned, there is no doubt in my mind that London prices are exceptionally high right now.

why arent you selling if they are exceptionally high?

cells

Filo25 wrote: »

Sorry to butt into this one Generali, but it is a topic that interests me.

Is there really a contradiction here though?

What I mean by that is that prices can be perfectly fair for current market conditions, which happen to be highly favourable for high house prices, and can also have been fairly priced at much lower prices in different market conditions in the past.

Low interest rates have been a huge benefit for prices alongside growth in demand for living in London and the South East.

You can look at low interest rates as being the big driver for the overseas investment in London property (lack of attractive alternative relatively secure investment options), its also fuelled BTL purchases, if your interest rates are decreasing you can afford a lower rental yield, and its made mortgages for buyers in general much more affordable if they have the equity to buy. If you combine all that with the slowdown in sales, restricting supply you are going to see prices forced upwards.

The environment will obviously get much more difficult as the rate decreases unwind, but I don't think anyone is now seriously expecting that to happen anytime soon or expecting rapid increases when it does start to happen.

In the same way that average wages are higher now than they ever have been historically, that doesn't mean that everyone was underpaid in the past.

more fundamentally London was clearly underpriced from the 1990s. The proof is in the fact that inner London was so cheap Hackney right next to the city of London was cheaper than Enfield right at the outside edge of London!

Persons per property in London was LOWER than the rUK which goes to show you how under-priced the capital was when people could afford to live less dense in London than they could in the Midlands!

Also London is not particularly expensive compared to say paris (about the same) or NY (London cheaper than NY)

London is expensive, is not the same as London property is in a bubble.

chucknorris

cells wrote: »

why arent you selling if they are exceptionally high?

Because I receive a very good rental income, which is further distorted by my lower margin tracker mortgages, but even despite that, I am not that far away from starting to sell.

As you know I'm not unhappy about the current values, maybe I am getting a bit bearish, given that I am thinking about my exit strategy, my wife is more bullish than me, for sure. When I say not too far away from selling, that could still be a few years away yet.