Where in London would prices be worst hit because of Brexit/Whatever?

ElsieMonkey

I don't see a crash at all. Mortgage rates at a low, low supply, high demand - at the moment it's summer holida times when it traditionally goes quiet in the market anyway and as a result not much on the market and not many people shopping to buy. Add to that endless speculation by the media which is getting seriously boring now, but is making people hold back in taking action to 'see what happens' (how long are people going to wait, 2+ years)?

Yes multi-million pound properties in prime central London locations may adjust their expectations, but then that's nothing new. Valuing these properties isn't easy. These houses can be overvalued by hundreds of thousands easily and knocking 250k off the asking price in order to attract more interest - especially in a quiet period - is nothing when you're talking millions. Valuing these types of homes is not as easy as valuing your average London property such as a flat for 400k when there's X amount of similar that have sold recently to make your judgement by.

So we may see some impact on the multi-million pound market which relies on foreign investors confidence, but for most i think it's business as usual! I don't see a massive impact on any average greater London property. If anything if people want to sell now they will have to be more realistic than ever because of it being quite quiet at the moment, but you're talking about making sure your price is competitive, which may result in an asking price 10k less than if the market was busier with buyers. That's about it. I'll be interested to see what happens in mid-September when the market traditionally picks up again.

Generali

cells wrote: »

Trophy Wives
Trophy Cars
Trophy Yachts
Trophy Art
Trophy Properties

Which self respecting billionaire is going to buy a top of the range £500,000 mansion in stoke-on-trent? But 1 hyde park at £140,000,000 thats something to talk about


Also there is the English Language. A rich Arab who speaks English is less likely to buy a property in Paris or Frankfurt or Warsaw than in London. In or out of the EU boom or bust as long as its a safe city they will buy

Why not Manhattan then?

zagubov

Generali wrote: »

Passporting depends on membership of the EEA I believe so that shouldn't be impacted by Brexit unless the British Government is run by a bunch of absolute moro....ah, oh dear.

IMHO, the biggest impact to London property is likely to be that the asset class is no longer seen as a safe haven.

Joining the EEA might be a better option for the UK. The other way to get in is via EFTA.You'd think we'd be a shoo-in as we founded it back in the day. But are we too big to rejoin it now? What are the entry criteria?

Would they welcome a new member that was about four times the size of the existing membership all added together?

chewmylegoff

Generali wrote: »

Passporting depends on membership of the EEA I believe so that shouldn't be impacted by Brexit unless the British Government is run by a bunch of absolute moro....ah, oh dear.

IMHO, the biggest impact to London property is likely to be that the asset class is no longer seen as a safe haven.

MIFIDII provides for firms from non EEA states to passport in to EEA ones as long as their home state is MIFID equivalent, so at least in theory all we need to do is implement MIFIDII and UK firms should be unaffected.

Generali

chewmylegoff wrote: »

MIFIDII provides for firms from non EEA states to passport in to EEA ones as long as their home state is MIFID equivalent, so at least in theory all we need to do is implement MIFIDII and UK firms should be unaffected.

So the UK would be forced to implement EU rules.while having no say in their make up. Hmmmmm.

chewmylegoff

Generali wrote: »

So the UK would be forced to implement EU rules.while having no say in their make up. Hmmmmm.

Well, not exactly as MIFIDII and the interlocking instrument MIFIR has already been written and published and the UK was at the heart of drafting both although obviously we will have limited influence going forward.

cells

Generali wrote: »

Why not Manhattan then?

I'm sure there is more than London as an option. The world has more millionaires than London has homes. There is also the tourisms factor

the point remains. As the number of millionaires grows they will be buying luxuary expensive stuff. They won't be buying a ford fiesta or a house in Stoke on Trent. A supercar and a house in NY or z1 london will be on the shopping list.


This isn't even just about forigbers. Even the natives that make it rich disproportionately buy in London. Think of the sports stars or actors or musicians that make it big. They may buy a home in their hometown but likely they will also buy a nice expensive home in London too.

Generali

cells wrote: »

I'm sure there is more than London as an option. The world has more millionaires than London has homes. There is also the tourisms factor

the point remains. As the number of millionaires grows they will be buying luxuary expensive stuff. They won't be buying a ford fiesta or a house in Stoke on Trent. A supercar and a house in NY or z1 london will be on the shopping
This isn't even just about forigbers. Even the natives that make it rich disproportionately buy in London. Think of the sports stars or actors or musicians that make it big. They may buy a home in their hometown but likely they will also buy a nice expensive home in London too.

Let's see what happens shall we. London wasn't a popular destination for the mega-rich in the 1990s and only a fool would claim that couldn't happen again.

My theory is that rich foreigners are buying in London largely as a store of wealth: better to buy a house in Kensington that is increasing in value by 5-15% a year than buy 5 year TIPS with a -0.29% yield. If London becomes a lousy store of value then look elsewhere: there are plenty of nice parts of the world where the property market is just as open as London.

Foreign owners have lost 12% since the Brexit vote. How much more do you think they have to lose until London property looks like a poor investment? If house prices fall by just 9% and cable stays the same then overseas owners have lost 20% of their investment. That means retracing less than a year of price rises. House prices are not on a ratchet, even in London.

cells

Generali wrote: »

Let's see what happens shall we. London wasn't a popular destination for the mega-rich in the 1990s and only a fool would claim that couldn't happen again

There simply was not the scale of wealth a generation ago as there is today. China GDP is up almost 30x from 1990 and a lot of the other developing and arab states are up 5-30x too.

Like I keep saying to you, you look at history without fully appreciating how quickly the world has changed.

A lot of people also seem to not be able to get their minds across the fact that these numbers are not just numbers they are real wealth and capital. Sometimes I have to resort to quoting real things to get the message across Im sure you dont need it but nonetheless a quick google shows china sold 0.6 million cars domestically in 2000 and 21.1 million cars domestically in 2015.
That can be a guage of how rapidly the middle class is expanding in china in just 15 years the middle class has expanded by 30x. So to say the forign rich were not buying in London in 1990 is true but the reason is they didnt exist (to avoid sillyness I know there were rich people in the west and some other countries but they did not have as big a need to diversify as the russians or arabs or Chinese etc)

My theory is that rich foreigners are buying in London largely as a store of wealth: better to buy a house in Kensington that is increasing in value by 5-15% a year than buy 5 year TIPS with a -0.29% yield. If London becomes a lousy store of value then look elsewhere: there are plenty of nice parts of the world where the property market is just as open as London.

you still dont understand the scale of the global wealth that has developed in just the last 15 years nor do you appreciate that its still growing very rapidly.

London could indeed become unattractive to buyers foreign or domestic but that would be down to politics/tax and if our government is stupid enough to make london unattractive for investment then we will be shooting ourselves in the foot

Foreign owners have lost 12% since the Brexit vote. How much more do you think they have to lose until London property looks like a poor investment? If house prices fall by just 9% and cable stays the same then overseas owners have lost 20% of their investment. That means retracing less than a year of price rises. House prices are not on a ratchet, even in London.

If you had £10 billion and a business producing £500m a year for you and owned so many homes cars and boats you could not write down the address or location of them what would you care about your £10 million London house losing you £1m paper that year?

cells

The next big economic miracle is going to be India.
Current Economy $2.1 trillion which is smaller than the UK. Most the country is still very poor

If it develops as rapidly as china did its going to be a $10-15 trillion economy (in todays money) over the next 20 years. A portion of its 1.5 billion people will become very rich and a portion of them will want to buy into Londons limited stock of about 2.5 million non social owned homes.

Far fewer of them will want to go to Paris or Warsaw or stoke on trent. Indian buyers could well be a much bigger force than chinese as a lot of the rich indians would have been educated at an English speaking university.

This is also looking at China and India at a mid point both those countries could well become $50 trillion GDP economies.


3 billion people, $100 trillion a year GDP, 2.5 million non social London homes to go around. Actually more like 0.5 million inner London homes to go around as they wont be looking at tired small terraces in Enfield or Daginham.