How far will house prices fall [volume 4]
Discussion
brickwall said:
New to this thread, but it's all very interesting to watch for me.
I've viewed a few properties in the 400-450k bracket in Wimbledon recently - every one I've viewed has had multiple young couples looking round at the same time as me. Every one I've viewed has gone within a week, at ~3-4% above asking.
There's obviously huge Bank of Mum and Dad support going on - £110k deposits magic'd up by a pair of 27 year olds. So two causes for concern:
a) How much of that support is loan vs. gift? How many of these BOMAD loans are being disclosed to the mortgage lenders?
b) Many of the Mums and Dads will have housing wealth but not incomes to match. My hunch is not that many will have £100k spare - instead they're raising it through re-mortaging the family home.
I'm reasonably confident the bubble will deflate, but how, and when, I just can't work out.
I've viewed a few properties in the 400-450k bracket in Wimbledon recently - every one I've viewed has had multiple young couples looking round at the same time as me. Every one I've viewed has gone within a week, at ~3-4% above asking.
There's obviously huge Bank of Mum and Dad support going on - £110k deposits magic'd up by a pair of 27 year olds. So two causes for concern:
a) How much of that support is loan vs. gift? How many of these BOMAD loans are being disclosed to the mortgage lenders?
b) Many of the Mums and Dads will have housing wealth but not incomes to match. My hunch is not that many will have £100k spare - instead they're raising it through re-mortaging the family home.
I'm reasonably confident the bubble will deflate, but how, and when, I just can't work out.
brickwall said:
Wimbledon/Southfields area.
£450k flats or houses? ClaphamGT3 said:
You have chosen one of the more desirable south London suburbs and you wonder that properties are sought after by people with big deposits....
Move your search half a mile south East to Colliers Wood and you'll be fine
Having been in both, I think I'd advise Raynes Park. Move your search half a mile south East to Colliers Wood and you'll be fine
ClaphamGT3 said:
You have chosen one of the more desirable south London suburbs and you wonder that properties are sought after by people with big deposits....
Move your search half a mile south East to Colliers Wood and you'll be fine
Oh I fully understand it's a desirable area, with prices to match. My musing was on the sustainability of the kinds of purchasing patterns I've seen (and therefore the sustainability of the prices those purchasing patterns create).Move your search half a mile south East to Colliers Wood and you'll be fine
Justayellowbadge said:
ClaphamGT3 said:
You have chosen one of the more desirable south London suburbs and you wonder that properties are sought after by people with big deposits....
Move your search half a mile south East to Colliers Wood and you'll be fine
Having been in both, I think I'd advise Raynes Park. Move your search half a mile south East to Colliers Wood and you'll be fine
ClaphamGT3 said:
You have chosen one of the more desirable south London suburbs and you wonder that properties are sought after by people with big deposits....
Move your search half a mile south East to Colliers Wood and you'll be fine
I've been researching the Clapham, Clapham Junction to Wandsworth area - nice 2 bed flats are realistically £650-£800k. I've rented here for a couple of years and it would seem to be a good area to buy in to if it were possible - popular, transport into London and the City are good, transport to the corporates in Surrey good etc etc, however at those prices it's not far off/ equal to Fulham prices. Move your search half a mile south East to Colliers Wood and you'll be fine
Would you buy a flat in the area now ClaphamGT3? Or the others with indepth knowledge of London property?
Yazar said:
brickwall said:
New to this thread, but it's all very interesting to watch for me.
I've viewed a few properties in the 400-450k bracket in Wimbledon recently - every one I've viewed has had multiple young couples looking round at the same time as me. Every one I've viewed has gone within a week, at ~3-4% above asking.
There's obviously huge Bank of Mum and Dad support going on - £110k deposits magic'd up by a pair of 27 year olds. So two causes for concern:
a) How much of that support is loan vs. gift? How many of these BOMAD loans are being disclosed to the mortgage lenders?
b) Many of the Mums and Dads will have housing wealth but not incomes to match. My hunch is not that many will have £100k spare - instead they're raising it through re-mortaging the family home.
I'm reasonably confident the bubble will deflate, but how, and when, I just can't work out.
I've viewed a few properties in the 400-450k bracket in Wimbledon recently - every one I've viewed has had multiple young couples looking round at the same time as me. Every one I've viewed has gone within a week, at ~3-4% above asking.
There's obviously huge Bank of Mum and Dad support going on - £110k deposits magic'd up by a pair of 27 year olds. So two causes for concern:
a) How much of that support is loan vs. gift? How many of these BOMAD loans are being disclosed to the mortgage lenders?
b) Many of the Mums and Dads will have housing wealth but not incomes to match. My hunch is not that many will have £100k spare - instead they're raising it through re-mortaging the family home.
I'm reasonably confident the bubble will deflate, but how, and when, I just can't work out.
brickwall said:
Wimbledon/Southfields area.
£450k flats or houses? This will get more prevalent with the new pension rules. Ma and Pa have paid into pensions based on retiring at 60 for 40 years and now sitting on a worthwhile pot. Kids need a deposit for 1st house, so use new rules to dip into said pot and push retirement back to 70 which many would want to do anyway
brickwall said:
Oh I fully understand it's a desirable area, with prices to match. My musing was on the sustainability of the kinds of purchasing patterns I've seen (and therefore the sustainability of the prices those purchasing patterns create).
I suspect a lot of the BoMaD assistanance is hard cash rather than extended mortgages simply because rates are so low (and foreseeably so) that many are cashing in their savings, Premium Bonds and ISAs. For those from a non-UK background - well 100k is a tad more than their university funding! So yep try West Wimbledon (Raynes Park, Merton Park etc.) and you should be able to find a 2-3 bed of some description.Edited by fido on Sunday 18th May 23:17
Eddw86 said:
ClaphamGT3 said:
You have chosen one of the more desirable south London suburbs and you wonder that properties are sought after by people with big deposits....
Move your search half a mile south East to Colliers Wood and you'll be fine
I've been researching the Clapham, Clapham Junction to Wandsworth area - nice 2 bed flats are realistically £650-£800k. I've rented here for a couple of years and it would seem to be a good area to buy in to if it were possible - popular, transport into London and the City are good, transport to the corporates in Surrey good etc etc, however at those prices it's not far off/ equal to Fulham prices. Move your search half a mile south East to Colliers Wood and you'll be fine
Would you buy a flat in the area now ClaphamGT3? Or the others with indepth knowledge of London property?
Eddw86 said:
Would you buy a flat in the area now
Will prices fall before you need to buy a bigger place or move down the Waterloo line? High LTV might make me twitch a bit on a £750k+ 2 bed flat.Can't really see any Fulham advantage unless you have a South-of-the-river thing going on (lots of SW6 isn't so pleasant).
I'd buy in Fulham in a heartbeat.. or that nice bit below parsons green. infact I have the cash waiting for the market to get fked so I can buy a nice townhouse for 900 grand..
this bubble is crazy. I see it every day. I even see buyers saying they are scared of the bubble, then plough a million quid into a 1 bed flat. completely irrational. and at the lower end cheap money, H2B etc propping up that market
it may mean I'll be out of a job when resi collapses. but at least I'll have a house.
this bubble is crazy. I see it every day. I even see buyers saying they are scared of the bubble, then plough a million quid into a 1 bed flat. completely irrational. and at the lower end cheap money, H2B etc propping up that market
it may mean I'll be out of a job when resi collapses. but at least I'll have a house.
turbobloke said:
Cyclic movements in an economy like ours seem inevitable, sentiment matters and unless optimism and pessimism are abolished, boom and bust won't be abolished.
good point... something I will never understand though. Its clearly a sellers market yet buyers are ploughing in like its a buyers market. I have no idea why anyone would do that, or outbid the asking price by 10, 15, 20%, so soon after the whole thing almost collapsed (not just the housing market but life as we know it)why, as a species, do we rinse & repeat, this nonsense
Well London is pretty crackers, but elsewhere prices are still below the highs of 6-7 years ago in real terms so are "cheap" (certainly below the long term trend line shown on the graph below). Coupled with low interest rates it looks a great time to buy to me.
Edited by XJ40 on Monday 19th May 10:20
Is that a whole UK chart? Looks like it, I think in London specifically it has now surpassed the 2008 peak has it not?
UK wide charts are very misleading, its pretty clear from all the info-graphics I've seen that the growth is in the SE, and its outstripping the decline of the rest of the UK to paint a positive overall picture?
UK wide charts are very misleading, its pretty clear from all the info-graphics I've seen that the growth is in the SE, and its outstripping the decline of the rest of the UK to paint a positive overall picture?
XJ40 said:
Well London is pretty crackers, but elsewhere prices are still below the highs of 6-7 years ago in real terms so are "cheap" (certainly below the long term trend line shown on the graph below). Coupled with low interest rates it looks a great time to buy to me.
Indeed, according to the Nationwide survey for Q1 2014 (link to pdf below) ten of the thirteen regions have yet to exceed the pre-crunch peak prices.http://www.nationwide.co.uk/~/media/MainSite/docum...
Gassing Station | News, Politics & Economics | Top of Page | What's New | My Stuff