How far will house prices fall [volume 4]
Discussion
turbobloke said:
Come on London, poor show. Nobody remembers second place.
http://www.theguardian.com/money/2016/jan/25/housing-severely-unaffordable-as-sydney-price-to-income-ratio-worsensNot even second place. Sydney according to The Grauniad. I don't think we'll have a crash in London now, we'll just become poorer by some other measure (dollars?).
I think the reason for all the rediculous new build valuations (london) is because the whole f
king lot are shared-ownership housing association owned and funded. A bit like supermarkets - they double the price then offer a third off - special buy! You buy 55% of an over-priced flat when in reality you have paid more like 75-80% of the true value. It's a rip-off.
I think the whole housing association / shared ownership thing is a massive con.
king lot are shared-ownership housing association owned and funded. A bit like supermarkets - they double the price then offer a third off - special buy! You buy 55% of an over-priced flat when in reality you have paid more like 75-80% of the true value. It's a rip-off.I think the whole housing association / shared ownership thing is a massive con.
CoolHands said:
I think the reason for all the rediculous new build valuations (london) is because the whole fking lot are shared-ownership housing association owned and funded. A bit like supermarkets - they double the price then offer a third off - special buy! You buy 55% of an over-priced flat when in reality you have paid more like 75-80% of the true value. It's a rip-off.
I think the whole housing association / shared ownership thing is a massive con.
I don't think you are far wrong, a friend has just bought a 1 bed flat in the Greenwich Peninsula on shared ownership.king lot are shared-ownership housing association owned and funded. A bit like supermarkets - they double the price then offer a third off - special buy! You buy 55% of an over-priced flat when in reality you have paid more like 75-80% of the true value. It's a rip-off.I think the whole housing association / shared ownership thing is a massive con.
The total price was apparently around £380k for a 40 sqm 1 bed (seems alot to me), but apparently the developers now value it at £410k after 4 weeks of them moving in, so they will struggle to get the other 45%.
Oh and they then discovered that their electricity supply is split. The heating in the greenwich penisula is apparently owned by some small start (Lotus/Locus, something like this) and they charge a 96p/day standing charge plus a kw/h cost (this includes repairs to the heating system as well though). Then for electricity from the plug e.t.c they can use their own supplier and of course, another standing charge (at normal rates).
Lets just say quite a few people in their block are a little more than anger, as questions were asked of the developer before and they neglected to tell them until after the fact. Probably not a deal breaker, but not impressive.
Whoever thinks HTB is actually a help is naive imo, it just helps people get into debt.
Edited by V6Alfisti on Thursday 28th January 22:26
scenario8 said:
A standing charge of 96p per day?! For only the electrical power to the heating?! And it wasn't made clear before exchange?!
There's a whole World of wtf? going on there.
I doubt a new build flat of 40sqm or even 200sqm spends circa £350 pa on heating. Bonkers.
Indeed, that is exactly the case.There's a whole World of wtf? going on there.
I doubt a new build flat of 40sqm or even 200sqm spends circa £350 pa on heating. Bonkers.
96p per day standing charge for electrical power to the heating. Although this apparently includes repairs to the central heating system in the flat. Some odd deal going on there, and not an option I imagine 90% of new owners would take.
Thats just the standing charge, so there is the cost of electricity used on top. It uses some kind of underfloor heating system (via pipes not the electrical matting)
Apparently they asked about any associated energy tie ins before, but were told it was open market. Which it is ...for half the electricity supply. Quite a few peeved folks in that block!
V6Alfisti said:
Whoever thinks HTB is actually a help is naive imo, it just helps people get into debt.
The full title for HTB is actually... "Help Developers to Sell Overpriced New Builds to Desperate/Gullible First Time Buyers"... but as that is a bit of a mouthful its easier to abbreviate it to HTB.Edited by V6Alfisti on Thursday 28th January 22:26
I appreciate we're talking about "a mate's" circumstances and that mate is young and inexperienced so we might need to take what is written with a pinch of salt and while community heating is not uncommon in modern large developments it must be said £350 pa is not by any means cheap for heating (and possibly hot water and, at a push, cooling) for a one bed flat 8m X 5m built in 2015. Even assuming that £350 is the total costs for those services.
The heating, hot water and cooking costs in my 1930s semi, over three times the size with heat losses hugely greater than that shoebox are barely that - and that's housing a young family and with home working.
Wonder how the contract for renewal, renegotiation, incremental price rises and so on is drawn up...similar to those for the other service charges and ground rents, I'd imagine.
The heating, hot water and cooking costs in my 1930s semi, over three times the size with heat losses hugely greater than that shoebox are barely that - and that's housing a young family and with home working.
Wonder how the contract for renewal, renegotiation, incremental price rises and so on is drawn up...similar to those for the other service charges and ground rents, I'd imagine.
scenario8 said:
I appreciate we're talking about "a mate's" circumstances and that mate is young and inexperienced so we might need to take what is written with a pinch of salt and while community heating is not uncommon in modern large developments it must be said £350 pa is not by any means cheap for heating (and possibly hot water and, at a push, cooling) for a one bed flat 8m X 5m built in 2015. Even assuming that £350 is the total costs for those services.
The heating, hot water and cooking costs in my 1930s semi, over three times the size with heat losses hugely greater than that shoebox are barely that - and that's housing a young family and with home working.
Wonder how the contract for renewal, renegotiation, incremental price rises and so on is drawn up...similar to those for the other service charges and ground rents, I'd imagine.
That £350 pa is just a standing charge, they then have the usage costs on top (or so I understood)The heating, hot water and cooking costs in my 1930s semi, over three times the size with heat losses hugely greater than that shoebox are barely that - and that's housing a young family and with home working.
Wonder how the contract for renewal, renegotiation, incremental price rises and so on is drawn up...similar to those for the other service charges and ground rents, I'd imagine.
I pay about £600 pa for all electricity/gas in a 70 SQM 1 bedder (albeit a period townhouse conversion, with windows made out of paper
)As a counter, apparently there is a broadband provider in the area that offers a one off fee(£150) for Broadband, including setup and lifetime subscription. It is only 4MB but still...£150 for lifetime broadband. Apparently there is a step up to super fast internet but its then £30 per month, no middle option oddly.
V6Alfisti said:
That £350 pa is just a standing charge, they then have the usage costs on top (or so I understood)
A lot of householders are paying £15-£20/mth for a service package from British Gas etc, so it's not that bad. Would it include renewing the gear when it wears out? A combi costs ~£2K and 8-10yrs is considered a decent lifetime. So about the same overall - peace of mind for £1/day doesn't seem outrageous.
Sheepshanks said:
A lot of householders are paying £15-£20/mth for a service package from British Gas etc, so it's not that bad. Would it include renewing the gear when it wears out? A combi costs ~£2K and 8-10yrs is considered a decent lifetime.
So about the same overall - peace of mind for £1/day doesn't seem outrageous.
Most people probably wouldn't choose that on a new build however, and I suspect less people on much older systems choose the insurance than use it.So about the same overall - peace of mind for £1/day doesn't seem outrageous.
Then factor in that HTB is supposedly meant to help FTB'ers struggling to meet today's financial requirements for a flat in London, and it seems even more of a con imo.
It's effectively a service charge (£350) on top of the existing service charge.
RE: Renewal - I don't know the exact terms.
Edited by V6Alfisti on Friday 29th January 13:14
Anyone see this article in the Sunday times ;
Welcome to Singapore-on-Thames, where London property prices are falling
A glut of luxury developments and sliding demand are killing values in the capital
http://www.thesundaytimes.co.uk/sto/business/Indus...
Looks like all the fancy new build stuff has peaked and is now on the decline.
Ironic that its at the time the gov is launching the new London help to buy with 40% interest free loan for 5 years on newbuilds.
I also thought this article made an interesting read!
http://www.telegraph.co.uk/finance/personalfinance...
looks like the parties over!
Welcome to Singapore-on-Thames, where London property prices are falling
A glut of luxury developments and sliding demand are killing values in the capital
http://www.thesundaytimes.co.uk/sto/business/Indus...
Looks like all the fancy new build stuff has peaked and is now on the decline.
Ironic that its at the time the gov is launching the new London help to buy with 40% interest free loan for 5 years on newbuilds.
I also thought this article made an interesting read!
http://www.telegraph.co.uk/finance/personalfinance...
looks like the parties over!
London house prices: more problems in the new-build sector
By Merryn Somerset Webb
There has been a huge response to my article on London house prices from the other week. MoneyWeek readers seem 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.
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”.
The Sunday Times picked up this story at the weekend. Cross the river from Pimlico to south London, turn onto Nine Elms Lane and you will “find yourself in a mile long building site”, says Oliver Shah in the paper. What you won’t find is very many people.
Five years ago, Nine Elms – or “Singapore on Thames” as Charlie Ellingworth of Property Vision calls it – was held up as “the brightest spot in London’s construction boom”. Now its 18,000 homes and two new tube stations exemplify a “glut of supply and shrinking demand”. Selling prices in the area (SW8) fell 7% last year (LonRes) and some 28% of unsold properties have been on the market for over a year. At the same time, the UK’s property websites are “awash with unofficial resales in developments including Battersea power station and Embassy Gardens” (find your favourite here).
The good news here, as search agent Henry Pryor always tells us, is that with most bad news comes opportunity. So some developers are already offering to pay buyer stamp duty and others are offering “deals on furniture packs”. Perhaps real price falls will follow
By Merryn Somerset Webb
There has been a huge response to my article on London house prices from the other week. MoneyWeek readers seem 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.
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”.
The Sunday Times picked up this story at the weekend. Cross the river from Pimlico to south London, turn onto Nine Elms Lane and you will “find yourself in a mile long building site”, says Oliver Shah in the paper. What you won’t find is very many people.
Five years ago, Nine Elms – or “Singapore on Thames” as Charlie Ellingworth of Property Vision calls it – was held up as “the brightest spot in London’s construction boom”. Now its 18,000 homes and two new tube stations exemplify a “glut of supply and shrinking demand”. Selling prices in the area (SW8) fell 7% last year (LonRes) and some 28% of unsold properties have been on the market for over a year. At the same time, the UK’s property websites are “awash with unofficial resales in developments including Battersea power station and Embassy Gardens” (find your favourite here).
The good news here, as search agent Henry Pryor always tells us, is that with most bad news comes opportunity. So some developers are already offering to pay buyer stamp duty and others are offering “deals on furniture packs”. Perhaps real price falls will follow
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