How far will house prices fall [volume 4]

How far will house prices fall [volume 4]

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turbobloke

103,742 posts

259 months

Tuesday 9th February 2016
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okgo said:
To be fair there are not likely to be that many folk there yet, its not done!

But it really is a mile long building site, I cycled to work that way the other month, its horrible, st all over the roads, the air is putrid dust at times, no soul, and as we know, all a fortune.
Sounds great! wobble

jonah35

3,940 posts

156 months

Tuesday 9th February 2016
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Regardless is what the average ph director thinks, £100k -125k pa is still a good income in London but if you're paying multiples of that for a flat eventually people will take £90k and a job in Leeds/Manchester and I think that is happening amongst the people I know.

Yes, London is great but so are other cities where you can have a nice car and bigger family home. You can still go to London for the weekend.

Also, the commutes are crazy - yes, a lot of the people there have property wealth but I feel a turning point has been reached. I know a chap in recruitment. Earns c. £100k pa paye. He gets up at 530am and home at 730pm. What kind of life is that?! Too tired to go to gym, too tired to do anything and he looks ill.

Outside of London things seem to be steadier.

okgo

37,857 posts

197 months

Tuesday 9th February 2016
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I can't imagine a £120k London job is a £90k job in those other places though. My job is around 50% in Manchester to London.

AstonZagato

12,649 posts

209 months

Tuesday 9th February 2016
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But that is surely unsustainable too? Eventually, firms will move away from London if that is the salary delta.

okgo

37,857 posts

197 months

Tuesday 9th February 2016
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AstonZagato said:
But that is surely unsustainable too? Eventually, firms will move away from London if that is the salary delta.
I suppose it depends what you do, us moving to Manchester would still result in us having to go back and forth to London almost constantly, so unless the whole industry packed up and left...

But for other things I agree, but then maybe I'm wrong and perhaps some roles are pretty close salary wise in other cities to London.

R11ysf

1,931 posts

181 months

Tuesday 9th February 2016
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I think the main thing here is that London population is expected to grow and keep growing. There is also a differential between well established residential places that people want to live in (Chelsea, Fulham etc) and new places with high rise flats which have never been desirable and will take a generation to become so - if they ever do.

Only in this morning's Metro was there an advert for a £5m penthouse and I read and read the article and I couldn't find out where the bloody place was. I had to search the website out online only to find it was in bloody Whitechapel! I mean WTF!! There are loads of these developers trying this on such as the ones who tried to make a £20m house in Wapping only to receive no interest at all and make 5 flats instead.

Places like 9 Elms got far too much heat in them from overseas buyers getting giddy, but in reality Brits don't like high rise to live in so all the heat and all the crash is just a currency trade from overseas.

If you are looking in a desirable area of central London flats are motoring along up to £1.2m and sales are still coming through at a good rate. It is the fringe areas that got too much heat and will have some to come off, but in reality London is still growing and is desirable the world over so if you think that the London market has 25% off across the board then I think you'll be waiting a very long time.

AstonZagato

12,649 posts

209 months

Tuesday 9th February 2016
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Hedge funds short London luxury homes
http://www.ft.com/cms/s/0/56d07144-ce5e-11e5-831d-...

"A small group of funds are targeting the shares of Berkeley Group, the main listed proxy for new high-end London property, amid signs that Asian and Russian buyers are deserting the market."

AstonZagato

12,649 posts

209 months

Tuesday 9th February 2016
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R11ysf said:
Stuff
I suspect that you are right.

London is probably a bifurcated (or perhaps trifurcated) market.

FTB market of 1-2 bed flats is still going gangbusters.

Faux London-prime new build like Nine Elms is crashing.

True London prime (houses on Chester Square or Kensington Palace) are probably fine (though not moving in either direction)

The interesting thing will be if the faux-prime rout leads to the sellers of the types of place that FTBs buy reassessing the price they need for a quick move on a distressed property. If that has an effect, then the ripples will be felt more widely.

R11ysf

1,931 posts

181 months

Tuesday 9th February 2016
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AstonZagato said:
I suspect that you are right.

London is probably a bifurcated (or perhaps trifurcated) market.

FTB market of 1-2 bed flats is still going gangbusters.

Faux London-prime new build like Nine Elms is crashing.

True London prime (houses on Chester Square or Kensington Palace) are probably fine (though not moving in either direction)

The interesting thing will be if the faux-prime rout leads to the sellers of the types of place that FTBs buy reassessing the price they need for a quick move on a distressed property. If that has an effect, then the ripples will be felt more widely.
Yep I agree with all of this. Having very closely watched the market for 2 years I have seen what has gone on in central and prime and have been looking for a pullback. Marylebone (where I was looking) went up 25% in the first 3 months of 2014 and this was too much. This made the buyers pull away and also created a lot of vendors who were detached from reality.

Asking prices continued to climb without the same in transaction prices. I have been looking and have seen stock hang around longer and longer without price reductions, especially in light of the stamp duty change.

I've been looking for a pullback or distressed sale as you mention and have just bought a prime house for 22% off its initial asking price from Summer '15. I feel this is a pull back which should protect me a 10% across the board dip and if it goes lower than that then I think we all have bigger problems ahead.

JagLover

42,265 posts

234 months

Tuesday 9th February 2016
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okgo said:
I can't imagine a £120k London job is a £90k job in those other places though. My job is around 50% in Manchester to London.
I'm not paid at that level but for my job 3/4 sounds the correct ratio compared to wages in central London. Even less premium than that for outer London and the rest of the home counties. Hence why I no longer live and work in the South-East smile

Justayellowbadge

37,057 posts

241 months

Tuesday 9th February 2016
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anonymous said:
[redacted]
Things still selling very quickly in SW19. Terraces 1-1.5m and semis 1.5-3m don't seem to hang around more than a week or two.

fido

16,752 posts

254 months

Tuesday 9th February 2016
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Justayellowbadge said:
Things still selling very quickly in SW19. Terraces 1-1.5m and semis 1.5-3m don't seem to hang around more than a week or two.
To balance that, there isn't much on the market - the gentrification is heading out towards Morden as people get more and more desperate to live in the area. When I moved in two years ago it was a mixture of families who had lived there for years - without being too snobby - let's just say the sort of people who you'd expect to find in Selco (Sutton). On Sunday, I came back home to both my neighbour caressing their Range Rovers. However I still think it's peaked - exchange rate cycles and all that. I actually hope so - because i'll never be able to afford to move to a nicer bit of London!

Derek Chevalier

3,942 posts

172 months

Tuesday 9th February 2016
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jonah35 said:
Regardless is what the average ph director thinks, £100k -125k pa is still a good income in London but if you're paying multiples of that for a flat eventually people will take £90k and a job in Leeds/Manchester and I think that is happening amongst the people I know.
I would guess the average in the city is now >100k - is there really that much on offer at the 90k mark in Leeds/Manchester?

turbobloke

103,742 posts

259 months

Tuesday 9th February 2016
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Derek Chevalier said:
jonah35 said:
Regardless is what the average ph director thinks, £100k -125k pa is still a good income in London but if you're paying multiples of that for a flat eventually people will take £90k and a job in Leeds/Manchester and I think that is happening amongst the people I know.
I would guess the average in the city is now >100k - is there really that much on offer at the 90k mark in Leeds/Manchester?
That prompted a look online, without much success as the various analyses tend to look at inner London or London rather than the City. One notable figure was that at the end of 2015 the highest earning area in Britain was the London Borough of Kensington and Chelsea, where the average (mean) salary stood at £94,416.

Burwood

18,709 posts

245 months

Tuesday 9th February 2016
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But it's one of those stats which offers nothing. It wing contain Dara n super wealth but will include graduates on 25k and the stay at home wife on zero

Welshbeef

49,633 posts

197 months

Tuesday 9th February 2016
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Speaking to a chap at work today he's going to exchange in a couple of weeks - him and Mrs stretched to the max.


I asked what if prices fall and hold down for some time & interest rates rise or you have a family?


He seemed to think a fall is so far out of touch it will never happen little supply and London everyone wants to live there (Um I disagree with that is not want to live there prefer the countryside within walking distance)

turbobloke

103,742 posts

259 months

Tuesday 9th February 2016
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Burwood said:
But it's one of those stats which offers nothing. It wing contain Dara n super wealth but will include graduates on 25k and the stay at home wife on zero
If so then it just told some more smile through being at the top of the pile in spite of that.

Anyone got (or found) the City equivalent?

Derek Chevalier

3,942 posts

172 months

Tuesday 9th February 2016
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turbobloke said:
Derek Chevalier said:
jonah35 said:
Regardless is what the average ph director thinks, £100k -125k pa is still a good income in London but if you're paying multiples of that for a flat eventually people will take £90k and a job in Leeds/Manchester and I think that is happening amongst the people I know.
I would guess the average in the city is now >100k - is there really that much on offer at the 90k mark in Leeds/Manchester?
That prompted a look online, without much success as the various analyses tend to look at inner London or London rather than the City. One notable figure was that at the end of 2015 the highest earning area in Britain was the London Borough of Kensington and Chelsea, where the average (mean) salary stood at £94,416.
This from 2006

http://www.theguardian.com/business/2006/dec/05/ex...

"Male median pay in the City is now £104,622, according to ASHE"

I think they are confusing mean with median - pay has dropped over last decade according to the latest 2015 ASHE numbers






RYH64E

7,960 posts

243 months

Tuesday 9th February 2016
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Derek Chevalier said:
I would guess the average in the city is now >100k - is there really that much on offer at the 90k mark in Leeds/Manchester?
£100k/annum nets down to less than £5.5k/month, I don't understand how people afford >£1m houses on that kind of money.

Derek Chevalier

3,942 posts

172 months

Tuesday 9th February 2016
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Burwood said:
But it's one of those stats which offers nothing. It wing contain Dara n super wealth but will include graduates on 25k and the stay at home wife on zero
ASHE numbers gives earnings at various percentiles so you can get an idea of breakdown
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