How far will house prices fall [volume 4]

[V6Alfisti]

p1stonhead said:

Im well aware of the difference was just wondering what specifics you used to get to 0.13%...

If you fancy/have time to kill, you can of course look at deducting all of the above from the initial cost base, reflecting expected void norms e.t.c

I wouldn't be surprised if it was that poor, if not worse. That is why so many people have stated looking to the north, as the yields in London are poor but were made up by asset value appreciation (which is now hopefully unarguably flat, if not the reality of dropping).

[p1stonhead]

V6Alfisti said:

p1stonhead said:

Im well aware of the difference was just wondering what specifics you used to get to 0.13%...

If you fancy/have time to kill, you can of course look at deducting all of the above from the initial cost base, reflecting expected void norms e.t.c

I wouldn't be surprised if it was that poor, if not worse. That is why so many people have stated looking to the north, as the yields in London are poor but were made up by asset value appreciation (which is now hopefully unarguably flat, if not the reality of dropping).

So the answer was, you made it up? Dont blame me for using the wideley recognised way of evaluating investments with gross rental yield.

Obviously you want prices to fall due to not having bought yet (I think it was you anyway?), but coming up with suspect (asking prices not sold prices, different flats etc) examples of 30% drops and zero yields is a bit ridiculous.

[V6Alfisti]

p1stonhead said:

So the answer was, you made it up? Dont blame me for using the wideley recognised way of evaluating investments with gross rental yield.

Obviously you want prices to fall due to not having bought yet (I think it was you anyway?), but coming up with suspect (asking prices not sold prices, different flats etc) examples of 30% drops and zero yields is a bit ridiculous.

It is "a" way, but no-one I know in development/investment would use that solely to make a decision. They have their own calculators that generate the true return.

I am particularly averse to building my own calculator, given there appear to be lots of people who want to be spoon fed answers and get antsy when pre-made calcs are used...but can't grasp the concept that yield reduces with costs!

The developers I know use gross as an indication but have the knowledge/common sense to factor in costs before determining risk/reward.

Sorry still slightly staggered, are you serious?, you would use gross yield as an investment decision without factoring any of your costs. No wonder you are so shocked by a net yield value, as this is actually what gets taken home.

A portal was used that acts as a calculator and has it's own back end logic vs using a figure that factors in zero operational/real costs.

You haven't even factored in stamp duty/legal costs, which is an upfront cost.

This could be an example of why people are willing to take a loss, once they realise they need to factor in cost to determine profit.

[p1stonhead]

V6Alfisti said:

p1stonhead said:

So the answer was, you made it up? Dont blame me for using the wideley recognised way of evaluating investments with gross rental yield.

Obviously you want prices to fall due to not having bought yet (I think it was you anyway?), but coming up with suspect (asking prices not sold prices, different flats etc) examples of 30% drops and zero yields is a bit ridiculous.

It is "a" way, but no-one I know in development/investment would use that solely to make a decision. They have their own calculators that generate the true return.

The developers I know use gross as an indication but have the knowledge/common sense to factor in costs before determining risk/reward.

Sorry slightly staggered, are you serious?, you would use gross yield as an investment decision without factoring any of your costs. No wonder you are so shocked by a net yield value, as this is actually what gets taken home.

A portal was used that acts as a calculator and has it's own back end logic vs using a figure that factors in zero operational/real costs.

You haven't even factored in stamp duty/legal costs, which is an upfront cost.

This could be an example of why people are willing to take a loss, once they realise they need to factor in cost to determine profit.

Believe me I am not shocked with anything anyone is saying in this thread apart from your mythical 30% drops which appear to be anything but. I work for a property developer

[V6Alfisti]

p1stonhead said:

Believe me I am not shocked with anything anyone is saying in this thread apart from your mythical 30% drops which appear to be anything but. I work for a property developer

Yikes, that is even worse but explains what I assumed to be stupidity is instead misrepresentation. It does explain your aversion to the numbers.

Even property118 crew have a calc (just found) https://www.property118.com/calculating-rental-yie...

Edited by V6Alfisti on Tuesday 8th August 15:37

[p1stonhead]

V6Alfisti said:

p1stonhead said:

Believe me I am not shocked with anything anyone is saying in this thread apart from your mythical 30% drops which appear to be anything but. I work for a property developer

Yikes, that is even worse but explains what I assumed to be stupidity is instead misrepresentation. It does explain your aversion to the numbers.

Even property118 crew have a calc (just found) https://www.property118.com/calculating-rental-yie...

Edited by V6Alfisti on Tuesday 8th August 15:37

Again you seem to think I dont know anything about net or gross yields. I was only asking how you got to the specific 0.13% which you seem to have just made up. Did you account for all of the tax write offs? Albeit these will be a thing of the past soon it seems.

Found any actual 30% drops? Any time...

Edited by p1stonhead on Tuesday 8th August 15:48

[V6Alfisti]

p1stonhead said:

Again you seem to think I dont know anything about net or gross yields. I was only asking how you got to the specific 0.13% which you seem to have just made up. Did you account for all of the tax write offs? Albeit these will be a thing of the past soon it seems.

Found any actual 30% drops? Any time...

Edited by p1stonhead on Tuesday 8th August 15:48

"Made up" to me is if I just plucked 0.13% from the top of my head, instead a tool that is publicly accessible was used and shared quite clearly. Frankly a nonsense assessment.

Yes, the one posted earlier was a property that represented a drop of 30% against a 2014 sold value of £1m, and was shown as SSTC @ £700K via rightmove.

There are other examples that are on the open market, but I won't share on a public forum with developers and BTL who are too lazy to look for themselves ! I don't value proving a point that much, as satisfying as it would be.

[TheLordJohn]

Thread seems to have spiralled into gibberish somewhat over the past few pages.

[p1stonhead]

V6Alfisti said:

p1stonhead said:

Again you seem to think I dont know anything about net or gross yields. I was only asking how you got to the specific 0.13% which you seem to have just made up. Did you account for all of the tax write offs? Albeit these will be a thing of the past soon it seems.

Found any actual 30% drops? Any time...

Edited by p1stonhead on Tuesday 8th August 15:48

"Made up" to me is if I just plucked 0.13% from the top of my head, instead a tool that is publicly accessible was used and shared quite clearly. Frankly a nonsense assessment.

Yes, the one posted earlier was a property that represented a drop of 30% against a 2014 sold value of £1m, and was shown as SSTC @ £700K via rightmove.

There are other examples that are on the open market, but I won't share on a public forum with developers and BTL who are too lazy to look for themselves ! I don't value proving a point that much, as satisfying as it would be.

Good plan actually we might go off to steal your imaginary bargains.

[gibbon]

V6Alfisti said:

"Made up" to me is if I just plucked 0.13% from the top of my head, instead a tool that is publicly accessible was used and shared quite clearly. Frankly a nonsense assessment.

Yes, the one posted earlier was a property that represented a drop of 30% against a 2014 sold value of £1m, and was shown as SSTC @ £700K via rightmove.

There are other examples that are on the open market, but I won't share on a public forum with developers and BTL who are too lazy to look for themselves ! I don't value proving a point that much, as satisfying as it would be.

I try not to rise to these things, but are you having a laugh?

The example you gave simply showed a flat which transacted at circa £1m in 2016. Not 2014, and no recorded sale at circa 700k.

So, no example shown.

You havnt bought a place in numerous years, i wouldnt worrying overly about a 'btl investor' or 'property developer' shnaffling one from under your nose, the worlds not out to get you mate, you are just getting called upon to show actual transactions you claim to have seen, which as of yet, you havnt.

As for you yield calcs, well, whatever, but just using some random online calculator isnt overly credible. I am far from a property magnate but i do own a buy to let in z2 london, which has been let for 4 years, and am currently reletting, and i am in the process of selling a zone 2 home and buying another. Im recounting my actual experience, not beating a tired drum with my fingers crossed for a price crash and quoting random online yield calculators with no given parameters.

Sorry if that sounds a bit ranty.

Edited by gibbon on Tuesday 8th August 16:34

[V6Alfisti]

gibbon said:

I try not to rise to these things, but are you having a laugh?

The example you gave simply showed a flat which transacted at circa £1m in 2016. Not 2014, and no recorded sale at circa 700k.

So, no example shown.

You havnt bought a place in numerous years, i wouldnt worrying overly about a 'btl investor' or 'property developer' shnaffling one from under your nose, the worlds not out to get you mate, you are just getting called upon to show actual transactions you claim to have seen, which as of yet, you havnt.

As for you yield calcs, well, whatever, but just using some random online calculator isnt overly credible. I am far from a property magnate but i do own a buy to let in z2 london, which has been let for 4 years, and am currently reletting, and i am in the process of selling a zone 2 home and buying another. Im recounting my actual experience, not beating a tired drum with my fingers crossed for a price crash and quoting random online yield calculators with no given parameters.

Sorry if that sounds a bit ranty.

Edited by gibbon on Tuesday 8th August 16:34

With a SSTC @ £700k in the last 1 month, so no it won't be recorded yet. I haven't done the work for you of pulling out further price comparisons of 2014 sales vs 2017 sales and completed a full analysis. I leave these summaries to the land registry which show the largest drops in central london. By your logic, if something sold for £1m say 2 years before, and then had an asking price of £700k...that isn't real/material/indicator until it is bought - and shows up on the land registry. That logic is quite different to mine clearly but for me that is a clear indicator, and that was a real property being offered and SSTC at £300k less than the most recent transaction on that property.

You do seem focussed on the fact that you think I have said every property in prime has dropped 30% since 2014, I haven't. Simply some, hence the wording of 'up to'. There are a large number that have increased little or dropped e.g. those below

Another prime example, a £40k loss before inflation, stamp duty, mortgage e.t.c accounted for.

55 Gunterstone Road, London, W14 9BS

23 May 2017 £600,000
16 May 2012 £640,000

or

10, Lansdowne Court, W11

16 Feb 2017 £725,000
16 Aug 2013 £800,000

or a £70k real drop in 5 months

Flat 6, 205 Holland Park Avenue,
London, W11 4XB

16 Dec 2016 £956,250
14 Jul 2016 £1,025,000

Using an online calculator isn't overly credible but no alternative analysis is offered (just more demands for spoon feeding) and a gross figure that is what it says and doesnt take account of any costs.

Anyway agree with the previous poster that this is a few pages of arguments which isn't really useful to the wider group .

Those are some recorded drops that I pulled out from a quick google search however.

Edited by V6Alfisti on Tuesday 8th August 17:46

[EddieSteadyGo]

V6Alfisti said:

<snip>
or a £70k real drop in 5 months

Flat 6, 205 Holland Park Avenue,
London, W11 4XB

16 Dec 2016 £956,250
14 Jul 2016 £1,025,000
<snip>

Just on this example, I think the property was purchased as a brand new flat in the first transaction and so the buyer would have paid circa 10% premium over a similar "second hand" property. The owner then appears to have sold quite quickly and in doing so has lost a good chunk of the new build premium they originally paid.

This is typical if someone sells a new build so soon after purchasing it when prices are not rising quickly.

[Justayellowbadge]

Rinse and repeat...

[menousername]

EddieSteadyGo said:

This is typical if someone sells a new build so soon after purchasing it when prices are not rising

EFA

People were flipping off plan to make a fast buck in a rising market, hence the flood of new build high rise rabbit hutches in London

[loafer123]

p1stonhead said:

Believe me I am not shocked with anything anyone is saying in this thread apart from your mythical 30% drops which appear to be anything but. I work for a property developer

amongst many other things, I am an Exec Director of a small regional house builder and advise a mezz fund on a defaulted scheme in central London.

As the saying goes, denial is not just a river in Africa.

[p1stonhead]

loafer123 said:

p1stonhead said:

Believe me I am not shocked with anything anyone is saying in this thread apart from your mythical 30% drops which appear to be anything but. I work for a property developer

amongst many other things, I am an Exec Director of a small regional house builder and advise a mezz fund on a defaulted scheme in central London.

As the saying goes, denial is not just a river in Africa.

Not saying there hasn't been a drop. But I haven't seen any cold hard evidence of 30% drops in London from previously sold prices.

Asking prices don't count because some are just loopy to start with and have no reflection of actual worth anyway - see: any new build tower block.

People actually locking in a 30% losses on the property itself from what they paid is another matter altogether.

Edited by p1stonhead on Tuesday 8th August 19:44

[ClaphamGT3]

V6Alfisti said:

I found one of them.

A quick search of emails found this one, in zone 2. Sold for £1m in 2014, and went STC in June/July at £700k.

Not gorgeous, but not unattractive, not small and not council. Whether or not it is a pent house in central london, or a council flat. A £300k fall is a £300k fall.

http://www.rightmove.co.uk/house-prices/detailMatc...

The other I am keeping in my back pocket as I know there are some shennigans going on that could result in a nice buy. Happy to share content/my time/research but not at my expense !

That's in the HS2 zone of influence, on the edge of the Regents Park estate that is just about to be pulled down and re-built

[gibbon]

V6Alfisti said:

With a SSTC @ £700k in the last 1 month, so no it won't be recorded yet. I haven't done the work for you of pulling out further price comparisons of 2014 sales vs 2017 sales and completed a full analysis. I leave these summaries to the land registry which show the largest drops in central london. By your logic, if something sold for £1m say 2 years before, and then had an asking price of £700k...that isn't real/material/indicator until it is bought - and shows up on the land registry. That logic is quite different to mine clearly but for me that is a clear indicator, and that was a real property being offered and SSTC at £300k less than the most recent transaction on that property.

You do seem focussed on the fact that you think I have said every property in prime has dropped 30% since 2014, I haven't. Simply some, hence the wording of 'up to'. There are a large number that have increased little or dropped e.g. those below

Another prime example, a £40k loss before inflation, stamp duty, mortgage e.t.c accounted for.

55 Gunterstone Road, London, W14 9BS

23 May 2017 £600,000
16 May 2012 £640,000

or

10, Lansdowne Court, W11

16 Feb 2017 £725,000
16 Aug 2013 £800,000

or a £70k real drop in 5 months

Flat 6, 205 Holland Park Avenue,
London, W11 4XB

16 Dec 2016 £956,250
14 Jul 2016 £1,025,000

Using an online calculator isn't overly credible but no alternative analysis is offered (just more demands for spoon feeding) and a gross figure that is what it says and doesnt take account of any costs.

Anyway agree with the previous poster that this is a few pages of arguments which isn't really useful to the wider group .

Those are some recorded drops that I pulled out from a quick google search however.

Edited by V6Alfisti on Tuesday 8th August 17:46

I feel this has been somewhat hijacked, and i dont want to make it personal V6Alfisti, but i would say this in a final effort-

With respect, i dont need you to do any work for me. You've seen a place advertised for sale, no data recorded of a sale, but then its popped up to rent. Maybe its sold, maybe its not, who knows, but what we do know is that we dont know.

The other details above i dont have the time to go through, so please forgive me, but, i doubt they prove much, i could be wrong.

Im not focussed on anything, I just feel you are not backing up your statements with actual fact, no worries either way, but you are struggling to back up statements with fact.

Alternative analysis is out there, particularly over an autobot calculation we dont know the parameters of, this is one of the great benefits of pistonheads, there are real people out there (here), with real experience. Analyse the market all you want, but please take reliable parameters and actual metrics and also may I say, listen to others, many people here have no axe to grind and are not trying to win any debate, simply calling bulls1t when they see it.

If you do not own a property, you are inherently short the market, people seem to find that hard to grasp. I think i've said this to you before, but take on what you wish to believe and draw whatever conclusion you need to, to believe you choices are right, but please do listen to others.

Im just telling you what i've experienced, from real time experience of the very market you are speaking of, draw from that what you want.

Good luck with your bargain hunting, but dont hate people for calling you wrong and lifting property before you convince yourself its the bottom of the market. Im sure glad i didnt listen to people saying what you are in 2010.

My advice, if you care to know it, as you dont own a place, is if you want to own a home, buy one, use the softer market to bid it low, be cheeky, and hopefully buy a home you love. Then move on, stop worrying about it, and enjoy living there. However, if you keep sitting it out, waiting for the bottom, and convincing yourself its not the right time, you will be a long time waiting, and potentially end up paying way more.

Good luck.

Edited by gibbon on Tuesday 8th August 22:21

[ClaphamGT3]

gibbon said:

I feel this has been somewhat hijacked, and i dont want to make it personal V6Alfisti, but i would say this in a final effort-

With respect, i dont need you to do any work for me. You've seen a place advertised for sale, no data recorded of a sale, but then its popped up to rent. Maybe its sold, maybe its not, who knows, but what we do know is that we dont know.

The other details above i dont have the time to go through, so please forgive me, but, i doubt they prove much, i could be wrong.

Im not focussed on anything, I just feel you are not backing up your statements with actual fact, no worries either way, but you are struggling to back up statements with fact.

Alternative analysis is out there, particularly over an autobot calculation we dont know the parameters of, this is one of the great benefits of pistonheads, there are real people out there (here), with real experience. Analyse the market all you want, but please take reliable parameters and actual metrics and also may I say, listen to others, many people here have no axe to grind and are not trying to win any debate, simply calling bulls1t when they see it.

If you do not own a property, you are inherently short the market, people seem to find that hard to grasp. I think i've said this to you before, but take on what you wish to believe and draw whatever conclusion you need to, to believe you choices are right, but please do listen to others.

Im just telling you what i've experienced, from real time experience of the very market you are speaking of, draw from that what you want.

Good luck with your bargain hunting, but dont hate people for calling you wrong and lifting property before you convince yourself its the bottom of the market. Im sure glad i didnt listen to people saying what you are in 2010.

My advice, if you care to know it, as you dont own a place, is if you want to own a home, buy one, use the softer market to bid it low, be cheeky, and hopefully buy a home you love. Then move on, stop worrying about it, and enjoy living there. However, if you keep sitting it out, waiting for the bottom, and convincing yourself its not the right time, you will be a long time waiting, and potentially end up paying way more.

Good luck.

Edited by gibbon on Tuesday 8th August 22:21

There is a lot of wisdom in the last three paragraphs; if you're a developer, a speculator or a portfolio-holder (of any scale) then, by all means, play the market; call when to be in and when to be out. If on the other hand, you're watching your life tick by as you rent, just get over yourself and buy a home

[EddieSteadyGo]

There is a story this morning in the online Telegraph related to stamp duty.

It quotes an unnamed cabinet minister that the chancellor is under pressure to reduce stamp duty in the Autumn budget or to at least reverse some of the sharp increases introduced by Osborne due to the effect it has had in reducing transactions.

If this story gains any traction it could further dampen the market until November as people would hold off exchanging in case the rate of stamp duty reduces.