UK House prices: News & Views

[drbubb]

Weybridge

I lived there a year and found it an odd place, a bit slow if you're not family focussed.

 

Would have been perfect as a kid, compact enough to walk or cycle everywhere and plenty of open space in the woods and near the river and canals for childhood adventures

I recall visiting there, and liking the canal link - and I found it oh-so-cheap compared with London.

 

But then, there are some areas of London that may look cheap soon too.

 

/see:

[nigel2012]

THE RESIDENCE, Manor House

 

(this place is being marketed in HK this weekend - Any comments?)

 

 

The Residence

 

The Residence is the last block in the current phase to be released at Woodberry Park. This iconic 27 storey tower consists of 167 one, two and three bedroom apartments and penthouses boasting spectacular panoramic views over both the East and West reservoirs and out towards London's iconic skyline.

 

Selected apartments including floors 20 and above will benefit from the platinum specification to include Bosch built in induction hob, microwave and double oven along with oak internal doors, fitted wardrobes to master and second bedrooms, multi room audio system including IPOD docking station, hard wired alarm system and video entry system.

 

With shops, cafes and restaurants due to open on the ground floor, and a residents only gym within the development* residents can experience the benefits of living above one of London's most prestigious new destinations.

 

 

Woodberry Park

 

Woodberry Park is the first phase of the stunning Woodberry Down regeneration project fronting the West Reservoir, providing stunning views towards the City and Canary Wharf. A fantastic development of studio, 1, 2 & 3 bedroom apartments, Woodberry Park is less than 5 minutes walking distance of Manor House tube station and only15 minutes from Oxford Circus by tube.

 

This property is currently being sold off plan and is due for completition in 2012

 

/see: http://www.rightmove.co.uk/property-for-sa...y-27180460.html

/brochure: http://www.berkeleygroup.co.uk/berkeley/woodberry-park

 

Manor House also has Finsbury Park on the other side of it, so this is a great location, BUT with Europe's debt crisis still massively under-represented in the mainstream press and larger economy then I would have thought that house prices will go into freefall when the UK re-enters recession either this year or in 2012.

I was going to buy a flat in a large block in Slovenia before the CDO-inspired banking crisis of 2008-09, but pleased I didn't. Anyone buying a flat in a huge block when the economy tanks either takes a large hit short-term and stays with it for the long-term or if needing to sell is going to have to discount heavily when the prices go down and there are so many others who are in the same boat.

 

So it depends if you think the economy is on the mend or just re-inflated by QE1, QE2, UK banking bail-out etc. I believe there is far far worse to come so house prices and flat prices will dive.

[drbubb]

Manor House also has Finsbury Park on the other side of it, so this is a great location, BUT with Europe's debt crisis still massively under-represented in the mainstream press and larger economy then I would have thought that house prices will go into freefall when the UK re-enters recession either this year or in 2012.

I was going to buy a flat in a large block in Slovenia before the CDO-inspired banking crisis of 2008-09, but pleased I didn't. Anyone buying a flat in a huge block when the economy tanks either takes a large hit short-term and stays with it for the long-term or if needing to sell is going to have to discount heavily when the prices go down and there are so many others who are in the same boat.

 

So it depends if you think the economy is on the mend or just re-inflated by QE1, QE2, UK banking bail-out etc. I believe there is far far worse to come so house prices and flat prices will dive.

I suspect you are right.

It is going to be very tough to rent the 2BR's in the tower for Pds. 350-400 per week, which is what the buyers will want to earn a 5% yield.

 

But as I say... / on the other thread: http://www.greenenergyinvestors.com/index....showtopic=14291

The opportunity is not in what the Builder is selling.

[chazza]

Weybridge

 

I recall visiting there, and liking the canal link - and I found it oh-so-cheap compared with London.

But then, there are some areas of London that may look cheap soon too.

 

/see:

 

 

How times have changed....

[drbubb]

How times have changed....

I must be thinking of another part of the Wey River. Weymouth perhaps ?

[tomas]

Bloody submerged by people moving to Weybridge from Clapham and the like....."want more room, good schools etc"....

 

Brought up here and lived here for most of my life but cant compete with the continuous stream of BMW X5 yummy mummy brigade.

 

5/600k doesnt buy you much of a family home in the area and we have been trying for a long time to stay where our family is and our friends and roots are (both 35 + two kids).

 

 

[John Doe]

I must be thinking of another part of the Wey River. Weymouth perhaps ?

No offence Dr B, and please don't take this the wrong way, but this really shows your lack of understanding of the UK market.

 

Meanwhile, more news to dampen the falls.

 

Lowest number of new homes built since 1923.

 

http://uk.finance.yahoo.com/news/Number-ne...763836.html?x=0

[Chartered Surveyor]

If you think the City will hold out and continue to boom then London prises will not only hold up but carry on rising.

 

For me its a false dawn and I am now raising the RED flag. The FUNDAMENTALS are all back to front. The battle may be won but mother market will always win the war.

My gut feeling is something is gonna snap this year.

 

 

 

 

[neil324]

No offence Dr B, and please don't take this the wrong way, but this really shows your lack of understanding of the UK market.

 

Meanwhile, more news to dampen the falls.

 

Lowest number of new homes built since 1923.

 

http://uk.finance.yahoo.com/news/Number-ne...763836.html?x=0

 

Makes me weep being a bricklayer. I'd be inclined to say that work will boom at some point in future, but only if prices fall first, otherwise affordability will just choke any boom off.

 

I mean how can another upturn start from 5x plus earnings.

 

 

[drbubb]

No offence Dr B, and please don't take this the wrong way, but this really shows your lack of understanding of the UK market.

Meanwhile, more news to dampen the falls.

Lowest number of new homes built since 1923.

http://uk.finance.yahoo.com/news/Number-ne...763836.html?x=0

It has been a long time since I was there...

My main recollection was being on the Wey River.

 

I know that Weybridge is a different place, far away from the Mouth - but I temporarily got the names confused.

 

But I probably know London better than most Brits, including some born there, having cycled or walked around most parts North of the river,

 

As to the supply, 1,000's or homes are being built now in the Manor House area, see the thread:

http://www.greenenergyinvestors.com/index....showtopic=14291

 

There's a now bonus program for councils that find a way to make this happen, and still-high prices, regeneration, and

densificiation (brought together) are providing a means to make this happen.

[G0ldfinger]

For me its a false dawn and I am now raising the RED flag. The FUNDAMENTALS are all back to front. The battle may be won but mother market will always win the war.

Very true.

 

This is what the central bankster have done to us. They are messing with our minds. It is immoral.

 

Look at Cuthie. He sees prices go up, and is tempted to jump back in, which could prove very bad. That he is in this state is Mervyn King's and Ben Bernanke's fault. They mess with the market, delay the inevitable, and instead sacrifice the currency. They turn it all into one big casino in which everyone has to gamble who wants to stay ahead of inflation.

[BoldAsBrass]

No offence Dr B, and please don't take this the wrong way, but this really shows your lack of understanding of the UK market.

 

Meanwhile, more news to dampen the falls.

 

Lowest number of new homes built since 1923.

 

http://uk.finance.yahoo.com/news/Number-ne...763836.html?x=0

 

Yes, it's an interesting situation. What are the big housebuilders doing? This is important because, one of the things that led the falls in the last bust in the late 1980s was the volume housebuilders dropping prices to unload the stock they had built.

 

This time round things are completely different as the government has got behind the banks to do anything to save the sector. And Barratts have stated they are going to rent their unsold houses out. Which, as business models go, is a pretty good one. The cost to build of (for example) 2 bed flats in a block is probably in the order of 40k - 60k (depending on land price and location). If you can rent these even for just £600 a month, you'll get your build costs back in 10 to 15 years (allowing for interest on debt) and then be sitting on a nice revenue stream thereafter. I can see the banks being quite happy to lend to fund this type of business model.

 

I have maintained for sometime that we are witnessing a structural change in property ownership in this country - less will own, more will rent.

[alexreeve]

I have maintained for sometime that we are witnessing a structural change in property ownership in this country - less will own, more will rent.

I agree, it does look that way. Feudalism ended with industrialisation; perhaps it will return with de-industrialisation.

[bobhope]

Your frustration is reminding me of a the-last-bear-throwing-in-the-towel scenario. I don't think house prices will continue to do well for long in the areas you have described. IMO, they will do sooner or later do what the rest of the country does.

 

I thought Merryn Somerset Webb buying a place was the last bear that turned indicator.

 

We're looking to move back to London / SE sometime this year. Even with the 30%+ currency devaluation, the prices still look too high.

 

[John Doe]

I agree, it does look that way. Feudalism ended with industrialisation; perhaps it will return with de-industrialisation.

Quite possibly.

 

This time round things are completely different as the government has got behind the banks to do anything to save the sector. And Barratts have stated they are going to rent their unsold houses out. Which, as business models go, is a pretty good one. The cost to build of (for example) 2 bed flats in a block is probably in the order of 40k - 60k (depending on land price and location). If you can rent these even for just £600 a month, you'll get your build costs back in 10 to 15 years (allowing for interest on debt) and then be sitting on a nice revenue stream thereafter. I can see the banks being quite happy to lend to fund this type of business model.

 

Yep, & Berkeley are doing the same (moving to rental market).

[Van]

Very interesting article -

 

"The number of properties reduced in price has leaped to 65,692 for the

month of January, a massive 64% more than in January 2010."

 

http://www.home.co.uk/asking_price_index/HAPIndex_FEB11.pdf

 

 

Tallies with what I am seeing on the ground - loads of sellers are slashing prices, month by month. Some by a few percent, a few more agressively. My Property Bee is a sea of red.

[John Doe]

Very interesting article -

 

"The number of properties reduced in price has leaped to 65,692 for the

month of January, a massive 64% more than in January 2010."

 

http://www.home.co.uk/asking_price_index/HAPIndex_FEB11.pdf

 

 

Tallies with what I am seeing on the ground - loads of sellers are slashing prices, month by month. Some by a few percent, a few more agressively. My Property Bee is a sea of red.

Where abouts are you van?

 

Also, what did make of the new "leading indicator" they have on page 10?

 

As of today, this new indictor shows a clear up-tick showing an increase in

property moving through the market. By the same gauge a significantly healthier

market than in Feb 2010 and hinting at further recovery in 2011

 

After their mainly negative comments, I thought this a little contradictory?

[Van]

Where abouts are you van?

 

Also, what did make of the new "leading indicator" they have on page 10?

 

After their mainly negative comments, I thought this a little contradictory?

 

I'm in West Ken at the moment. It's a decent enough area, if a little spartan. I've searched just about all properties with W- and SW- postcodes under £350k.

 

The p10 chart - I see nothing to be bullish about here - if you look closely it shows that turnover jumps at this time every year; in fact in previous years it has jumped far more.

[John Doe]

I'm in West Ken at the moment. It's a decent enough area, if a little spartan. I've searched just about all properties with W- and SW- postcodes under £350k.

 

The p10 chart - I see nothing to be bullish about here - if you look closely it shows that turnover jumps at this time every year; in fact in previous years it has jumped far more.

It was more the comments than the chart (wasn't too sure about the chart myself).

[frizzers]

Meanwhile rents in prime London areas keep on rising:

 

London rents to rise by 8pc in 2011, says property consultant Savills

Rents in prime London properties soared by 11.5pc in 2010 and will rise by another 8pc this year as a shortage of properties drives the market forward.

 

http://www.telegraph.co.uk/finance/newsbys...nt-Savills.html

[drbubb]

Meanwhile rents in prime London areas keep on rising:

 

London rents to rise by 8pc in 2011, says property consultant Savills

Rents in prime London properties soared by 11.5pc in 2010 and will rise by another 8pc this year as a shortage of properties drives the market forward.

 

http://www.telegraph.co.uk/finance/newsbys...nt-Savills.html

That is merely a forecast - not reality (yet)

Austerity is being introduced... but very slowly.

And as it is, we may instead see a "shortage of tenants." The big drop in HK prices in 2008, came just after

rents began to slide. So, if we see stagnating and falling rents, it may be a sign of a coming sharp

slide in the market.

 

London will be helped to some extent by the Olympics, since that will bring people to the capital.

But after that temporary influence, there will be a falloff since the works will be done and the crowds

will be gone.

 

THE NUMBERS:

 

11.5pc

The average amount prime London rents increased in 2010

 

17.6pc

The 2010 growth rate for rents in prime North London (including Islington and Hampstead)

 

4.8pc

The increase in rental values across the UK last year

 

0.7pc

The increase in property capital values across the country in 2010, according to Nationwide

 

4.8pc

The rise in prime London property values last year

 

 

[Jake]

It's like a mexican standoff isn't it? People like CC know that property 'should' fall and hence holding off buying meanwhile landlords using the opportunity and creaming the increasing demand from renters, while they can. This will continue...until it can't. It is damn frustrating if your rent is going up every year. And values on desireable properties also increasing as renters throw in the towel and get mortgages while they are low...whiich prolongs the problem...which is exactly what Brown and the banks wanted in order to save their bacon. What's amazing to me is that properties flagged up here recently which are very average homes are up to a million AND PEOPLE CAN STILL (and want to) BUY THEM.

I try to wonder what will stop this standoff and when. I don't know the answer but I have a feeling that when it is apparent, it will be sudden and dramatic. If it was me then I would hold off and cough up the rents for at least this year. The term of the mortgage will be long and I think the chances of a crash happening this year or next are now gathering steam-despite that it looks like the opposite.

The big question is How long can the game continue?

[jsr]

The term of the mortgage will be long and I think the chances of a crash happening this year or next are now gathering steam-despite that it looks like the opposite.

The big question is How long can the game continue?

 

The crash which everyone appears to be waiting for, may not happen. It may just be the case that rents will continue to rise to the point where it is cheper to buy than rent. While house prices remain weak in nominal terms, and falling in real terms.

 

 

[Jake]

The crash which everyone appears to be waiting for, may not happen. It may just be the case that rents will continue to rise to the point where it is cheper to buy than rent. While house prices remain weak in nominal terms, and falling in real terms.

I think this may be appealing to those holding their noses whilst buying now. I have a feeling though that we will look back on this stage (low rates propping up the market alone) as a phony war. US, Ireland, Spain, wherever else, the UK is sure to follow sooner or later. So, I hope you are wrong and we see both real and nominal falls in the future.

 

The only real acceptable (to me) reason for buying now is the possibility that hyperinflation will destroy all (cash) savings and owning a house outright would be better than owning worthless paper and you are bound to the UK. I don't think we are there just yet, if hyperinflation is the outcome.

 

Still, I'd also appreciate Fred Harrisons input.

[Carlton]

I think this may be appealing to those holding their noses whilst buying now. I have a feeling though that we will look back on this stage (low rates propping up the market alone) as a phony war. US, Ireland, Spain, wherever else, the UK is sure to follow sooner or later. So, I hope you are wrong and we see both real and nominal falls in the future.

 

The only real acceptable (to me) reason for buying now is the possibility that hyperinflation will destroy all (cash) savings and owning a house outright would be better than owning worthless paper and you are bound to the UK. I don't think we are there just yet, if hyperinflation is the outcome.

 

Still, I'd also appreciate Fred Harrisons input.

Hey. I've been following this conversation and I'm inclined to agree with you. Although, it can become quite tempting to buy a place.

 

The"experts" say that if the purchase price for properties similar to the one you rent is less than 15 times your annual rent, then buying makes sense. Where I am in the American Midwest this is easily true. In fact, I can buy a flat or even a townhouse (attached) that is considerably nicer than the shoebox rental I currently call home for 10-15 times my rent. If I went to the suburbs I could buy a single family home (with garden and all) for less than 15 times my rent. So I sometimes think I am "throwing money away" renting. Of course, given the economy and the RE market it seems like rents should be much lower - but it hasn't happened yet.

 

And, you know, sometimes it almost hurts to look at pictures online of places I can afford to buy that have much nicer baths, kitchens, woodwork, etc. But, especially being single, I don't want to get married to my local jurisdiction/politicians/tax policies.