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Central LONDON Property: Databank & Charts

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According to latest data, Ken and Chelsea continues to rise at an annualized rate of 27%.

 

Rises also for Hammersmith and Fulham and Westminster.

 

This 'crash' hasn't reached prime Central London yet.

I think when you look at prices in these areas and those who are buying they are hardly representative of the UK. Falls in the last quarter for a couple of them though.

 

Kensington And Chelsea

Average Cost: £1,118,429

Detached: £13,075,000

Semi-detached: £3,183,333

Terraced: £2,872,570

Flat: £748,102

 

Change in last quarter: 3.6%

Change in last year: 24.9%

Sales: 590

=====================

 

Hammersmith And Fulham

Average Cost: £539,736

Detached: £0

Semi-detached: £901,621

Terraced: £891,075

Flat: £400,946

 

 

Change in last quarter: -7.5%

Change in last year: 21.7%

Sales: 651

 

=====================

 

City Of Westminster

Average Cost: £688,467

Detached: £4,473,666

Semi-detached: £1,496,250

Terraced: £1,559,879

Flat: £616,643

 

 

Change in last quarter: -11.1%

Change in last year: 20.4%

Sales: 1019

 

http://news.bbc.co.uk/1/shared/spl/hi/in_d...ces/html/bk.stm

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EA PSYCHOLOGY - Why asking prices rose recently:

 

Per an EA on a thread here:

 

"Haven't posted on here for a while, but thought i'd have a look to see what's been said now things seem to be biting!

At the end of last year I started giving some fairly honest advice and watched nearly every client i saw go on the market with another agent at about 10% over what i'd recommended!! Having realised this approach wouldn't work i've gone back to pricing up, working on the theory that it's better to have a house on the market that you have a chance to get the price down and earn a fee at some point rather than watch another agent do exactly that and my pockets remain empty!!

Sooner or later enough sellers will HAVE to sell and reduce prices to a level where buyers will start offering, but it ain't happened yet!! (except in a small number of cases, and those vendors have found buyers!!) "

 

/see: Mildura: http://www.housepricecrash.co.uk/forum/ind...68544&st=30

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Mortgage Drought as Economy Faces Plunge into Recession

 

QUOTE

Cheltenham & Gloucester, part of Lloyds TSB, has instructed brokers that borrowers who work in the City and whose income depends on bonuses are not to be trusted. If they have bonuses of more than £100,000, they should be referred to underwriters and must provide their bonus history for the past two years and details of any anticipated bonuses.

 

 

 

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QUOTE

Cheltenham & Gloucester, part of Lloyds TSB, has instructed brokers that borrowers who work in the City and whose income depends on bonuses are not to be trusted. If they have bonuses of more than £100,000, they should be referred to underwriters and must provide their bonus history for the past two years and details of any anticipated bonuses.

 

LOL

Continuing:

"The Bank of England revealed that new home loans slumped to a near 13-year low in February—73,000 were granted, compared with 120,000 in February of last year, a decline of 40 percent. Even so, the scale of the crisis is set to intensify as the credit-fuelled spending boom grinds to a halt and goes into sharp reverse.

 

The Bank’s figures showed that consumer credit had its sharpest rise in five years to almost £227 billion. Unsecured debt, not mortgages, rose by £2.35 billion in February to its highest level since October 2002. This was due to a £2 billion surge in borrowing through loans and overdrafts, the biggest rise since figures were first collected in April 1993. Outstanding debt on credit cards has increased by £350 million.

 

The situation is compounded by the growing number of lenders who face negative equity. The 2.5 percent house prices fall in March was the biggest monthly decline since September 1992.

 

Estimates vary, but all predictions are for further substantial falls for the next two years. Liberal Democrat Treasury spokesman Vince Cable warned that 3 million households could fall into negative equity within a year and that there were signs that repossessions were approaching the levels of the 1990s recession.

 

“There are currently three million families—three million—who have loan-to-value ratios of properties in excess of 90 percent, the Council for Mortgage Lenders confirms that,” he said.

 

 

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Update:

My post of the 29th Oct 2007 mentioned an end of terrace house in St Johns Wood London selling for £2.75 million. The house has now been gutted and refurbished at a cost of ? - maybe £200000. It is now up for rental at.... errr £4700 per week! It has been on the rental market for 6 weeks. Who in their right mind is going to rent this at quarter of a million per year!!?

 

Some property is moving though at not much below asking prices. A friend of mine has just sold a 3 bedroom flat in Maida Vale for £739000. He sold it to an employee of a well known British bank's investment banking division!!

 

Interesting times!

Hogwild

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A friend of mine has just sold a 3 bedroom flat in Maida Vale for £739000. He sold it to an employee of a well known British bank's investment banking division!!

Interesting times!

 

Your friend was very lucky.

 

Even the Piggies are waking up:

Re: Central London Apartments/Flats

I would be careful of London. It is now being widely talked about as one of those cities like Manchester, Birmingham, Leeds, Cardiff etc where prices are tumbling due to a huge oversupply in flats. Where I live in West London there are large amounts of flats being built every where. Its become a complete glut.

 

jbbrentforddocklockgatejz5.jpg

The luxury flats in Brentford dock have plummeted tens of thousand in just the last few months and yet huge developments of Luxury flats are being built next door (A4 Great West Road Development - Barrats). It may be different in East London and Belgravia but here there are a lot of people loosing money. South London leads some of the biggest drops in the country

 

/see: http://www.singingpig.co.uk/forums/thread/471018.aspx

 

I remember visiting those flats on Brentford dock, and thinking how wildly overpriced they were

for such a remote location.

 

I live in HK in a nicer flat, only 30 minutes MTR ride from centra, and it was far cheaper to buy.

I have no doubt my present flat will one day be worth more per square foot, than those Brentford disasters

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BTL : there are lots of them the Financial Times reports.

 

Buy-to- Let Percentage of all mortgages by area. London.

 

London E 28.35% of all mortgages are BTL

London EC 27.36% of all mortgages are BTL

London WC 26.16% of all mortgages are BTL

London NW 25.22% of all mortgages are BTL

London W 24.72% of all mortgages are BTL

London N 23.49% of all mortgages are BTL

London SE 20.96% of all mortgages are BTL

London SW 20.85% of all mortgages are BTL

 

The FT says Canary Wharf feels the chill.

 

Local Estate Agent Anthony Flynn of Morgan Randall says "Big investors just aren't buying in the next

few years developers will be stuck with a lot of unsold property, developers who have not already

sold will have to drop their asking prices by 15-20%".

 

 

Looks like Citigroup with their 15% fall in house prices over the next 18 months is about right.

 

/source: #39: http://www.housepricecrash.co.uk/forum/ind...30&start=30

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A fair amount of common sense in this article. The media in particular does seem to present the falling property market as something equivalent to the end of the world but if it forces people to take more responsibility for themseleves, spend less, save more and, as the author suggests, possibly work harder then it is just possible that there may be some benign consequences to the drop.

 

http://www.telegraph.co.uk/money/main.jhtm...0/ccliam120.xml

 

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EXCERPT

======

 

I think we are in an environment now when house prices are likely to fall further in the UK, but that the cost of mortgages to the great majority of home-owners will not rise much. So while the number of people who might have negative equity might rise substantially, the number of people who have real problems servicing their mortgage debt may not. For some people it will be tough - but they are likely to be a minority, which is little consolation if you are one of them.

 

For what it is worth, some economic modelling of the forces driving the demand for and supply of property that I have done with colleagues at Morgan Stanley suggests that a plausible central scenario might be one in which the average level of house prices falls about 10 per cent this year, and by about 5 per cent in 2009. Forecasts from economists are two a penny, so no one should get very excited about that. It might be more interesting to note what futures contracts (derivatives) imply.

 

I attach weight to the message from the prices of derivative contracts that are written on house prices - in part because that is where people are putting their money. Talk is cheap and there are lots of vested interests from those who offer strident views on where house prices are going. Prices of derivatives reflect where people are actually staking money.

 

Derivatives contracts priced off the Halifax national house price index currently price in something close to a 10 per cent fall in nominal house prices over 2008 (i.e. around 8 per cent from the March level) and around a 5 per cent fall the year after. Beyond three years ahead, derivatives contracts imply increases in prices.

 

== ==

 

I think the US futures showed modest drops like that a year ago, then got driven lower

as the falls rolled on - I reckon you will see the same in the UK

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(I had this comment via a PM on HPC overnight):

 

minus 15% ! ... Yesterday, 10:55 PM

 

I believe you're in Hong Kong so will have missed this good news......

...Last night on the Channel 4 News estate agent saying

 

''LONDON PRICES ARE 15% DOWN SINCE JANUARY''..........The market's imploding!!!!!!!!!

 

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Interesting. FWIW I had the opportunity to quiz a former Deputy Governer of the Bank of England about all this recently. He expected to see drops in house prices of about 15% in the next two years and confessed things had got somewhat out of whack. He noted that a 10% drop in house prices would counterbalance his entire annual salary for the year and that, soberingly, such a fall would mean he'd see 'no net gain' in wealth during the year. It wouldn't affect this individual, but that would really hurt some people living on the margin.

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...He expected to see drops in house prices of about 15% in the next two years ...

 

Does he really that prices are only overvalued by that much?

If prices can overshot on the upside, why not on the downside too?

 

So if they are overvalued by 30-35%, they could fall 40-50%

 

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Hi,

 

I don't think he thought 15% was the maximum it would fall. Rather what he expected it would fall by - which was what struck me, the matter of fact way in which he accepted this as almost given. So yes, presumably he would entertain the idea of larger falls. (I certainly hope so!)

 

CS

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Just an observation, houses in the worse streets round my way seem to be down about 10% from their highs, while the better streets are seeing more of a stand-ff between buyer and seller. We are seeing properties coming off the market rather than accept lower offers. Stuff definitely staying on for considerably longer.

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Just an observation, houses in the worse streets round my way seem to be down about 10% from their highs, while the better streets are seeing more of a stand-ff between buyer and seller. We are seeing properties coming off the market rather than accept lower offers. Stuff definitely staying on for considerably longer.

 

Sounds like the buying is drying up, and it is only a matter of time before

the sellers "on better streets" will have to cave in too.

 

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(There will soon be No "bulletproof" in the UK either):

 

Bulletproof housing markets get hit

The mortgage meltdown has finally gotten to Seattle, Charlotte and and other cities where prices had been holding up.

 

NEW YORK (CNNMoney.com) -- Some of the last, best housing markets - the ones that continued to climb even as the rest of the country cratered - have turned south lately.

 

Seattle, Portland Ore., Charlotte, NC, and Salt Lake City all posted home price gains during 2007, even as more than half of the 150 markets tracked by the National Association of Realtors registered declines. Now they've joined the losers.

 

"What the numbers are saying is that the trend is broadening out," said Michael Larson, a real estate analyst with Weiss Research. "[The downturn started with] the markets that had flown the highest. When the speculative bubble popped, those got hit first. These [bulletproof] markets are now getting hit for traditional economic reasons."

 

/more: http://money.cnn.com/2008/05/01/real_estat...oney_topstories

 

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Benham's is promoting BTL investment to HK based investors...

 

A seminar entitled: ‘How to make money from London property rentals’

Event Details: Thursday 8th May at The China Club, Old Bank of China Building, Bank Street, Central from 6.30pm.

 

Right now, despite the “credit crunch” the London property market is buoyant. Both capital appreciation and rental returns are holding. Anita has over 25 years experience of the London property rental market and runs the longest established lettings agency in Central London. Virtually no one has more experience of letting properties in London than her.

 

What you can learn at this seminar:

* Anita will be talking about what you can do to your property to increase both rental income and capital appreciation. Anita has an incredible talent for this, having, in some cases, almost doubled rental income with a few interior design ideas. And Anita is not the only person you can learn from...

 

* Marc von Grundherr, who is the Lettings Director for Benham & Reeves and he will be talking about the current state of the London property market with a particular emphasis on the rentals market. If you do not regularly visit London this talk will give you a real feel for where the market is now.

 

* Russell Hunt from Property Hunt specialises in finding the best London properties for either investment or home purchase. He will be telling you exactly what to look for when you are selecting a property in London.

 

* Also Peter Wynn Williams from the Henley Group will be talking about: the effects of the sub-prime crisis and it's knock-on effects; the importance of asset allocation and diversification; the Henley Group's view on all the major investment asset classes: cash and bonds, equities, property, commodities (especially oil, gold & wheat), and funds of hedge funds.

 

About Benham & Reeves Residential Lettings

Benham & Reeves Residential Lettings has been established for over 50 years and is London's main lettings agency. We have ten offices covering London's prime areas, from Hampstead, Highgate and Swiss Cottage in the north west through to St John’s Wood, Hyde Park, Kensington and Knightsbridge in the centre extending east to the City and Docklands. No other London lettings agency has as much local knowledge as we do.

 

From the landlord's perspective, finding the best tenants is always the biggest concern. Because we have been established for so long we now occupy the top of the London lettings market, most of our tenants are wealthy (and credit-worthy) executives working for established, large companies. We have an excellent record for achieving high rental income.

 

= = = = =

 

"Both capital appreciation and rental returns are holding" ???

 

Is that a credible statement?

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Up and coming areas of London, The myth busted

 

(from GHPC thread):

 

I stopped surfing the web long enough to read a book, gosh I feel clever again.

 

From Tim Harford’s “The logic of life – uncovering the new economics of everything”

QUOTE

Unfortunately, it is uncommon for neighbourhoods to break out of the vicious circle of poverty. While estate agents love to describe particular areas as “up and coming”, relative to one another neighbourhoods do not tend to “up and come” at all. Anyone who doubts this should look at Charles Booth’s famous map of London’s rich and poor areas at the end of the nineteenth century. <edit> Overlaying Booth’s map with today’s poorest areas is a sobering experience: with few exceptions, yesterday’s poor areas are also today’s poor areas. <a bit about all London richer than it was but relative poverty between areas remain> <Then a bit about how this isn’t surprising, referring back to a previous bit in the book – lively/safe areas stay lively/safe because, well, they are lively and safe>

== ==

 

Link to Booth's maps and the corresponding modern area: http://tinyurl.com/4gc6ek

You can shift the maps with the controls on the left hand of the page.

 

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http://www.guardian.co.uk/money/2008/may/1...es.creditcrunch

 

 

QUOTE

One of Britain's leading buying agents has startling advice for anyone wishing to purchase a home in today's sliding market: don't settle for a price reduction of 5 or 10 per cent when you could negotiate 20 to 30 per cent off.

 

'I've no hesitation in being hard-nosed. When the market's going up, estate agents push prices higher. Now it's falling, so buyers can get their own back,' says James Greenwood, managing director of Stacks Property Search & Acquisition.

 

Greenwood says most homes recently put on the market carry realistic asking prices which can form a basis for negotiation. But a few, usually those lingering from last year, are overpriced. 'It's the sellers' fault; they're unrealistic or just don't need to sell.'

 

So far in 2008, Greenwood has bought homes for clients at an average of 21.7 per cent below the asking price - even, in some cases, when values had already fallen from 2007. On one home he negotiated a whopping 37 per cent discount.

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Firstly, in yesterday's Barnard Marcus auctions something like 50% went unsold. UNSOLD! In an auction. That is a huge statistic.

 

This is only anecdotal, and relates to Wandsworth Common where I live. It is one of those areas about which people endlessly say 'house prices'll never crash round here'.

 

1. Very little is shifting. For sale signs are staying for sale signs. Sometimes they are taken down. Very little is now under offer or sold, except in the area closer to Earlsfield which is more liquid and there are more flats.

 

2. Bloke next door is a major developer. He calculates that we are already 20% down off the 2007 peak. His own house for example was valued (not sold) at 1.9. It is now valued at 1.4. Over the road another family home was valued over 2 million in 2007. They can't sell it now for 1.4 and have gone multiple agency.

 

3. Close friend who lives further down the hill where houses were going for 550 at the peak has had an offer at 495 for her place.

 

And things haven't even got going yet

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..And things haven't even got going yet

 

Right. Here's a writer who things 2010 could be the earliest year for a low

 

UK House Prices Plunge Over the Cliff

/see: http://www.marketoracle.co.uk/Article4256.html

 

US Recession 2008, UK Recession 2009 - Housing Bust into 2010

Just as the US housing bust of 2007 has lead to the US tipping into recession during 2008, which is expected to lead to at least 3 quarters of negative growth, so will the UK housing bust of 2008 lead to a UK recession during 2009 as the UK housing market is expected to continue to fall throughout 2009. Therefore the Market Oracle forecast will be updated towards the end of 2008 to expand the forecast trend into 2010. Preliminary analysis suggests that UK house prices are on track for an average 33% decline from their peak in August 2007 to the eventual trough.

. . .

During the boom years the City of London as the worlds financial centre contributed disproportionately to UK GDP growth, and this growth has been reflected in the degree to which London House Prices have been bid ever higher. However during the current credit crisis, London will experience the deflationary impact of the lack of liquidity as bonuses dry up for city workers and huge job losses occur as banks and financial institutions curtail their lending. This is something that I pointed out as the eventual consequences of the credit crisis in August 2007. The expectation is for London's Credit Crisis to accelerate into 2009 on the back of the UK housing bust that will see London hit particularly hard given the extent of overvaluation of London's House Prices.

 

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Perfick. I'm not due back in London till 2010-11. I'll just sit the next couple of years out....

 

good plan. Fred Harrison would agree, I think. Where are you living now?

 

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I live in London and intend to buy at the end of 2010, as we need to move for my first son's school. I may rent a further year if necessary.

 

It does seem that London hasn't really been whacked yet, but has definitely fallen. The problem is that there appear to be relatively few forced sellers in the decent areas (unlike elsewhere in the UK). So I suspect we'll see the low end collapse quickly, followed by a later (and faster) capitulation at the top end.

 

Interestingly, I did notice some very quick falls in some high-end property asking prices a few days after the Lehman collapse.

 

I have thought about doing a colour-map of falls. I suspect you'd see epicentres of poverty showing high falls at the moment, surrounded by nicer areas with no falls.

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This sold house price data is a lagging indicator but so far big falls have not happened in London:

 

http://www.home.co.uk/guides/house_prices_...&lastyear=1

 

Asking prices are leading indicator and the median figures show stagnation....

 

http://www.home.co.uk/guides/asking_prices...&lastyear=1

 

Looking at the sales volumes though I expect sellers will cave soon enough.

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