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Central LONDON Property: Databank & Charts

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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.

 

Hang on a minute....

 

In posh areas like Chelsea and Knightsbridge house prices are collapsing...

 

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

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

 

Obviously nearly all sales are flats.

 

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if you are using firefox then there is a great widget called property bee, that allows you to track the historical changes to house prices as recorded on rightmove, well worth a look.

 

Spreadfair have a pretty active futures market on London house prices,

This is the Y10 London price.

http://www.spreadfair.com/chartpage.jsp?productOid=551293

 

 

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WHERE HAVE ALL THE HEDGIES GONE??

=====

 

EXCERPT / from an email from a London-based friend:

 

(he is looking for office space in London):

 

- Prices shrinking with every day we wait; I have seen at least xx properties in the last 3 weeks, all around Mayfair. Y of these were occupied by former hedge funds - all had simply vacated, leaving their over-specced furniture and IT systems behind,

 

- Hedge fund redemptions here are still not yet out of the system - there is a typical 3 month moratorium on payments from HF redemptions here - most of them will have been declared in September, so we must expect further forced asset sales leading up to Christmas

 

- Several fellow parents at my children's school are HF/PE operators - looking very glum- some are even trying to get back into the (real) workforce

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Rental falls outstrip decline in sale prices. What’s going on?

 

Surely rentals are booming because no one has confidence in the sales market and even if they do, they can’t raise a mortgage? Well no, when the supply of property on the rentals market increases year on year by 92% and the City enters one of those periods when large numbers of people are ejected, the demand / supply relationship gets turned on its head. Overall, renting remains the preferred option, so the volume of transactions overall are increasing. However, the activity of the market is heavily skewed towards the lower end and, as a result, on average, there have been falls in the rental value of 4 bedroom houses across Douglas & Gordon’s 10 letting offices of 15% - 20% in the final quarter alone. In contrast, 1 bedroom rental values have fallen on average by around 5% / 6%. Average rental values in Douglas & Gordon’s areas have fallen 10.6% in the final quarter of 2008, bringing the total decline in the calendar year 2008 to 11.2%.

 

On the sales side

 

Average values have declined by a further 8.9% in the final quarter, bringing the annual decline in values to 20%. The peak of the activity in the sales market in 2008 was April, with a small spike at the end of November. This means that the normally prime months of May, June and September / October saw very little activity for reasons that will be pretty obvious to all readers.

 

“Averages are Averages”

 

As we have said many times before in our Market Reports, “averages are averages”. The ones quoted above are specific to Douglas & Gordon’s areas of operation. They are derived from a revaluation of a set portfolio of properties of different sizes, but of a standard condition and quality. They are useful to an extent if you are a property owner in this territory in a way that any national statistics quoted are comparatively useless. The properties being valued vary in size, but what they have in common is that they have no major snags i.e. they are not situated on busy roads, they are not basements, they are not a 4th floor walk up, and in a weak market such as we are currently facing, the price of properties with any kind of handicap will suffer more than those without.

 

 

http://www.douglasandgordon.com/dng/market...ewareOfAmateurs

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With gold at £650 per ounce and latest nationwide showing 257,000 as average London property price (Jan 9th - it will be lower already) that means we are now at 395 ounces for the average London house. Looking at the chart, we are at the first level of support. I think we will see 300 by the spring.

 

HP_UK_in_gold_1973.PNG

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ANOTHER WEIGHT on London Property

 

Rental income on wane as homeowners stoke up supply by letting rooms

 

Hard-up homeowners trying to let a spare bedroom is being pinpointed as one of the factors keeping down rental prices, says Spareroom.co.uk.

 

The website, which matches prospective landlords with tenants, conducts a monthly survey of the rental market. It found that average prices in the UK fell 0.5 per cent during December. While year-on-year rents were 4 per cent higher, Matt Hutchinson from the website said the rental market is looking particularly weak and is likely to remain so through 2009.

 

"Multiple factors are affecting demand for rental properties," he explained. "The number of overseas workers coming to the UK has plummeted owing to the weak pound and a tough jobs market. And companies are no longer moving employees around the country to the same extent: a key driver of the market.

 

"Added to this, 27,000 more homeowners took in a lodger last year to cope with pressures on household income and meet mortgage repayments. We expect at least another 35,000 households to take in a lodger this year, adding to the supply."

 

As a result of all this, Mr Hutchinson continued, "rents are likely to be under pressure for some time".

 

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Excellent question. The answer is that they actually do depreciate... see current -20% depreciation from peak in 2007 !!! Also some specific cars can increase in value for antique collectors or specialty buyers.

 

The full answer is probably more complex than that, but for the most part is a matter of good old demand and supply. And for demand I mean actual demand capable of purchase, not just wish list demand.

 

Depreciation of UK Houses =

 

This point is often forgotten, and the usual house price indices obscure this issue,

by taking the "average price from their loan applications", rather than specific homes,

the Indices pick up an "average" home that gets upgrade and modernised with no adjustment

for the price of that work -

 

In effect, the Index is heavily spun in a bullish direction, to help and maintain confidence.

Dont fall for this VI scam !

 

/see: http://www.housepricecrash.co.uk/forum/ind...30&start=30

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Signs of a possible top ... update

 

zzzzp.gif

 

If that downside volume picks up, that would be an indication that the Dead Cat Bounce

may now be fading. I'm not predicting that just yet, but I am watching BDEV and PSN carefully

to see if they continue their slide.

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Here is a mixed message from the leading property auctioneer after the recent September auction:

 

"Auctioneer and partner, Gary Murphy commented: "There is clear evidence in the room that confidence in property is continuing to strenghten. From the opening moments of the sale, bidding was strong and determined across all sectors. The most noticeable improvement in demand was for prime Central London unmodernised vacant flats. It was virtually insatiable. The problem for us is lack of stock, not lack of demand. For example, flats in Hyde Park Gate and Kensington Gate in Chelsea and in Ormonde Gate, Kensington all significantly exceeded expectations". (*see Highlights below)

 

One sector which had formerly fallen victim to the recession, land and buildings for redevelopment, is now showing signs of a healthy recovery. Lots to note included a Grade II Listed manor house in 1.23 acres (Lot 88 - sold for the London Borough of Hillingdon at £1.295m), a small corner site in Holloway, London N7 (Lot 108 - sold for £1.115m) and a site of 0.21 acres in Bromley (Lot 243 - sold for 600,000). (*see Highlights below)

 

Commenting further on the recovery in market conditions, Murphy said:

 

"The level of repossession sales has been noticeably reduced in the post-summer auction rooms as the market begins to show signs of recovery. I think however it's too soon to say whether this trend is unlikely to be reversed. We may see higher volumes of repossession sales over the next 12 months and this view is shared by some of our lender clients."

 

Cash rich investors fought keenly for income. However, Murphy cautioned:

 

"Although the market is improving it is still fundamentally fragile. Assured shorthold investments are principally yield driven in this sort of climate. Sellers therefore need to be conscious of price sensitivities when planning AST disposals."

 

Yields Analysis

Assured Shorthold Tenancies 9.01%

Regulated Tenancies 4.82%

Ground Rents 3.99% "

 

 

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At this rate by 2012 the average price of property in London will be £1,000,000 thanks to those 12 sales to Hedge Fund Managers.

 

Hahah yeah amazing 6.5% in one month, 12.6% in Ham & Fulham !!

 

 

 

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Hahah yeah amazing 6.5% in one month, 12.6% in Ham & Fulham !!

And now back down at a similar rate, I think

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Signs of a possible top ... update

 

zzzzp.gif

 

If that downside volume picks up, that would be an indication that the Dead Cat Bounce

may now be fading. I'm not predicting that just yet, but I am watching BDEV and PSN carefully

to see if they continue their slide.

In fact, BDEV and PSN held up until last October

 

What's next - as we head into October 2010? ... update : BDEV-2009/10

zzzzj.gif

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Chinese are top spenders in Prime London property

 

http://www.ft.com/cms/s/2/054b7c32-570e-11e0-9035-00144feab49a.html#axzz1Hj9zDZq1

 

Chinese are top spenders on prime property

 

Buyers from mainland China are now the biggest spenders in the prime central London property market, overtaking Russians as the buyers of the most expensive houses over the past year, according to new research.

 

Chinese buyers spent an average of £6.5m on top-end property purchases in the 12 months to the end of February, outspending the 60 other nationalities that have bought in London over the same timeframe.

 

According to figures from Knight Frank, investors from Malaysia and Hong Kong were the next biggest spenders, paying average purchase prices of £6.2m and £5.5m respectively.

 

Overpriced London properties are being sold with real enthusiasm in Hong Kong

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LONDON'S FALLING - Let's acknowledge that! - and Kensington's cold as ice

 

Mo.: Rt'mov : London : Hometrack %/ Nt'wide H-oldSA Halif.SA Hal.NSA: HNindex : mom : DelusIdx

2011

J. : : 223,122 : 413,259 : 154,300 - 0.5% / 161,211 = n/a = 164,173 161,470 : £161,341 :- 0.33% :138.3% :

F. : : 230,030 : 430,680 : 154,000 - 0.2% / 161,183 = n/a = 162,657 161,680 : £161,432 :+ 0.06% :142.5% :

M : : 231,790 : 424,307 :

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

mom : + 0.8% : - 1.5% : Est.DI: 143.6% /: -0.02%: = n/a = : -0.92% : +0.13%

 

London’s Worst Performers March 2011

London's BOTTOM 5

-------------------- Avg. Price : Mar 2011 / Feb 2011

================================== : Monthly Change

Ealing----------------------------- £397,393 -- £418,898 : -5.1%

Bromley-------------------------- £321,739 -- £339,139 : -5.1%

Kensington and Chelsea £1,776,895 £1,870,082 : -5.0%

Merton--------------------------- £403,916 -- £424,510 : -4.9%

Enfield--------------------------- £315,561 -- £331,418 : -4.8%

 

This this info to your London Estate agent, especially if he is trying to sell you a new property in Ealing

 

branch_photo_75079_0000.jpeg

Dickens Yard, Ealing Broadway

 

Psst! Want to buy some overvalued London property ??

 

/see: http://www.rightmove.co.uk/developer/branch/St-George/Dickens-Yard-75079.html

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Chinese are top spenders on prime property

 

Buyers from mainland China are now the biggest spenders in the prime central London property market, overtaking Russians as the buyers of the most expensive houses over the past year, according to new research.

 

Chinese buyers spent an average of £6.5m on top-end property purchases in the 12 months to the end of February, outspending the 60 other nationalities that have bought in London over the same timeframe.

 

According to figures from Knight Frank, investors from Malaysia and Hong Kong were the next biggest spenders, paying average purchase prices of £6.2m and £5.5m respectively.

 

Overpriced London properties are being sold with real enthusiasm in Hong Kong

 

 

Here is the Knight Frank quarterly review for Prime London

 

http://resources.knightfrank.com/GetResearchResource.ashx?versionid=556&type=1

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Neighbours sold their house this week after 3 days on market. 5 bidders put offers in.

No crash here.

The part of the market that is still healthy, narrows and narrows.

 

Watch the figures, they show CRASH CRUISE speed is alive and well for the UK as a whole,

and Rightmove's latest suggests it is now spreading to London.

 

The real CRUSHER may be higher taxes on property, especially high end. Do you think this can be resisted?:

 

Do you see a PATTERN here ?

 

(threads from HPC):

 

+ "Property Levies To Reduce Income Tax" / Top end...a start

 

+ Those Who Benefitted The Most Should Contribute The Most

 

+ Why Do Newbuilds Suck?

 

There's a BIG RISK (of tax rises) for anyone buying expensive new property in London now, but no one is talking about it.

 

BTLers are (eventually) going to be a target. Look at this cigarette butt and think: BTL:

 

1786015Comp.jpg

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There are fools, godd@mned fools, and there are foreigners...

 

Here is the Knight Frank quarterly review for Prime London

http://resources.knightfrank.com/GetResearchResource.ashx?versionid=556&type=1

 

The headlines are fairly clear: rents are up, prices have recovered from last autumn’s hiatus, demand from tenants and buyers is healthy but supply everywhere is stubbornly low.

 

Behind the headlines there is a more complex picture across the marketplace, with investment requirements and international demand becoming evermore critical in terms of determining the direction of the market. International buyers, the saviour of the market in early 2009, have now become omnipresent.

 

The desire of Asian, European and Middle Eastern investors to buy into the London market has been soaking up a huge slice of the new-build market and overseas demand is now the biggest single contributor to price growth.

 

Replace the word "desire" with "foolishness" and they have described how I see the market too. Time will tell whether or not those buyers are really being foolish.

 

One thing which would quickly shrink demand from foreigners would be new taxes on high end properties. I reckon this is inevitable, and we may even see new taxes within 2011.

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Here is an antidotal tale. Today I did a remortgage valuation. The house was bought in 2005 at £485,000 at just shy of a 100% LTV. The same house today is worth £750,000 yet the applicant now owes £490,000. This is replicated all over.

 

At the end of the day most people waiting for a house price crash need to preserve their purchasing power. A significant nominal crash will NOT happen. So far against gold they have crashed spectacular. One should have sold out in 2008 and converted their £ savings and bought gold. Did you know Prime London for a house over £2milion has gone up 57% since 2008. Compare this agaisnt golds rise since 2008 and you will calculate a huge drop against Gold.

This story demonstrates my contention:

 

The UK has not "bit the bullet" on Housing yet - particularly in the London area.

 

With the US, Ireland, Spain, and practically every other country in the Western world have seen a large correction, why has the London area escaped?

 

ANSWER:

Banks never really became disciplined in London, the government kept pumping out housing benefits, and ultra-low rates arrived in the "nick of time" back in late 2008.

 

I think the bullet will get bit, and London will suffer too, and when prices come down, all those debt fueled households that have built their debt up to beyond the high prices they paid back in 2004-2007 are going to be in a world of pain.

 

There is no magic way of boosting incomes in the UK, and UK interest rates cannot stay at ultra-low levels forever. Inflation rates are now well above base rates. This type of negative rate cannot be sustained for long, since it encourages malinvestments and distorts the economy.

 

The debt crisis which is now ravaging Greece and Ireland, will sometime soon show up in the UK. That will push borrowing rates for the UK government up, and I think this will be the pin that finally bursts the UK housing bubble.

 

The sad news is that Go-down Brown is no longer in centre stage to absorb the full share of the blame that he richly deserves.

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