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UK House prices: News & Views

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London Housing Market House Prices Forecast 2016-2018 - Video

 

http://www.marketoracle.co.uk/Article53319.html

London's housing bull market continues to gallop along at an astonishing pace which depending on which measure one looks at ranges from an annual rate of between 8% and 12%, and that the most recent surge higher has now lifted the average London house price to over an eye watering £600k! Pushing London house prices affordability ratio's upwards of X10 average London earnings, pushing London properties out of the reach of even the professional middle classes, let alone the army of working class necessary to keep the metropolis ticking over. Where many prospective home buyers are being forced to adopt extreme measures such as shared ownerships or be convinced by highly polished sales pitches that a tiny box studio flats priced at £300k+ in run down areas sold as up and coming are a very good deal! So buy now before it is snapped up by someone else, probably who has yet to even set foot in Britain which highlights London's ultimate safe haven status, not just for the worlds people but capital of tax evading billionaires and people of more ordinary means plowing billions into London's better than gold property market each year.

 

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Bizarre statistic - why are they determined to Buy at the Top?

 

London property worth £2.5 billion bought by Taiwanese buyers in 2015

Taiwan buyers account for more than a fifth of the estimated £12.4 billion spent on London property this year by overseas investors

London.jpg The price of property in London has risen by around 90% in the last decade

London’s property market has been popular with Taiwanese buyers who have splashed some £2.5 billion on high-profile purchases, including the home of Madame Tussauds, experts have said.

Taiwanese buyers have launched a spending spree from a virtual standing start to become one of the biggest spenders in London commercial property during the past 12 months, according to agents CBRE.

 

Its figures show Taiwan accounting for more than a fifth of the estimated £12.4 billion spent on London property this year by overseas buyers. International investors account for around 65% of the total £19 billion spent.

Alongside Madame Tussauds, bought by insurer Fubon Life, Taiwanese buyers have accounted for a clutch of City office buildings including the Walbrook, which Cathay Life paid £575 million for in the biggest individual deal of the year.

Business news in pictures

Non-Taiwanese buyers using Taiwanese cash have also accounted for deals worth hundreds of millions in London.

Taiwan’s push into London is due to a relaxation of rules in 2013 allowing pension funds to invest offshore

 

> http://www.independent.co.uk/news/business/news/london-property-worth-25-billion-bought-by-taiwanese-buyers-in-2015-a6778381.html

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London has a major property bubble problem, a report says
CNNMoney-Oct 30, 2015


"Average real dwelling prices have soared by almost 40% since the beginning of 2013, more than offsetting all losses triggered by the financial crisis," the report said.

UBS said London now faces the risk of a "substantial" price correction.

The average house price in London reached £499,997 ($766,053) in September, the U.K. government said earlier this week.
London's booming house prices are making home ownership difficult or even impossible for many average Londoners. Median annual salary in the British capital was just over £34,000 ($52,106) last year, official data show. And while house prices keep rising, real wages fell by 7% since 2007.
"It takes a skilled service-sector worker approximately 14 years of average earnings to be able to buy a 60 square meter (645 square foot) dwelling," the UBS said.
That compares to 11 years in New York and 13 years in Paris, the report said.

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TALLEST BUILDING - is this a sign of a top? (in place)

 

78e4e651-25f0-4886-ac7f-24e0e1f10272-0.j

 

It is being pitched to me by email:

 

I am pleased to be able to offer you the opportunity to buy into one of London’s most exciting developments yet…..SOUTH QUAY PLAZA. Dubbed as London’s YOUNGEST landmark, this is going to be a fantastic addition to London’s already fabulous skyline. Designed by world renowned architects FORSTER AND PARTNERS, this is set to be Europe’s TALLEST residential tower.

 

Buying any investment is ALWAYS about timing and with Berkeley, one of London’s highest rated developers, it is fair to say that buying in the early phase will pay dividends. As with every other Berkeley development in London, buyers who buy in early always make great gains in capital values, with value being added at the release of each subsequent phase. Further bolstered by the amazing creativity and design that comes with Foster and Partners, this is going to be a truly exceptional development and one that will be a future landmark of London.

 

With the expansion of Canary Wharf and the almost doubling of the current work force, Canary Wharf is set to go through some major changes in the coming years. Forecasters are predicting an increase in values from the current level of circa £1150 psf, to well in excess of £1650 psf in 2019 once the new Cross Rail line is in operation and the expansion of Canary Wharf begins to come through. The development of Wood Wharf is set to add even further value to the area as a whole and help in the transformation which is set to come. The creation of London’s 3rd financial and business district with the Asian Business Port (http://abp-london.co.uk) will further bolster the area as a whole and create further demand for property in the area. We are currently witnessing the evolution of London as a city with the emergence and further development of the already very popular CBD location

 

Please see attached a fact sheet and prices for the development, together with links below for the brochure and floor plans. Also below are a few images that will help set the scene for this hugely impressive development and will give you a real taste of what’s to come.

 

The development integrates 1.5 acres of high quality external public space also, creating more than just a stand-alone building.

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Everyone panic: Generation Rent is fleeing London

Is London bracing for a mass exodus of millennials?

The capital’s exorbitant housing costs are hardly news, but a new survey suggests that the situation is getting so bad that more than 80 per cent of London’s twenty-somethings may be sent packing to other parts of the UK. At £1,507, the average monthly rent for a Londoner is more than double the UK average - and not something everyone can comfortably, or for that matter uncomfortably, afford.

City A.M.
=
It is about time people woke up!
I don't know if it is the millennials who will flee... Some will - those who can get an acceptable job.
But the greater number fleeing may be boomers who have retired, and no longer need to go to daily jobs in London.
Waking up is smart, isn't it?

 

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Prime London popping:

http://www.marketwatch.com/story/luxury-real-estate-boom-is-dying-down-as-global-rout-bites-investors-2016-01-21?siteid=bigcharts&dist=bigcharts

 

"LONDON—In August 2014, when the housing market here was on a tear, a two-bedroom condominium in one of the most expensive neighborhoods went up for sale at £3.25 million ($4.64 million), a 67% premium to its purchase price six months earlier. (GBP 1.95mn?)

 

The redbrick home on Cadogan Gardens in Knightsbridge is still unsold, and expectations have been revised. The price has been cut three times, the latest at the start of this year, to £2.5 million.

In London’s priciest neighborhoods, the housing boom is over."

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GBP 1.95 mn to 2.5 million would still be a good profit for that original buyer.

 

Maybe the market will deliver to him a loss, since he seems to be just "chasing the market lower" with an unrealistic offer price.

I have seen many people behave like that over the years

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GBP 1.95 mn to 2.5 million would still be a good profit for that original buyer.

 

Maybe the market will deliver to him a loss, since he seems to be just "chasing the market lower" with an unrealistic offer price.

I have seen many people behave like that over the years

 

Minus transaction costs, of course.. which would be considerable these days with the new 10% and 12% marginal bands, although I don't think they were in place when the original purchase was made.

There is no way the seller would be able to pull that sort of flipping trick today.. if they manage to pull it off at all

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Yes.

And those heavy transaction costs will deter new buyers also

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http://sluggerotoole.com/2016/01/25/limerick-tops-global-property-price-affordability-index-for-the-second-year-in-a-row/

 

 

The latest release of Demographia’s annual survey of house price affordability has created headlines for highlighting how chronically unaffordable property is in Hong Kong. Median property prices in the territory were a staggering 19 times median household incomes in the third quarter of 2015, a new record in the twelve years that the survey has been published. Hong Kong has beaten its own record set in 2014 of properties being valued at 17 times median incomes, which in itself beat the record it set in 2013 (14.9).

What hasn’t received quite so much attention is at the other end of the scale, properties which are affordable compared to median incomes. Remarkably, out of the 367 property markets tracked by the survey across nine countries over four continents, it is the property market in Limerick which is judged to be the most affordable.

The median property in Limerick in 2015 was €100,000, and with median household incomes in the area of €51,200, a typical house can be bought for less than two years’ worth of gross income, a fraction of the nineteen years’ worth of income a property in Hong Kong would cost.

Limerick’s house price multiple of 1.8 is the lowest multiple outside the United States over the period that the survey has ran, and even inside the United States the only markets with appreciably lower income multiples have been seen in the famously troubled real estate markets in Michigan (Flint, Detroit and Saginaw) in 2011 and 2012, and all have seen substantial rebounds since. In both 2014 and 2015, it has been the nearby market of Waterford which was the second most affordable property market, with an income multiple of 2.1 in 2015 (down from 2.2 in 2014).

The graph below shows a selection of house price multiples across the UK & Ireland. It is notable how, despite the ongoing boom in London property prices, compared to incomes they still haven’t reached the heights experienced in Belfast in 2007 (Belfast is the only Northern Ireland property market tracked by the survey).

UK-Ireland-Property-Prices-630x353.png

And to put these markets in a global context, this chart shows Belfast, London, Dublin and Limerick compared with New York, Sydney and Hong Kong.

Global-Property-Prices-630x353.png

 

 

http://www.demographia.com/dhi.pdf

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Buy in Limerick?

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Perhaps swapping a Hong Kong flat for this residence :

Glin Castle, Glin, Co. Limerick

might suit a large family or one with regular guests?

 

http://www.rightmove.co.uk/overseas-property/property-53084078.html

 

I have already done a Swap

 

I sold my 550sf flat in HK for just over 7-figures, in USD

 

And invested the PROFITS in three flats in Makati, Philippines, totaling : 22+59+28= 109 S x 10.73 = 1170 sf

and a house in Philadelphia (1300sf), rented out, and yielding 11%+ pretax

 

(so 550sf, became : 2,470sf, that's + 349% sf, most of which will be rented out)

 

And had enough left over to buys some gold.

 

The remaining capital went into a HK-quoted property share with a good yield (more than rent would have acheived)

and in HKD deposits

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Sounds good. I've been wondering how best to reduce risk to various pension funds and looking at farmland and possibly property.

 

I'm very wary of any venture in the Philippines being owed a six figure sum that I do not expect to collect. I hope your arrangements are more secure.

 

Given this and other early stage ventures, I'm much more risk averse now and probably very overweight in gold.

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Help to buy distorting the market? I have two young adult sons - both earning decent money (say, about twice the UK average each). They have been looking at getting on to the bloody 'ladder' and, if they buy together, can get a mortgage of getting on for half a million. (I know, I know.) They have been looking at local new builds (East Berkshire in 'Silicon Triangle' between Reading, Bracknell and Basingstoke) and I am now convinced that builders are simply adding on the 20% help to buy discount to the price. A new build 3 bed semi was sent to them the other day - in a (reasonably pleasant) road in Wokingham - with excellent ability to hear the M4 just up the road. The builders want £595k for it. Which is probably £150k over the top. There is a bit of volume housebuilding going on in the same area - all bang next to the motorways. The prices are eyewatering - a 4 bed town house with a back garden barely big enough for a table and chairs - £485k - AFTER THE DISCOUNT!

 

I tell you, the builders are adding the 20% on to the price. So much for helping first time buyers.

 

And a final little moan - what on earth are planners up to these days? The car parking on new estates is a joke. There is an estate near Bracknell with about 1500 houses on it - you get wheel clamped if you park on the main road! Most of the houses are about 4 feet from the pavement - so, no chance of off road parking, and the larger (I use the word loosely) 4 bed houses - have a single garage and one parking space - buried somewhere out the back. Yet if you have the cheek to want to build an extension on your house, the idiots demand two or three additional off road parking spaces and a turning circle. The world is going nuts.

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Help to buy distorting the market? I have two young adult sons - both earning decent money (say, about twice the UK average each). They have been looking at getting on to the bloody 'ladder' and, if they buy together, can get a mortgage of getting on for half a million. (I know, I know.) They have been looking at local new builds (East Berkshire in 'Silicon Triangle' between Reading, Bracknell and Basingstoke) and I am now convinced that builders are simply adding on the 20% help to buy discount to the price. A new build 3 bed semi was sent to them the other day - in a (reasonably pleasant) road in Wokingham - with excellent ability to hear the M4 just up the road. The builders want £595k for it. Which is probably £150k over the top. There is a bit of volume housebuilding going on in the same area - all bang next to the motorways. The prices are eyewatering - a 4 bed town house with a back garden barely big enough for a table and chairs - £485k - AFTER THE DISCOUNT!

 

I tell you, the builders are adding the 20% on to the price. So much for helping first time buyers.

 

And a final little moan - what on earth are planners up to these days? The car parking on new estates is a joke. There is an estate near Bracknell with about 1500 houses on it - you get wheel clamped if you park on the main road! Most of the houses are about 4 feet from the pavement - so, no chance of off road parking, and the larger (I use the word loosely) 4 bed houses - have a single garage and one parking space - buried somewhere out the back. Yet if you have the cheek to want to build an extension on your house, the idiots demand two or three additional off road parking spaces and a turning circle. The world is going nuts.

 

This is surely the case... even if I take off my cynic's glasses, the developers at best are chasing the market up and at worst slamming 20% on.

 

I never thought I'd check out this government scheme but out of desperation I did. Conclusion? Looking through the stuff on offer through Help To Buy, its like they want to squeeze everyone into high-rise flats if they ahve anything less than 500k to spend. We might just about stretch to a house but will be overleveraged and buying into what feels like an insane market place (prices shooting up easily 10% a year) even in the less glamorous NW London suburbs.

 

On a personal note, I can get a 280k mortgage which on a 55% basis means we could 'afford' a 510k house. There's nothing like that in the new build sector... the cheapest we can find is £585k (http://www.bellway.co.uk/new-homes/north-london/abbotswood-park). Our only choice will be to move further out. I dont know if we'll see the end of this crazy setup in my lifetime anyway (im in my 40's).

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Is this a sign of the end of London's long bull market in property?

 

This article suggests that BTL landord's are struggling with low yields (falling rents?)

 

I'm not really up to date, so it would be interesting to hear people's comments

 

'I've doubled my yield through letting ex-counci houses' By Olivia Rudgard | TheTelegraph – 17 hours ago

How Matthew Bennett is tackling new buy-to-let tax: ex-local authority property

 

Dwindling buy-to-let yields have scared off many investors, but there are ways of making the market work.

‘Kerb appeal’ might be a superficially attractive way of choosing a buy-to-let property, but in a difficult market, investors are finding a more pragmatic approach brings the largest returns.

Yields in expensive areas such as London and the South West can be as low as 3pc, and are likely to be hit hard by new tax rules which mean landlords can no longer deduct the cost of their mortgage interest from their rental income before calculating their tax bill.

 

• Nine ways to increase your buy-to-let profits

• Buy-to-let warning: Immigration checks apply from February 1

 

Mapped: how buy-to-let will lose money in 91pc of regions by 2021

This is a particularly useful trend in urban areas where demand exceeds supply.

It’s also a good prospect if your investment is more short-term. While the average landlord invests for a 10-15 year period, if you buy now and can achieve high yields in the short term, you could even sell before you are affected by the higher taxes on rental income in 2021. Local authority-built properties tend to accrue in value more slowly than others in the same area, so you might not make as much on the price itself, but the high rental yields make it a better option if you want to sell it on after a few years.

==

> https://uk.finance.yahoo.com/news/ive-doubled-yield-letting-ex-190502680.html

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The Crossrail effect - per Dickens Yard email

+ 47% increase in Ealing property prices over the past two years, 28% in the last year alone.
+ 50% increase in house prices predicted over the ext 5 years within a 750m radius of Ealing Broadway Station.
+ GBP 5.5 Billion added to residential and commercial property values along the Crossrail route by 2021.
+ GBP 1 Billion in investment has been put into the improvement of Ealing's infrastructure, residential stock and retail space as part of the wider improvements associated with Crossrail.

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