to think thank god the London property bubble is looking like bursting

[lexiepix]

www.property-time.co.uk/news/Featured-News-227/articles/Latest-Index-Shows-London-Housing-Bubble-Has-Burst-111171.aspx

Its been long overdue and the lr figures for the last few months show that pretty much all of inner London is falling. I know some will have pain from this, but its been waiting to happen for ages and the longer it inflates the worse the pop will be.

For what it's worth I don't live in London, but I think when they do pop the whole country will be better off. When I was working in London most of my older workmates were on about the UK average pay (22-30), but living in property worth between 500-800k, and calling a 300k one bed flat "cheap"

Draylon - Let me know when you're up for election. You can count on my vote.

Edna and the last poster have hit the nail on the head, it's the foreign investors (Russian, Chinese etc) that have been investing heavily in London property, hence pushing up the demand and value of it. There doesn't seem to be any sign of that changing, so I don't see much of a correction in prices imminent.

I was discussing this with a friend the other day- we were saying that the decoupling is so extreme now that you can buy a frikkin estate in North Dorset (with cottage annex), employ a driver and commute every day and still have a lot of change vs. buying a house in Zone 2.

Labour created the boom and the Tories have just pumped it up more.

It's shit that you can make more money flipping some zone 6 poorhouse from the 19th century than a professional city worker gets paid working 60 fucking hours a week.

£500k for Delboy's flat in Peckham or what have you - it's just silly. The places haven't changed apart from a few hipster twats moving in, underneath the same problems, drugs, crime, worklessness, murder.

It really makes no sense to work in London unless you can get paid seven figures now, because a salary of say £150k is fuck all when it comes to buying a house - a flat in Brixton is within grasp, but that's absurd.

You only have to walk down the street, or just take a look on Streetview to see that these roads are not populated by the wealthy - they are rundown and dilapidated owned by ordinary working class people with 15-year-old cars who bought their houses years ago. Yes, you get the refurbs where someone puts in some laminate and a B&Q kitchen, but fundamentally these places are not (outside of a few key areas) rich people's areas and in the long-term it can't continue. It works now because of people leveraging earlier gains, but with the first-time buyer almost extinct in the London area, there will no longer be the new blood entering the pyramid scam on which the £3 million houses bought for £20k 40 years ago are based.

sterling is effectively a reserve currency and to the super wealthy a tax haven, if these were undermined and the money moved on then the property market would collapse.
The doomers need to be careful of what they wish for, if the market collapses the banks will again hold insuffient security and there isn't enough money to refinance the banking system a second time.
All western governments are well aware of this and have been flooding home economies by QE for years and will continue for many years.
If the cash machines stop working and there's no food in the shops most of the posts on here will look pretty trivial.

I think a crash is inevitable - bubbles always burst. And it's going to be painful.

I'm a bit mystified by the preference for variable rate mortgages. Yes, they're cheap now, but anyone who is stretching a bit to cover payments currently is going to be in a lot of trouble when rates go up.

Now that interest rates are low is a good time to lock in something manageable.

sterling is effectively a reserve currency and to the super wealthy the uk is a tax haven, if these were undermined and the money moved on then the property market would collapse.
The doomers need to be careful of what they wish for, if the market collapses the banks will hold insuffient security and there isn't enough money to refinance the banking system a second time.
All western governments are well aware of this and have been flooding home economies by QE for years and will continue for many more.
If the cash machines stop working and there's no food in the shops most of the posts on here will look pretty trivial.

Draylon you've got my vote too

the London bubble is a monstrosiut. NO PARTY has any new ideas on providing housing.

I'm not interested in the the welfare of those who bought a few months ago at an INSANE price into a price crash. You're part of the problem in paying mad prices that others refuse to pay. You chose to suck off the bankers' mega debt. Eat a crash, whilst others buy for the first time at a more reasonable price.

At least with all the QE the banks won't fail with a massive house price crash. Get them crashed. 50% off these levels would just a scratch against these prices. 75%-80% crash is fairer.

I think Littlecharlie is spot-on. The sooner it CRASHES and the faster it CRASHES the better for us all in the long run. On the other hand if you don't want your children and their children to ever own their own home then continue to buy into this lunacy.

I think littlecharlie is unhinged and needs to understand that any economic environment which involves a 50% crash in hOuse prices also involves a huge amount of knock on affects such as job losses and recession. The economy is interlinked.

Also although I'm not a first time buyer and expect to pay off my mortgage before the end of the decade, I find his/her attitude to first time buyers potential misery in the face of an unlikely crash disgusting. Being jealous of others because you can't afford to buy is nasty.

The problem is these inflated prices were built on Loan to earning values that were ludicrous. Now they have returned to the sensible 3x earnings they were before the mega boom, but the prices have stayed (and increased) to the massive loan to earnings. Meaning it is unachievable for most. I don't and can't believe it will ever crash to the values it 'needs' to, and i think if it did it would have such massive consequences.

I do believe building more shared buy / rent housing would help. Small developments of just those. BTL land lords couldn't buy them, but it would be stable homes for people with all the loveliness that comes with that. You then sell them as you would and move as you would normally. But it would cause a two tier housing system and I'm not sure how i feel about that.

Capricorn Im jealous of people who have / can buy. Im jealous that your kids can go to the same school throughout their childhood, they can decorate their kids rooms, they can plant trees and flowers in the garden and see them grow. They can buy a piece of furniture without thinking 'it might not fit in the next house', they can buy expensive curtains. Have a pet, put up a picture, not panic when you spill ribena on a carpet!
Be part of a community as you know your staying. Imagine how shit it is knowing you always have 2 months notice hanging over you.
Its shit
Really shit
So i am hugely jealous of people who own.

But i also recognise a crash would be awful for the economy

^Capricorn76 Sat 28-Feb-15 12:01:39

I think littlecharlie is unhinged and needs to understand that any economic environment which involves a 50% crash in hOuse prices also involves a huge amount of knock on affects such as job losses and recession. The economy is interlinked.

Also although I'm not a first time buyer and expect to pay off my mortgage before the end of the decade, I find his/her attitude to first time buyers potential misery in the face of an unlikely crash disgusting. Being jealous of others because you can't afford to buy is nasty.^

Capricorn. Why are you getting all emotional about it? If you want to play it that way, I think you're hideous in wanting one part of the market protected for values, at the expense of others who rent or who are waiting for lower prices so they can upsize. You're being nasty in wanting stupid high prices protected to benefit your vested interest.

Maybe it's just me but I've never felt jealous of anyone because we can't all have the same. I can't see how being jealous of others helps you achieve your goals?

Some people have more than me, I sometimes wish I could have more, I wish I could afford not to work, have a second home etc but I currently don't and I can live with that.

I'm sure there are people with far less than you who wish they could be in your position. Would you feel good about them wishing you ill because you have more than them? How does being jealous of you help them achieve more?

Littlecharlie I'm not going to get into a situation where I'm defending myself to you as it will make me look crazy too.

It's not going to burst. What we are seeing is a correction to the ridiculous spike that happened last summer. Where I live now a 2 bed cottage was going for £550,000 in the spring, then suddenly on for £7-800,000 in the summer! Most sold for between £650-700k. They've been sticking at around that mark for the last 6 months or so now.

I dare say in a few months we'll start to see prices creeping up. I think the majority of ours round here go to buy-to-let landlords but the vast majority don't come up for sale because people have lived in them for 20-30 years.

Those making the market rise are not those who haven't sold. It's just stupid to blame people whose property value has increased due to the actions of others who have sold.

We have hundreds of thousands of pounds in the bank, but we're not going to buy a massively overvalued house with it + jumbo mortgage on top.

Capricorns house price winners have been outbidding us at higher prices for years, paying prices some of us think are stupid high.

The house prices need to crash. There are now more people who own outright than who have mortgages. I don't see owners sobbing about position of dead money renters.

All I see on this thread is owners wanting others to pay high prices and tell those waiting for better value that they should be careful what they wish for, and how they're terrible people for wanting lower prices.

Wanting a house price crash really badly isn't gong to make it actually happen.

It is not as if wishing prices to crash, or go up, releases some power.

It is just wishful thinking, one way or another.

Noone is evil for wanting it to go up or down.

I wonder what will happen when interest rates finally go up a bit, that should create a correction.

capricorn
I'm not wishing ill on anyone, like I said a crash would be awful.
But I am jealous of people in an owned house who can give their children stability, a decorated room not magnolia, a pet and flowers in a garden, long term school friends. I'm not talking about mansions. It's a constant depression and anxiety that's out of my control that I can't fix.

£1.1million for a crappy ex council flat

www.rightmove.co.uk/property-for-sale/property-33261657.html

Who's going to lend in a crash?

Doesn't matter what the price is if the banks are bust and there's no credit.