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

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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"

I see that what has happened really is the same as we British have done around the rest of the world - an example:

We buy up lots of lovely holiday homes in a rural seaside town somewhere on the Med, and this pushes up the prices so that the locals can't buy anymore (although some of the locals do in fact make more money than they could ever have dreamed of by selling their land, but most cannot ever hope to buy again) and then, when we want to sell because we want to release our money for cruises or something, we refuse to take less than we paid originally, so those houses remain on the market for 2, 3, 4 even 5 or more years. Still blocking the locals.

This is what has happened in London. Lots of foreign cash buyers, as well as ludicrously wealthy Brits, have done exactly as above. Whether there is still a market for those properties when they want to sell remains to be seen because the ordinary man in the street certainly can't afford to buy them.

I've just moved out of Greater London ( Bromley) after 13 years. I have 3 DC with my DH. We rented for years and lived in our last house for 6 years. We had kids in less than ideal circumstances so hadn't been able to buy. My husband was born and brought up in Bromley and my children have been attending the same primary for 6-7 years.

We have just managed to buy a small 4 bed house in Kent which needs complete refurbishment . My inlaws have leant us some of the deposit and we saved too. It's been a huge upheaval and I didn't want to leave London but after renting for more than 20 years, I am happy to get away from the awful insecurity of it all and paying my rogue landlord £1,550 a month for a run down, inefficient grubby rental that had no work done for over 15 years.

We spent money looking after it as he didn't pay a penny on internal or external maintenance. He issued us with a Section 21 and then said he wanted an extra 350 PCM or we leave! So we paid the extra for 5 months while we bought the house.

I hate the fact that we have been priced out but even if I went back to full time work , we still couldn't ever afford a 4 bedroomed house. It's about 5- 800k for a 3 or 4 bed house in Bromley. What a joke! The whole area is populated with little old ladies in big 3 bed semis, wealthy buy to let landlords and foreign investors.

My next door neighbour lived in her 3 bed semi for 53 years then sold it last summer to a banker with 1 adult child at uni for above the asking price of £500k - cash. She is now planning an extension and then going to sell up again. I like the woman who bought the house , she is a successful single mum so all credit to her but it shows how London is pricing ordinary families out completely.

Bromley has changed hugely and not for the better unfortunately. It's becoming overcrowded, dirty and more like Lewisham every week ( sorry Lewisham) . But the prices are still eye watering yet the Bromley High street is run down; only The Glades is nice.

My DH earns a very good salary in town and will have to commute further now - 1hr,15 mins plus tube of 5 mins each way. And the kids have to start new schools as well plus I'm much further away from my friends. But it's worth it, otherwise we would have stayed renting for another 10 years and bought my landlord's house for him.

We need a correction in the market, it's just hideous in the South. I only am finally on the ladder because of my inlaws - we could never have saved the deposit on our own , we just couldn't save enough. They have loaned us the money so I know I'm very lucky.

This is what we have had to do in order to buy- we could never buy in London. I'm very grateful for what I have. Having rented for so long, I really really want to see significant rental reform; private landlords need proper regulation. My lanlord broke the law contractually many times and got away with it as he managed the property.

How anyone on a normal salary is affording as a first time buyer family home in London and parts of the South East like Sevenoaks, St Albans and Guildford is beyond me. I'm sure there will be many more young families like us who will leave London over the coming years if prices continue to rise.

It's beyond me too gypsy. Take a look at prices around Frensham and Farnham in Surrey. 2 bed terraced cottages are £275k or more. How does a person on an average wage of say £25k, with a spouse maybe working part-time earning say £10k, and a child, get a mortgage to cover that? 35k x 3 = £105k. So you need another £170k from somewhere. Even if your lender gave you four times joint income, 4 x £35k = £140k. You still have to find £135k cash from somewhere.

Completely agree about proper regulation of landlords. I looked at a number of houses for sale that had lost a sitting tenant and which were basically unmodernised. Really shocking, and this in a nice leafy suburb. If there are minimum standards for habitation they certainly aren't being enforced.

It's very hard. My parents had to save for 13 years and put off children in all that time! just to afford a house in 1961. They found it pretty hard then. Many people did not buy at all then.
The house I first bought when I was just married now sells for about £350k. Outer London although this one (similar) is much much better done up than those houses were 30 years ago when we first bought www.rightmove.co.uk/house-prices/detailMatching.html/svr/3124?prop=45262691&sale=51020894&country=england.

You could borrow to buy that £350k London terraced house on the same careers we were in - law and teaching by the way today so it is no less affordable now. Now that may just be that lawyers and teachers have had good salary rises over the last 30 years. I certainly remember my midwife being very surprised when she came to the house that we actually owned it rather than just renting it all those years ago as many people rented.

We can certainly build more. Only something like 2% of the UK is built on. Only something like 6% is classified as urban. We have plenty of space.

And we really need a crash. Fewer people would be affected negatively than are being affected negatively now, every day. Even at the very worst point of the 90s crash, only 10% of households were in negative equity - around 1.5 million. Whereas in the situation we have now, 2.5 million households are on housing waiting lists. Hundreds of thousands of families are living in temporary accommodation (which incidentally costs ££££s so even if you think 'oh well that doesn't affect me' it actually does because your tax money, and billions of it, is going to landlords who stuff entire families into single rooms with not only shared but substandard cooking/toilet facilities) and millions more are renting but, despite working, are unable to afford their rent so again £billions of tax-payers' money goes to private landlords in the form of housing benefit.

So the situation that we have at the moment is not only causing misery in terms of substandard properties (1 in 3 rentals or 2 million according to a recent report) but also bleeding the Treasury dry in payments to landlords (£10bn a year, every year), and that is money that comes from all of us. Thus far more people are being affected, now, in a very real sense, by what people are at last waking up to see is a housing crisis (as opposed to a housing boom) than would be affected by even the kind of drastic correction in house prices that we saw in the 90s.

And actually, as for the households that would be affected by negative equity, all that we need is a bit of creative thinking. We're currently paying out £22bn a year in housing benefit to tenants, over £10bn of which goes to private landlords. If there was a crash, and houses and therefore rents became more affordable, that amount would be much less. Who's to say (and yes I know it comes from different pots but it's all public money) that the money saved from that couldn't go to compensate the people in negative equity who needed to move/sell up but couldn't afford to? I bet that it would cost the country a lot less than £22billion a year to do that, especially if you tacked some kind of residency qualification onto it so that the money only went to households who were UK tax-payers and none of it went to the 'investors' who have been using London as some kind of housing casino for the last 10 years.

I agree, it is very difficult to get on the property ladder if you already have a child or children due to childcare and childcare costs. We have only done it after many years and without that family loan we wouldn't have ever left renting. Many people , like myself have a child for lots of reasons before they buy a house and you just can't save with a child(ren).

I hate renting with a passion; so many unscrupulous landlords and agents flouting the law, exploring tenants and you can be thrown out with 2 months notice. The standard of our home was poor; an absolete boiler, broken windows, exposed external bricks, damp, old worn out fittings, no heating in our bathroom and 6 broken electric sockets to name but a few of the problems we had. And this property is currently being advertised at £1,600 PCM! It's band E council tax and unless you put a very large family in there, you cannot get housing benefit due to the cap.

I don't know what the answer is to the housing crisis but to see landlords able to exploit those not in the housing ladder makes my blood boil to the brim. Buy to let is a scourge and it's the children who will lose out as well, being moved frequently or every few years because of those dreadful Assured Shorthold Tenancies. My sister owns 4 buy to lets in the Maidenhead area, preventing more young people getting on the ladder. I do understand it's a good investment and her reasons and I don't hold it against her but it's just so unfair on those caught in the rental trap.

We do need to build more houses, cap buy to let and it's tax relief. Renting would be ok if you were protected as a tenant as in say Germany but you have few rights in the UK.

The Government help to buy schemes and 20 percent price reductions on new builds are all very well , but only 1 in every thousand mortgage applications with a 5 percent deposit are approved making it almost impossible to buy still without a bigger deposit.

We got turned down with 5 percent trying to use help to buy because 8 years ago my DH used a pay day loan when we were struggling. The bank checked back 8 years ! He hadn't missed any payments for more than 5 years. They are that strict now. Banks can and do check often up to 10 years back - mortgage companies are still not lending with 5 percent. Only once we could get the magic 10 percent did we secure the mortgage. How many young people under 35 have not had any debt?! Virtually none unless you have always lived at home , saved and not gone to uni. It's still so difficult, despite the rhetoric of Gov spin on how all the help available.

Surely if there is a crash many people won't be able to afford to sell (except death / divorce forced sales), so there won't be significant new supply and therefore the supply / demand equation will still be completely supportive of a reasonably buoyant market...?

Yes, we need to invest more and consume less, and control the housing market by increasing supply. Its really not rocket science, the way ahead is clear, but the political stomach is not.

You see, people LIKE over-consuming, and they LIKE their house price going up because it makes them feel rich and then they feel less guilty about all the consumption they're doing.

It takes a brave government to turn on the lights in the disco just when the music is cranking up. Maybe we need an independent fiscal authority like we have an independent monetary authority who wouldn't be afraid to take tough long term decisions.

There will be significant supply there always is. The can't afford to sell argument only affects a minority People wanting to move who haven't over borrowed will be able to and it will be cheaper. BTL landlords will offload investments which they are keeping purely for quick capital gain. It needs to happen

gypsygirl, agree with you about btl. That, along with ASTs, has caused absolute misery for the 6 million (and counting) households in the UK who rent. Also with TalkInPeace upthread about property taxes - ffs, even the US, bastion of the free market, has property taxes. We are one of the very few countries in the world that don't tax assets in this way. Probably because all of our politicians - and that's Labour and Tory - are also owners of multiple properties.

Don't even get me started on the billions paid out in HB to private landlords who flout the law, don't keep their properties to a good standard and throw out tenants on a whim because they want more rent! Buy to let since the 90's is a huge factor in the housing crisis; my ex lanldlord has now a market rent of £500 PCM more than when we moved in but hadn't even repaired the electrics in 6 years . It's greed , pure and simple. Buy to Let should be limited to a certain number of homes. We need a massive shift away from private renting to make it less attractive to investors and more focus on building good quality family homes. But I have no real answers.

If there were strict rent controls and minimum standards BTL landlords would be offloading their properties in a flash ATM they get away with murder and so keep buying up property and ramping rents

I would welcome a significant drop in house prices in expensive areas. I won't say crash. Because cheaper prices will benefit more people than it will penalise.

Vivienne you are right. A fall in prices is not the vote loser it used to be as the tables are turning. People who may be affected have still got a home and will have to play catch up. In every massive shift there are winners and losers but those who have bought and paid low IRs for years now have had an opportunity to pay down the capital and have a nice home Its the turn of everyone else now. If its a home then its irrelevant and if you see it as an investemtn they you expect it to fluctuate so have to take the rough with the smooth.

I feel very helpless about those trapped in renting having been stuck in the rental system for so long. I am going to join Shelter as they campaign for better housing standards in the PRS. Yes it IS all about consumption I agree, everyone seems to have ' fisherman's wife' syndrome- you know .... I want a hovel, then a cottage, then a castle, then a palace, then a country etc! Money makes money and buy to let gives you a capital asset and an income. Great! As long as you are not the poor renter on the end of it because they pay the price.

Why are landlords not taxed? Why? Why are they allowed to let out substandard homes? Renters often paint or improve the decor themselves like we did as I didn't want the children to live in poor conditions. It's a disgrace! Sorry, rant over. I've drifted the thread away from London property - apologies :)

But it is the landlords like mine in London ( he owns 4 properties) that are part of the problem, preventing families from putting down roots. My family come from London going back to about 1650, maybe longer and my mum's side were gypsy immigrants into Notting Hill. My family all had council homes but I can't get on the council list for love nor money! We were told there was no hope- about a 10-15 year waiting list. And that was 4 years ago.

I know we didn't need it as such in that we could afford the rent but the system whereby a private individual landlord can be bought one or more properties via the tax payer through Housing Benefit is fundementallly wrong. It just makes a few people very wealthy and keep everyone else just surviving. I know we live in a capitalist society but the balance has swung too far in favour of rich landowners. Is positively Dickensian and it's not right or justifiable. We need to build more homes. People DO have a right to a secure family home in our first world country.

I would be very interested to see figures on- not how many empty homes there are in the UK- but how many empty bedrooms. There should be more incentive to get elderly singles or couples to downsize, both pull factors in the shape of building more 2 bed properties, possibly with the option of supported living, for them to move to, and push factors in the shape of increasing tax.

It stuns me that, in a small crowded country like this, where land is at such a premium, and the cost of land is such a huge proportion of new housebuilding, there are no land taxes. It's almost as if Parliament were stuffed full of landowners, weren't it?

gypsygirl - I agree with you completely especially about limiting BTL. One of the most thoroughly depressing (and anger-inducing) things about the 1988 Housing Act, which ended security of tenure and brought in the AST, is that it was done with the express intention of encouraging 'investment' (you saying 'investment', I say 'speculation' let's call the whole thing off etc.) in what was just about starting to be termed 'the housing market'. They wanted houses to be bought by landlords as opposed to owner-occupiers. They wanted that to happen, because they knew that with a never-ending rent bill in the form of housing benefit, prices would keep on going up and up and those that owned the houses would keep on getting richer. They also knew that it would shaft tenants, but they didn't give a shit about that. It was one of the last things that the Thatcher govt did, and pretty much her most enduring legacy to the poor and dispossessed.

But the blame doesn't lie solely at her door - she may have put the original boot in, but subsequent govts have kept on kicking. I find it absolutely appalling that we had 13 years of a Labour govt who did not repeal this legislation, who did nothing to address the huge chasm of inequality that exists between home-owners and tenants, who kept on repeating the tired old mantra about rising house prices = good. It started with Thatcher, but there has been 25 years of failed housing policy that followed after her, which has not only caused untold misery to the families and households left behind by the housing race, but has also effected one of the biggest transfers of public money to private hands in the shape of a housing benefit bill that has quite frankly spiraled beyond control to the point that no political party will even mention the issue.

Well said, both cruikshank and draylon.

My MP owns 24 properties at the last count - hardly feel he is going to represent the tenants in his constituency.

I don't see a crash in the near future - too many factors come together to keep the market buoyant. Domestically, there's an net influx of people from the regions wanting to go and live in London. From slightly farther afield, it's a magnet for young migrants from Europe and beyond. That keeps the lower end of the market, from beds in sheds to HMO s etc going.
Then you've also got the fact that London property is effectively a safe and lucrative haven for foreign cash. If you live somewhere a bit unstable, or run by a slightly insane government, it's a great idea to buy a place here. It's increasing in value all the time, and if the shit hits the fan you've got a bolt hole in a country that does actually have the rule of law.
All of this creates misery for the average person wanting to buy somewhere to live. Single person needing a flat has no chance. Two professionals might get a little place. Families have the choice of being crowded or moving out to the burbs. Now the burbs are getting insane
Y priced too.
What's the answer? Honestly, I don't know, it's complicated. It would probably need a combination of slight stagnation / deflation of prices (unlikely) a massive house building program (unlikely) a reduction in net migration (unlikely) and legislation to crack down on non Dom buyers (very unlikely.)
even things like housing benefit make it worse. I'm not saying strip everyone of it (heck no) but the system is crazy. The taxpayer is subbing private landlords, effectively, just like tax credits subsidise private employers who pay shitty wages.

Anyway, I'm rambling. But no, I don't think there's going to be a crash anytime soon. I live near stockholm and it's exactly the same here. 500-750k for a family house. Utter madness.

Well, quite, andango. Didn't bloody Blair buy up half of Bristol or something? No surprises that he did fuck all to help tenants during his time in office then.