Oh god, have I really started this thread... (property market in ED)

[????]

A few points. Trading up in a falling market is a bit of a myth unless you're at least doubling your base price or if you're in the over a Million pricing area. Factor in relative falls and moving costs (especially Stamp Duty) and you're lucky to get any benefit from a trade up financially (a nicer bigger house/flat is cool)

There are real prices and nominal prices - if you say inflation will average 3%ish over the next 4 years and house prices will stay flat your 100k of house equity will be actually worth about 90K in 2015.... if you manage to get inflation pay rises over the same period that's a significant discount than buying today.

But, hey, they're to live in aren't they?

[Saila]

but.... if we get 'proper' inflation i.e. wage inflation which hasn't happened yet, then house prices may participate in asset rises. Equities and Houses have historically risen in moderate inflationary environments in the past.

Who knows - it's only a matter of time before the unions will be out demanding wage inflation (by year end?) then we'll see real inflation...

If this happens and houses participate (an assumption that may not happen), then everyone's mortgages will shrink, relative. A painful way of sort of paying everyone's massive debts off is to stimulate moderate inflation... i.e. just print a load of money and keep interest rates low.. hmmmmmmm

[tommy]

Saw yesterday in the Standard that Southwark house prices are at an all time high

[Sue]

Not according to

this!

Unless the article was referring to the price houses are advertised at rather than their actual sale price?

[new mother]

Is ther any value left in ED would be my query...isn't it time to be buying on the periphery and waiting for it too to tend towards ED prices? Just a thought/feeling. What do others think?

[Jeremy]

I think it's best to look at where you want to live and what you can afford. I don't think it's wise to base your decision on what you think might happen in the property market.

[JohnL]

What Unions? I'm in UNITE and am one of only 2 members in our department of over 200.

The company imposes pay increases on us. Thats how it works now, most of us are lucky to get a pay increases

I see a base rate increase and a slowdown in inflation next year.

Saila Wrote:

-------------------------------------------------------

> but.... if we get 'proper' inflation i.e. wage

> inflation which hasn't happened yet, then house

> prices may participate in asset rises. Equities

> and Houses have historically risen in moderate

> inflationary environments in the past.

>

> Who knows - it's only a matter of time before the

> unions will be out demanding wage inflation (by

> year end?) then we'll see real inflation...

>

> If this happens and houses participate (an

> assumption that may not happen), then everyone's

> mortgages will shrink, relative. A painful way of

> sort of paying everyone's massive debts off is to

> stimulate moderate inflation... i.e. just print a

> load of money and keep interest rates low..

> hmmmmmmm

[benmorg]

Even so, wage inflation in London is quite likely as companies have to compete to attract talent from an increasingly international labour market. The fall in the value of sterling means more ?? must be offered to stop people looking elsewhere.

JohnL Wrote:

-------------------------------------------------------

> What Unions? I'm in UNITE and am one of only 2

> members in our department of over 200.

>

> The company imposes pay increases on us. Thats

> how it works now, most of us are lucky to get a

> pay increases

>

> I see a base rate increase and a slowdown in

> inflation next year.

>

>

> Saila Wrote:

> --------------------------------------------------

> -----

> > but.... if we get 'proper' inflation i.e. wage

> > inflation which hasn't happened yet, then house

> > prices may participate in asset rises. Equities

> > and Houses have historically risen in moderate

> > inflationary environments in the past.

> >

> > Who knows - it's only a matter of time before

> the

> > unions will be out demanding wage inflation (by

> > year end?) then we'll see real inflation...

> >

> > If this happens and houses participate (an

> > assumption that may not happen), then

> everyone's

> > mortgages will shrink, relative. A painful way

> of

> > sort of paying everyone's massive debts off is

> to

> > stimulate moderate inflation... i.e. just print

> a

> > load of money and keep interest rates low..

> > hmmmmmmm

[Saila]

JohnL Wrote:

-------------------------------------------------------

> What Unions? I'm in UNITE and am one of only 2

> members in our department of over 200.

If we get a period of consistently high inflation, labour work forces will rise and demand wage inflation. It's just basic economics. What name they call themsevles or what shape it will take is unpredictable. Apparently there's a factory in Durham who have gone on strike and demanded higher wages - but this is just something i heard from a slightly paranoid city guy who's very worried bout inflaiton.

Medium term looks like stagflation? or is that short term...

http://uk.finance.yahoo.com/news/Biz-Briefing-Worst-Pay-skynews-2636462935.html?x=0

edit to include this link

[Twirly]

Penguin68 Wrote:

-------------------------------------------------------

> I suspect that the key issues here are simple economics 101 factors.

>

> (1) Different types of house operate with different elasticities of demand ? properties targeted at first-time buyers (who have little equity to trade) are price elastic ? falling prices bring buyers in, rising prices exclude them, primarily as a function not of desire but availability of funding (affordability). At the other end properties are relatively price inelastic - quite significant changes in price will have limited effect on purchase as people are in a better position to exercise choice less constrained by funds availability (simply because they probably already have sufficient equity to be able to borrow lower fractions of the total house cost).

I?m curious about this. Won?t the elasticity in prices at the first time buyer end of the market have a knock-on effect at the other end, particularly if prices fall? If you are trying to sell your property to a first time buyer in order to trade up, but they can?t get the mortgage or don?t have the deposit, then if I want to sell, I either have to wait a very long time till the right person comes along (and be affected by the vagaries of the market) or drop my price to what they can afford, which in turn leaves me with less equity to trade up. Or am I missing something?

I am also curious as to how the current situation with student tuition fees is going to affect the housing market in years to come. If someone is graduating at 21 with ?30-40k debt, has to pay it off and then potentially save up another ?20k (or more) to buy a property, then there is going to be a scarcity of first time buyers. Unless they all have rich mummies and daddies who will pay that out for them of course. Personally, I suspect that fewer people will chose to go to university and there will be a contraction in that sector, but that?s another issue. I was lucky enough to get my degree in the days when there were still grants to go to uni, and it still took me until my 30?s to get on the property ladder. If I?d had the amount of debt these kids are expecting, then I?m not sure I?d ever have made it, particularly with the cost of living in London.

[Saila]

Twirly Wrote:

>

> I am also curious as to how the current situation

> with student tuition fees is going to affect the

> housing market in years to come. If someone is

> graduating at 21 with ?30-40k debt, has to pay it

> off and then potentially save up another ?20k (or

> more) to buy a property, then there is going to be

> a scarcity of first time buyers. Unless they all

> have rich mummies and daddies who will pay that

> out for them of course. Personally, I suspect that

> fewer people will chose to go to university and

> there will be a contraction in that sector, but

> that?s another issue. I was lucky enough to get my

> degree in the days when there were still grants to

> go to uni, and it still took me until my 30?s to

> get on the property ladder. If I?d had the amount

> of debt these kids are expecting, then I?m not

> sure I?d ever have made it, particularly with the

> cost of living in London.

Immigration will play (and is currently playing) a big role in propping up the housing market

Something the daily mail readers are clueless about

so YES - by clamping down on immigration AND taking away home grown first time buyers...- doesn't bode well for property prices.

[Quill]

Hi there - I thought I'd pipe up as I'm a FTB looking in E Dulwich and fringes. I've been looking solidly for two months and there is very little movement at my end of the market - 1-2 bed flats with outside access (if possible). It seems, from what several agents have told me, that owners of such flats can't readily afford to move up the ladder so there is very little available, and what I have viewed looks very over-priced (some flats have been on the market for 5-6 months so maybe I'm not the only one who thinks this). One agent also told me that other agents are advertising well-beyond the current market (with fingers-crossed behind their backs).

Agents who I am finding helpful are Bushells and Keatings so would recommend them. I'd steer well-clear of Foxtons and I told KFH (Peckham branch) that I refused to do business with them as they were bullying and rude.

Let me know where you list your flat - I'd be interested in looking at it. In the meantime I'll continue to enjoy the delights of East Dulwich's cafes as I continue my hunt.

[mastershake]

try pedder dulwich village...

[JohnL]

No sign of wage inflation yet. Financial times today ...

"Wage growth edged downwards and remained well below inflation, with average earnings including bonuses rising by an annual 2 per cent in December to February, compared with 2.3 per cent in the three months to January. Excluding bonuses, the figure was 2.2 per cent, against 2.3 per cent"

http://www.ft.com/cms/s/0/3bb7a414-65ad-11e0-baee-00144feab49a.html#axzz1JOdj3Rkg

That's my experience flat 2% no arguing, no negotiation, no unions involved. How do the Unions even get a foot in the door if they have no say in anything outside the public sector. I work in IT for a media ompany - Brenda Dean and her lot are long gone. There are no negotiaions or unions here.

Of course what falls is the standard of living and we just have to accept that.

Does anybody have a different experience ?

Saila Wrote:

-------------------------------------------------------

> JohnL Wrote:

> --------------------------------------------------

> -----

> > What Unions? I'm in UNITE and am one of only 2

> > members in our department of over 200.

>

> If we get a period of consistently high inflation,

> labour work forces will rise and demand wage

> inflation. It's just basic economics. What name

> they call themsevles or what shape it will take is

> unpredictable. Apparently there's a factory in

> Durham who have gone on strike and demanded higher

> wages - but this is just something i heard from a

> slightly paranoid city guy who's very worried bout

> inflaiton.

>

> Medium term looks like stagflation? or is that

> short term...

>

> http://uk.finance.yahoo.com/news/Biz-Briefing-Wors

> t-Pay-skynews-2636462935.html?x=0

>

> edit to include this link

[pk]

Saila Wrote:

-------------------------------------------------------

> Twirly Wrote:

> so YES - by clamping down on immigration AND

> taking away home grown first time buyers...-

> doesn't bode well for property prices.

unless you think that property prices coming down would be a good thing, which a lot of people do (including many property owners)?

[Shaggy]

Apologies if it has already been mentioned, but anybody got any guesses about where the 240k ED three bed bargain mentioned in this article might be?

http://www.telegraph.co.uk/property/propertynews/8425711/Historic-houses-for-sale-at-bargain-prices-by-desperate-town-halls.html

[Bunny19]

Half way down Lordship Lane on the left, now for sale with Wooster & Stock for 325k

[benmorg]

Could be one of the flats in the Dog Kennel Hill Estate? Southwark Council is selling several to fund improvements on the rest of the estate.

If councils are selling on the open market (which they damn well should be - otherwise there's corruption going on), the properties are unlikely to sell for bargain prices.

Shaggy Wrote:

-------------------------------------------------------

> Apologies if it has already been mentioned, but

> anybody got any guesses about where the 240k ED

> three bed bargain mentioned in this article might

> be?

>

> http://www.telegraph.co.uk/property/propertynews/8

> 425711/Historic-houses-for-sale-at-bargain-prices-

> by-desperate-town-halls.html

[mockney piers]

1 bed DKH estate refurbed flat is about ?150k.

Not bad for the area in this day and age (mind I paid less than that for a 3 bed flat when I moved here 10 years ago!!)

[dubluke]

Shaggy Wrote:

-------------------------------------------------------

> Apologies if it has already been mentioned, but

> anybody got any guesses about where the 240k ED

> three bed bargain mentioned in this article might

> be?

>

> http://www.telegraph.co.uk/property/propertynews/8

> 425711/Historic-houses-for-sale-at-bargain-prices-

> by-desperate-town-halls.html

Bit puzzled as to why they're discussing that st giles hospital as an opportunity for developers, that part of the old hospital was converted into flats ages ago, perhaps they're just selling the building to freehold investors though...