Property Price Reality

[Gidget]

Claire.Hobbs Wrote:

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> Properties selling for well above the previous

> sale prices of similar properties in the

> neighbouring area are likely to be knocked down by

> surveyors when it comes to arranging the mortgage,

> and apparently they often knock it down below what

> it should/could have been. This happened recently

> to a friend of mine selling in Camberwell and by

> all accounts it's not that unusual.

>

> We recently put our 2-bed flat on the market and

> were advised by several agents to put it on for an

> outrageous ?40-?50K more than the expected sale

> price. Similar properties in the area have been

> achieving high sale prices recently, presumably

> due to the lack of properties on the market

> currently compared to demand.

If you have a substantial deposit to put down on a property then it won't necessarily be knocked down after a survey.

[benmorg]

A house in Holly Grove SE15 (link below) sold at Allsop's auction yesterday for twice the guide price, which is a phenomenal result by Allsop's usual standards (most London properties were going for about 25% over guide price, compared to 10-15% over last year):

http://www.auction.co.uk/residential/LotDetails.asp?A=761&MP=84&ID=761000105&S=G&O=A

A couple of properties in New Cross also nearly doubled the guide price. SE London apparently the place to invest at the moment.

[Claire.Hobbs]

In their case it did, they had a large deposit so were still able to get a mortgage, but they weren't offered the best interest rates as the loan-to-value was altered.

[Gidget]

benmorg Wrote:

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> A house in Holly Grove SE15 (link below) sold at

> Allsop's auction yesterday for twice the guide

> price, which is a phenomenal result by Allsop's

> usual standards (most London properties were going

> for about 25% over guide price, compared to 10-15%

> over last year):

> http://www.auction.co.uk/residential/LotDetails.as

> p?A=761&MP=84&ID=761000105&S=G&O=A

>

> A couple of properties in New Cross also nearly

> doubled the guide price. SE London apparently the

> place to invest at the moment.

That guide price sounds way off for a 4 storey house in the Bellenden area. ?350,000 would be a guide for maybe the lower two floors.

[benmorg]

Gidget Wrote:

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> benmorg Wrote:

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

> -----

> > A house in Holly Grove SE15 (link below) sold

> at

> > Allsop's auction yesterday for twice the guide

> > price, which is a phenomenal result by Allsop's

> > usual standards (most London properties were

> going

> > for about 25% over guide price, compared to

> 10-15%

> > over last year):

> >

> http://www.auction.co.uk/residential/LotDetails.as

>

> > p?A=761&MP=84&ID=761000105&S=G&O=A

> >

> > A couple of properties in New Cross also nearly

> > doubled the guide price. SE London apparently

> the

> > place to invest at the moment.

>

> That guide price sounds way off for a 4 storey

> house in the Bellenden area. ?350,000 would be a

> guide for maybe the lower two floors.

It does sound low, but bear in mind the house was split into housing-association flats and probably a bit of a wreck. I doubt there's much margin for the developer at the sale price.

[ibilly99]

If I wasn't selling it would be a great big yawn ....

[benmorg]

ibilly99 Wrote:

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> If I wasn't selling it would be a great big yawn

> ....

You mean you'd find it boring if you didn't find it interesting?

[ibilly99]

we're back to the bad old days of how much is your house worth dinner parties and property porn on all the channels WTF is going on .. meanwhile Greece burns and money is magicked out of thin air there is something disquieting about it all - rather like folk in Thailand going out to pick up the fish just before the tsunami...

[benmorg]

ibilly99 Wrote:

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> we're back to the bad old days of how much is your

> house worth dinner parties and property porn on

> all the channels WTF is going on .. meanwhile

> Greece burns and money is magicked out of thin air

> there is something disquieting about it all -

> rather like folk in Thailand going out to pick up

> the fish just before the tsunami...

I agree. The financial crisis was caused by the house

price madness, so a return to rapidly rising prices is a return to madness. London is in a bit of a bubble at the moment, propped up by monetary stimulus. Easily mistaken for a bullet-proof safe haven.

[woodrot]

yes

[ed_pete]

Article in the Guardian today that talks about the London house price bubble and East Dulwich gets a mention.

[*Bob*]

Property anecdote #59 (in a series of 50000000)

A house we offered on (in 2006.. you know.. at that peak, before it all came crashing down) just sold again for an extra ?250k.. nothing added to it spacewise either.

ooh, aah, house prices, thwack, thwack

[George the Robot]

benmorg Wrote:

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> ibilly99 Wrote:

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

> -----

> > we're back to the bad old days of how much is

> your

> > house worth dinner parties and property porn on

> > all the channels WTF is going on .. meanwhile

> > Greece burns and money is magicked out of thin

> air

> > there is something disquieting about it all -

> > rather like folk in Thailand going out to pick

> up

> > the fish just before the tsunami...

>

> I agree. The financial crisis was caused by the

> house

> price madness, so a return to rapidly rising

> prices is a return to madness. London is in a bit

> of a bubble at the moment, propped up by monetary

> stimulus. Easily mistaken for a bullet-proof safe

> haven.

'Monetary stimulus' is only part of the story. Mortgage lending is still incredibly low by historic standards. Mortgage rates are pretty low but remain substantially disconnected from the BoE base rate.

The key issue in my mind is that the market is so small, especially in terms of available property, which means there are enough cash rich people out there to sustain the market. Unemployment remains relatively low considering where we are in the cycle and there are still very few forced sales. In this environment it's easy to see how prices continue to rise. This could potentially send a signal for more people to try to sell over the next few months, causing prices to moderate, but I still think that most people are in a position where they have to stay put given that it remains very difficult to borrow money.

[????]

Loved the Guardian article, so typical. Snobby abouty the plebby estate agents, moans about bankers bonuses, disgust at buy to let, sneers at bank of mum and dad......the cliff is that the Guardian Jpournalist is himself trying to buy a place and is just SO ANGRY PEOPLE LIKE ME CAN'T AFFORD ONE

[red devil]

Cuts both ways ????.

I know someone who wrote a blog from the perspective of someone working in an investment bank during the credit crunch.

He highlighted how miserable life was, what with redundancies and the general doom and gloom.

But despite this, everyone should muck in to help the economy, and his contribution was that instead of holidaying abroad he would be having a staycation in Cornwall.

What he forgot to mention in his blog was that he had bought a Cornish bolthole outright on the back of bonuses...my, it must have been such a hardship :)

[*Bob*]

Do people really use the word 'staycation' with a straight face?

[katie1997]

Only if they aren't 'glamping' this year.

[ibilly99]

No Glastonbury this year sob (no government no subsidy) because of the f%%ing Olympics (?7 billion net subsidy) bah humbug who wants to watch drugged up corporated out traffic jammed no ticketed sporting nonsense - not me. Rant over I've got a house to sell on the new centre of the Universe. I put the recent price increases down to the arrival of Papa John's - Better Ingredients , Better Pizza.

[simonethebeaver]

'Staycation' for a UK holiday really boils my piss. A 'staycation', vile word that it is, is staying in your own home for a holiday. Going on holiday in the UK is just another holiday, like many people do every year.

[benmorg]

George the Robot Wrote:

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> The key issue in my mind is that the market is so

> small, especially in terms of available property,

> which means there are enough cash rich people out

> there to sustain the market.

... I still think that most people are in a position

> where they have to stay put given that it remains

> very difficult to borrow money.

Yes, but that's a consequence of monetary stimulus. Low mortgage rates help to keep those on the edge from selling or being repossessed, which in turn keeps supply down and supports prices. The low bank rate also makes savings accounts unattractive to investors, pushing them into riskier assets like property. Monetary stimulus also weakens sterling and therefore makes London houses cheaper to foreign buyers. So it supports house prices in several different ways besides the obvious one of making borrowing cheap.

All this goes into reverse when interest rates rise, but that won't happen until inflation gets seriously out of control.

[northlondoner]

simonethebeaver Wrote:

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> 'Staycation' for a UK holiday really boils my

> piss. A 'staycation', vile word that it is, is

> staying in your own home for a holiday. Going on

> holiday in the UK is just another holiday, like

> many people do every year.

"Boils my piss." Cool phrase. Will be using it in future and claiming it as my own.

[hpsaucey]

Curmudgeon Wrote:

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> having lived here for more years than I care to

> mention I am mildly interested at how ridiculously

> expensive the entire area has become with flats

> selling for considerably more than houses sold a

> decade ago.

>

> I remember when you could buy all this for a fiver

> and still have change for a poke of chips on the

> way home ..yaddaydadda

>

> feel sorry for people trying to get on the housing

> ladder - good luck

I'll second this as one the one's to 'feel sorry for' and despite a deposit, with no real chance of getting anything. My kids love bursting bubbles and I'll happily join them in bursting a housing one! Off now, to stop feeling sorry for myself and scoff some lunch.....

[Sue]

East Dulwich was namechecked in the Guardian Money supplement on Saturday as one of the places in London where property prices are rocketing.

[Jeremy]

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