Trying to buy a house in this area is near impossible

[Hood83]

Most measures of poverty are based on where you sit compared to the average. To use the same principle I'd say being in the top 1% or even 5% makes you rich. If we lived in a developing country I'd see your point, but ED isn't the Congo.

Sad thing is a lot of people think earning this sort of income makes them 'average'. Not even close.

[Loz]

Hood83 Wrote:

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> We do need a better way of taxing the worst rent seekers though

Oooh, 'eck. We've gone all Guardian.

[Jeremy]

Hood83 Wrote:

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> Of course I live on the DKH estate

Living on the estate doesn't automatically say anything about you - especially when privately owned flats are changing hands for 280K... there are presumably some fairly decent earners living there.

[KidKruger]

Oh to have qualified for a council property and then be 'entitled' to purchase it for a fraction of the market value - then flog it after a couple of years and get minted. Virtually for no personal risk or expense. Talk about privileged.

[Alan Dale]

I like Norbury. It is the next Selborne Village.

[Hood83]

Ha, have we? Just seems that taxing unearned income is fairer.

[Hood83]

It's possible I was being a little provocative but I think people may have taken this a bit to heart. I'm not criticising people, just suggesting ED's inhabitants are wealthier than they would like to believe. I bought off the council, which could mean one less person living in social housing here for all I know, so I'm not trying to get on a moral high horse. Very few privately are exchanging for 280k, and mine about a year ago was not even close to that. Even if it were, that is not remotely similar to the rest of ED as far as I can tell. But again, happy to be proven wrong.

As I say, I was possibly stirring a little, but it seems to have touched a nerve so again, I'm not trying to criticise, just point out ED is a rich area. Apologies if anyone was offended by this.

[Hood83]

KidKruger was that in response to me? Just to say I didn't qualify for a council flat, although I think I probably bought a bit below market rate from the council so I was fortunate in that sense definitely.

[Hood83]

Jeremy - living on the estate clearly does say something about you, it says you probably can't afford to live in the rest of ED. In my case I'd rather live here, so that's fine all round I guess.

[Hood83]

Alan - I don't know much about Norbury, what would you recommend about it?

[strae]

An observation from someone who wished he had realised this sooner:

A. Each year, 52,000 NET new households are created in London (as estimated by CBRE).

B. Number of homes currently in planning for Greater London over next 5 years = 300,000 or 25,000 per year.

There is not much we can do about A in the near term. In fact, if demographics stay stable, this is likely to rise given we are emerging from recession. Absent another recession, this only goes down if the structural balance of old vs young people changes in London - hard to see how this happens given the trend is for younger people to come to London seeking employment etc and for older people to move out etc at the end of careers.

There is also not much we can do about B, thanks to planning laws which limit how quickly and how many new homes can be added.

In the case of areas like ED, where there is a large stock of Victorian/Edwardian/Period family homes, this is exacerbated even further because (in general, clearly there are exceptions):

- You cannot demolish period houses to build new ones (so effectively, number of homes is fixed)

- There is obviously no new supply of period houses

- Buyers continue to prefer period houses (not all of them, but many)

Therefore with each passing year, we have more and more buyers for the same fixed stock of homes.

The conversations that long-time ED residents are having about incomers is the same conversation that almost every resident in any other London borough is having.

This doesn't mean the situation is fair or right. It is what it is.

And perhaps unfortunately, no amount of gnashing of teeth or wringing of hands will change things, at least in the near term.

[DaveR]

"Number of homes currently in planning for Greater London over next 5 years = 300,000 or 25,000 per year"

I'm not making any claims for my maths skills, but surely 300,000/5 = 60,000?

[strae]

DaveR you are spot on, thank you for pointing out the glaring mistake.

It is 300,000 potential homes in the planning pipeline over the next decade, so 30,000 per year.

Here is the PR accompanying the release of their report. The full report is available if you register on the CBRE website and then navigate to the news and events tab.

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CBRE has reported there are currently around 300,000 residential units in the capital?s planning pipeline. However, as London?s population is set to increase by 14%, more than 1 million people, over the next decade, the capital city is unlikely to reach the level of housing required. We estimate there is a significant imbalance between supply and demand with potential supply satisfying just two thirds of the estimated level of future demand for housing.

During the past 20 years, London has built an average of 17,350 homes per year, well below the 42,000 target which was recently unveiled as part of the Homes for London publication by the Mayor of London. The findings revealed by CBRE demonstrates that 52,000 new homes will need to be built in London each year, 10,000 more than the revised target, and well below the number of units built in 2012, which was approximately half this level.

Jennet Siebrits, Head of Residential Research at CBRE, comments:

?Over the past decade London?s population has increased by around 800,000, however only 200,000 new homes have been built. Out of 33 London boroughs, only 7 currently have enough stock in the development pipeline to satisfy the projected growth in households over the next 10 years.

[Twirly]

Never mind the housing, how is London's transport system going to cope with a million more people? It struggles at the moment. strae, does the report say why the capital is going to keep on increasing in population/size? Wouldn't good planning encourage some of this population growth/economic growth to go to the regions rather than the SE? Or even other areas within the SE?!

Suddenly that retirement plan to sell up and move to some remote (cheapish) rural location is looking quite appealing, in about 20 years time!

[strae]

Twirly, it doesn't really get into transport, except for impact of Crossrail, which is only going to move house prices in one direction in areas where it arrives...

Re planning, the issue is that you cannot control demand (hard to imagine legislation which dictates where people are allowed to live) and it is hard to add supply in existing areas of London due to a combination of planning laws and local preference.

Paradoxically, the voices who bemoan how much ED has changed (lost character, too expensive, chain stores on high streets) are at least part of the reason for the change.

By this I mean that one consequence of preserving the heritage / preventing the further development of areas such as ED is that existing property prices rise disproportionately because there is no other way for the market to allocate the scarce space.

IMHO I agree with this view and that is why I moved here (to be in an area where there is an appreciation of heritage and where the preference is for what came before, rather than necessarily the new). But I also have had to come to terms that this means people like me have paid / will have to pay over the odds to live here (relative to places where this is not the case). Frankly if the forces that be allowed a 25 story block of flats to be placed smack in the centre of LL, I am sure it would make ED a cheaper place to live, but then perhaps I and others on this forum wouldn't want to live here...

Re your other point, of late real estate commentators have been advising owners of property in Greater London who have ambitions of moving to the country to sell up and move now because the bow wave of rising prices hasn't yet affected prices in the country to the same degree (yet)...

[StraferJack]

I totally get supply and demand, why some areas cost more than others, why there aren't enough homes etc etc. I have no argument with any of that

I get that London is unique and has always drawn people from afar

What I don't get is where quite so many people are getting the money from to pay for these homes.

I get where some people have got the money from (bought small years ago and sold up the chain etc). But something isn't quite right. I can't put my finger on it, and I understand why some people say it's same as it's ever been. and yet, and yet....

[Jeremy]

I can't quite work it out either. Especially for what is a pleasant, but not really high end part of London. Where are all these people with 900K to spend coming from?

[*Bob*]

I think you've answered your own question, Jez

- From all the various places in London that cost a whole more than 900k for something equivalent

[lane lover]

Its pretty obvious really.

With record low interest rates, many people have had an opportunity to save over the past few years.

Also, those who have recently sold have got a nice little jump in their property price - increasing the equity and hence the cash available to buy up the chain.

Finally, mortgage availability has increased dramatically in the last year; with deposits required dropping due to incrasing compeition from lenders.

Simple.

[James]

>>I can't quite work it out either. Especially for what is a pleasant, but not really high end part of London. Where are all these people with 900K to spend coming from?

Clapham, Jez

[Jeremy]

I just looked at the price of flats in Clapham... think you might be onto something, Jamez...

[Twirly]

I didn't so much mean legislating where people could live or work, more policies to encourage development elsewhere. But I guess that London has always been a magnet and just grows and somehow seems to cope - or people just put up with poor travel conditions, etc.

As for where the money is coming from - I thought that was supposed to be foreign money investing in central London? That pushes those who would normally have bought in Kensington/Chelsea etc. further out (to Clapham, etc.) and the Claphamites move to ED, those of us who couldn't afford ED anymore move out to other areas, which will cause a price rise there, and so it ripples out. Eventually to the countryside (that is a plan we're definitely not ready for yet!).

[JDR]

We moved up a property level just over 2 years ago and ours was funded by owning for 11 years first plus third child going to school and no longer paying child care.... On our road though, the last 4 houses have been moved into but the previous three sold within a couple of weeks and then were let immediately. I'm not convinced investors( foreign or otherwise) aren't spreading their wings and heading this way

[Cyclemonkey]

I think people are beginning to overextend as well due to low interest rates. For personal reasons we have deliberatly kept the amount we are borrowing fairly low but i was absolutely shocked when i was told how much lenders were prepared to lend us and then the implications for our household finances when i stress tested potential monthly repayments against a set of interest rate rise scenarios.

[KidKruger]

There will be a lot of sorry stories when rates have risen 2%.

Cycle has done the right thing using calcs to gauge effect in front.