Blackcurrant

LondonMix Wrote: ------------------------------------------------------- > Sorry, Blackcurrent, I mean why haven't your > friends sold if that was always their intention? > Why would they continue to be accidental landlords > subject to interest increases in this situation. Because mortgage rates are very low, so it's easy to cover the mortgage with rent, and because prices started rising again. As long as mortgage rates stay low and house prices keep rising, there's no need to sell. If rates go up then people can of course sell the rental property, but that would obviously release new supply onto the market.

LondonMix Wrote: ------------------------------------------------------- > House prices in London are now well above their > previous peak. The people you know in that > position are still in negative equity? Also, > rents have risen in London to boot. You don't need to be in negative equity to struggle with rising mortgage rates - just very indebted. Lenders don't have to take salary into account when assessing buy-to-let mortgages so people who became accidental landlords can easily be carrying 10x their salary in debt and would struggle with a rise in interest rates. Rents have risen but falling at the moment.

DaveR Wrote: ------------------------------------------------------- > Re interest rates, I wonder whether there are many > current owners who are 'zombies' i.e. can only pay > their mortgage debts because they have a very low > pay rate and/or their mortgage company is > unwilling to repossess. It's now been 5 year > since the worst point of the credit crunch to the > vast majority of borrowers (everybody who wasn't > on a long term fix or pure floating rate) will > have had to re-mortgage during that time. To get > a really low rate they will have had to be both > equity and income rich so would be likely to be > able to withstand a rise to more 'normal' levels. > > Because of that it's difficult to see rate rises > leading to falls in prices, but should definitely > act as a brake on house price inflation. > > Re overseas money, it's difficult to see any > reason for that changing imminently, particularly > at the top end. I saw a news report recently that > said foreign buyers of ?1 million + properties > came from > 40 different countries. It's a > fashion thing; London has always been attractive > to the global wealthy for various reasons, and > there are now more of them, from more countries, > and London seems to be even more attractive. I know quite a few people who couldn't sell during the financial crisis and were forced to rent out their first home to fund a move and now have 500K to a million in debt. Even a very small rise in mortgage rates would hurt people in that position.

Mick Mac Wrote: ------------------------------------------------------- > Saila Wrote: > -------------------------------------------------- > > But even say a 20% drop - is a huge amount of > real > > money on these massive numbers. > > If you read this forum from 2007 you will get the > same message. Didn't happen though. But prices did fall about 20% in 2008-2009, even in prime central London. They rebounded very fast after interest rates were cut to near zero and QE started. That kind of sudden change in prices clearly isn't caused by insufficient building or population rise, which work over longer timescales - it was government intervention and safe haven money flooding in.

MarkE Wrote: ------------------------------------------------------- > You're right that supply has dropped, but when you > consider the state of the economy over the course > of that period since 2009 and general lack of wage > inflation, it's staggering to think that the level > of demand has sustained itself. Where are all > these people coming from? Even if you're somehow > able to secure a sizeable mortgage to the tune of > ?400k, there's still the same again to be found to > finance the rest... Part of the explanation is that buyers in London tend to have lots of equity, so can access the cheapest mortgages. So the top of the market keeps rising while the bottom is stagnant. But there's also a London effect at work. London has changed dramatically since I moved here in the early 90s and is now the de facto financial capital of Europe and the biggest city in western Europe by far. The liberal tax regulations make it a huge magnet to wealth. People who would once buy in Kensington or Notting Hill are now displaced by foreign money to Wandsworth/Clapham, and would-be Claphamites are displaced to East Dulwich. There's no political will to address the shortage of property in London as everyone in power has a stake in the market, so it's always going to be expensive here. But there is likely to be a correction when the rate cycle turns.

LondonMix Wrote: ------------------------------------------------------- > Yes but the extra dosh the first time buyers have > will result in these "climbing up the ladder > folks" to sell for more which in turn will lead to > them pushing up prices further up the housing food > chain so to speak. > > Yes, but the trickle-up effect will fade up the chain. Most of the benefit of help to vote will be felt at the bottom of the market, particularly outside London.

Loz Wrote: ------------------------------------------------------- > My understanding is you need to have at least a 5% > deposit, not a max of 5%. You're probably right, but anyone with a deposit of 20% or more, which includes most people trading up, can already access cheap mortgages so help to buy won't make any difference to them. Only first time buyers with little cash will be likely to use the scheme.

Otta Wrote: ------------------------------------------------------- > "I don't think help to buy (help to vote) is a > factor outside the bottom end of the market. There > can't be many people buying 600k houses who only > have a 5% deposit and ?150k salary. But I could be > wrong." > > > I don't know, this could be a way for a lot of > people to move up the ladder a bit. Something > which, as has been pointed out by others, isn't as > easy as it once was. Wouldn't you have more than 5% equity if you were trading up? Help to buy isn't available to people with a deposit larger than 5%, so second-time-byuers are excluded unless they're in negative equity.

It's easy to see why prices are rising so fast in SE22 and other parts of London simply by looking at the supply numbers on Rightmove. Excluding properties under offer, there are only around 130 properties on the market. The number was over 400 in 2009. Supply has plummeted and we all know about supply and demand (note that the fall in supply is not primarily a demographic phenomenon, though that does make it worse). Nobody needs to sell while mortgage rates are so low - forced sellers just don't exist at the moment. Anyone with a bit of equity is paying peanuts on their mortgage and can comfortably service the debt. Landlords can easily cover their outgoings with rent. Consequently, there's nothing for sale and the supply/demand balance has gone beserk. Meanwhile, it's impossible to beat inflation with savings as the bank rate is still near zero. That makes property look good - relatively. Clearly the whole market is underpinned by the bank rate and things could turn on a dime, as they have done, dramatically, several times already. Not before the election though. I don't think help to buy (help to vote) is a factor outside the bottom end of the market. There can't be many people buying 600k houses who only have a 5% deposit and ?150k salary. But I could be wrong.

An increase in bank rate doesn't just affect mortgage affordability though. It makes cash more attractive, which means investors aren't forced into buy-to-let to chase yield, which leads to less demand from landlords. Having said that, rates could still rise and stay negative in real terms.

LondonMix Wrote: ------------------------------------------------------- > Yes, maybe. Most people took for granted that the > BofE's priority was growth rather than inflation > so when they made such a definite statement (with > caveats concerning 2.5% inflation) the market > assumed they meant the opposite of what they said. > However, no one thinks that the BofE will raise > rates unless there is significant inflation so > this only becomes a concern if you believe we are > headed toward staglfation (high inflation with no > growth) that will force the central bank to make a > decision regarding priorities. I don't see that > on the horizon. Their job is to use bank rate to control the future path of inflation a year or more ahead, based on their predictions, rather than to bring down today's level of inflation. So any evidence suggesting inflation will rise in the future tends to increase the chance of a rate rise. One concern the BoE have is the effect of QE having raised the money supply - if we have an economic recovery without the QE money being withdrawn from the economy, there's a danger of inflation getting out of control. I don't think Carney gives a damn about this. All he does is slash rates and stoke property bubbles, whether in Canada or the UK. But he can be outvoted. And he has his reputation to consider. I agree London has a shortage of property and it's one of the reasons prices have recovered faster here than elsewhere in the UK. But that's not to say they can't get out of hand. It's crap for first time buyers in London. It has been for a long time. Unless you have lots of equity, buying here is like running across the motorway wearing a blindfold.

You only have to look at the rise in Sterling to see that markets don't take the Bank of England's commitment to keep rates low seriously. If rates were to stay at 0.5 for another three years, sterling would have fallen. Also, the mortgage rates are already rising. Fixed term mortgage rates are linked to the yield on long-term gilts, which have doubled in a year. There isn't much the BoE can do to control that - ultimately markets set the cost of borrowing.

NewWave Wrote: ------------------------------------------------------- > I have to say there are lots of lovely little > Pockets in Forest Hill on the Western side of the > station, lots of greenery nice houses, and superb > transport links. > We all know property prices are going up, and for > those not already on the ladder its tough. I grew > up in Bayswater, my entire life was in west > london,friends work (it still is in the west end) > EVERYTHING-but in order to get on the property > ladder in my late '30's I had to more South of the > river. > There is no point in becoming bitter and twisted > about the cost of property in the city, look at > Tokyo,Paris and New York, most people have to rent > cos they can't afford to buy. Yes London is on a par with those cities now, so prices are going to stay high. That's not to say they won't ease off or fall again. The panic buying that's going on at the moment reminds me of the MIRAS fiasco and the noughties credit bubble. You shouldn't need to be a multinational CEO to be able to buy a flat in Nunhead.

simonethebeaver Wrote: ------------------------------------------------------- > Nunhead prices have gone insane. When we were > looking about 16 months ago ceiling price for a > standard layout terrace house was 500k. Now it > seems to be heading for 650k. It's the same across a lot of London. The number of properties listed on Rightmove has fallen by over 50% in the last three years. When supply falls, prices rise. The worst thing about London is not how high prices are but how volatile they are. They shouldn't shoot up and down at the rate they have done since 2007 - it isn't a normal market.

Girl82 Wrote: ------------------------------------------------------- > Blackcurrant Wrote: > -------------------------------------------------- > ----- > > > Try Nunhead. The 250K stamp duty barrier is > still > > holding back the price of a lot of flats in > places > > like Ivydale Road. You can find large victorian > 2 > > bedroom flats, but under 250k will need a > little > > work. Once refurbed they are worth nearer 300. > > > > The north end of Ivydale is an easy walk to > > Brockley for the east london line. > > Where are these magical two bedroom flats on > Ivydale Road? Because I've not seen one like that > on my year-long search for a place under ?250k. > They're more like ?300k there (and still with work > to do!!) PN33 I totally feel your pain. Have you > tried looking at the Queens Road area? That used > to offer slightly better value? You're probably right - prices have gone up since I looked at Ivydale. The Ludlow Thompson flat asking 260 is a 1 bed but could be used as a 2 bed. Obviously will sell under stamp duty. Has been on and off the market a lot so must have issues.

unlurked Wrote: ------------------------------------------------------- > Last time I was there,ages ago,there was a bullet > shaped hole in the screen. Spoilt the experience. A bullet would have made a round hole rather than a bullet-shaped hole, so at least it wasn't caused by a gunshot.

It's very convenient, cheap as chips, independent and it has Frank's cafe on the roof, all of which make it an asset in my opinion. But I can't blame people for getting annoyed with wrong schedules, especially if they are queuing up with kids. Agree with whoever said it will be a characterless odeon in a few years, but would quite like it to turn into something more like ritzy - half pretentious arthouse with obscure & foreign films and half mainstream stuff.

PN33 Wrote: ------------------------------------------------------- > > At the moment there is almost nothing on > > Rightmove. Same story all over London. The main > > reason for this is extremely low mortgage > rates, > > which means very few people who are financially > > stretched need to sell. In a normal market > there > > are always a fair few "forced sellers", e.g. > > overstretched landlords who can't cover the > > mortgage with rent or people made redundant > etc. > > and find they need to downsize in a hurry. When > > the BoE cut rates to near zero all the forced > > sellers disappeared, supply dried up, and > prices > > shot up. This isn't normal and won't continue > > indefinitely. > > Thanks, I understand that. I guess we feel a sense > of urgency because of this help to buy scheme > which currently doesn't affect us as it's only > applicable to new-builds (we're not looking at > them at all, we want a period-coversion with a > garden). But as of next year this scheme is going > to be opened up to existing buildings which will > mean a large number of renters can all of a sudden > afford a period conversion, meaning demand is > likely to shoot up even more. So we've set > ourselves a target of Xmas. > > Just out of interest, if August is the worst time > to look, when are the good times? I'm hoping you > say Winter! November to December is the best time to pick up bargains. The dark evenings make everything look less appealing and people are distracted by Christmas, so demand is lower and prices are a touch softer, usually. I think the second phase of help to buy will be watered down until it becomes irrelevant, as it's a totally stupid idea. But Osborne can't do a U-turn at the moment without looking daft, so don't expect any announcement. Same situation applies to the governor of the Bank of England who has set himself up to look like an idiot over forward guidance. Mortgage rates might creep up next year. Even so, London keeps pulling people in and not enough is being built, so prices here are never going to be cheap. If SE London gets too expensive, have a look at the ends of Crossrail, e.g. from Acton to Reading/Maidenhead. The commute from those areas to the City will drop substantially, which should push up prices faster than the rest of London.

PN33 Wrote: ------------------------------------------------------- > > Try Nunhead. The 250K stamp duty barrier is > still > > holding back the price of a lot of flats in > places > > like Ivydale Road. You can find large victorian > 2 > > bedroom flats, but under 250k will need a > little > > work. Once refurbed they are worth nearer 300. > > > > The north end of Ivydale is an easy walk to > > Brockley for the east london line. > > > Nunhead is our number one spot! We are desperately > trying to find somewhere around there, and cannot > exceed the 250 mark as the deposit alone has been > a stretch, paying 3% stamp duty upfront would > cripple us. We have been looking every day for the > past month and barely anything comes up in > Nunhead... it seems by the time we see anything > it's already under offer. We are going on a big > scouting mission tomorrow though, fingers crossed! At the moment there is almost nothing on Rightmove. Same story all over London. The main reason for this is extremely low mortgage rates, which means very few people who are financially stretched need to sell. In a normal market there are always a fair few "forced sellers", e.g. overstretched landlords who can't cover the mortgage with rent or people made redundant etc. and find they need to downsize in a hurry. When the BoE cut rates to near zero all the forced sellers disappeared, supply dried up, and prices shot up. This isn't normal and won't continue indefinitely.

PN33 Wrote: ------------------------------------------------------- > Where do they find these properties?! We are > having such difficulty finding any one-beds within > 2 miles of SE15 for less than ?250k that isn't > either ex-Local Authority (with huge service > charge) or a total dump that needs another ?50k or > so spending on it! Similarly to that berk with the > trainers, I would have made an offer on that > Forest Hill flat straight away Try Nunhead. The 250K stamp duty barrier is still holding back the price of a lot of flats in places like Ivydale Road. You can find large victorian 2 bedroom flats, but under 250k will need a little work. Once refurbed they are worth nearer 300. The north end of Ivydale is an easy walk to Brockley for the east london line.

Same happened to me and the phone turned out to be in the boot of my car under luggage. For a while I was convinced it was in a neighbour's house. Keep looking for it.