Did Foxtons choose a bad time to open? House prices (Lounged)

[Domitianus]

There has been discussion before on ED's second favourite subject - house prices; and it might be interesting to speculate whether Foxtons have picked the right time to open glittering new branches.

Four new(ish) bits of info:

1. HSBC's Chief UK economist has stated the view that British houses are over-priced by 30%!

2. Last month the International Monetary Fund stated they were over-priced by 40%!

3. Nationwide have stated that house-prices slid 0.8% in November - the biggest slide since June 1995!

4. Earlier this week, Land Registry figures suggested that London house prices dropped at their fastest rate in more than two years during October!

All of this, of course, comes on top of other research I quoted some months ago from ABN Amro, Nationwide, Chartered Institute of Surveyors and Savills. Remember where you heard it first.

Perhaps Foxtons move to ED will not begin on a high after all?

[karter]

yes but domi, that may be the case however have you seen how many boards they have now all over southeast london working just from the dulwich office?. Lots, which mean that unfortunatly they have captured alot of the market and have the business on their books.

[Domitianus]

karter Wrote:

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> yes but domi, that may be the case however have

> you seen how many boards they have now all over

> southeast london working just from the dulwich

> office?. Lots, which mean that unfortunatly they

> have captured alot of the market and have the

> business on their books.

Perhaps so, Karter, but a new branch will have taken a fair wee bit of upfront Capex and they will need to recover that. So, no matter how well they may appear to be doing, I am sure that some people will be gloating that the current housing market won't necessarily make that easy for them?

[snorky]

They have a great deal of cash behind them - I would not shed a tear for Foxtons - like cockroaches after a nuclear armageddon , they will emerge all shiny and cockier than ever

I wonder if foxtons read the board ?

Indeed, can they actually read ?

[Jeremy]

Domitianus, you are not providing us with any new facts, we've heard it all before. You just seem to take some sort of perverse pleasure in doom-mongering! Surely the value of housing (or anything else) is determined by how much people will pay for it. So I don't really understand how it can be "over-priced" - are there any other factors apart from supply and demand?

Saying that, the market has of course slowed down, and it isn't an ideal time to open a new branch. But Foxtons are not a small company, they will weather the storm better than most.

[*Bob*]

Yes Jeremy - 'overpriced' is bandied around like it actually means something, which it clearly doesn't. You don't count the bricks and multiply by 14 to get the value, do you?

[Keef]

Even if house prices fell by 10% tomorrow, they'd still be selling for a hell of a lot of money, and I'm sure most estate agents would still be rather pleased with the commision.

[snorky]

eggzacly

a house is " worth" 500K - commission @ 2.5% = ?12,500

It drops to ?450K - commission @ 2.5% = ?11,250

The difference would hardly pay for a service on their vulgar little scrotum minis and a team night drink at the Black Cherry

[karter]

I can see dulwich prices just being corrected and not dropping by a large amount.

[capt_birdseye]

I would argue that it is in fact a fantastic time to open. There are hundreds of Foxtons "0% commission" boards lining the streets providing them with a huge amount of advertising and making themselves look very generous at the same time. The fact that none of these properties seem to be shifting within the 12 week "0%" period means that they're not exactly losing out on any commission either.

[*Bob*]

Lots of people (still) want to live here, but ED is geographically small.

High demand, low supply.

Nothing too drastic will happen to prices round here, not that I would really give too hoots if it did.

[chief35]

No they didn't.

House prices in ED have been lower than they should have been for years. ED is now more in line with other areas in South London of which it is on a par.

Prices may stagnate, but i would be super surprised if they started to fall by any major amount.

[Muttley]

As others have commented, what happens to actual price of houses in SE22 is not particularly important to estate agents, what is important is that flats and houses sell. It's quite possible that the number of transactions in 2008 might be half what they were in previous years because people are feeling cautious about the market/finding it harder to get a mortgage/hassle and cost of doing HIPs putting people off selling/deciding to "improve" rather than move etc. Back in the early 1990s I remember there being a huge slump in the ED market: people wanted to buy, but nobody was prepared to sell (because of negative equity). Estate agents told me at the time how bad things were. But I don't recall any actually going out of business. Mind you, there weren't as many on LL then...

[Domitianus]

Doom mongering? Well, I guess it beats living in a fantasy inflationary bubble. I think people might find that thousands of years of human history have taught us that shooting the messenger makes no difference to the facts whatsoever. It has always struck me as interesting that one can pretty much guess who the folks are who are geared to the hilt, dependent upon house price inflation and terrified of negative equity by the testiness with which they respond to even the most objective evidence that everything in the garden isn't rosy. Also by their willingness to see themselves as more skilled oracles of the housing markets than the professionals whose job it is to predict what may happen and also WHAT IS ALREADY CLEARLY HAPPENING!!! I was called a doom-monger when I brought this up a good few months ago and got the same type of response "People are always saying house prices will fall", "It'll never happen in East Dulwich" etc etc. Now that there is tangible statistical evidence that it is happening, people say the same thing only louder!

Well, it may provide short-term comfort for people to take a head-in-the-sand, or King Canute approach to financial affairs but, long-term, I think a healthy relationship with reality is likely to be more productive. I do not own property or intend to buy any (in London at any rate) so I have no hidden agenda. If my posts persuade some would-be buyers to at least take a slightly more balanced perspective on house-buying (whatever their ultimate decision is) then they will have served a positive function.

Oh, and - Nothing new here? Sorry, but I wasn't aware that the October and November house price figures were old-hat. Perhaps they were actually announced months ago and I just didn't notice them.

[Louisa]

I consider ED to be sat alongside such areas as Putney, Chiswick, Battersea and Clapham, therefore any major fluctuation in the housing market with long term effects will happen in the suburban areas of London long before an area like this. Having said that, it is always best to air on the side of caution so I disagree that Domitianus is doom mongering. I remember the boom and bust days of the 80's and 90's and back then before the gentrification areas like ED remained extremely vulnerable to the national trends on housing, but I believe this is much less the case today. But we shall see.

Louisa.

[Muttley]

Not sure if this is 100% accurate, but worth reflecting on:

ESTATE AGENTS ON LORDSHIP LANE 1993:

Halifax,

Winkworth,

White Dent (now Huntwood),

Wates,

(Raymond) Bushell - that's five. Have I missed any?

ESTATE AGENTS WHO HAVE ARRIVED SINCE 1993:

Acorn,

DVR,

Property In,

Haart,

Ludlow Thomson (x2),

Osborne Stewart,

Foxtons

- that's another seven, and typically their offices are bigger than their predecessors.

(Another agent, Rogers & White or something, came and went in the interim).

The number of properties available have not doubled, but commission per property has probably quadrupled. Nonetheless, the figures suggest there may be trouble ahead for somebody.

[*Bob*]

It's time for a cull.

[SimonM]

>>(Raymond) Bushell - that's five. Have I missed any? <<

Alexander Pritchett

SimonM

[EDOldie]

Don't forget the whole market has grown since the days of Mrs T. The council house sell off being a big driving factor at the bottom of the market. More people 'own' their own house today than ever before. It's in lots of peoples interest (literaly) to lend money for people to buy and the whole thing feeds on itself. Markets of any sort experience ups & downs but the overwhelming trend for house prices in London & the South east has been upwards since the war. Consider what your parents paid for their first property and what that property would cost today. I would suggest that Foxtons are here for the very long term. They see the market growing further and being able to offer a more attractive service than their competitors. It has obviously worked for them elsewhere.

[Damo]

Caleb Samuels are opening on Upland Road at the moment. Signs went up yesterday on the old furniture shop opposite the dry cleaners.

I'm guessing they are more rentals than sales, judging from a quick Google search.

Interesting to see how an independent (presuming they are?) based off the main LL strip will do in this property environment?

Anybody know what "Don't Lose The Plot" up by the Magdela was about? Can that be added the list of ex-estate agents too?

[MrBen]

karter Wrote:

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> I can see dulwich prices just being corrected and

> not dropping by a large amount.

Thats it. Lets keep talking the market up! Even when its heading south......

Who truely knows what their house is worth in "real" terms now? Its all speculative. And like you say based on whatever anyone is prepared to pay at any given time.

People have a short memory after a 10 year boom. That "bargain" 3 bed at ?650,000 in July 07 all of a sudden starts to feel like a shit load of money when prices fall back to ?550K and in a high interest rate environment (could easily happebn again). I'm not doom mongering but I think a modest fall would be great news all round as further sharp hikes (like the 25% rise in 2006) can only lead to armageddon following proven laws of economics and speculative behaviour. And I have a fair deal of exposure myself. Diversify your investments kids. And buy barrels of crude oil or copper or something instead.

[Jeremy]

Domitianus, if you are genuinely just trying to help people by warning them about the dangers of property ownership, then that's fair enough. It just seems to me that because you post on this subject so frequently (and you don't own property yourself), you appear to be gloating... you just want to be able to say "I told you so", which isn't really constructive.

I'm not in denial, far from it. I'm fully aware of what's going on in the housing market. I'm not "geared to the hilt", neither am I "terrified of negative equity"!

[Administrator]

Moving this to the Lounge as it is about house prices in general

[Domitianus]

-- moved topic --

[Domitianus]

Gloating is not in my nature, old chap, particularly as I know people who have heavy property exposure and who I don't wish to see come to harm. I merely think the housing debate is so geared culturally towards buying that some redress or rebalance is useful.