London House Prices Surge Most in Two Years

[zdreg]

Quote from deThommo:

London is ridiculous. This is why even a terrace house is (apparently) worth GBP300K and the owner turns it into 4 bedsits/studios to pay the mortgage, each one with an immigrant family straight of the boat living in it, and a pokey shoebox studio in Chelsea is priced at half a mill.
Londons a shithole with it's own inflated economy.
I'd leave but I love Soho too much

london is not a shithole.
london is a cesspool.

London, that great cesspool into which all the loungers and idlers of the Empire are irresistibly drained.
Arthur Conan Doyle

 

[Ash1972]

Quote from Visaria:

I don't think so, in Tokyo, people were taking out 100 year mortgages, the entire real estate of Tokyo was worth more than the the entire US etc. A real bubble.

London is not even close, you can barely obtain a mortgage here without a substantial down payment.

Rents here have also gone up much in this year, lending support to property prices.

Rising rental demand is the clearest indication that people are unwilling or unable to buy at current prices.

I don't believe property prices will halve in London long term, but I think we'll be looking a roughly zero rate of growth for some time.

Property is not going to be a good investment for the next 10 years. Everyone's thinking has been skewed by what the London market did from 1996 to the present, but looking at the prior 10 year period would be far more realistic.

 

[sme]

Quote from Ash1972:

In 1989, if you had said central Tokyo real estate prices would fall for the next 20 years, you would have been laughed out of the room..

Deflation is here, and it doesn't spare ANY asset class.

+1

And thank god for deflation. We have entire generations that instinctively fear deflation and do not know how to operate in a deflationary environment--up now means down, and down now means up.

 

[Visaria]

What deflation?

 

[Ash1972]

A falling stock market for a start. The huge dead cat bounce from the March 2009 doldrums seems to have eerily echoed what happened in the central London real estate market..

 

[Visaria]

I laugh at the notion of deflation here in the UK. Our beloved Bank of England has just embarked on a money printing spree to the tune of £75 billion. Prices as measured by the govt's own index are rising at 5.5% pa. In reality, it's more like 7-8% a year. Anyone who thinks there is going to be deflation is seriously deluded.

 

[deThommo]

Quote from zdreg:

london is not a shithole.
london is a cesspool.

London, that great cesspool into which all the loungers and idlers of the Empire are irresistibly drained.
Arthur Conan Doyle

I'd say I was more of a lounger than an idler.

 

[southall]

This is Southall in west london.

Sheds and garages in most back yards converted to 'bungalows' to illegally house groups of illegal asian immigrants (indians mostly) in each one.

No way those guys can afford to buy or rent a place of their own, even in the poorest parts of the capital.

And these slums are spreading to the rest of london too.

http://www.dailymail.co.uk/news/art...ualid-homes-immigrants.html?ito=feeds-newsxml

 

[Ash1972]

Quote from Visaria:

I laugh at the notion of deflation here in the UK. Our beloved Bank of England has just embarked on a money printing spree to the tune of £75 billion. Prices as measured by the govt's own index are rising at 5.5% pa. In reality, it's more like 7-8% a year. Anyone who thinks there is going to be deflation is seriously deluded.

There are two things you really need to understand:

1) Right now we are seeing STAGFLATION: falling *asset* prices and lacklustre GDP combined with increasing *consumer* prices.

2) QE is NOT inflationary, whether they 'print' 75 or 750 bn quid. All monetary printing does is increase the banks' lending base. The point is, no one is BORROWING. The resultant effect on money supply is nil.

 

[Visaria]

Falling asset prices, eh? You may want to check the title of this thread.

As for QE, the notion that it is not inflationary is a contradiction in terms. Have a look at when QE was first announced in the US (and indeed the UK) and then have a look at a chart of stock and commodities prices.