There has been a huge response to my article on London house prices from last week. MoneyWeek readers seems to be genuinely split on this one. Half think that London is so fabulous and so much in demand that prices can\u2019t ever fall much \u2013 or for long. The other half are totally convinced that a crash is on the way.<\/p>\n
However, for me the most interesting of the comments on the matter come from those with some knowledge of the new-build sector in London.<\/p>\n
I hear constantly that too much is coming on too fast (this round of supply will peak later this year) and that sales (both first and second hand) are running into trouble at a good number of new developments.<\/p>\n
Reader John D thinks he sees the same thing: don\u2019t forget about all the foreign off-plan purchasers, he says. \u201cWhen the flats are finished they will have to pay the bulk of the purchase price. With the collapse of emerging currencies that final payment will be much higher than they expected.\u201d So they\u2019ll be selling up before they have to pay the balance of the price.<\/p>\n
Another reader tells us he has already seen that happening with flats in the tower at Saffron Square. The number of off-plan resales he says is already \u201cstaggering\u201d.<\/p>\n
The Sunday Times picked up this story at the weekend. Cross the river from Pimlico to south London, turn on to Nine Elms Lane and you will \u201cfind yourself in a mile long building site\u201d, says Oliver Shah in the paper. What you won\u2019t find is very many people.<\/p>\n
Five years ago, Nine Elms \u2013 or \u201cSingapore on Thames\u201d as Charlie Ellingworth of Property Vision calls it \u2013 was held up as \u201cthe brightest spot in London\u2019s construction boom\u201d. Now its 18,000 homes and two new tube stations exemplify a \u201cglut of supply and shrinking demand\u201d. Selling prices in the area (SW8) fell 7% last year (LonRes) and some 28% of unsold properties have been on the market for over a year. At the same time, the UK\u2019s property websites are \u201cawash with unofficial resales in developments including Battersea power station and Embassy Gardens\u201d.<\/p>\n
The good news here, as search agent Henry Pryor always tells us, is that with most bad news comes opportunity. So some developers are already offering to pay buyer stamp duty and others are offering \u201cdeals on furniture packs\u201d. Perhaps real price falls will follow.<\/p>\n","protected":false},"excerpt":{"rendered":"
There has been a huge response to my article on London house prices from last week. MoneyWeek readers seems to be genuinely split on this one. Half think that London is so fabulous and so much in demand that prices can\u2019t ever fall much \u2013 or for long. The other half are totally convinced that […]<\/p>\n","protected":false},"author":9,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[3,1],"tags":[],"class_list":["post-1579","post","type-post","status-publish","format-standard","hentry","category-news","category-uncategorized"],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/p9PjAq-pt","_links":{"self":[{"href":"https:\/\/poseidon-gp.com\/property\/wp-json\/wp\/v2\/posts\/1579","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/poseidon-gp.com\/property\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/poseidon-gp.com\/property\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/poseidon-gp.com\/property\/wp-json\/wp\/v2\/users\/9"}],"replies":[{"embeddable":true,"href":"https:\/\/poseidon-gp.com\/property\/wp-json\/wp\/v2\/comments?post=1579"}],"version-history":[{"count":0,"href":"https:\/\/poseidon-gp.com\/property\/wp-json\/wp\/v2\/posts\/1579\/revisions"}],"wp:attachment":[{"href":"https:\/\/poseidon-gp.com\/property\/wp-json\/wp\/v2\/media?parent=1579"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/poseidon-gp.com\/property\/wp-json\/wp\/v2\/categories?post=1579"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/poseidon-gp.com\/property\/wp-json\/wp\/v2\/tags?post=1579"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}