We have seen, over the past 12-18 months, the most extraordinary HPI in central London. 100% is not abnormal.

Could prices fall 50% over such a short period of time (i.e. the same amount) - not even the beariest of bears on here suggests that.

Moreover, if they do fall 50%, then they're back to Winter 2006 levels - which are supposed to be unsustainably high.

Are we looking at 80% or 90% falls over this period?

I recall that in 1989ish, at the absolute peak, 2/3-bed Victorian terraces in Bow, in the East End were 250k apiece. By 1991ish they were 75k and didn't move until 1997. 500-600k now. (1987ish = 60,000; 1986ish = 6,000).

[I might be the odd year plus/minus with these last numbers, but you get the idea.]

The beariest of bears say that on average, the falls will probably be less than 50%, just as they were in the last crash. However, where properties have been rising at ridiculous rates, such as 100% in a year (on average, London HPI is much lower than that), then I think that prices could easily fall by a lot more.

New build flats and the Belfast market are just two examples of rapid rises being followed by rapid falls at the moment.

in my experience of equties markets,they alsways go down quicker than they come up.fear is a more pwoerful emotion than greed

Resistance to increases is lower than falls due to increased LTV's, extending mortgage peiods and like. Fall aren't so easy due to people mentality and the effects of negative equity, most who can, will weather the storm which will restrict supply and acting as some sort of support.

Having said that 'real term' falls are easier to envisage and the long term income multiple of 3.5 is like that for a reason. Just remember if a house falls 50% from 200 to 100, it has to go up 100% just to get back where it was!

I can only speak from personal experience

I bought a one bed flat in Ealing - admittedly NOT central London but:-

Bought 1987 - £62,000

On Market - 1988 - £80,000

Sold 1989 - £62,000

1989 was just the start, so I am assuming it probable got down to around £40ish

50%

Things were no way near as over inflated as they are this time.

Only time will tell.

Wanna back that up with some evidence.

Uhuh.

55 Grange Road, Southwark, London, Greater London, SE1 3BH £796,500
Terraced Freehold Not New Build 12-Nov-2007

52 Grange Road, Southwark, London, Greater London, SE1 3BH £790,000
Terraced Freehold Not New Build 27-Jun-2007

51 Grange Road, Southwark, London, Greater London, SE1 3BH £510,000
Terraced Freehold Not New Build 19-Jan-2007


51 and 52 are similar. Compared to these 55 is not as nice, smaller and has no garden worth speaking of, suggesting a November 2007 price of 950 for 51 or 52.

That's 86% over 11 months and prices are firmer there now than they were then. 51 did need some of its rooms painting.

I don't know this street because, well, because it's Sarf Lahndan and I wouldn't go there without good reason and suitable innoculations, however.. Google Earth allows me to visit it vicariously.

There's a row of terraced houses on Grange Road, some of which have gardens and others have what look like industrial units where there used to be a garden. Assuming this is the row you are talking about, can you tell me which way the numbering runs? I'd expect 52 to be just across the road, but the properties there look like nasty 60's council flats.

I guess what I'm saying is, show me several examples of very similar properties and I'll agree with you that 100% rises in a year are feasible, otherwise I'm going to believe the consensus of the various statistical indicators over the last few years which indicate low double figure rises and reply to you with a clear and concise.... AWOOGAH!



[edit - Breaking news! I will be visiting S. London in two week's time as I've just got a pair of tickets for the match at Twickenham to watch the bogtrotters lose. Right, must pop down to the B.A. travel clinic and get a top up yellow fever jab.]

Not that easy... as freehold properties round here (which are the ones showing the uplift) are few and far between. And those that there are, tend to be rather different sizes, so a £psf basis makes more sense, but you're not going to believe me... Whatever, low double figures are WAY out over the last 18 months or so.

Grange Road referred to above has a terrace of sequentially numbered houses, so the examples are all next door to each other. (The council block opposite is a s*****y [that's funny, I'm sure I put luxurie apppartment] flat development.)

33 Alma Grove, SE1 5PY £448,250
Terrace Freehold Not New Build 13-Jul-2007

43 Alma Grove, SE1 5QB £320,000
Terraced Freehold Not New Build 08-Dec-2006

32 Alma Grove, SE1 5PY £289,000
TerracedFreehold Not New Build 03-May-2006

So that's 55% for Alma Grove in a year, but missing out on the latter part of last summer; I'd guess they've hit the 500k mark by now.


75 Pages Walk, SE1 4HD £525,000
TerracedFreeholdNot New Build 19-Nov-2007

91 Pages Walk, SE1 4HD £405,000
TerracedFreeholdNot New Build 22-Jun-2007

65 Pages Walk,SE1 4HD £473,000
TerracedFreeholdNot New Build 05-Apr-2007

65 Pages Walk,SE1 4HD £330,000
TerracedFreeholdNot New Build 26-Aug-2005

That's 60% over an admittedly longer period, but nothing much happened market-wise from summer 05 to summmer 06

17 Bartholomew Street, SE1 4AJ £430,000
Terraced FreeholdNot New Build 05-Jan-2007

7 Bartholomew Street, SE1 4AJ £380,000
TerracedFreeholdNot New Build 26-Nov-2004

Bartholomew St is very similar houses to the Grange road ones in first example; they sell for similar amounts, and one (requiring a lot of work but a little bigger) is now on the market at 800k

Now to Marylebone - more your part of the world? :

http://www.primelocation.com/uk-property-f.../PRKP999000177/ - for sale at 1.35m and they'll get it - see my other thread about a nearby much less nice but arguably better located property with three buyers.

49 Molyneux Street, W1H 5JD £1,250,000
TerracedFreeholdNot New Build 31-May-2007

19 Cato Street, W1H 5HR £725,000
TerracedFreeholdNot New Build 29-Sep-2006

30 Molyneux Street,W1H 5HW £780,000
TerracedFreeholdNot New Build 16-May-2006

38 Brendon Street, W1H 5HE £795,000
TerracedFreeholdNot New Build 24-Feb-2006

OK, so that's a 75% increase over a similar period.



Crash? What crash? Not here.

Good research.

If you're correct, then the people who have seen a 65% or more increase on their purchase are safe from a 40% drop in prices which is what a lot of the more rational opinions on here think we'll witness. Of course, if they've used their equity as a cashpoint, they might be a bit fooked though.

I still don't believe 100% in a year. Maybe one place in 10,000 got a mad punter with cash burning a hole in his pocket but otherwise, nah.

I'm not going to begin to argue the "crash, what crash?" statement, as that's just an opinion based on trailing rather than leading statistics.

[edit; too many "thoughs". Oh, and I'm going to Twickers and you're not. Na na na nah nah.]

How is this a 50% fall? It sold twice for 62K so a drop to 40ish would be 33%. By your logic if you had marketed it in 1988 for 400K that would of meant a 90% drop.

So you can't back it up then, you have cherry picked a few properties to prove 86% in a very small sample, your second attempt produced less impressive results.



Great, but what about 50 Alma road? Sold on 15th October-2007 ?????



Wrong... they are now at the £384,994 mark in October, god knows what they are today......

Hi Paddles

SE1's my home patch, and it has been so hot it's unbelievable. Marylebone is a second home to me, and that's been just as hot. And they're still going up, see my other thread on Marylebone.

http://www.housepricecrash.co.uk/forum/ind...showtopic=69369

So yes, in areas where prices have nearly doubled over a short period in time (and I can't think of any more f/h houses in the area, and flats are too difficult to keep track of as they're all different sizes), provided you didn't buy at the top, who cares about a 50% correction. And if - as I did - you managed to sell at the high price, and buy at the low price (smug) because the sellers' rather dim agent hadn't caught up with what was happening, that's 200% house price return in no time at all, so prices can crash by 80% before I'm poorer than I was in Autumn 2006. I wanted to STR, but the opportunity to buy at 2006 prices - i.e. half price - was too much like good value.


I think you'll find, gilf, that 50 Alma Grove was a wreck so it didn't seem worth including; Sold 15 October 2007 means the offer almost certainly went in before the credit crunch happened and prices started to slide in the provinces; certainly no way they slipped 15% during the middle of last summer in SE1. Whatever you may want to believe. And add the Bartholmew St results in with the Grange Rd ones; similar increases.

Here's another part of town with impressive growth: E3 - Bow, Tower Hamlets.

179 Swaton Road,E3 4EP £455,000
TerracedFreeholdNot New Build 14-Sep-2007

175 Swaton Road,E3 4EP £364,000
TerracedFreeholdNot New Build 16-Mar-2007

78 Swaton RoadE3 4ET £300,000
TerracedFreeholdNot New Build 01-Sep-2006

72 Swaton Road,E3 4ET £245,000
TerracedFreeholdNot New Build 08-Jun-2006

183 Swaton Road,E3 4EP £310,000
TerracedFreeholdNot New Build 12-May-2006

So that's 50%

447 Mile End Road,E3 4PA £775,000
TerracedFreeholdNot New Build 01-Nov-2007

455 Mile End Road,E3 4PA £635,000
TerracedFreeholdNot New Build 26-Jul-2007

443 Mile End Road,E3 4PA £580,000
TerracedFreeholdNot New Build 04-Sep-2006

449 Mile End Road,E3 4PA £575,000
TerracedFreeholdNot New Build 07-Apr-2006

441 Mile End Road,E3 4PA £470,000
TerracedFreeholdNot New Build 15-Nov-2005
Map (E3 4PA)

That's "only" 35% spring 06 to autumn 07, but 65% is you stretch it back to a 2 year period.

So, is it your view that there isn't going to be a crash or that if there is one it doesn't matter to most people?

16,156b The Glass House Bermondsey Street,SE1 3TQ £660,000
FlatLeaseholdNot New Build 11-Oct-2007

16,156b The Glass House Bermondsey Street,SE1 3TQ £455,500
FlatLeaseholdNot New Build 28-Mar-2007

45% in 7 months... - this is a luxury apartment - so called

I did market it at £80,000. I was offered £78,000 which I wanted to accept but my partner refused. When we put it back on the market a year later the valuation was £18,000 down.

That is what I was referring to - the peak @ £80,000.

The point is to yoyo £20,000 in the space of two years is nuts really.

Oh they can fall.... http://www.housepricecrash.co.uk/forum/ind...showtopic=40472

Just as the average never went up 50% in a year, the average won't fall 50% in a year. Individual properties/areas on the other hand... It's perfectly possible.

New-build flats always sell at a premium and are worth less when second hand. Just like second hand cars. Who will pay as much for a flat which has a pre-used kitchen and bathroom and carpets as for a new one? Nobody. Just like a second hand BMW. Second-hand flats have no rental guarantees, free carpets, SDLT paid

So the point of your observation is...

... that second-hand goods without sweeteners are worth less than new ones with sweeteners.

That's a non sequitur. I was merely pointing out that rapid falls are indeed possible. It's interesting that you use the fact that new-builds sell at a premium to justify prices drops. Property generally has been selling at a premium recently because we were in a bubble market financed by widely available credit.

In fact if an omnipotent being were trying to test your theory to destruction they would start by creating exactly the market conditions that we have now. You'll be shocked by how swift the drops can be.

In central London - which is the only place that I presume to speak about - prices continue to rise. As I keep repeating! Buyers continue to fight over properties.

What's the non sequitur by the way - I cannot see any sequitu, let alone a non?

Has anybody ever denied that new build sells for a premium over second hand? It is true that in a rising market you may get more for a second hand flat than you paid for it, but that has nothing to do with the flat in question, does it.

You started talking about new build flats when my point was about statistical averages.

As for your assertion that prices continue to rise in Central London, it depends how central you mean? I'm seeing asking prices slashed in Notting Hill and good properties failing to sell.

Errr, you pointed to a discussion on resale values of former newbuild flats in Nottingham as evidence of rapidly dropped values - when some of the drop at least is attributable to the loss of the 'new' gloss.




W1, SE1. Notting Hill is a drugs-filled dump.

Prices slashed in EA windows have nothing whatsoever to do with a HPC. EAs slash prices even as prices rise, owing to over-optimistic pricing. Asking prices are not 'values'; they are exactly what they say. You don't get a value until the parties to a transaction exchange contracts.

Still waiting for you to provide evidence of this.

Telometer: To what capacity do you work in property?

Edit to add: it's interesting that most of the rise in the Grange Road properties occurred in early '07. Only a few grand after that.

Whereas your anecdotal price increases have no context whatsoever.




SE1? I see your knowledge of London geography is as good as your understanding of asset bubbles.

I'd put money on Foxton's especially with the join up date 15th February 2008.

Nope, I don't work in property. I work in the city. (And if I worked in Foxton's Islington Office I'd probably be posting Islington prices...)

I have posted considerable evidence of near 3-figure price rises over a shorter period than my suggested 18 months. Are you seriously suggesting that prices have fallen in these areas over this period?

Sorry, missed your post. The latter. To most people they are only paper profits.

Obvoiusly if you borrowed £1m on a 125% 6x mortgage and bought last October and you don't get the mega bonus you were hoping for, so have to sell then you will be stuffed.

But if you borrowed 500k on a 100% mortgage last January and your property is now worth 950k... then a 50% reduction in value isn't going to make any difference to you.

Those headline rates of "only" 10-20% per annum are as much nonsense as the CPI numbers. They cover the entirety of Greater London, including such gems as Thamesmead (where prices achieved have fallen off cliffs - but that's got nothing to do with a HPC - albeit everything to do with a bubble, but a very local bubble).

I don't care if prices drop even 50%. In fact I would be delighted as it would make moving up the ladder easier. But I would care very much if I were out of the market and they rose another 10%. No way I could ever get back in.

If you borrowed 500k on a 100% mortgage last January and think your property is now worth 950k... then you probably account for a large part of the drug consumption figures in those areas you were telling us about.

Either that or you've got corrupt connections in the property business and you ripped someone off.

That was a fun day. I cycled home with a gum-shield in.....

A quick calculation...

if something rises by 100%

but then falls by 50%

the starting price is the same....

if it were to fall by 100% it would be £0..

YA??

where are the scholars when we need one...

Correctamundo

OK. I've just managed to find land registry numbers for the last 18 months for SE1.

http://www.home.co.uk/guides/house_prices_...mp;endyear=2008
Jan 2007 Jan 2008 Change



Terraced £265,000 £590,000 +123%

Flat £314,430 £448,800 +43%

All £313,515 £457,625 +46%

Looking at the graph on the home page (which you were so keen to cite in another of your most interesting threads) the last crash shows prices falling at about the same rate as they rose. So what's your evidence for this bold comment?

Not possible. I can only ever have one most interesting thread.




Going back to my original assertion, I can only repeat my original assertion that nobody on here (or if they are, I have missed the thread) no matter how beary is suggesting price falls of 50% in under a year - nor anything like. 30% over three years, perhaps.

Yet I can point to clear evidence of large property hotspots where the price rises in a much shorter period than the 3 years suggested for the 'crash' are the 100% or more.

Hence the use of the word 'can' in my assertion. I fully take your point that the home page graph is reasonably symmetrical. However I am more interested in the extreme cases, and am yet to see anybody posting evidence of such rapid falls in such a short period. Newbuild shoeboxes don't count.

Maybe SE1 will show a 50% fall over the coming year for terraced houses; I should be very surprised but am happy to be proved wrong. Personally I don't care; I have a roof over my head that belongs to me come what may.

I refer you to your inflation thread (which surprised me, since you're supposed to work in the city and should therefore understand that kind of stuff).




Why are you more interested in the extreme cases?!? Your thread is titled 'Prices Can Rise More Quickly Than Ever They Can Fall', not Prices Can Rise More Quickly Than Ever They Can Fall In Extreme Cases.

Thanks for accepting that the fall was similar in gradient to the rise the last time this happened. Again I refer you to your title 'Prices Can Rise More Quickly Than Ever They Can Fall', with emphasis on the word 'ever'. This has happened already, so you are wrong.

You didn't mention the number of properties sold:

Number of Properties Sold in SE1

Jun 2006 Dec 2007 Change

Terraced 2 2 0%

Flat 106 59 -44%

It's hardly surprising that the figure for terraces is very volatile given that only 2 sales were recorded in each month. Maybe the ones sold in Dec 2007 were just much better properties? The price figure for flats also doesn't mean much on its own given the drop off in volume and the median was only up 5%.

I think you need to check your facts! Prices have not doubled in the last year anywhere!

I think you will find those figures are for Jun 2006 to Jan 2008, a period of 18 months rather than a year as you have changed the heading to, if you want to fiddle the figures please do so, but I suggest you do it somewhere the forum members are not total idiots.

I shall post the real figures for you....

Jan 2007 Jan 2008 Change
Detached 435,000 - -
Semi £320,000 - -
Terraced 340,000 £590,000 +74%
Flat £265,000 £315,000 +19%

Number of Properties Sold in SE1
Jan 2007 Dec 2007 Change
Detached 1 0 -100%
Semi 1 0 -100%
Terraced 5 2 -60%
Flat 69 59 -14%

The second stat shows clearly that the volumes are so small that no useful conclusions can be drawn from these figures.

It will be interesting to see whether Telometer posts a response of any merit... doubt it.

So just like in my OP, then. Well spotted!



So a mere 74% over a year then. What a piffling amount.

I agree the numbers are low, but I've produced numbers earlier in this thread with identical houses virtually next door to each other over this period. You guys really are so completely in denial that house prices have risen that you refuse to believe numbers when they're put in front of you.




Of more merit than your post, Disillusioned. Backed up with hard facts rather than abuse!

You get merit for avoiding the points I made yesterday, but for nothing else.

Again I refer you to the title of your thread and my post on Wednesday at 05:56 PM. You keep banging on about how prices have gone up - like no-one here knew that - but you've yet to provide evidence of the falls in price being slower then the rise. I have provided my evidence of an equal gradient and you have provided nothing... nada... zip.

Sigh.

What you are saying amounts to "people much prefer making money in a boom to losing it in a crash"
FWIW I think this is completely uncontroversial and obvious. I am not surprised you found so much evidence. Prices can actually fall quite quickly, which is shown on the graph, because in the downswing they are set at the margins by forced sellers who have no choice other than to accept the loss- most choose to hold until the recovery and lose invisibly or not at all- depending on thier play in the boom phase.

i'm not going to bother quoting from this thread or searching out links because im sure you're not really interested or open to persuasion. But to go on, as you have, to use this simple observation to argue that prices cant really fall far or that any falls won't really matter is qiute simply wrong. I know how it seems: because prices have risen so far and for so long that even the worst predictions look fairly mild. The staggering scope of the boom has so distorted everybodies perception of risk that it can only end badly.

I think you should follow the events unfolding in America very carefully, modest declines in a market that boomed far less and for a shorter period than ours have caused havoc. Its so bad the Banks are talking about forgiving some of the mortgage principle as long people keep paying SOMETING, anything other than more keys in the mail. Imagine that. If you worked in any meaingful capacity in "the city" you would know this. These developments have made me an ultra-bear: 50%+ nominal 70%+ real declines are a possibility although not by any means certain 25%+ is definite really. Such a loss would be a catastrophic destruction of billions (trillions?) of pounds in housing wealth. To assume we'll collectively be able to laugh it off on top of the ensuing recession/depression is unduly optimistic.

And those numbers you also left out information which was relevant i.e. a property which didn't show the trend you were saying....

As for the 74%, yes very impresive but still way short of your 100% which you claimed in your orginal post was the norm.

You have consistently failed to show a single 100% when you claim there was nothing abnormal with the figure.

I claimed my 100% over a 12-18 month period.



With 74% over 12 months and 123% over 18 months, then that's exactly what I claimed as not abnormal. Who cares; it's not the point of the first post.

Some of the more paranoid posters here seem to suggest that I am denying that prices can fall quickly, or that I am asserting that they will not fall as quickly as they rose. Where did I write that? (Other than in the title which would admittedly benefit from a question mark, but is of necessity brief.)

Not even the owner of this site is predicting 50% falls, and his 30% falls are over iirc a three year period.

You may recall (except you won't as you're all deliberately ignoring - or do not want to understand - what I wrote in my first post I asked and gave evidence of a 70% fall over a two year period in the 1990 crash.

My original post was suggesting that the bears not beary enough.

You're also linking a prediction for the national average fall (actually 35%) with a specific London postcode... you work in the city and you can't see the problem with this?
Those areas which had rampant HPI (like the area you've repeated over and over and over and over and over again - Zzzzz) are likely to be the areas that fall the most - much more than the average.

idiots are impervious to reason.

a really common strategy i've noticed among the 'neither' posters are to make a series of obv bullish, and given the forum, inflammatory posts like the one quoted. Once this immediate argument runs into strong opposition they retreat to nuetral territory. Rather than concede the point the origonal position is vastly watered down, and in the eyes of the idiot when you agree on the vague generalisation the argument is won.

This is a good example:

"Some of the more paranoid posters here seem to suggest that I am denying that prices can fall quickly, or that I am asserting that they will not fall as quickly as they rose. Where did I write that?"

by focusing on very limited aspect of his position and totally ignoring the wider points he made in this thread he is hoping to force an agreement and carry the day. Actually when he(?) wrote "Are we looking at 80% or 90% falls over this period?" the question was clearly rhetorical, which they knew full well. This is how teenagers and the uninformed argue, my other favourite closers are "We all have an opinion and mine is worth just as much as yours" "i'm just joking ur so srs, lol" "look @ my face am i bovvered"- all of these get the person out of responding directly to points they feel they can't answer while saving face.

Drifting off topic- thread is dead anyway- Why bother though? I started posting here just to have someone agree with me once in a while, frankly. Bears are lonely in the real world. But these guys have the whole rest of the world to agree with them why even make an account? I don't know about anyone else but in ordinary discourse the "HPI" argument has been an open goal for bulls for a long time now and in alot of social situations ive noticed that certain people enjoy apparently 'winning' it again and again- not always vs me - perhaps if you dont get to 'win' in these situations often or are not known or percieved as being clever its important to have something to feel good about and on here you can have it again and again, dam its almost masturbatory: new definition of 'property porn'?

Is this a joke?

Youre quoting 'price rises' for different properties on the same street and ignoring price falls.

Thats beyond stupid.





As for this.... when I go to the page and look for the dates you have outlined Jan07-Jan08 these are not the figures I get - it says 77%.

Additionally the properties are not like-for-like houses they could be any type of house.

Finally youre brilliant sample consists of 1 sale....yes ONE sale.


Now Telemoter of whatever youre called listen and listen good -

Fu C koff and stop wasting peoples time with your special needs analysis of the housing market.

Needles. I suggest you read Laughing man's excellent post above.



Your position of antagonism to my initial post, Needles, has nothing to do with evidence or fact. Merely belief. There is plenty of evidence earlier on in this thread of like-for-like houses. This was derided as cherry picking.

A more general approach however is derided as possibly not representing like-for-like.

I'm sure I've never been sworn at on a chat forum before.

You'd probably better get used to it because, so far, your posts have been worthless.

Have you admitted to yourself yet, that prices CAN fall as quickly as they can rise?