Posts tagged 'london'

Your comprehensive guide to the all new ‘Upstairs Downstairs’ London property market

Three months down the line, enough time has passed to properly assess the impact of Brexit on the London property market. Read more

“Golden bricks”

In the real estate world, the term “golden brick” refers to the first level of bricks above ground and is typically discussed because of the tax implications: developers can avoid VAT on a land sale with a “golden brick” transaction, where it’s obvious that a building is under construction.

In the peer-to-peer real estate world, the term “golden brick” has emerged as a nice bit of spin for property market pain. Here’s Property Partner, a crowdfunding site for housing equity, encouraging its customers to keep buying last week: Read more

Buy this loan to let a wannabe landlord from Brazil get a mortgage in London

You might recall Deutsche Bank’s bearish note on the London buy-to-let market last month. It argued, in short, that regulatory changes had set property in the British capital on the road to a nasty crash in the not-so-distant future.

And that was before minor things like Brexit and the closure of a raft of open-ended property funds. (It still boggles the mind. Open-ended fund. Property funds. Open-ended… property…)

Well, online lenders are putting on a brave face and continuing boldly on. Here’s a prospective 12-month, £143,000 loan just listed on Assetz Capital, one of the many UK lending startups. It yields 7 per cent: Read more

The London scaling effect

Geoffrey West, theoretical physicist at the Santa Fe Institute*, has made a name for himself crunching data from cities, organisms and companies and figuring out the commonalities in how they all scale.

Thus far his work is indicating that a single universal scaling law — linked to network effects — could be behind the growth patterns of all these systems.

For example, the mammals he’s looked at scale in a sub-linear manner, meaning the bigger they are the less energy they use per unit of mass, and the slower their metabolic rates become. The smaller the animal, meanwhile, the more energy they use per unit of mass. The findings are consistent across a wide range of mammals.

This means that the bigger a mammal is the more efficient it is at distributing energy the larger it gets. Similar rules, meanwhile, also apply to the growth rates of individual animals though this sort of growth is not open-ended. Eventually things plateau out, and the mammal gets old and dies. Read more

The London property market is doomed, doomed I tells ya

Yes, yes, we know, people will keep buying property in London no matter the price, no matter the Brexit, no matter the sheer insanity of it all.

But, there’s a credible bear case to be made that regulatory and tax changes in the buy-to-let market — known colloquially as the ‘evil landlord’ sector — are about to prick what has become a very sizeable bubble.

Last week, Deutsche Bank analysts Oliver Reiff and Markus Scheufler made that case over about 70 pages, arguing that for any rational investor, the economics of buying London property have been hammered. Read more

Clickbait du jour: Brexit, banking and housing market exposures charted

From Bernstein’s Chirantan Barua and team:

They “wouldn’t be surprised”, btw, to see house prices down 20-30 per cent if Brexit were to happen as sterling falls, volatility increases and people realise it’s a market ripe for a drop. Read more

Who would buy London property in a market like this?

A chart from Deutsche Bank to soothe the minds of London’s middle-class millennials, whose only shot at owning property in the capital is probably the popping of the housing bubble/unfair destruction of an appropriately-priced market (delete as per your preferences):

 Read more

London, house builders, marketing suites

From the FT’s Kate Allen this weekend:

Data published last week showed that new housing construction has surged by 19 per cent in the past year to 155,080 new homes. That figure is a quarter higher than previously reported government statistics, which suggested that only 124,520 new homes had been built during the period. The figures for London, where the housing shortage is biting the hardest, show the greatest difference. Last week’s data showed that over 24,000 new homes were created in 2014-15, whereas the communities department’s quarterly statistics show only 18,270.

 Read more

Mark 3:25 (or, the UK’s housing divide)

A few charts from the latest English Housing Survey, out on Wednesday…

 Read more

The great London horse carriage war of 2014

The following arrived in our inbox this Tuesday from Hailo, the cabby app which allows you to hail a cab using a mobile:

As of 5pm today you’ll find a free £10 credit applied to your Hailo account which expires at midnight tonight.* Make the most of your evening, stay out late or swap your normal commute with a safe, comfortable and cool cab home. Or why not try our new luxury HailoExec service? Just hit Pick Me Up Here and swipe across to select it. It’s a little post Bank Holiday gift from us to help you enjoy a hassle-free summer with Hailo.

 Read more

Let the generational war begin

(Disclosure: the author is 27… and renting.)

From the UK Prudential Regulation Authority’s consultation paper on the loan-to-income cap… Read more

A game of mega-city states

Here’s a radical idea to deal with the London house bubble from Rob Perrins, managing director of Berkeley Group, the upmarket housebuilder.

Give London its own interest rate.

Or as he put it:

London is getting self-sustaining now – it doesn’t need the stimulus…It should probably have a higher interest rate than elsewhere in the country.

Which begs the question: are super-city states about to disrupt our current concept of the old fashioned sovereign state? Read more

Dispatches from the London House Price zone

Could the tide be turning? This, from Kinleigh Folkard & Hayward’s latest Spring report suggests something is going on:

In the sales market, parts of London are still attracting high numbers of overseas buyers, encouraged by the perceived financial and political security of the London market as an investment choice, along with its education, business environment, health and leisure provision. The lack of supply, which has been a key feature of the market in recent years is starting to ease as vendors become more confident about market conditions. In March, Rightmove reported an 8.7% increase in properties marketed across the country compared to the same period the previous year.

 Read more

Housing boom, ex London

The latest RICS survey shows that house prices are continuing to boom in the UK.

This is despite the fact that the net balance of surveyors reporting house price gains edged down from 58 per cent in November 2013, which was the highest since 2002, to 56 per cent in December. As Citi’s Michael Saunders notes the overall rate remains very high and consistent with house price gains of at least 10-15 per cent year-on-year, especially since the reading for house price expectations is the highest since 1999.

What’s more interesting, however, is that the boom is no longer as London/South-East centric as it has been. Read more

London and those foreign buyers, datapoint du jour

UK home-builders trying to move ahead of the political wind on foreign investors buying up London property?

In any case, though we missed this on Wednesday it seems part of the Zeitgeist — eleven of them agreed not to sell UK (read: London) new-builds abroad before they go on the domestic market from next year: Read more

Flipping foreigners?

Here’s a modest proposal for the prime London property boom: time-travel back and prevent the foundation of the British Empire. Given the post-imperial nature of who seemingly buys.

In the meantime, this is a nice scoop by Sky’s Ed Conway… Read more

London as a cheapo Hong Kong

Does £450/sq ft really count as ‘prime’ London these days?

We don’t know. But these were some interesting charts from Deutsche Bank nevertheless on Monday, about who’s been buying up London from abroad: Read more

Wait what, the enormous unnoticed collapse in London property prices

So, we may have been a little distracted by the boom in estate agents, dark inventory, and London houses earning more than their occupants to see what was really going on.

In fact, London is in the grip of a terrible and deep housing bust that has only just begun to turn. Greater London house prices, adjusted for inflation, are fully 27 per cent below their peak in the summer of 2007.

 Read more

Houses beating households, London edition

Ever feel like you are slipping behind in the rat race? Well, Londoners now face competition from their homes as well. The average house in the capital is now earning as much as its occupants.

As we noted noted last week, London house prices are rising far faster than in the rest of the UK, up 9.7 per cent over the 12 months to July on ONS figures. Read more

Repossessed at One Hyde Park: the Irish connection

There was just one detail missing from the exquisite tale of the repossessed flat now on offer at London’s most hideous luxurious residence. The owner.

Well — after perusing this “exciting opportunity” to own 988 sq ft of One Hyde Park — note the apartment number… Read more

The economics of the Olympics

As Londoners prepare for a two-week-long festival of queuing, mostly in the rain, and getting struck in traffic and on the over-crowded tube trains (otherwise known as the London 2012 Olympics), Goldman Sachs has looked into the economics of the event.

They found that stock markets of recent hosts have outperformed in the year after the Games, local houses prices have tended to rise and that dictators award the most valuable medals. Read more

China to back London as offshore renminbi centre

China is for the first time to give formal backing to moves by British banks to turn the City of London into an offshore trading centre for the renminbi, UK government officials have told the Financial Times. As George Osborne, the chancellor, prepares to hold talks in London with Wang Qishan, the Chinese vice-premier, on Thursday British officials say a joint statement by both countries backing the growth of renminbi trading in London is set to be the centrepiece of their meeting. British banks and financial institutions have for some time been pressing for London to become an offshore trading centre for the Chinese cuurrency. Treasury officials say British banks and financial services institutions increasingly want to trade in the renminbi, seeing this as a rapidly growing market in foreign exchange and bond issuance.

London riots spread on second night of disorder

More than 100 people have been arrested by police on charges ranging from theft and burglary to violent disorder after the Tottenham riots spread to other London boroughs in a second night of unrest, the FT reports. The Metropolitan Police deployed officers across the capital to combat what they described as “copycat criminal activity” in Enfield, Islington, and Walthamstow in north London, and Brixton in the south of the city. Police said “small and mobile groups” of youths who have continued to attack police officers and their vehicles. The violence first started in Tottenham, north London, on Saturday when a peaceful vigil for Mark Duggan – a local resident who was shot and killed during a police operation last week – flared into an angry riot in which officers were attacked with petrol bombs and local businesses ransacked.

Safe haven alternatives, London property edition

As FT Alphaville and others have duly noted, the search for the ultimate safe haven alternative is on.

RBS now points to one possible alternative, London luxury-home prices. Read more

Super rich to get new London address

A leading European hedge fund is preparing to build one of London’s most expensive housing developments as global investors scramble to gain a foothold in the capital’s resurgent residential market, the FT reports. In a deal completed over the weekend, Orion Capital Managers acquired an acre of prime residential land in Chelsea. The fund plans to build a £300m ($493m) housing complex on the site, which is bought for £85m. It has planning consent in place for a building designed by Sir Norman Foster’s practice, with six apartments, a duplex penthouse and two detached villas, which are expected to price at between £25m-£35m ($41m-$57m). Knight Frank found the price of London luxury homes recorded their highest rise in July for six months, says Bloomberg, driven by the low pound and an aversion to mainland Europe.

Licence to Kreil

Investing is difficult. Fortunately, there are wise heads willing to share all of their wisdom and experience in exchange for a modest fee.

Anton Kreil, the portfolio manager in the BBC programme that let eight members of the public trade $1m (£620,000) and run their own hedge fund, is now publishing his trading positions in his ‘Global Monthly Report’. Until now Mr Kreil’s report has only been available to friends and high net worth individuals.

 Read more

CNH centre: coming to a City near you?

We knew that China’s efforts to internationalise the RMB were moving along nicely, but thus far CNH deposits (yuan held offshore in Hong Kong) are still a relatively small part of China’s total deposit base.

But a new paper from RBS notes that as a percentage of Hong Kong deposits, they’re becoming a big deal indeed, and quickly: Read more

Interest soaring in London property

Competition for land in London is hitting pre-recession levels, as international investors prepare to inject more than £5bn into the city’s lucrative residential property market, reports the FT. The money, more than £1bn of which has been raised since the start of the year, will target high-end developments and could see the construction of about 10,000 homes in the capital. The wave of interest is driving up land prices, as investors bid aggressively for new sites, say companies operating in the city’s already congested housebuilding market. London’s appeal has grown for investors as its property market has been relatively insulated from pressures felt elsewhere in the UK amid government austerity measures.

CapCo, Kwoks in London project talks

Capital & Counties, the UK property group, is in talks with one of Asia’s wealthiest families in Asia to provide funding for the multibillion pound redevelopment of the Earls Court site in west London, one of the city’s largest development schemes and potentially the most valuable, reports the FT. CapCo is in talks about a joint venture with the Kwok family, which controls Hong Kong’s largest listed property developer, Sun Hung Kai Properties. The family has been behind some of HK’s biggest property schemes and is looking to diversify its wealth amid spiralling Asian property values. CapCo is continuing the talks directly with the family.

Geneva set to trump London in oil trading

Geneva will leave London behind and become the world’s most important trading hub for physical energy commodities, including oil, as leading companies relocate dozens of traders to Switzerland, according to industry executives, the FT reports. The transfers threaten the UK capital’s leadership in physical crude and oil products, first established in the late 1980s, and come amid broader financial industry complaints about stiffer regulation, higher taxes and poor transport infrastructure in London. The Geneva Trading and Shipping Association, the industry body, believes the Swiss city now “ties with London as Europe’s number-one oil trading hub”. But oil executives said the balance was turning in the favour of the Swiss city.