Hundreds of flats in Canary Wharf development sell in hours - half to foreign investors

[Mr Smin]

Property expert Henry Pryor
"...selling what is really a sterling currency option dressed up in bricks and mortar..."

He might be saying that to buyers, but the two things are quite different.

 

[ska invita]

Property expert Henry Pryor
"...selling what is really a sterling currency option dressed up in bricks and mortar..."

He might be saying that to buyers, but the two things are quite different.

this is it - investing in the stock market is a madly risky business, especially so at this time - like was for pension pots...so much of that money is ending up in property....its not all foreign investors...even putting your own money into a pension scheme, pension companies are investing that into property...

 

[gosub]

or were. At least two banks have put out warnings in the last year that its a bubble do not touch. Its similar to what happened in Hong Kong, where there also wasn't enough residential housing, and people have to live somewhere so the money piled in. As soon as the government said they would do something about it,building x number of flats, the money ebbed away. Thus creating pressure of a different kind. In the end they only built a fraction of the housing they needed and said they would build.

 

[Dogsauce]

this is it - investing in the stock market is a madly risky business, especially so at this time - like was for pension pots...so much of that money is ending up in property....its not all foreign investors...even putting your own money into a pension scheme, pension companies are investing that into property...

If they fund purchase by getting a mortgage in pounds, they can then wait for the pound to plummet on the UK leaving the EU and pay it off at a fraction of the cost. It's a decent gamble if you have the bread.

 

[Mr Smin]

If they fund purchase by getting a mortgage in pounds, they can then wait for the pound to plummet on the UK leaving the EU and pay it off at a fraction of the cost. It's a decent gamble if you have the bread.

The moneyed foreign buyers aren't getting mortgages, they're cash buyers. The point is to own an asset rather than hold cash. Also, if sterling falls and stays down following brexit it will be as part of a wider economic shock which will see property prices fall: london premium property would be less of a safe haven investment, and there would be a (perhaps small) fall in demand for the sorts of places ordinary people actually live in if there were fewer jobs to be had.

 

[FridgeMagnet]

There are properties selling on my street starting at £1.95 million. (This is not a great street btw; not awful but a pretty standard London real-people type street, flats and nail bars and laundrettes.) The houses have clearly been architecturally designed specifically for investors who won't live there, and nobody else will. They have huge glass-fronted living rooms which give a great view into the house but are utterly impractical as real dwelling places. You couldn't even rent these; who would pay the rent required to cover a £1.95m mortgage in a dodgy area of Shepherds' Bush?

International capital doesn't provide the only driver here but it perpetuates it.

 

[Brainaddict]

There are properties selling on my street starting at £1.95 million. (This is not a great street btw; not awful but a pretty standard London real-people type street, flats and nail bars and laundrettes.) The houses have clearly been architecturally designed specifically for investors who won't live there, and nobody else will. They have huge glass-fronted living rooms which give a great view into the house but are utterly impractical as real dwelling places. You couldn't even rent these; who would pay the rent required to cover a £1.95m mortgage in a dodgy area of Shepherds' Bush?

I've been thinking for a while that it can't be possible to rent out all these expensive new flats. There aren't enough people with enough money in London to take them, surely? I do wonder if something might go 'pop' when investors start to realise how unlettable many of these places are. I mean, it's all a confidence game at the moment, so if a few key players start to lose confidence it could all go pear-shaped. There are people whose business model doesn't include letting the flats out, so they don't care, but if there are people whose business model includes letting out, and they discover they can't....

 

[brogdale]

I've been thinking for a while that it can't be possible to rent out all these expensive new flats. There aren't enough people with enough money in London to take them, surely? I do wonder if something might go 'pop' when investors start to realise how unlettable many of these places are. I mean, it's all a confidence game at the moment, so if a few key players start to lose confidence it could all go pear-shaped. There are people whose business model doesn't include letting the flats out, so they don't care, but if there are people whose business model includes letting out, and they discover they can't....

Probably best to see the new-builds as a kind of (asset) bank for the global, post-national, profit dependent classes to stash their wealth in a jurisdiction that they perceive as stable/secure.

 

[isvicthere?]

Looks like London is set to rival Zürich as money-laundering capital of the world.

This makes me sick to my guts. I never thought I'd consider leaving this city I've loved for so long.

 

[isvicthere?]

I've been thinking for a while that it can't be possible to rent out all these expensive new flats. There aren't enough people with enough money in London to take them, surely? I do wonder if something might go 'pop' when investors start to realise how unlettable many of these places are. I mean, it's all a confidence game at the moment, so if a few key players start to lose confidence it could all go pear-shaped. There are people whose business model doesn't include letting the flats out, so they don't care, but if there are people whose business model includes letting out, and they discover they can't....

No-one IS going to live in them. Hence the new(-ish) term buy-to-leave.

They're empty shells for foreign consortia and money-launderers to use as an "investment."

A term other than "housing" should be invented for them.

 

[Brainaddict]

No-one IS going to live in them. Hence the new(-ish) term buy-to-leave.

They're empty shells for foreign consortia and money-launderers to use as an "investment."

A term other than "housing" should be invented for them.

Yes, I know that's true for a lot of them. But is it true for all? I don't think we know. The full facts about buyers and their finances aren't readily available afaik. What I'm trying say is if only a small percentage of them have been bought by people who have, e.g. borrowed money and are dependent on rental income to repay the debt, and then that rental income doesn't appear, then I suspect that just that percentage could cause some serious perturbations in the market.

 

[isvicthere?]

Yes, I know that's true for a lot of them. But is it true for all? I don't think we know. The full facts about buyers and their finances aren't readily available afaik. What I'm trying say is if only a small percentage of them have been bought by people who have, e.g. borrowed money and are dependent on rental income to repay the debt, and then that rental income doesn't appear, then I suspect that just that percentage could cause some serious perturbations in the market.

I hope so. It's long got on my nerves that spectacularly prohibitive prices for even modest housing are somehow "good news."

 

[Pickman's model]

I'm sure it doesn't in your mind, but for many people that might not be the case. That's why it's important to be careful with language and not feed into some UKIP-style myth of thieving foreigners buying up empty flats. The problem is with property prices, not foreign buyers.

perhaps you could run through the factors which make the cheapest flat at a development - eg east57 in dalston - something like £500,000. what costs lie behind this?

 

[Pickman's model]

Yes, I know that's true for a lot of them. But is it true for all? I don't think we know. The full facts about buyers and their finances aren't readily available afaik. What I'm trying say is if only a small percentage of them have been bought by people who have, e.g. borrowed money and are dependent on rental income to repay the debt, and then that rental income doesn't appear, then I suspect that just that percentage could cause some serious perturbations in the market.

when?

 

[bi0boy]

perhaps you could run through the factors which make the cheapest flat at a development - eg east57 in dalston - something like £500,000. what costs lie behind this?

Like almost every other thing, flats aren't sold at cost price.

 

[Pickman's model]

Like almost every other thing, flats aren't sold at cost price.

that's your running through the factors behind the pricing? pisspoor

 

[bi0boy]

that's your running through the factors behind the pricing? pisspoor

I'm not a quantity surveyor.

 

[Brainaddict]

when?

Who knows? It might not happen at all. We're in fairly uncharted territory here (it isn't just London this is happening in but many 'global brand' cities, as marketers like to call them). We can only speculate about if or how it all goes tits-up. The markets are complex, non-linear systems, including the links between property and stock markets. Betting on how/when the next crash will happen would not be a good use of cash, but I find it interesting to take a few stabs in the dark about where the cracks will finally start to show.

 

[Pickman's model]

I'm not a quantity surveyor.

you don't need to be a qs to have some knowledge of the factors affecting pricing of new properties: you've already alluded to one.

 

[Pickman's model]

Who knows? It might not happen at all. We're in fairly uncharted territory here (it isn't just London this is happening in but many 'global brand' cities, as marketers like to call them). We can only speculate about if or how it all goes tits-up. The markets are complex, non-linear systems, including the links between property and stock markets. Betting on how/when the next crash will happen would not be a good use of cash, but I find it interesting to take a few stabs in the dark about where the cracks will finally start to show.

go on then

 

[stethoscope]

If you can't point out the very real problems of international capital and international investment (and its very much about that capital and class, not people from other countries wanting somewhere to live) on the pressures of London housing, especially when its happening in poorer boroughs, without being accused of some sort of liberal 'careful you don't sound like UKIP' comparison, socialism/left/class politics is properly fucked.

 

[brogdale]

I'm sure it doesn't in your mind, but for many people that might not be the case. That's why it's important to be careful with language and not feed into some UKIP-style myth of thieving foreigners buying up empty flats. The problem is with property prices, not foreign buyers.

The class of individuals investing in off-plan new-builds in central London do not really recognise things like nationality or race, they regard themselves as belonging to the post-national class with sufficient capital to benefit from free movement. The demand resulting from their investment preferences has massively accelerated the bubble of house-price inflation in the capital. This has nothing to do with perceptions of xenophobia, it is just what has occurred and continues.

 

[Sue]

perhaps you could run through the factors which make the cheapest flat at a development - eg east57 in dalston - something like £500,000. what costs lie behind this?

'The council gave permission for the FiftySevenEast project last year after Taylor Wimpey argued that the tower would help tackle the housing shortage in Hackney.

Then, in October this year, the developer held a marketing event for FiftySevenEast at the Regent Hotel in Singapore.'

These flats in Dalston are being marketed to buy-to-let investors in Singapore — dalstonist

£520 grand for the cheapest (and very small) flat.

Plot 35 - FiftySevenEast

 

[bi0boy]

The class of individuals investing in off-plan new-builds in central London do not really recognise things like nationality or race, they regard themselves as belonging to the post-national class with sufficient capital to benefit from free movement. The demand resulting from their investment preferences has massively accelerated the bubble of house-price inflation in the capital. This has nothing to do with perceptions of xenophobia, it is just what has occurred and continues.

I am aware of that, which is why I am resisting framing the debate in terms of "foreigners", unlike others on this thread.

 

[brogdale]

'The council gave permission for the FiftySevenEast project last year after Taylor Wimpey argued that the tower would help tackle the housing shortage in Hackney.

Then, in October this year, the developer held a marketing event for FiftySevenEast at the Regent Hotel in Singapore.'

These flats in Dalston are being marketed to buy-to-let investors in Singapore — dalstonist

£520 grand for the cheapest (and very small) flat.

Plot 35 - FiftySevenEast

Shit like this enables the tories to spout claims of the thousands of housing starts that 'they've' achieved, whilst allowing their paymaster corporations to rake up profit. Win, win for the vermin; lose, lose, lose for the rest of us.

 

[Pickman's model]

If you can't point out the very real problems of international capital and international investment (and its very much about that capital and class, not people from other countries wanting somewhere to live) on the pressures of London housing, especially when its happening in poorer boroughs, without being accused of some sort of liberal 'careful you don't sound like UKIP' comparison, socialism/left/class politics is properly fucked.

the capitalist class can be international but woe betide anyone who points out their global activities.

 

[brogdale]

I am aware of that, which is why I am resisting framing the debate in terms of "foreigners", unlike others on this thread.

Yes, but it's odd not to acknowledge that a substantial part of the demand is derived from non-UK nationals, especially when there are sound (progressive?) reasons for seeking to impose discriminatory legislation/taxation to shrink that component of demand.

 

[Pickman's model]

I am aware of that, which is why I am resisting framing the debate in terms of "foreigners", unlike others on this thread.

you are one of this class of individuals then,or unwittingly serving them? you seem to me reluctant to offer any alternative analysis of class or caste or whatnot but desperately trying to keep foreigners out of the discourse.

 

[bi0boy]

I disagree, targeting foreign buyers will achieve nothing useful for British prospective homeowners.

 

[Pickman's model]

I disagree, targeting foreign buyers will achieve nothing useful for British prospective homeowners.

yes: but that's what some developers are doing. why have you no obvious condemnation of these developers?