Brexit – The Final Nail In London Property’s Coffin WWW.MERCURYHOMESEARCH.COM
2000 – “Housing-market experts, from estate agents on the ground to analysts in the high-rise city banks, are agreed on one thing: this is more than the annual summer slowdown. House-price inflation has dropped considerably and, in some pockets of the capital - usually areas on the fringes of more fashionable addresses - where people were paying silly prices for bad houses, properties are indeed worth up to 10 to 15 per cent less than they were six months ago.” The Daily Telegraph 2001 – “The house price indices are for once agreed: prices are slipping as the effects of recession take hold. Suddenly, the telephone- number price-tags of rather ordinary two-bedroom flats are beginning to look ridiculous.” The Daily Telegraph
2002 – “The top of the property market has been in trouble for some time… Property in some outer London boroughs now changes hands at phenomenal multiples of average local earnings - the prices being pushed up by a relatively small number of people driven out of expensive parts of the city. In Bromley, for example, house prices are now 10.4 times local earnings” The Daily Telegraph 2003 – “He [Roger Bootle] said: 'The message is clear. Houses are now so over-valued that a prolonged period of falling prices is on the cards.' … Some London 'hot spots' have already seen prices marked down in recent weeks, which has been attributed to lower City bonuses and Stock Market uncertainties.” The Daily Mail 1st March 2003 2005 – “After five years of unstoppable price rises, the housing market has been showing signs of jitters.” BBC
“Mr Peters, the Managing Director of Peters and Peters Sotheby’s Realty, based in Germany, said: ‘We have been analysing the number of ‘clicks’ we have on each property and for the first time we are seeing that the country where the second highest number of clicks is coming from is London. We are getting some requests from people based in London who are mostly looking for small, studio flats that are fully furnished in a luxury style. They will be commuting into the country and working here Monday to Friday – then travelling back to the UK on the weekend to be with their families.“ The Evening Standard
Tech take-up in the City (Core and Fringe sub-markets) last year was 65% up on the 10- • year average - the highest level of take-up seen in the City by tech occupiers since the tech boom of 2000. ( Savills) Foreign buyers spent more on the UK capital’s offices in the first half of 2018 than in • central Paris, Manhattan, Munich and Frankfurt combined. ( Knight Frank) Goldman Sachs has sold its new office scheme for £1.2bn and will be renting it back. • Goldman Sachs vice-chairman Richard Gnodde said the long lease “demonstrates our continued commitment to London”. “O ffice take-up in London reached 14.61m sq. ft. last year, 14% higher than the long- • term average… take up in 2018 was more than 5% higher than 2017 ” (Property Week) Statistics for January to March 2018, show that there were 2.29 million EU nationals • working in the UK, 28,000 less than a year earlier - the first annual fall since 2010. The figures show there were 1.25 million non-EU nationals working in the UK, 20,000 • more than for a year earlier. ( Labour Force Survey)
Increase in wealth – In 2018 you needed a minimum of £115m to feature • in the Sunday Times Rich List. 20 years previously, one “only” required £15m, i.e. the net wealth of the richest has increased 700% in 20 years while the average wage in the UK has risen from £16,500 to c. £25,000 and the FTSE has increased from 5500 to 6857. 2016, in the US alone there were 1,095 new millionaires created every • day (400,000 in the entire year), while globally 4 new people became billionaires every week. Indeed, on average the wealth of each billionaire increased by $1,569,006 per day (or $3.2bn per day combined).
“As for money owed by every single person and country in the world, the • grand total is $199 trillion, with some 29% of it borrowed since the 2008 financial crisis.” Marketwatch Bain and Co in their report “A World Awash With Money” (2012) • estimated that all assets in 2010 were worth $600tn and that this would have risen to $900tn by 2020 in what they describe as a “capital superabundance” which will drive asset prices higher for longer while supressing yields. “Global capital balances more than doubled between 1990 and 2010 — • from $220 trillion (about 6.5 times global GDP) to more than $600 trillion (9.5 times global GDP). And capital continues to expand. Our models suggest that by 2025 global financial capital could easily surpass a quadrillion dollars , more than 10 times global GDP .” Harvard Business Review
Between 2005 and 2013 the top decile of properties in Prime Central • London increased in price 190% while the bottom 10% increased 63% ( Source: Savills) This is the equivalent of buying a property for £2m and it being worth • £5.8m or £3.26m It is imperative that you acquire “Best in Breed” properties unless you are happy with average or substandard returns. If your property was worth 190% more after 8 years would you be concerned with a price fall of 15%?
To discover the proven strategies and tactics that will help you acquire your ideal home or investment on the best terms possible request your free copy by calling +44(0)2034578855 or emailing Jeremy@mercuryhomesearch.com “ Your book should be compulsory reading for all those thinking of buying property in London ”. Paul Brittlebank (FRICS chartered surveyor)
WWW.MERCURYHOMESEARCH.COM 0800 389 4280 JEREMY@MERCURYHOMESEARCH.COM
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