A property firm which buys up distressed property has forecast that the London housing market bubble will burst, with the catalyst being the riots.
But the claim has been countered by London agents Douglas & Gordon, which said there were no reported fall-throughs as a result of the London riots.
However, in the last month, PPR Estates says it has started receiving inquiries from property owners in riot-affected areas of London who are now seeing sales fall through and a collapse in buyer interest.
The firm’s director, Nick Hopkinson, said: “This change in market sentiment may well prove to be the event that bursts the unsustainable London property bubble that’s built up over the last year.
“Two very different property markets have emerged in London and across the rest of the UK in the last year.
“London has been the one area of the UK to buck the downward house price trend. Prime London prices, limited supply and cash-rich international buyers have masked the real state of the housing market by propping up the national statistics.
“PPR has had relatively few distressed inquiries from London sellers as a result of this unique dynamic.
“However, since the recent riots, PPR has started receiving inquiries from worried owners in affected areas such as Lewisham, Croydon, Walthamstow and Tottenham, who have seen buyers withdrawing their interest.
“We are also aware of international buyers withdrawing from investment purchases as a result of a loss of confidence in the ‘safe haven’ investing benefits of London.
“As we move into autumn I fear this may prove to have been the catalyst that bursts the London property bubble.”
Hopkinson said that outside London, inquiries to his firm continue to climb, and it is receiving ‘hundreds’ of inquiries each week from distressed home owners, landlords and businesses wanting to sell their properties.
The firm said that, increasingly, sellers are trapped in negative equity, and that it cannot help over 90% of inquiring individuals as their properties are worth less than their assets.
In the same period last year PPR was able to help over 15% of sellers outside London.
Comments
No self interest from these guys then in the story, hardly in their interests to say the reverse?
Whichever way it falls, London is NOT England.
Thank goodness.
Cheers for that one. Some valid comments there, too. I suppose he rubs shoulders with some of the affected areas, but by no means centrally placed amongst the trouble. Didn't actually realise that to be honest! Perhaps thats why his input on this article was a touch in front of zero.
Still sticking with my idea of the '9/11' impact. Difficult for the immediate short term, but the confidence will bounce back - look at the spirit shown by Londeners at 7/7 and recently at the riots with their inspiring response...will take more than those idiots looting and causing havoc.
Here's a link to the full article - note the response in the comments too though!
http://propertytalklive.co.uk/london-focus/7324-august-riots-no-effect-on-london-property-market?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+propertytalklive+%28propertytalk+Live!+-+Latest+News%29
Ha ha! Truly speechless - you don't see that often.
Laura - Thousands of people commute to London on a daily basis. I think you can work out what I was going to say next....
Douglas and Jordan probably said something along the lines of house prices only go up, buy now before it's too late etc and all the usual guff. I'm just making a prediction though...
Actually, I've found a link. Ed Mead, their director, was apparently left speechless:
http://www.pennington-online.co.uk/news/property-news/2011/09/09/august-riots-no-effect-on-london-property-market/
Thankfully, whilst my fellow pupils were drawing pictures of big houses, I drew pictures of a quarter of a one-bedroom flat. Thank God, because it's all that is attainable in the London market.
Unfortunately this site is fast becoming a playground for them.
I disagree with the article and it's a shame that it didn't cover both sides of the coin, just the fact that Douglas and Jordan 'countered' it - Why? How? What did they say?
Poor show.
There are practically zero non-vested interests commenting on the property market.
As an example, Knight Frank are saying today that they expect prices in central London to double in the next five years:
http://uk.reuters.com/article/2011/09/09/uk-london-property-idUKLNE78800320110909
"But the claim has been countered by London agents Douglas & Jordan, which said there were no reported fall-throughs as a result of the London riots"
There's two sides to this article - other than the above, you don't hear a peep from Douglas and Jordan who counter the statement...strange, no?
Always be cautious of articles saying "dozens, hundreds, thousands" - If they numbers where that subtantial, you'd expect a more definitive figure. It's the same as answering a phone call saying you'll be 5 minutes instead of being honest, saying you're actually 15 minutes away.
Bit of attention for PPR - Surely you can see that?! You're normally good at picking out these self-interest sources.... They want to create a panic so people actually do come to them.
I am not denying there have been a few inquiries, but this is all short term while its fresh in people's minds. Those withdrawing offers today, does not mean they will not make a new offer tomorrow.
Besides, do you realise how many riots London has seen over the years?
There was a short term affect on the number of tourists flying to New York after that sady day on 9/11...It's still one of the busiest tourist locations in the World; it didn't take long for the great City to re-build that.
When London's burning
The bubble's bursting...
/ Abdul Ali /
I thought this article highlighted how the riots have scared overseas buyers away from London?
IF the price is driven down for London properties, it is perfectly natural for there to be a further increase in the interest from overseas, especially with the weak £. I doubt we will see the bubble burst or a (dare I say it) CRASH!! You love that word.
While more and more people are being pushed out, the foreigners will swoop in and London might well become an 'official' internationally owned city. It would lose it's traditions and history, but it would continue to succeed.
...........and about time as well as foreign money taking advantage of low sterling has made property look atifically cheap to lazy foreign buyers suckered into what is London, the roulette table of the world.
All this funny money has been propping up a London centric market that is both unstainable and lets face it has kept on its legs purely to allow the "smart" money to exit over the lat 2 years.
London property is like a bit of old fillet beef hanging in the butchers, its still beef but a little past it's prime and ready for a knock down as the money was fueling it is slowly running out or in reality going to countries that actually have an economy not based on hype, marketing bluff and smoke and mirrors - that is right isnt it?
Its a tale of two London's; Prime Central where foreign investors are exploiting the weak pound and using million pound homes as cash safety boxes and then the suburbs which have been increasingly suffering.
Areas on the border of prime central London may hold value better as rich Londoners are pushed out of the centre but outside that prices will continue to fall. The London suburbs are exempt from the financial crises and their isn't the lending to support these high values.
The risk to prime central is a stronger pound if the Euro collapses and mansion taxes being openly talked about by the government now.
All bubbles burst eventually; the only surprising thing is how much longer London held on by its fingernails.
Also, if it’s starting to get this bad for people now, while so much is being done to make life easy for borrowers, included but not limited to fantasy low interest rates, just imagine the carnage when rates actually do rise. Indeed, most people seem unaware that rates are going to have to rise sooner or later.