According to Ernst and Young, the London property market is exhibiting bubble-like conditions: Source BBC.
The rise in house prices is far out-pacing any other area in the British isles.
With the concentration of landscaping companies being far greater than other - many landscape and garden companies travel from adjoining counties into London - one wonders what impact a property price crash might have on landscape construction?
International buyers are fuelling an artificial market that has become detached from the traditional home-buyers market.
Everyone knows (or perhaps they don't?) that investments cannot continue in one direction forever. At some stage in the process there has to be some selling.
Investors who got in early will want to get out near to the top, secondary investors - those who joined the party later on but are still in with a reasonable profit - will follow suit in order to protect profits, and then there's the panic seller who got hooked into the hysteria and bought late but with little wiggle room to make a profit.
Let's also consider that the London property market was largely untouched by the credit crisis.
One particular aspect that may have a bearing on anyone's decision to sell - and the timing could not have come at a worse moment - is a call by independent think tank Civitas has called for curbs of oversees buyers of London property.
How would the London landscape and horticulture scene fair should international buyers cash-in their profits and seek a new focus?
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Having experienced Londons property nightmare when I lived and worked there in the early nineties,I dont think it would make a difference as far as people looking to buy in London. The original invester would take all the hit when it came to selling but in London there is always a buyer for housing. May even work in a landscapers favour as the price to buy the house is less so the buyer would have more free funds to turn the garden into their dream quiet space away from the city stress. But London is a different egg compared to the rest of the UK, so you just never know. Buyer beware as the saying goes !!
I always thought the big property owners in the capital had a vested interest in not allowing price deflation to happen, its not good for business.
As ever, anyone can be proved wrong including myself.
Having lived through three property crashes, it'll affect people exactly the same this time, the next time, and the time after that!
If there's a serious price crash, some people go into negative equity and stop spending, or even sink. But, some decide to stay put and improve their property, so it's swings and roundabouts. The key, as with any business, is to stay lean, keep debts and costs low, and ride the bad times. Don't milk the business dry in good times by spending the profits on an Aston Martin: reduce borrowing and build equity.
"Recent strong house price gains have sparked concerns that a bubble may be building up in the market, particularly in London, where prices were rising at an annual rate of 18 per cent during the first quarter, according to Nationwide’s measure."
http://blog.zoopla.co.uk/2014/06/03/breaking-house-prices-return-to...
If there is a mass selling of houses in London, hopefully new owners will want new landscaping to make it their own, boosting industry income!
In my opinion, there appears to be denial en mass that the London housing market (and potentially the UK economy in general) is heading for a crash.
I've just returned from London, where the skyline is filled with the gibs of cranes...their presence confirms that London is building again.
We often talk about incomes on LJN. Some of the discussions centre around the minimum wage and the survivability of anyone who is earning it. When you hear that the average price of a house is now over £400k, one has to wonder how the average person can afford to live? Even on such low interest rates, the re-payments on a mortgage are out of reach for so many.
The Russians are coming
Whenever someone mentions the fragility of the London property scene there's almost certainly someone who will tell you that there's no need to worry because the (rich) Russians are buying.
It doesn't matter how rich one is, people make investments for a reason. Many of the savvy foreign buyers got in early (probably 2008-10) and brought up property from the distressed sellers caught out when the credit crunch hit.
The sensible ones will be looking to cash in their investment. Why hold an investment that can, potentially, lose a great deal of its value?
This chart shows how the London property market has boomed (look at the stark difference to most of the other areas of the UK).
Phil Voice said:
Housing market threatening UK economy, Bank of England official says
http://www.theguardian.com/business/2014/jul/03/housing-market-hous...
"Hometrack Housing Survey reveals 'seasonal' dip is likely to linger as London market cools rapidly"
http://www.hometrack.co.uk/our-insight/monthly-national-house-price...