Presswatch: East London Line property

The closure of the East London Line has prompted a small flurry of articles in the property press about destinations along its new route.

The Standard re-wrote its article from last year, for yesterday's paper ("Here's the hottest tip in town - buy in an area before a new tube arrives for a sure property profit. David Spittles reveals the East London Line's new stations opening in 2010. Start your search now.")

The Telegraph focuses on Forest Hill here

And the Standard's website carries another feature about Forest Hill.

Hats off to Berkeley Homes' PR people, who appear to be behind the coverage of SE23...

34 comments:

Nicola said...

16th Jan - completely agree with the Ev Standard article - Hilly Fields Conservation Area IS an understated and undiscovered gem. We looked absolutely everywhere in zone 2 and found this was best, in terms of architecture, promixity to fantastic schools that come in the UK's top for both boys and girls each year, easy access to town (Charing Cross, Victoria), transport to City and Can Wharf (where 20% of the country's GDP is generated by the way). Perfect for men and women who work in the City or west end and want a short commute back to their families.

And of course CURRENT PRICES....

(See my other postings on Nick's previous articles on London house prices a couple of weeks ago regarding costs er sq foot.)

To cut a long story short, prices could easily double in the Conservation area and they would then be at the same level of relative value (?overvalue) as eg Islington is today. This is not just my view; it is empirical fact.

As everywhere in london though, it is the family houses where a particular value lies - not just because of their bigger absolute amounts but also because there is such a shortage that I personally think it is a screaming buy. (Even today with all the gloom in the sector.)

The truth is that they just ain't making central London family houses any more. At least not at a price that a non oligarch can afford!

Tom said...

As a journalist reporting the financial markets I can't let the house-price boosting that some round here seem to enjoy go without comment.

Prices can go up and down, it depends on a number of factors, many of them unrelated to 'facts'.

It depends on which facts you decide to include. Nicola puts together one set, whereas I could put together another, noting, say, the easy availability of credit and the parallel rise in the value of houses, which are bought using debt. Credit now is being withdrawn at a pace across the market.

She could be right - the point of this post is to say that in the markets what seems very obvious one day can seem very foolish the next, and what seems very weird today can be tomorrow's reality.

nicola said...

Tom, completely different question

We are talkign here about RELATIVE not absolute value. Relative across the series of micro markets that exist across London. Brockley Central blog great though it is, does not exist to act a a house price predictor across the UK. (not yet anyway)

Would I buy in se4 as a first time buyer right now? probably not - and that's an example of absolute value. (We all know about decreasing credit availability, yesterday's factory gate inflation at a high level, PSBR very high, "prudence" rules being broken, US repossessions and non farm payroll numbers, sterling probably a short, FTSE yield last year of 4% etc etc.

HOWEVER, would I trade up in se4 OR move out of an area which has enjoyed a massive rise already - eg Islington, Notting Hill - into one which is great fundamentally but where the rise is still to come? Of course, that's a trade most people would do all day long if they knew about it.

Would I trade up in se4 itself? a mixture of a relative and absolute value question - I personally would if I had the money as I think the area has a long way to go. but that's for those who have seen the costs elsewhere and realise that se4 offers such a huge amount relative to those other areas that it's worth it in the medium term.

Anonymous said...

According to one of the websites Nick referred to SE4 has seen an overall rise of 11% in one year, and in SE13 a rise of 27%.

Semi's in SE13 rose by 65% while they fell in SE4 by 17%.

Anyone have an explaination?

Chap said...

No idea but you have to VERY careful with statistics. What was the sample size? A terrace house could be two or six bedroom? And so on....

You'll go nuts if try and extract any logic out house price changes.

Anonymous said...

I am about to exchange contracts on a two bed flat in Telgraph Hill I know it's not Brockley but it's only 7 min walk to the station. I really like the area and I do think it is a good buy (I managed to knock down 15k from the asking price) but being a first time buyer you are really scaring me off. Could you guarantee that 6 month down the line house prices will have drop 30%? Probably not but all this is confusing me...

Anonymous said...

If you're like me, I agree -- you'll go nuts if you try and make too much sense out of it all. When I bought in SE4 3 years ago, several people looked at me dubiously and said, 'oh, but the market's at its peak, isn't it?'. My conclusion was, that there's never a perfect time to buy; and you'll always get someone who thinks you're being really thick by buying 'right now'. Crucial to my calculations at the time were: a total property crash was very unlikely; london always rises quickly or slowly; and at that moment, buying was the right thing for me. I was ready to be in my own place etc etc. It woudl have been financially cleverer if I'd bought 8 years ago, sure; but at that time I wasn't ready to do it. Granted, I'll probably never be a millionaire with this attitude.. but I reckon other things are more important. [I do regret getting a relatively short fixed-term mortgage though -- that's going to bite me in a few months].

Tom said...

Nicola, I agree with you only to the point that money and infrastructure is being invested in the area, which is going to improve the quality of certain amenities.

You believe that this would mean that this would bring the area into line with Islington and then the house prices of the two would also fall into step.

It's a nice line of argument, but it has its weaknesses.

It reminds me of a similar argument I was being told this morning by someone who had invested billions in emerging market (ie Russia, CIS, Middle East, LatAm) debt.

Emerging markets, I was told (for the umpteenth time in my career), will develop in line with those countries in the West and so the price discrepancy between, say, the UK and Russia is false, meaning that Russian debt is a bargain. So fill yer boots with them roubles!

Hmmm, says I, having heard a self-invested argument once or twice before in my career.

Is betting on a story really the same as betting on a reality? I think not. And I wonder where this investor would prefer to live? Russia or the UK? (Barnsbury or Brockley?)

'Up and coming' market sectors tend to have greater price volatility then established market sectors, though demand and hence price can skewed by other factors.

In London, fundamental price drivers are difficult to easily identify, and include patterns and scale of immigration (both domestic and international), investment patterns from different asset classes (share investors from the 1990s now invest in housing, for example), credit availability as well as local factors.

So in answer to our nervous new 'Anonymous' Brockley-ite, eyeing their freshly-bought expensive pad in Jerningham Road: no-one knows where prices are headed, and if anyone says otherwise they are lying.

But whatever prices are in six months' time, or six years, I hope that this doesn't stop you enjoying living in one of the nicest parts of London, which is likely to continue improving in the years to come.

Nicola said...

question:
How did you make so much money?

Jimmy Goldsmith (I think!) answer: I never tried at sell at the top or buy at the bottom.

I think he meant don't try to be too clever and go by general trends.

It's more dangerous to be flat london property than long it. within reason.

Anonymous said...

House prices rising or falling will have no advantage to people if you own a single home. If the value of the house which you're selling has gone up then so will the value of the house you're buying. It only becomes advantageous if you own more than one property ie buying when houses prices are low.

Anonymous said...

Anonymous, working in property, and having relatively recently bought a two-bed in Brockley and (and not secured a 15k discount!) I'm firmly placing myself in the camp that does not expect anything like a 30% drop in this area. There probably will be significant drops in value over the next couple of years in some parts of the country, greater than most assume, but London is relatively stable and I agree with Nicola that this is relatively undervalued area of London and is therefore a safer investment. Tom points to the price fluctuations in emerging markets, but dealing in debt is inherently more risky than (most) residential property and the market mechanisms work in different ways. Volatility is to a certain extent linked to ease of transaction thus property-price change is still a long-term process compared to other market sectors.

Grotbags said...

I very much doubt prices will fall in and around Brockley and Telegraph Hill. I bought a flat 8 years ago for 56,500 and the replica flat next door is up for 215,000. And I was annoyed when I bought mine because my best friend had bought the flat above mine flat a few years before and paid only 40,000 for a bigger flat. That said, all those on the hill are in serious danger of collapsing and many have had underpinning which brings a whole new set of problems regarding insurance with it. People want to live in or near to London, that's all there is to it. Eventually they'll be building on every scrap of grass in order to meet demand and 'London' will spead further and further outwards, sucking up the suburbs.

Tom said...

Many of the arguments I read here and elsewhere for continued growth in house prices are simply extrapolations of previous trends. But at present almost all of these trends are under question.

Much of London's house price growth has followed the massive rise in the financial industry over the last 15 years. This is now coming to a shuddering halt, hence the problems already being felt in the commercial property market.

Very much understand that different liquidity and transaction-friction makes property different in some ways to the debt markets, however the biases demonstrated are remarkably similar, maybe just operating over a longer timescales.

jon s said...

I agree with Tom about people are extrapolating from previous trends and the fundaments are very different now.

I would argue that relative price values in comparison to similar areas in London will increase in the long run due to infrastrucutre upgrades and wider area developments. e.g. ELL, O2 Arena, further LB developments, Lewisham redevelopment, etc..... Brockley Road is ripe for gentrification after the east London line (And incidentally, studies show on top of a base template of infrastructure, small local businesses (and chain outlets) are the key to gentrification.

The housing market will go pop in general, for a semi detailed summary of why, see my rant here. http://jonnosrants.blogspot.com/2008/01/great-property-swindle.html The only thing I left out was the imact of london becoming a superprime market as the city sucks up global listings.

Ed said...

The ACQ site with the Brockley Cross regeneration plans (covered on this site by Nick months back) appears to have disappeared; anyone know anything?

http://www.acq-architects.com/

Monkeyboy said...

I should imagine the ACQ stuff was a feasability study that that was comisioned at great expense, delivered to Lewisham council with great fanfare and quietly filed away along with the other glossy studies. It happens...a lot.

I've seen TfL and London Underground spend a packet on excercises like that. The trouble is to find out if something is truly feasable you have to spend money to investigate. looks like they found out that the scheme was too expensive/too much hassle?

Nicola said...

financial markets collapsing?
nope, the banks got a bit too greedy and competitive - they are still making billions each year despite billions of write offs.

and the bonus pool in total is around 70% of last year's.

financial markets alone won't bring down property but financial markets combined with widespread unemployemnt in the UK might.

but that's a whole different discussion of PSBR and Mr Gordon Brown's macro economic policies....

in the meantime, be grateful we are all living in a gorgeous central area, much cheaper than its comparables.

Anonymous said...

Monkeyboy,
That's exactly what happened with the BC study. Lewisham roads/planning dept said the cost of taking the study further (I think it was referring to traffic use of the cross) is something they don't have the budget for at the moment.
Moira

Hugh said...

A lot of starry-eyedness on this thread. I'm as much a fan of Brockley as anyone else who bought here and is now sitting on a fat capital gain, salivating openly at the tube's impending arrival. But I agree with the point that no one knows where the market is going. No amount of singing and dancing about the neighbourhood's good points will prove it's a wise investment. Just as no amount of hype will remove the fact of New Cross and Lewisham and Brockley's large population of poor people, and the brake they put on the ability of the area to change. It's not PC to say this but it's accurate.

max said...

What's worse is that they even have jobs now!
Once they were poor but at least you could tell them to go and get a job.
Some people never learn.
Only thing left is for you to give them some money.

Monkeyboy said...

I'll leap in to defend Hugh here, he's being a bit blunt and provocative (rather like Richard Dawkins baiting people who believe in the Easter Bunny and God) But the fact is that Lewisham is one of the poorer areas of London so it won't be spilling over with chi-chi shops and posh bars for a while - house prices will reflect that. The shops and pubs cater to the local market, quiet rightly. Don't think Hugh is implying that being poor means your a second class citizen just that there isn't enough disposable income around to support the type of place that us smug middle class 'professionals' like to frequent.

Hugh said...

Bodie and Doyle were professionals. Would they have been seen dead drinking skinny lattes?

Make it rough.

Monkeyboy said...

No, they were men's men. Although they did wear tight slacks and spent an awful lot of time together. I suspect a gay sub-text.

Anonymous said...

I'm poor financially but I'm 'time rich' cos I have no job. I can do anything I want during the day while you lot are at work. Time is on my side as they say. Unfortunately time doesn't pay my rent or feed me. So actually I'm quite poor...

max said...

Yes Monkeyboy, I had realized that Hugh's consideration on poverty and property values was a provocation, that's why I provoked him back with the daring suggestion that he shares his riches with the poor of the neighbourhood. I'm sure he's generous with the time-rich rather than one of those rich people that gets eczema at hearing the word sharing.

Hugh said...

Sharing - that's where wool comes from, isn't it?

Headhunter said...

I don't necessarily think that the presence of poverty will affect Brockers' rise. I lived in Islington for a few years before moving to Brockers. Islington has some of the most deprived spots in London, a mere stones throw from areas like Canonbury which are oh so chi chi. Upper Street for all its pretensions, regularly hosts knifings and shootings.

I suppose part of London's charm is that large council estates rub shoulders with beautifully maintained Georgian and Victorian terraces, unlike cities such as Berlin or Paris where immigrants and those in unfortunate circumstances are forced into ghetto areas like St Denis, where they occasionally riot...

Monkeyboy said...

CLASS WAR!!!

My mum and dad are both Italian Imagrants. Both had various low cleaning jobs. I clawed myself up through the Comprehensive School system (OK it WAS Muswell Hill but the principle holds, also explains my awful spelling and punctuation) I therefore request to be on workers side.

Can I loot Hughs or Headhunters place please?

monkeyboy said...

CLASS WAR!!!

My mum and dad are both Italian Imagrants. Both had various low cleaning jobs. I clawed myself up through the Comprehensive School system (OK it WAS Muswell Hill but the principle holds, also explains my awful spelling and punctuation) I therefore request to be on workers side.

Can I loot Hughs or Headhunters place please?

max said...

Do it fast, before the burglars come down by tube from the east-end.

Headhunter said...

Go for it... It's all insured anyway. Just don't make too much of a mess... Very busy at work at the moment and don't have time to sort out a cleaner...

Monkeyboy said...

You can keep your bike though, bloody un-natural to be wobbling around on two wheels if you ask me.

Hugh said...

Amateurs wobble. We fly.

JPM said...

I agree with Nicola, absolutely. No way I'm ever ging to go skating with Tom 'Thin ice! Thin ice!! Thin ice!!!

Knowledgable though... However, I don't agree with his lofty assertion "...no-one knows where prices are headed, and if anyone says otherwise they are lying."

I think I know a lot about a lot of things, does it make me a liar? I 'believe' I know where property prices in Brockley will move in the short term, because I have a cunning plan. Static or down slightly. [But only because of the doomsayers preying on people's fears.]

I believe I know where prices may be headed in the mid 2008 - up 10%. In the long term (2012 in this example, though not really long at all), up 30% plus. But that's just based on the information, the facts, I choose to build my plan on, and those I choose to ignore. [Like choosing a bank, Northern Rock say, or a finacial adviser, 'Put it in stocks and shares!' We know they're always right.] So far, so good.

Of course, I could be wrong about my faith in property, and Brockley in particular, but 'lying' -why?
Perhaps Tom means delusional... Thankfully I've deluded myself, for some time now that I can target an up-and-coming area that's prime for investing and nesting... even when the markets (note the plural) fall down around it. Brockley is one of the better investments in the London property market (not the only one) and will remain so for some time to come (from summer onwards).

Delusional maybe, but thus far the facts chosen, although contradicted by the experts, speak for themselves.

My humble advice to the person wanting to buy in Brockley/Telegraph Hill...

Everything has a tipping point. I seem to recall the doomsayers predicting this (?) crash many years back and it is now wearing so thin I can't wait for it to happen. [I've been like a condemned man on death row and I just want it over with.] However, remember, as a result of the downward slope from 1988's high, house price inflation shot up dramatically to its present level. [Some say too high... Yes, maybe, elsewhere, but not in Brockley.] So... failing a world recession, with massive job losses, increased interest, my advice is if you are going to ride out any economic winter(s)Brockley's your man. But that's just me thick icing.

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