Told you so …

Investors were warned years ago about an impending glut of identikit luxury housing developments.

https://www.buzzfeed.com/patricksmith/why-are-asking-prices-for-londons-luxury-flats-falling?utm_term=.qebQp1zyM6#.prEyPlWwOK

“I warned you to avoid these five trades – but how did they turn out?

From Dominic Frisby, across the river from the City

Dear Reader,

Back in September I outlined what I saw as the worst five investments you could make.

Today we check in on those “dumb” investments. How have they done?

 

 

 

Dumb trade no.3: buy a new-build London flat on the South Bank, and pay the full list price

In terms of dumb property trades, I was tempted to recommend buying in Sydney, where prices seem extraordinary. Or perhaps in Vancouver, which tops the UBS Global Real Estate Bubble Index. But I don’t have the local knowledge. So I opted for London.

Bottom line: there are too many overpriced two-bed flats in bland glass-fronted tower blocks coming to market in London. Locals won’t buy them – any local with enough dough will buy somewhere more stylish. Stamp duty, as well as prices, is deterring foreign buyers, while new legislation and rock-bottom yields have deterred the buy-to-let investor. These flats aren’t selling.

Search Zoopla for flats in SW8 and filter it by “most reduced”. You’ll find at least 25 pages of reductions – over 1,000 flats – in SW8 alone (!), starting with these two blandities (I don’t believe there was such a word until now. No other will do to describe modern British riverside architecture.)

“One of the most impressive two bedroom apartments in Nine Elms” has already seen its asking price reduced by 26.9%.

It’s a train wreck – and yours truly was the first journo to warn about it many moons ago, in late 2014.

 

NB: MoneyWeek is a weekly investment magazine that covers financial and economic news and provides commentary and analysis across UK and global markets.

Advertisements
This entry was posted in Local developments. Bookmark the permalink.