On this subject I would like to add to what Danonthehill says (and offer some support to the poor chap). Remember that the FSA has recently suggested that there should be discussion about restricting in some way the amount of money people can borrow to buy homes.
The fact is that unregulated lending has been disastrous and still causing many more serious problems than the loss of value of property (think about all the people who are losing their jobs...). House prices will have to go back to healthy percentages of income (three times annual income or so). This is the only sensible thing to do. From a personal point of view it is also a question of social justice: it's not acceptable to live in a world in which what should be our homes are treated as commodities as much as they have done. It has all been too much and has encouraged many to accept terrible compromises. Sure, estate agents may have called the converted public toilets in front of the station a 'quirky one bedroom period conversion', but they remain ex-toilets, the symbol of something which has gone too far.

Anyway, you wait for next year's elections to be over. Then the word will be 'austerity'. I wouldn't be surprised if the underground extension was scrapped altogether...

Sorry guys (and gals)...

One more thing.

The lack of housing mentioned before is not an accurate expression. The accurate expression is "lack of affordable housing", which is a misleading way of saying that property has become too expensive but that there is reluctancy to hold back the tide of price-rises. This means that there is plenty housing, but that it is so expensive that there is a lack of those crappy holes that 'allow' a young professional (or anyone else, for that matter) to get on the housing ladder.

M6[/u]

Dan - If average property prices in SE23 in December 2010 are 50% lower (or more than 50%) compared with December 2007, I will pay you ?100; if the average fall is less than 50%, you pay me ?100.

If you accept this, I will contact Admin and deposit ?100 with him and you do the same.

Food for thought:

http://www.telegraph.co.uk/finance/perso...nt-up.html

Indeed mambo66.

One of the things I always find most confusing is that the same people that seem to think that high food price's are a bad thing. Or high gas prices, or indeed high 'anything' prices, also believe that high house prices are a good thing.

It is a great shame that so many young people are trapped in small flats with huge debts. But that's what you get in a Boom Bust economy.

The other great hypocrisy is that of affordability. People say that sky high prices are OK, because of affordability, principally low interest rates. Well that just means that inflation is also low, and that your debt will not be eroded like it was for the baby boomer's. The debt is very real.

nasaroc. I have no intention of accepting that bet with those stacked terms. I told you that I would expect prices to be down about 50% from peak in about late 2010 or 2011. But I cannot know, (as you are perfectly well aware) precisely how much and by precisely when. Under the terms of your bet Prices could be down 45% and you would win. Or they could be down 40% after double digit inflation for 2 years and you would still win. You would even still win if prices drop 60% from peak but not until 2012. Even if I do win, I win on the last percentile and you win on the other 99 percent.

Now ?100 really is not a lot of money to me, so I?m happy to humor you to an extent. If you want to bet ?100 that average house prices in the Greater London will be lower in 20 months than today. And today according to the BBC the average price is ?344,521.

I sense that your zeal is somewhat more visceral than logical, and perhaps you have some sort of vested interest. It is perhaps in your interest for your peace of mind for me to be seen to be proved wrong. So I have no interest in getting into a back and forth with you. Your position seems to me to be, and do correct me if I?m wrong, that you believe house price will float around seeing some modest gains. Such as the ones you have already quoted at me.

If this is the case than you should be happy. Indeed I would be happy to spilt the difference with you . If indeed we are discussing the likelihood for a further 25% fall on top of what we have already had why not agree the mid-point of 12.5% down and go either way. That gives an average house price in London as quoted on the following website: http://news.bbc.co.uk/1/shared/spl/hi/in...gion10.stm
Of ?301,455 and above you win, or ?301,454 and below I win. That gives us both ?43,067 or 12.5% of the remaining 25% equity. It?s the halfway position and I hope you will agree, perfectly reasonable.

If you find the idea of a further forty three thousand pounds drop ludicrous your have no problem.

It largely guesswork really isn't it?! Just as no-one could predict when the bubble would burst, there are so many imponderables that I don't suppose we'll know where the bottom of the market is until we're well past it.

This might not have been 'tulip fever' as nasaroc says, but when those who you'd hope would have more sense were talking about a "new paradigm" for property prices, when every second programme on TV was about property, and taxi drivers were telling me buy to let was a sure bet I knew there was trouble ahead.

With the buy to let market in decline and a more realistic attitude to lending multiples, personally I wouldn't be surprised if prices of flats and houses in some parts of London do drop up to 50% from their peak - particularly on some of those new builds (hello Bermondsey "Spa").

Overall I'm less optimistic than some about how prices in HOP and FH will fare, particularly as one of the reasons some have moved to SE23 is its relative affordability - i.e. they can't afford somewhere they'd actually prefer, like E**t D*****h, so they go for somewhere close to it. If prices in more 'established' areas become affordable then, as good as it is, why move to SE23?

I think Dan and Narsoc should stop this betting nonsense and grow up

I have no special insight into the housing market. But it does strike me that 'established' places cannot become affordable, sort of by definition. If everybody can afford to live in SE21 then the prices will go up - that is supply and demand. There will continue to be people, like most of us on this forum, who choose to live in a very nice area of London which does not have premium prices. Just as prices in SE21 are governed by supply and demand, so are SE23 prices.

The difficulty in the 2007 housing market was that buy-to-let was pushing up prices (more so than massive mulitples, shared ownership, or anything else). This worked because there was an under-supply of housing in and around London as immigration to the capital from across Britain and Europe. Population has probably fallen in London in the last two years but, swine flu permitting, I suspect that the population will be higher in 2012 than it was in 2007. As such there should be demand in the market for houses to buy and rent.

From what I remember, in the last housing bubble at the end of the 1980s, there were plenty of people claiming that house prices would never rise to such high levels again. But that was when a ?100k house was about as rare as they are today, only that was the top of the market not the bottom. The doom-mongers were wrong then and I think they are most likely to be wrong again.

My prediction, for what it is worth, is that by summer 2012 house prices in SE23 will be higher than they are today (even if only by a few percent). I won't be making any bets as I have quite enough money riding on it already in the form of a mortgage.

I agree, this argument gets us nowhere as no one can possibly know.

Michael
Not sure where you get the figures that London population declined in last 2 years?

Brian,
I have no figures as it takes ages for population statistics to catch up with reality. But just as Londoners knew that there was a population boom, especially from Poland, we also know that many have returned to Poland and other parts of Europe. This has been caused by the fall in the value of the ? and the contraction of the house building and other industries.
Would you disagree with this estimate of London migration?

Michael
Not sure to be honest. Apparently much unemployment in Poland , Latvia etc and benefits better here.
Guess some have returned but still seems to be influx from other areas.
I accept I do not know the facts and you may be right

Guess like house prices the facts will not become clear until a year or so.

I recently carried out a piece of work related to the property market in London, it seems that the expected rule of thumb (which I have indeed read about in many related articles - so this is no secret) is that an additional 5% - 10% will come off property value by the end of this year across the greater london area, a total of 20 -25% since the decline last summer. Then there will be a period of static value throughout 2011 then a slow rise in 2012 coming up to the Olympics and a continual slow growth, albeit at a smaller % in the following years. London is still a growing city and this will continue so eventually demand will be greater than supply, which will affect value too.

Luckilly we in SE23 have the tube ext coming here. This is one of the main reasons I bought here 3 years ago. I think we will recover much quicker than some other areas in London. Any improvement in infrastucture improves property values. Lets try and be a bit more optimistic As long as we are in the fortunate position to stay put all will work itself out.