The sale of Lisa’s flat in Chiswick went through on Friday. Great news and champagne all round. The flat made a very good profit, so it’s now up to Lisa to decide what to do with the cash made from the sale.
We both see property as a good long term investment, and both have other properties which we rent out, but now’s a very jittery time in the market and right now it looks like keeping the money in the bank is the best option until we see which way things will go.
House prices in the US are in freefall and STILL we’re being given the impression that it’s unlikely to happen here. Constantly, surveys are re-assuring us that while prices will stop going up over the next year, they’re unlikely to drop. We’re still being told about “soft landings” and “leveling off” and we’re being given psudo-science predictions about how prices are expected to rise or (slightly) fall in different parts of the country…
But who’s giving us these surveys? Who are the experts making predictions? They’re the banks, the building societies, the estate agents and the brokers. In other words, the Experts whose predictions we’re all relying on are the very people who stand to loose most if there’s a crash – and so the least likely people to give out an impartial view.
I’m not saying their appraisal is wrong – I’m just saying that there’s no more reason to think it’s right than to trust the word of car salesman on the subject of roadworthiness. Historically, crashes happen and nobody in the industries concerned predicts them even when they’re damned obviously going to happen – simply because if Lloyds start saying there’s going to be a crash then that will cause one anyway.
All I’m really saying is that us ordinary folk go on the best available info, but the best available info is rubbish.
What I think will happen
The market is largely sustained by investors right now – rather than by people wanting to buy homes. Investors don’t need to buy and sell. They do it only if they think it will pay off. The moment prices stop going up – or even the moment people think they will, there will be a shift.
Instead of the pressure being on buying as quickly as possible, before the prices rise further, the pressure will be on to wait – to slow down buying. Instead of your purchase getting more and more expensive the longer you wait, it will get cheaper the longer you wait, and anyone who can hold off buying will do so. In the meantime, anyone who NEEDS to sell will want to do so sooner rather than later.
The idea of a gentle leveling off I think is a nonsense. The moment investors think there’s no money in selling and buying, they will instantly pull the plug. And the whole property market is based on investors.
Home-buyers (real people) can’t afford properties in the normal way. A one bedroom flat in London is a minimum of£160,000 and the average wage is just over £20,000. do the maths. Most people are having to tell lies on their mortgage forms, or find exotic ways of affording a property. As the credit crunch continues, these mortgages are being stamped on by the banks.
So as soon as prices start to level off, they’ll start to drop, and they’ll drop fast.
My view is that with investors stepping out of the market, prices will drop until the average first time buyer can afford an average flat on an average income with a normal mortgage. In other words, I’d estimate that you should be able to get a flat in London for about £80-100,000.
That’s bad news for investors and even though I count myself as one, I have little sympathy. Houses are for people who live in them and even though I see them as an investment and buy them for that reason (and think there’s nothing wrong with doing that – you need a rental market for the majority of people who can’t or don’t want to buy) I think the investors can look after themselves and will find a way to flourish in any climate.
It’s home-buyers that need affordable housing, and I’ll think it’s great if more people can get on the property ladder. Even as an investor, a price crash will benefit me – because I’ll be able to invest in a more sustainable way and buy more for my money!
Remember: it doesn’t matter one jot if your house is worth £10,000 or a million. It’s only if you sell it or borrow against it that its value matters. If you just live there you’re fine whatever…. Unless interest rates go up!
George is moving around – pushing himself with his legs and propelling himself forwards a lot more. He’s also more and more expressive in his face and he’s making sounds (other than crying). His noises are more varied and now have tone and pitch to them.
I find myself repeating his sounds back to him to give him the idea that he can elicit a verbal response when he ‘talks’ to me – the beginnings of communication.
The gentrification of East Dulwich continues apace. On Saturday we went for a stroll with George through the new market – it’s a warehouse full of tiny shop units including another cheese shop an oyster bar and a photographer’s.
After that we went to Goose green where there was a ‘green fete’ in full swing. By which I mean that there was a ukulele band whose mics were powered by kids on bycicles, a tent full of stalls (selling recycled bags, panatone and, of course more oysters) and a row of stalls offering different types of therapy.
Whereas the tent of stalls was so well attended you couldn’t move in there – it took me 20 minutes to get through one side while Lisa waited outside with the pram! – there was nobody showing any interest in the therapy stalls.
I didn’t investigate them either. If I want to have a bag of herbs hung round my neck, I’ll go to a gypsy who I at least know isn’t making £50,000 a year pretending they can cure AIDS.
After that we tried to get into a new café called Chandelier – where there are about 10 seats and (I’ve heard) an excellent eggs-benedict – although it’s always too busy to get in, so we ended up in the (gourmet) burger bar. The only fast food joint I’ve ever been in where you pay £7.50 for a burger (and it’s worth it!- they’re great) and where the walls are covered with trendy pictures of Mohamed Ali and Audrey Hepburn.
We then went to buy a gift at a shop bearing the banner “voted best retailer in London” I’m tempted to ask best for what – I think it’s probably best for things you don’t need which will only be of use to give to other people who also don’t need them.
East Dulwich is full of such shops which are slowly replacing the useful shops.
However, I can’t complain. Lordship Lane is after all one of the main reasons we moved here. It’s generally a great place to live and there’s a brilliant range of good restaurants fed by one of the best butchers (I know I don’t eat meat) in London and one of the best fishmongers and one of the best cheese shops. Not to mention one of the best Delis. If there were a few more pound shops and a few less estate agents, the balance would be perfect.
I remain confident – given my last few comments that there will be a few less estate agents soon.
South London Food club
The south London food club met again on Sunday – this time the venue was Nick’s new flat (he’s moved out of Sam’s now and has a place of his own – this was his first time inviting lots of people round). The flat is decorated in a great combination of glitter and medieval iconography. There’s also a great view over London from Borough – I suspect New year’s eve there would be spectacular.
The food choice this month was Mexican. We’d all scoured the web for interesting Mexican recipes – none of us being that enamoured by UK Mexican restaurants we’d looked for things other than the standard fayre.
Probably the main attraction was the piñata – a brightly coloured cardboard donkey full of sweets which it’s apparently a Mexican/Spanish tradition to beat with a stick until it splits open spilling treats all over the floor.
This sounds pretty typical of Spanish treatment of animals as I understand it.
Anyway, both Lisa and Abbi entered into the spirit fully – beating the donkey with vigour. Abbi explained afterwards that it was a great stress relief – a good alternative because you can’t hit your children…
The food we came up with was largely similar to the restaurants (although we all liked the food a lot more) – so I’m yet to be convinced that there is a great Mexican cuisine out there waiting to be discovered!
One good dish we did was this one using fish cooked by the acid from limes (cribbed from the Internet):
I N G R E D I E N T S
1 pound fresh red snapper fillets
3/4 cup freshly squeezed lime juice
1 large tomato, cored, seeded, diced
1 small red onion, finely diced2 bunches coriander eaves, roughly chopped, about
1 cup1/2 cup bottled clam juice
2 chiles, stemmed, thinly sliced into circles
1 1/2 teaspoons salt
I N S T R U C T I O N S
Cut red snapper into 1/2-inch cubes and place in glass or ceramic dish. Toss with 1/2 cup of lime juice. Cover and marinate in refrigerator 15 minutes. Drain and discard lime juice.Transfer fish to medium bowl. Stir in remaining 1/4 cup lime juice, tomato, onion, cilantro, clam juice, chiles, and salt. Chill at least an hour, or up to 1 day, for flavors to blend.
Apparently Spanish explorers brought the citrus frit to the Americas and the native American cooks discovered that very fresh fish could be cooked without heat by simply adding these acidic fruit juices. The coriander and chillies made for a really fresh, sharp taste.
Another good dish was this one - a bit of a new recipe, this I think, but it’s not as odd as it sounds. It tastes a little like banana and the texture is very creamy:
Avocado Ice cream
12 ounces avocado meat,
approximately 3 small to medium
1 tablespoon freshly squeezed lemon juice
1 1/2 cups whole milk
1/2 cup sugar
1 cup heavy cream
Peel and pit the avocados. Add the avocados, lemon juice, milk, and sugar to a blender and puree. Transfer the mixture to a medium mixing bowl, add the heavy cream and whisk to combine. Place the mixture into the refrigerator and chill until it reaches 40 degrees F or below, approximately 4 to 6 hours.
Process the mixture in an ice cream maker according to manufacturer's directions. However, this mixture sets up very fast, so count on it taking only 5 to 10 minutes to process. For soft ice cream, serve immediately. If desired, place in freezer for 3 to 4 hours for firmer texture.