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History rhymes...big rich foreigners paid for London properties 10 years ago, the same is happening now. I don't have a lot in tbf but I am holding for the mid term
Plenty of reasons why the next Foxtons update will be a blockbuster and take us back to 70s. Stamp duty holidays, money in people's pockets, low interest rate, housing market reluctant to slow down, Foxton's cash position! Happy to hold and what this grow.
Good question, who is buying the houses in London at the moment? Simple and fair question! Let's go back 10 years and it was a similar situation then. Smart, foreign investors bought bought bought when everyone was bearish on London. History rhymes!
Here are some facts which went under the radar but are revolutionary and backs up my speculation (article below). 'Under the new rules, existing commercial properties, including newly vacant shops, can be converted into residential housing more easily, in a move to kick start the construction industry and speed up rebuilding'. Many commercial building will get renovated and converted into residential properties. To add 'builders will no longer need a normal planning application to demolish and rebuild vacant and redundant residential and commercial buildings if they are rebuilt as homes'. Again, food for thought and If this get into the low 30s I will top up. Sometimes you have to follow the Smart (sinister) money.
https://www.constructionenquirer.com/2020/06/30/boris-clears-planning-red-tape-on-change-of-use-to-housing/
I bought this morning, a small position. Why? I noticed that a subsidiary of Soros Fund Management bought 5% a few weeks ago. I was scratching my head, why, particularly in times like this. Of course because of SP growth, London exposure, cheap pound, and other obvious reasons such as their impressive net cash position. However, purely speculating, Soros bought for a bigger reason, London's Letting and residential market is going to keep growing. How? As people work more from home, it's possible that many commercial buildings will not be used and will be demolished, or renovated into Flats. This whole ordeal is about control, more people in cities = easier to control. Not only that, after the last property crash, very wealthy foreign buyers gobbled up London Properties. One more thing is that some wealthy people may want to move to the country and could very well rent out their London properties. Food for thought.
Digital property investment platform BidX1 and estate agency Foxtons have formed a strategic partnership which will see BidX1 become Foxtons’ exclusive auction partner.
https://www.mortgageintroducer.com/foxtons-bidx1-strategic-partnership/
Paolo, I too was pleased to see the net cash of 40.5m in amongst the results today. I view it as a reassuring safety net whilst the market gets its act together.
I can't help thinking that redundancies, divorces plus working from home will all contribute to drive London sales volumes.
Here's to a gradual but convincing upwards movement over the weeks and months to come.
£40m cash was a great surprise.
The stamp duty holiday will be beneficial in London. I think with record divorce rates and redundancies, and people working from home a lot more so not needing to live close to the London office, but wanting a garden and countryside to walk in nearby, the volume of sales should accelerate in London.
That's the point
". And I think it is widely accepted that London may at least lag the provincial market."
It wasn't
The media has been filled with many in the industry hyping up that activity has rocketed in London Safe haven money arriving from abroad by the truckful . This has been borne out today in the half year report where June and July figures are disappointing .Just agents flannel
"Guy Gittins, London based Chestertons’ Managing Director, said:
“Three months of lockdown has given people a lot of time to think about their homes, and as soon as the market re-opened in May, we saw a surge of enquiries coming through from people serious about moving.
“Many expected prices to fall dramatically after lock-down but, due to the shortage of available properties on the market, prices have been well supported and now appear to be pretty stable.”
“We expect the market to remain busy during the remainder of summer and into the autumn, boosted by the return of overseas buyers as quarantine restrictions are lifted”
Let's hope that they aren't going to go wild flashing the cash buying up other businesses
What is different is London normally leads the charge on any uptick in the property market .This is not the case today
Not Savills. But perhaps Marsh and Parsons of LSL or Countrywide London offices where they 'farm the same ground.' Know what I mean - more like with like than Countrywide Southampton. And investors here know Foxtons is fundamentally in the London Market. And I think it is widely accepted that London may at least lag the provincial market.
Having said that, I have not seen any data on completions post lockdown, that were not already in the pipeline and temporarily held up,relative to London or elsewhere. Perhaps you have?
"But is there a reason for continued comparison between pure-London Foxtons, and Countrywide
Well CWD farm the same patch as Foxtons and are experiencing the same modest reaction to stamp duty changes and lockdown easing
Noticeable that activity increasing farther out into the Home counties . Both listed and perhaps coupled with the news of the regime change explains why CWD SP is in a trajectory and Foxtons soft pedalling
LSL the other main listed agent with a London presence has recently had a small lift too
What it is showing is the activity in London has so far been overhyped
Who else do you want to draw some comparability with -Savills?
Maybe some fairy dust will be arriving soon
Comment on June property market averages.
https://www.mortgageintroducer.com/naea-propertymark-10-asking-price-june-2020/
A random article. https://www.buyassociation.co.uk/2020/06/16/london-property-market-housebuilding-and-house-prices-remain-buoyant/
Just Foxtons off-beam perhaps.
But is there a reason for continued comparison between pure-London Foxtons, and Countrywide.
Well Foxtons have sold less than 260 properties in the last 60 days and relatively little progress this month . You can do the arithmetic
Loaves and fishes
Ceertainly all the activity has yet to translate into sales Early days,yes
Many offices with just a handful of properties sold STC or under offer Maida Vale for example has a healthy book of over 80 properties with just 2 under offer
Compare that to CWD's Morris Dibben in Southampton where 1 single office is showing over 100 sold STC
Relative simplistic EVs - On last printed figures, taking Foxtons net cash position from the market cap gives £85.5m. Adding Countrywides net debt gives £101.85m.
They are saying there is migration from London and at the moment FOXT has a MC of nearly three times that of Contrywide so on that basis CWD seem to be the better recovery play. I have a holding in both.
Nobody is issuing much in the way of future guidance, and unlike Countrywide, we have heard nothing really from Foxtons since publication of final results in February. Improving ( thankfully ) their net cash position at a premium at 40p has not helped the price. But, putting house prices on one side, it is inconceivable that the London market in which Foxton's competes will not improve ( or anecdotally how can people leave the smoke for the green fields, and those obliged to seek premises in the capital through let or purchase be accommodated )
But we shall be updated soon, and anticipate the six months, albeit without future guidance, will show an immediately- improving situation from dealing with the pent up backlog of completions, some relief from lockdown restrictions, and the temporary benefits of stamp duty changes.