LondonCalling
London prices are rising so fast that people are
panicked into 'gazumping' themselves in sealed bids, writes
Angela Pertusini
The sheer lunacy of it all - the estate agents have taken over the asylum and it's all we, London's mortgaged classes, can talk about.
Prices are rising so quickly in central London that, by the time you get back from viewing somewhere, its value probably will have gone up by another £50,000 (€73,600).
You think I'm joking? The Evening Standard last week reported that buyers were gazumping themselves in their desperation to buy one of the few properties on the market at the moment - that is, going to sealed bids and then on the way home panicking that their over-the-asking-price offer just wasn't ludicrously large enough and running back to stick on an extra £10,000 (€14,700), £20,000 (€29,500) or whatever random five-figure sum comes into their head.
Incidentally, you've never seen such a sorry collection of unlovely, ex-rental flophouses gracing the pages of the freebie property glossies recently; you have to worry when a house that is for sale for almost £1 million (€1.472 million) is unaccompanied by a single photo of its interior.
I thought this might just be hype so I called a central London estate agent who is unusually reliable in his gossip and he confirmed that it was true in every detail. "If you've got somewhere to sell, for God's sake sell it now," he said in the tone of someone who has gazed into the abyss.
Which is fine if you do have somewhere to sell and don't need to find anywhere to live. For the rest of us, it's a question of battening down and putting up with whatever we've got because the hell of finding somewhere else is too traumatic to contemplate.
Interest rate rises, stamp duty hikes, terrorist attacks, the disappearance of the first-time buyer, a U-turn on Sipps (Self Invested Personal Pensions), nothing has managed to do more than temporarily stutter the London market so now it's time to get superstitious: Tony Blair's entry into Downing Street heralded the era of the property boom, perhaps his departure in six weeks' time will finally usher it out?
A report by Rightmove - which runs one of the UK's largest property websites - claims that prices have risen 12.9 per cent in the past year. This figure seems farcically low to anyone living in London and I will illustrate: last year houses on my street had asking prices in the mid-£500,000s (mid-€700,000s) - the general consensus was that this was too much by half for three-bedroom terraces with not much garden but, there you go). This week one of the houses has gone on the market for £850,000 (€1.251 million) - the same house sold for £455,000 (€670,000) in August 2006 according to Land Registry figures.
Admittedly, it has been given a loft conversion and a not very even lick of magnolia paint but, still, the sheer chutzpah of the asking price takes your breath away.
And this is not an isolated example of vendor bravado - in the streets all around my humble patch of south-west London, homes that were generally doing business in the £500,000 (€736,000) bracket have geared up by £300,000 (€442,000) or more.
Little wonder that the gap between average asking price and average earnings is at its widest ever according to recent surveys. Even bonus-bloated bankers will soon struggle to buy a semi in Balham.
It's similarly buoyant mood in the commercial sector - Savills reports an acceleration in business during February largely driven by the booming office-building sector. Again, the reasons behind this are, according to another piece of Savills research, lack of availability. But there are hints that the good times may not last - it predicts a "bulge" in speculative development in the mid-term and classes the current investor predictions as possibly "optimistic". As my friend, the estate agent counselled, "Sell, sell, sell!"
Never has buying the worst house on the best street made more sense - developer Paul Davies paid £8 million (€11.784 million) for an imposingly Gothic, rat-infested wreck on Park Street in Mayfair two years ago and has now restored and refurbished it. He describes his style as "Spanish neo-baroque" which seems to translate as some extremely splashy colour statements, very large furniture and the odd bit of classical statuary around the newly-installed basement pool.
The extravagant six-bedroom pile is now being marketed at a rent of £40,000 (€59,000) per week - a record-breaking level even by Mayfair standards. Davies is pinning his hopes on one of the Russian oligarchs, someone who has "an awful lot of money and very little time to develop their own taste". With that sort of description, no wonder Jennifer Aniston and Johnny Depp have already walked away from it.
