London house prices could be halved by Euro crisis - The economic choice
The recent rush of money seeking a safe haven has pushed the price of luxury London homes up during the recent financial crisis, but this could quickly be reversed if the Eurozone breaks up leaving many with homes worth 50% of what they paid for them.
The research by the property firm Development Securities (Prime Central London: In a Class of its own?) covers seven postcode areas where the average house price is a cool £1.2 million.
The inflow of money into the capital by safe haven investors has pushed the price of PCL property up by 75% says the report, with 60% of them going to foreign buyers. But this could all change should the Euro fail. “A break up of the single currency is perhaps the single greatest threat to PCL” says the report.
Now, if a particular PCL house was worth say £1 million a few years ago and it went up in value by 75% it would now be worth £1.75 million. If it then drops in value by 50% it will be worth just £875,000. That is it will be worth less than the buyer paid for it! The later 50% drop is greater than the earlier 75% gain. Food for thought?
The report argues that the PCL property market is different from the rest of the country for several reasons.
It says that PCL property attracts investors from around the world, including the UK, who would never consider buying in any other part of the country. Because of this 90% of their price movement is caused by “…a combination of: changes in global equity prices; changes in the sterling exchange rate; and changes in those factors to do with risk and uncertainty that underpin the relative attractiveness of sterling assets more widely.”
This means that a Euro collapse, which would bring with it strengthened sterling and a collapse in global equity prices, would ‘undermine’ the wealth of those that would normally buy PCL property. But the report does say that after a time this trend would begin to reverse as the markets began to settle after the turmoil.
Michael Marx, Chief Executive of Development Securities, said “Safe-haven flows associated with fears about a messy end to the euro debt crisis have boosted PCL property prices over the past two years. And yet we end this report by arguing that a break-up of the single currency area is perhaps the single greatest risk to PCL prices. In the worst-case scenario, we estimate that PCL prices could fall by 50% following a break-up of the single currency area.”
Then we could see house prices across the country eventually following suit, despite PCL prices being ‘different’.
Queen's Grove, St John's Wood - by Stephen McKay
Image by Stephen McKay [CC-BY-SA-2.0 (http://creativecommons.org/licenses/by-sa/2.0)], via Wikimedia Commons
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Tags: House Prices, london, News, property
London 2012 Chairman sees enthusiasm of athletes on forthcoming Games - Xinhua News Agency
FRANKFURT, May 31 (Xinhua) -- The London 2012 Chairman Thursday said the levels of efforts and enthusiasm among elite athletes to compete at the London 2012 Olympic Games were among the highest he had seen.
He made the remarks at a news conference here with Thomas Bach, German National Olympic Committee President and International Olympic Committe vice president. Bach announced the selection of the first athletes to represent Germany at the London 2012 Games.
Coe said the interest and desire to participate at the London Olympic Games was sky high. The triathletes in Tokyo, runners in rabat, swimmers in Los Angeles and gymnasts in Beijing have an unprecedented appetite among elite level competitors around the world to get to London, he said.
Bach expects an exciting and inspiring atmosphere and brilliant games in London. "On the sport side they will be the stage for the toughest Olympic competition ever," he said.
China and the U.S. will compete for the first place in the medal tally in London Olympics, probably followed by Russia in the third place, Bach predicted. He also added that the U.K., which is the host country of the Games, will probably take the fourth place in the medal tally.
There will be fierce competition for the fifth place, he said.
The news conference was attended by a popular German Olympic gold medalist fencer, Britta Heidemann who told Xinhua that she will try to secure a medal in London, pointing to strong competition from her Chinese and French competitors.
Coe said the Torch Relay is building momentum and excitement is continuing to increase in the countdown to the Games.
"We are on track to provide a memorable welcome that will inspire the athlete and the world," he added.
The England team welcomed fans to the Vauxhall BBQ on Wednesday - FA.com
The England team welcomed fans to the Vauxhall BBQ on Wednesday
On Wednesday evening, following their afternoon on the golf course with journalists and members of the media, the Three Lions ended a relaxing day at the team hotel in Hertfordshire at the Vauxhall England BBQ.
The informal event organised by The FA and Vauxhall, a week before the team departs for Euro 2012, brought together coaching staff and players, along with sponsors, fans, competition winners and selected members of the media, as they prepared for the meeting with Belgium.
"We've talked about The FA and England being a more inclusive, more confident organisation, good tourists and so on," said FA Chairman David Bernstein at the BBQ.
"Today epitomises that. It has been fantastic to see everyone together, the media, the sponsors and others with the players. It's been relaxed. A fabulous day."
Duncan Aldred, Managing Director of England Team Sponsor Vauxhall added: "Best wishes to the whole team. We're all fans, so come on Engalnd and let's have a great tournament."
Check out the video above for a behind the scenes look at the BBQ...
England take on Belgium on Saturday in front of a sell-out crowd at Wembley Stadium giving them a perfect send-off to Euro 2012. For fans not able to be at the game, you can watch it live on ITV1 or follow our updates right here on TheFA.com or via @thefadotcom on Twitter.
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