Wrong Housing, Wrong Investment and Bad Mortgage Lending

Thamesmead encapsulates a lot of what has gone wrong with housing over the years – from poor local planning, to bad mortgage lending to yet worse property investment decisions by amateur investors says David Lawrenson of www.LettingFocus.com

A few weeks’ ago I had cause to visit Thamesmead where my boy was playing in a kids’ football match. I mention the match only because Thamesmead would not be a destination you might pick first for a family picnic or other day out.

Thamesmead is an interesting place because it encapsulates a lot of what has gone wrong and continues to go wrong with the housing market.

Council Housing

After the war and right up to the 1970s a lot of council housing was built in Thamesmead. Grand estates were erected that no doubt looked great on an architect’s drawings but were perhaps not much fun to live in.

Later, in the 1990s and early noughties, a lot of new build stock was built here, some of it to be sold as private homes.

Much of this was in turn promoted by the “Get Rich Quick in Property” fraternity, who at the time were peddling the mantra that you would make a lot of money buying this new build stock (at supposedly great discounts and often with “no money down”) and then just sitting back and renting it out for good rents or selling later and making quick, big profits.

Warnings Not Heeded

Of course, as many people like me warned at the time, the hype failed to match up and much of the new build stock proved hard to let at any price – apart from perhaps to housing benefit dependent tenants. And even many of them resolutely refused to live here.

Unsurprisingly, houses prices, especially of the new build stock, fell sharply.

Added into the mix was the abject failure of many buy to let mortgage companies. Big high street names, including some major building societies, happily lent on this new build stock – clearly they failed to assess that lots of housing stock coming on stream in an area at the same time will always depress rents and sell-on prices.  Or perhaps they somehow believed that regeneration of the area was just around the corner?

Mortgage Fraud

The lenders also suffered from a lot of mortgage fraud with hundreds of millions of pounds disappearing to the usual fraud capitals of the world.

It takes time to untangle frauds and recover a property back into the lenders possession, thus many flats in Thamesmead were left occupied by the associates of the fraudsters, illegal tenants or squatters for quite a long time after.

Greenwich and Bexley Councils try their best but still seem to fall short with litter much in evidence and verges next to the roads remaining uncut – though horses who are allowed to wander freely right next to the main thoroughfares do their best to keep the grass down.

Low Demand, Low Prices

Today, it’s possible to buy a three bed house for less than £150K in Thamesmead – making it the most affordable place in London.

There are some takers – some possibly having an eye to the uplift effect that the nearby Cross Rail station at Abbey Wood could potentially provide. (A risky punt but not without some upside).

But Thamesmead stands as a good example of 1) what can happen when urban regeneration goes wrong and 2) as a testimony to past hapless lending by the banks and building societies.

It also stands as a monument to the folly of those who believe it is possible to get rich quick as a property investor whilst still sitting on the sofa. (I doubt whether many “investors” actually bothered to visit the area before they bought.)

It’s Not How Much You Build!

Today, there is ample stock available to buy at low prices in Thamesmead which is a lesson for government that it’s not how much you build – it’s how you build it and what you build that counts.

With a 10 or 15% first time buyers mortgage, many of these properties today must be well within the reach of the young buyers who are prepared to save up and forgo a holiday or long weekends at the umpteen rock festivals that there seem to be today. (When I was just out of college there was Glastonbury and Reading and that was it – and I wonder if a desire to spend not save explains why many young people can’t afford to buy).

But many first time buyers will still just not buy in this area.

So, the lesson for government from Thamesmead is surely this: What the UK needs is good quality housing stock of the right size and type that people really want to live in combined with a sensibly and carefully thought out plan for the local environment.

Only then will the buyers come.  Only then will sustainable communities be built.


Services to Businesses and the Public Sector

We advise a range of organisations including banks, building societies, local authorities, social housing providers, institutional investors and insurers. We help them develop and improve their services and products for private landlords.

We also write for property portals, speak at property events and we are regularly quoted by the media.

Services for Private Landlords

We help landlords and property investors by showing them how to make money in the private rented sector using ways which are fair to tenants and which involve minimal risk.

HOME PAGE OF THIS viagra for sale BLOG click here: Blog

To read blog posts on related posts use the tags and categories at the bottom of each post (after the list of links), or over to the right of this page – where, you can click on “Select Categories” and use the pull down menu to read all the posts on any Category that interests you.


For our main home page click here:  http://www.LettingFocus.com

For general information on our CONSULTING SERVICES and also to find a small sample of links to where our comments have been featured in the National Press please click: Consultancy and Seminars


TO READ CLIENT TESTIMONIALS – from both organisations and private landlords click here: Testimonials


Our book is the highest selling property book in the UK. Click here to Find Out More and Buy it at Amazon. If you are from an organisation and would like to bulk buy at least 50 books please ask us for special rates.

TO JOIN OUR FREE NEWSLETTER and get our latest Newsletter which goes to over 3,000 people (as at December 2011) just send an email to [email protected]

We do not spam or sell our mailing list to advertisers, though we occasionally mail landlords about good products from third parties. Please put us on your “white list” to ensure you receive our emails.


Please note we only allow selected advertisers to market their services.


NEXT SEMINAR EVENT FOR LANDLORDS: Landlord and Property Letting Seminar

Copyright of Blog: David Lawrenson 2012. Please link to us here or quote us. We actively pursue copyright infringements. The blog is updated once a week.

TWITTER PAGE For my thoughts on property, personal finance, plus a lot of other random things from sport, to 80s and 90s Indy Music, to tsunamis to musings on boardroom pay, plus my (usually) slightly centre left “take” on UK and world politics please see our Twitter page.