Oh hey, this is fun – if your idea of fun is to browse the sort of London property listings that presage the arrival of the end times. From Wednesday's Evening Standard:

Estate agents selling this one bedroom 'detatched house' in south east London today confirmed the building has full planning permission and is on its own plot of land.

The small property, on the market for £280,000, is situated on Brenchley Gardens, in Forest Hill.

Except, whether you call it a small property or a detached house, look at the picture and you can’t help but notice that it’s actually, well, look.

Forest Hill, for those who aren't intimately versed in London's social geography, is a mid-range south London suburb that no one was particularly interested in as recently as five years ago. Then the London Overground arrived, the property market went nuts, and now what is clearly a shed is on the market for a price that would require a first-time-buyer to have an income of approximately £56,000, plus £28,000 in the bank.

Which is, of course, complete and utter lunacy.

Bear in mind, though, how easily a story like this can be misrepresented. That £280,000 is not the price that the shed has sold for, or any other measure of objective value; it’s just what its owners are asking for. The crazy pricetag may less about real world house prices than it does about optimistic vendors and self-promoting estate agents.

All this has happened before, and all this will happen again. In April 2012, the Evening Standard reported with some excitement that a 224 square foot converted garage in Highgate (posh hilly bit in north London) was on the market for £260,000. Sixteen months later, the papers reported, with no less breathlessness, that a 224 square foot converted garage in Highgate was on the market for £250,000.

What hardly anyone pointed out was that this was exactly the same garage and it was back at a lower price because no one had bought the bloody thing. It was last spotted on the market as a “commercial property” valued at the relatively bargain rate of £195,000; the Land Registry shows that a garage on Dukes Head Yard changed hands in late 2013 for £170,000, though it's hard to be certain it's the same one.

Whatever the fate of the quarter of a million pound garage, however, we cannot find a shred of evidence that anyone actually paid a quarter of a million pounds for it.

Look into the fate of other stupidly expensive properties, in fact, and you'll find the same trend. Lots of hysterical coverage of high prices, but much less evidence that anyone actually paid them.

In May 2012 a pair of garages in Knightsbridge went on sale at £525,000. Check with the Land Registry, and you'll find that those garages haven't changed hands since 2009, when Goldfrost Resources Lt paid £410,000 for them. This hasn't stopped various newspapers misreporting that £525,000 as if it was the sale price. It wasn't.

None of this should be taken as a sign that the London property market isn't completely potty, of course. House prices are high in part because land prices are high, so buyers sometimes will pay crazy money for crappy properties with a view to building something better on the site. Speculation is a factor, too: some will pay a lot now, in the expectation that someone else will pay even more later. For whatever reason, those Knightsbridge garages genuinely did change hands for £410,000.

All the same, whenever you spot a report claiming that a small potting shed in zone 5 is now valued at half a million quid, it's worth asking yourself – who is it that valued it as such? Because until it’s a buyer, that figure is meaningless.

Jonn Elledge is the editor of CityMetric. He is on Twitter as @jonnelledge and also has a Facebook page now for some reason.

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