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London House Price Collapse?


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#1 qwerty_qwerty

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Posted 26 May 2011 - 07:03 PM

Hi,

I'm currently looking to buy a property in the N1 area of London, roughly around 350k. Am I right in thinking that London house prices are likely to remain separate from the rest of the UK (in that they will continue to steadily increase, or at least remain roughly at the same level over the next five years)?

Obviously no one can give a definitive answer, however I'd really appreciate some of your well-informed views on the situation.

I know about the favourable exchange rate for foreign nationals and the 1m stamp duty introduction propping up the market recently, but what about in the future? Surely if the 1m stamp duty kept average prices in London high during April, then the sub-1m market would have fallen like the rest of the UK? Or is that an extremely simplistic view?!

Very confused on the situation if I'm honest, and would really appreciate your opinions!

Thanks!

#2 bergkamp N4

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Posted 26 May 2011 - 07:26 PM

Good luck with 350k. Pains me to say it but not unless your happy with an ex local or lower ground (estate agent speak for basement) conversion then you goona struggle.

Sellers will not budge in this area.

N1 Angel forgeddit.
N1 Old Street close enough to walk to city/sq mile.
N1 Hoxton/Shoreditch may have been little while back but now b.o.m.d. hipsters flipsters area and brand new tube stations (yawn.....east london line).
N1 KIngs X ....shabby shabby. Few good roads hemmed in by truly awful depressing council estates...... but hey with the new Eurostar you could be in Paris by mid morning.

#3 Starla

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Posted 26 May 2011 - 08:40 PM

Decent 2 bed flats are in your price range of 350k. (not meant to sound like 350k is in any way reasonable for a flat!)

Personally I think London is split into it's own micro area's. So some area's will be hit worse than others. I live (rent) in Chiswick and am pretty confident it's going to hold up. Brentford next door could well get battered. Just remember if London area's do drop then it will be hard. Personally I wouldn't take that chance.
Tell me all about it and start at the end.

#4 rantnrave

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Posted 26 May 2011 - 10:15 PM

If interest rates go up then London gets hits twice - those with a mortgage who can't make the payments and overseas buyers deterred by a stronger Pound.

#5 qwerty_qwerty

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Posted 26 May 2011 - 10:53 PM

Good luck with 350k. Pains me to say it but not unless your happy with an ex local or lower ground (estate agent speak for basement) conversion then you goona struggle.

Sellers will not budge in this area.

N1 Angel forgeddit.
N1 Old Street close enough to walk to city/sq mile.
N1 Hoxton/Shoreditch may have been little while back but now b.o.m.d. hipsters flipsters area and brand new tube stations (yawn.....east london line).
N1 KIngs X ....shabby shabby. Few good roads hemmed in by truly awful depressing council estates...... but hey with the new Eurostar you could be in Paris by mid morning.


Ha ha, I know what you mean about the areas you mention, however I *think* I've found a place which I'll be happy with, for the right price (assuming a fair bit of haggling - about 15-20% off a rather inflated asking price). The place next door sold for about 25% less than they're asking for back in September '09, so I think 15-20% is fair with the market how it is at them moment (just concerned that it may prove to be a massive mistake in 6 months time!).

Decent 2 bed flats are in your price range of 350k. (not meant to sound like 350k is in any way reasonable for a flat!)

Personally I think London is split into it's own micro area's. So some area's will be hit worse than others. I live (rent) in Chiswick and am pretty confident it's going to hold up. Brentford next door could well get battered. Just remember if London area's do drop then it will be hard. Personally I wouldn't take that chance.


Thanks for your insight - as I'm sure you've gathered, that's my main concern, so (whether I want to hear it or not) that's really helpful.

If interest rates go up then London gets hits twice - those with a mortgage who can't make the payments and overseas buyers deterred by a stronger Pound.


Ah, that's a bloody good point regarding the overseas buyers. Hmmm... I'm starting to get serious second thoughts on this now, for good reasons.

Thanks for all of your advice - it's very much appreciated!

#6 meltsheep

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Posted 27 May 2011 - 03:37 PM

Thanks for your insight - as I'm sure you've gathered, that's my main concern, so (whether I want to hear it or not) that's really helpful.



Ah, that's a bloody good point regarding the overseas buyers. Hmmm... I'm starting to get serious second thoughts on this now, for good reasons.

Thanks for all of your advice - it's very much appreciated!


Every development around N1 / EC / E1 I have enquired about has almost sold out. So new build for that money, forget it.

Maybe heading towards the Hackney end of N1 you'll find somewhere suitable.

#7 yekim1967

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Posted 28 May 2011 - 09:02 AM

I live in n1 and defintely overpriced as stuff is on the market for ages check property snake or property bee to see what i mean. Also bezier at old street is not selling at all. There is another at new development on new north to road and a couple on city road. Actually n1 must have the one of the highest amiunts of council tenants so will be interesting to see how the benefit cuts effect things.

Every development around N1 / EC / E1 I have enquired about has almost sold out. So new build for that money, forget it.

Maybe heading towards the Hackney end of N1 you'll find somewhere suitable.



#8 okaycuckoo

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Posted 28 May 2011 - 01:53 PM

Hi,

I'm currently looking to buy a property in the N1 area of London, roughly around 350k. Am I right in thinking that London house prices are likely to remain separate from the rest of the UK (in that they will continue to steadily increase, or at least remain roughly at the same level over the next five years)?

Obviously no one can give a definitive answer, however I'd really appreciate some of your well-informed views on the situation.

I know about the favourable exchange rate for foreign nationals and the 1m stamp duty introduction propping up the market recently, but what about in the future? Surely if the 1m stamp duty kept average prices in London high during April, then the sub-1m market would have fallen like the rest of the UK? Or is that an extremely simplistic view?!

Very confused on the situation if I'm honest, and would really appreciate your opinions!

Thanks!

Bear in mind mad Irish developers dumped alot of London property in Ireland's bad bank NAMA - the bureaucrats have been preparing since January to offload everything by 2013. They need readies, and reckon the UK is a much more liquid market than the domestic one.

#9 BentoBox

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Posted 28 May 2011 - 02:29 PM

I have been watching N1 for quite some time as well and it is indeed one of these seemingly HPC-proof London areas. A few opportunities came up in early 09 but I didn't pull the trigger as I thought it had more to go on the downside (greedy bear, I guess) and now stuff is back to pricing levels that are completely nuts. I'm afraid 350 isn't leading anywhere in that area.

My feeling is that the good stuff is very low LTV or owned outright (so I am not even sure rising rates are going to help) so supply sucks and therefore stuff like Barnsbury/Canonbury is just not happening at the kind of prices I'd like to get. De Beauvoir/East N1 (but already Hackney really) has been ramping up as well - and links are still not that good, so you're left with shitty KX / York / Cally back streets, and that couldn't be more depressing.

#10 EDW

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Posted 29 May 2011 - 11:08 PM

350k gets you a nice flat in Holloway.

N1 forget it.

#11 qwerty_qwerty

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Posted 30 May 2011 - 09:46 AM

I've actually found a few places that I think I'd be happy with for 350k in N1, so I'm not really looking for advice on that regard. Admittedly, I wouldn't have thought everyone would be happy with them, but for me they tick the boxes.

My theory behind N1 (though it probably is a little simplistic) is that it central, and has very good transport links so is likely to hold its value if/when the crash reaches London. I know I could afford a nicer property further out, but personally, and financially, this makes the most sense to me.

Thanks for all your input!

#12 qwerty_qwerty

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Posted 30 May 2011 - 09:50 AM

I live in n1 and defintely overpriced as stuff is on the market for ages check property snake or property bee to see what i mean. Also bezier at old street is not selling at all. There is another at new development on new north to road and a couple on city road. Actually n1 must have the one of the highest amiunts of council tenants so will be interesting to see how the benefit cuts effect things.


Hmmm... that would be interesting actually. Do you think that this would effect purely ex-local authority prices, or the whole sub-4/500k market?

#13 qwerty_qwerty

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Posted 30 May 2011 - 09:59 AM

Bear in mind mad Irish developers dumped alot of London property in Ireland's bad bank NAMA - the bureaucrats have been preparing since January to offload everything by 2013. They need readies, and reckon the UK is a much more liquid market than the domestic one.


Just been reading up on that (interesting article here, if anyone's else is interested: http://www.guardian....property-market) and it *seems* as though it's mainly commercial property, and for the residential property that is involved, they are trying not to flood the market. Of course, that could well be me reading what I want to read...

#14 EDW

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Posted 30 May 2011 - 12:44 PM

Nice flat in best part of N1

http://catalogue.auc...ay2011/sav5.pdf

Result: 420,000


By Order of Metropolitan Police Authority

12 Grice Court, Alwyne Square, Islington, London N1 2JY

A second floor three bedroom purpose built flat requiring modernisation Vacant

Tenure

Leasehold. 125 years from 3rd July 2002. Ground rent 1 per annum.

Location

Situated on the south side of Alwyne Square which runs off Canonbury Park North

Edited by EDW, 30 May 2011 - 12:46 PM.


#15 qwerty_qwerty

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Posted 30 May 2011 - 01:16 PM

Nice flat in best part of N1

http://catalogue.auc...ay2011/sav5.pdf

Result: 420,000


By Order of Metropolitan Police Authority

12 Grice Court, Alwyne Square, Islington, London N1 2JY

A second floor three bedroom purpose built flat requiring modernisation Vacant

Tenure

Leasehold. 125 years from 3rd July 2002. Ground rent 1 per annum.

Location

Situated on the south side of Alwyne Square which runs off Canonbury Park North


I actually can't believe that sold for 420k! When was that?

For the record, I have found a few nicer places places, of a similar (if not larger) size, with similar leases, in similar areas that just had wildly exaggerated asking prices. I spoke to the estate agent before going for a second viewing, and explained that I wouldn't consider offering anything over 20% less than the asking price, which brings it quite a way under my budget.

To be honest, if I had 420k then I really wouldn't dream of spending it on that place. I just wouldn't be able to justify that to myself!




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