Crashman Begins

Whats Your Opinion. 1St Time Buyer, Buying At Low End Of Wealthy / Saught After Area Near London?

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what were the maintenance and ground rent costs?

opportunity cost on your deposit?

I *loathe* flippant comments from people who claim to do the maths but clearly haven't

It wasnt a flippant comment, believe me I do the maths

We've had the property 7 years, lived in it the first 3.5 years, been renting it out since then as we escaped left the country, had tenants the whole period.

Ground rent/service charge is £1k per year. Deposit was 10%, Mortgage has averaged around £1100 per month. We rent it out for £1350 per month which covers the mortgage, estate agents fees and service charge. Repairs have been averaging £300 per year. Works fine for me, so far we've paid off over £50k of the mortgage and put very little money into it

We were lucky that we bought in 2003 when the numbers just about made sense. Since then the returns have got much worse.

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If you like the house, can afford it without stretching yourself, and you can see yourself happily living there for at least 5 years then there's no problem in buying it. Just try to make sure you are in a good position to benefit from any future crash by being able to trade up (as you say, try to stay out of negative equity). I did something similar last year and I'm happy with my decision - I now have somewhere I enjoy living and the mortgage payments are very manageable. I could have stretched to buy a better place, but I'm a bear that likes to get a good night's sleep :)

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Well its been a few months & my purchase has nearly goine through now.

Sods law its on the brink of round two of the credit crunch.. . but like I said, if deposits are increased any further we'll be stuck in terms of options & would have to look further out

from the area we want to live in.

Some of the headlines on London seem to backup my theory of London as a safe haven / hedge, but as with this crash nothing is certain

http://www.thisislondon.co.uk/standard/article-24008306-london-house-prices-to-rise.do

London house prices to rise by 20 per cent in five years

London house prices are today forecast to rise by almost a fifth over the next five years, outstripping every other region of the country.

The capital's property market is expected to remain the most resilient in Britain with the biggest rises seen in the most sought after central London neighbourhoods where they could go up by as much as 23 per cent.

The forecasts, from agents Savills, mean that a £500,000 London family house could be worth close to £600,000 by 2016.

Prices are expected to rise much more slowly or even fall outside London, a trend that is deterring thousands of families from making the move to the countryside.

Yolande Barnes, director of Savills residential research, said: "Despite the widening gap between London and the country, Londoners seem increasingly reluctant to move out and there has been a 24 per cent drop in such relocation activity, meaning that values in the South-East are still 12.5 per cent below peak and will only turn upwards as the economy begins to recover." Prices are likely to fall slightly next year because of the pressure on family budgets caused by high inflation and low wage increases, before a slow recovery in 2013.

By 2015 they are expected to rise by six per cent a year. The Savills research suggests that the days of making huge profits from London property are over for the foreseeable future. The expected cumulative 19.1 per cent rise in values in London by 2016 is only two per cent ahead of inflation.

Until the 2008 financial crisis triggered a crash, property values had been rising at an average of 2.5 per cent above inflation for decades.

However, Lucian Cook, director of Savills residential research, said: "We certainly do not believe the trend of inflation-busting house price growth has been consigned to history. By the end of 1995, inflation-adjusted house prices were at the same level as they were 12 years previously. In the following decade they rose by 140 per cent."

Within London, growth is expected to be fastest in the prime central "bullseye" of Westminster and Kensington & Chelsea. Ms Barnes said she could see no signs of let-up in foreign demand for trophy London homes and estimated that £6 billion has flowed into the central London property market from abroad over the past 18 months.

She added: "We believe the influx of foreign wealth in uncertain times still has some time to run and it may even be boosted by the international attention focused by the Olympics."

The average price of properties sold in Westminster has smashed the £1 million mark for the first time.

It becomes the second borough in London where average prices are measured in seven figures, following Kensington and Chelsea.

http://www.bbc.co.uk/news/business-15735837

House prices falling outside London, says DCLG

Average UK house prices fell by 0.7% in September, according to figures from the Department for Communities and Local Government (DCLG).

The fall took the average UK house price to £207,326. Prices were 1.4% lower from a year ago.

London was the only region where house prices had risen, with prices up by 2.8% in the year to September.

By contrast, the largest price falls were in Northern Ireland, where prices were down by 12%.

The DCLG figures chime with the results of other monthly house price surveys from organisations such as the Halifax and the Nationwide.

These have also shown that prices have changed little in the past year, in a market subdued by the continued rationing of mortgage funds by lenders.

Experts have explained that the resilience of house prices in the capital has been due to a combination of factors, including the relatively buoyant level of employment and the continued influence of rich foreigners who continue to view houses in London as a good investment.

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I'm shocked, guys.

I thought this was housepricecrash.co.uk, not housepriceramping.co.uk.

Let me tell you a story about a man I work with from southern Ireland. Perhaps you'll think I'm full of it, but read it anyway.

Back in 2007 he bought a flat in a very nice area in Dublin for €500k, just when the property bubble started to wobble. The conventional thinking he said at the time was that property might crash in the over supplied areas in the country, but because he was buying a great location in a busy capital, he would be insulated from the crash.

The logic could not have been more wrong. He estimates that the flat he paid €500k for, is worth about €200k and that's if he's lucky. Meanwhile, his job was moved to Belfast, his commuting costs have rocketed, his tax has increased, he's currently contemplating jacking it all in and moving to Oz.

IMHO, London isn't as overpriced as what Dublin was. However, I still think there will be a correction, think 30-40% to go back to normal affordability.

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Sought not Saught! :blink:

I was thinking the very same thing...... it says something about the world and declining standards that even people with 'wealth' simply cannot spell simple words correctly.

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I'm shocked, guys.

I thought this was housepricecrash.co.uk, not housepriceramping.co.uk.

Let me tell you a story about a man I work with from southern Ireland. Perhaps you'll think I'm full of it, but read it anyway.

Back in 2007 he bought a flat in a very nice area in Dublin for €500k, just when the property bubble started to wobble. The conventional thinking he said at the time was that property might crash in the over supplied areas in the country, but because he was buying a great location in a busy capital, he would be insulated from the crash.

The logic could not have been more wrong. He estimates that the flat he paid €500k for, is worth about €200k and that's if he's lucky. Meanwhile, his job was moved to Belfast, his commuting costs have rocketed, his tax has increased, he's currently contemplating jacking it all in and moving to Oz.

IMHO, London isn't as overpriced as what Dublin was. However, I still think there will be a correction, think 30-40% to go back to normal affordability.

Funny, I immediately thought of Southern Ireland too. Anyway:

Experts have explained that the resilience of house prices in the capital has been due to a combination of factors, including the relatively buoyant level of employment and the continued influence of rich foreigners who continue to view houses in London as a good investment.

But hey, I'm sure this is completely sustainable and London really is different...

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IMHO, London isn't as overpriced as what Dublin was. However, I still think there will be a correction, think 30-40% to go back to normal affordability.

Conversely, Ireland couldn't print money and we can...

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The six months after the Olympics will be telling I reckon. Hard to say how much is froth at the moment. One thing's for certain though - nobody seems to buy a home which goes down in price (until they do). Even RealistBear reckons his is worth more then when he bought it (strange that he had it valued so quickly after he bought it).

I expect I'll be the same whenever I finally fork out.

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I was thinking the very same thing...... it says something about the world and declining standards that even people with 'wealth' simply cannot spell simple words correctly.

And it says something about the world & its declining understanding & assumptions, when someone criticises your spelling after you've apologised for it,

& dosent even bother contributing to the topic.

Edited by Crashman Begins

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Didn't realise this was an old thread, so it's probably too late for you now. All I can say is when you have bears on this forum using EA-speak like talk of the Olympics and foreign buyers propping up the market, all I can say is that you have a shoe-shining boy moment, right there!

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Update :

Completed & have moved in with the family

Me and Mrs Crashman have been saving the pennies & are okay with the bills / mortgage, especially when the necessary furniture

etc has been bought.

To tell you the truth I havent felt as happy & rested in years !!

Our own independace, space & surrounding have already made a positive change to us as a family & im really looking forward to the summer.

Edited by Crashman Begins

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Update :

Completed & have moved in with the family

Me and Mrs Crashman have been saving the pennies & are okay with the bills / mortgage, especially when the necessary furniture

etc has been bought.

To tell you the truth I havent felt as happy & rested in years !!

Our own independace, space & surrounding have already made a positive change to us as a family & im really looking forward to the summer.

Congratulations. I did not realise that this was an old post and was about to warn you not to go for the 2 year fix but rather go with floating at the moment as they tend to be cheaper. Use the savings to make overpayments.

Rates aren't going anywhere for some time and 2 years will go buy in flash. Once you add the fees, it works out as a pretty expensive 2 years, and if interest rates are really high in 2 years, you are still in trouble, especially if you find you are stuck in the SVR. 2 year fixed rate mortgages are not fixed at all - it is a 25 year floating rate debt which re-sets to prevailing mortgage rates every two years.

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B)

Not jealous, much, congrats.

Whereabouts did you settle on, and what was the difference between asking and actual?

Dont want to give too much away but its a nice area & is close to lots of green open spaces & rivers etc .

Most on this forum automatically associate london to extremely cramped conditions with no picturesque places. Not always the case

Difference between asking & actual - 25K

Was on the market since around March 2011, offered around Sept

Similar flat nearby has recently STC , for possibly 10K more than ours .. ( Will show on land registry eventually) & another is on sale for 30K more.

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The concept of 'sought after' areas near London confuses me? Do you mean Surrey, Bucks and Herts - or the outer suburbs.

Central London is where the foreign money is going in - that is stable (until we get strong economies and democracies world wide). But outer London - where the average wages (by residence and workplace) are only around £30,000 a year is less clear (many areas are dropping). Even there people are struggling. I for example am not clear how well the east London market will hold up post Olympics e.g. once the 11,000 new homes in the Olympic village (which we have disgracefully sold to Qatar) are opened.

Indeed it seems its only immigration, low interest rates and housing benefit (in Hackney 40% of all residents get housing benefit so couldn't afford to live there without state aid). Take this subsidy to buy to letters away and the whole thing is a pack of cards.

So pick your sought after area carefully - as pick the wrong place and its crime anti social behaviour, poor schools and disrespectful neighbours. And just hope there are no more experiences like we had last August!

Edited by MRMX9

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.

So pick your sought after area carefully - as pick the wrong place and its crime anti social behaviour, poor schools and disrespectful neighbours. And just hope there are no more experiences like we had last August!

Prime south west london. Have visited area many times over the last 10 years.

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Similar flat nearby has recently STC , for possibly 10K more than ours .. ( Will show on land registry eventually) & another is on sale for 30K more.

£30K more. Exciting. Maybe you should sell.

Whenever the time comes for me to buy, I won't be monitoring asking prices of other houses in the street or area. Working out if the value of my home is up or down relative to what is up for sale. Seeking some reassurance I've done the right thing or hoping it's worth more than I paid. When the decision to buy is made and all done, that's it for me. Value of my home up or down against what I pay I won't care, except prefer no HPI.

Glad you feel happy with your new home Crashman Begins and hope the positive changes are lasting for you and your family.

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Ill make this really simple ... the fact that you are concerned about a possible negative equity situation means you are going to be sailing close to the wind financially. So thats a categorical "no" in the current climate.

Edited by goldbug9999

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Prime SW London? That could be anywhere from brixton to Richmond. Wont you even give the borough or zone?

Its got to be Richmond. The other prime London areas I know of are not green and tranquil.

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HI

I don't have a family etc but I guess I am in a similar situation, sort of.

My own opinion is that I would not buy a house in your scenario. The only way you can really protect yourself against negative equity is by not borrowing huge sums of money from the bank to invest in a hugely volatile housing market, in the middle of a massively uncertain economic situation.

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Prime south west london. Have visited area many times over the last 10 years.

This post seems ridiculous to me on so many levels - I'm surprised so many people have bothered to respond!

I'll echo other posters by saying it's impossible to even attempt answering your question without knowing:

What on earth do you mean by prime? Where on earth is the property?

For the record, IMO, the only prime parts of London are parts of SW1, SW3, SW7 & W1, W8, W11, NW8, NW3 (i.e. Belgravia, Chelsea, South Kensington and Mayfair, Notting Hill/Holland Park, Kensington, St Johns Wood - which I personally don't get - and Hampstead).

Everything else can be described by many pretty and not so pretty adjectives, but they are simply not prime enough - that's not to say they are 'sub-prime' of course ;)

So, if you have found an area neighboring any of these mentioned 'prime' areas that are pretty and green with good schools within your budget you have a DUTY to let use humble folk on HPC know!

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Maybe we could say Prime is where prices are going up right now and non prime is where they are going down.

Prime might be where people live when they have a choice. Non prime where people live because they cant afford to to live where they want.

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