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Whats Your Opinion. 1St Time Buyer, Buying At Low End Of Wealthy / Saught After Area Near London? Am I shielding myself from NEG Equity by buying such an area ?

#1 User is offline   Crashman Begins 

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Posted 25 August 2011 - 07:25 AM

Hello HPC'ers,


I would be a 1ST TIME BUYER, buying at low end of a wealthy / saught after area near London.

My main thought is that I would be shielding myself from NEG Equity by buying such an area, instead of buying
in areas that are dropping & dont tick all our boxes.

Also we want to move there because of the good schools, cheap childcare & the facilities i.e parks, classes, scenery & transport. It ticks all the boxes for us

Whats your thoughts
precious-metal-investment.blogspot.co.uk

BBB @ Dec 5 2004, 05:30 PM: some credit crunch guys....not my idea of a credit crunch......is it yours?
''first this will happen, then this will happen'' you all said..kind of throws all your baloney theories out of the window doesn't it?

 Dorkins, on 02 May 2013 - 01:05 PM, said:

They will do anything to avoid suggesting that the size of the pie is not the real problem, it's the way it is sliced.

#2 User is offline   Killer Bunny 

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Posted 25 August 2011 - 07:43 AM

Ask yourself this: how much was it in 1993 before the easy money? Now that there is no more easy money, how much will it be?
In 1931 they did not know yet that they were in The Great Depression
Cap'n, you cannae change the laws of... Economics!
"If they raise rates we're toast. If they don't its BECAUSE we're toast" Pundit: Sky News March 2011
"That which is unsustainable will not sustain" Milton Friedman

#3 User is offline   davidcameron 

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Posted 25 August 2011 - 07:44 AM

Go for it. Live your life.

You'll now get a few dozen posts telling you not to and to live a in a shed in the woods until the world ends.

#4 User is offline   Chest Rockwell 

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Posted 25 August 2011 - 07:49 AM

Sought not Saught! :blink:

#5 User is offline   scrappycocco 

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Posted 25 August 2011 - 07:51 AM

Go for it, as long as your buying to live not for profit and it's near London. I'm watching similar places near London near a tube and the way properties are going here, as each day passes and I'm slowly losing faith in a HPC for where I want to buy.

#6 User is offline   mijas99 

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Posted 25 August 2011 - 07:53 AM

View PostCrashman Begins, on 25 August 2011 - 07:25 AM, said:

Hello HPC'ers,


I would be a 1ST TIME BUYER, buying at low end of a wealthy / saught after area near London.

My main thought is that I would be shielding myself from NEG Equity by buying such an area, instead of buying
in areas that are dropping & dont tick all our boxes.

Also we want to move there because of the good schools, cheap childcare & the facilities i.e parks, classes, scenery & transport. It ticks all the boxes for us

Whats your thoughts


That was my thinking when I bought in Putney in 2003, I was expecting house prices to crash back then as they were ridiculously high. Still the mortgage payments were less than the rent so it made sense to buy.

So I chose a desirable 1 bed flat in a good street in Putney rather than a 2 or 3 bed in a not so nice place in London. My thinking was that property in nice areas hold their prices better because wealthy people arent so reliant on credit.

I looked at past prices too. We bought for 235k in 2003. The flat sold for 191k in 1999 and 140k in 1993, so I though that was a steady progression and not entirely unreasonable.

I would say you should be looking to buy something in a good part of London at 2005 prices now.

#7 User is offline   Pent Up 

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Posted 25 August 2011 - 07:54 AM

No where is immune. The price of properties in your desired area are at a premium to other areas. That premium will always be there but prices will still fall. The only way to protect from NE is have a massive deposit.
Remember that buying a house is a highly leveraged investment and can result in losses that exceed your initial deposit. Buying a house may not be suitable for everyone, so please ensure that you fully understand the risks involved.


"The time to buy is when blood is running in the streets" Baron Nathan Rothschild

#8 User is online   winkie 

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Posted 25 August 2011 - 08:16 AM

View PostPent Up, on 25 August 2011 - 07:54 AM, said:

No where is immune. The price of properties in your desired area are at a premium to other areas. That premium will always be there but prices will still fall. The only way to protect from NE is have a massive deposit.



I agree...also a small one bed place maybe fine for one person who is out working all hours to pay for it, but the chances are it may not be fit for purpose for as long as a larger two bed place...the cost of moving can easily be 20k in itself so you don't want to be doing that too often if you can help it. ;)
What you don't owe won't worry you.

Less can be more.

#9 User is online   tomandlu 

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Posted 25 August 2011 - 08:48 AM

View PostCrashman Begins, on 25 August 2011 - 07:25 AM, said:

Hello HPC'ers,


What's the LTV? What will the monthly mortgage payments be? Fixed or variable? How long is the term of the initial mortgage deal?

I don't think anything can be assumed.
Buy my book "All the Way Home"

#10 User is offline   the flying pig 

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Posted 25 August 2011 - 11:41 AM

I presume your choices are: (1) buying in what you see as an upmarket area; (2) buying in what you see as a less upmarket area; or (3) renting.

Basically if your main choice is (1) vs. (2) you should make your decision based on which bests suits you and your pocket as a place to live long-term there rather than on HPI predictions... itd be incredibly silly, a complete nonsense, for anyone to think that they can do area-specific HPI predictions.

If you main choice is buying vs. renting in a general sense then all the usual financial and non-financial arguments apply [see the other squillion threads about it].
"HOUSE PRICES FALL AGAIN", Daily Express, 28th Dec 2007... "HOUSE PRICES RISING AGAIN", Daily Express, 29th Dec 2007

#11 User is offline   Executive Sadman 

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Posted 25 August 2011 - 11:43 AM

"near london"

Are we talking some riot ridden suburb or some tranquil middle class exurb?
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#12 User is offline   Biddyboy 

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Posted 25 August 2011 - 11:53 AM

What are you going to exchange for food during the depression starting next year?

Ok, that was a bit hard. :)

Bottom line is if you need to move do it, if you can wait do it. No harm in waiting a few months right now.

#13 User is offline   ader 

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Posted 25 August 2011 - 12:20 PM

If you're planning on living there ten years and you'll be happy living in a place that's in NE then go for it. NE isn't a problem unless you have to sell.

#14 User is offline   Crashman Begins 

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Posted 25 August 2011 - 12:37 PM

View PostKiller Bunny, on 25 August 2011 - 07:43 AM, said:

Ask yourself this: how much was it in 1993 before the easy money? Now that there is no more easy money, how much will it be?


Around 60 - 70K

Surely if it gets that cheap, the millionaires / everyone else who likes that area will just buy them up.


View PostChest Rockwell, on 25 August 2011 - 07:49 AM, said:

Sought not Saught! :blink:


OOps was in a rush this morning ; )

View Postmijas99, on 25 August 2011 - 07:53 AM, said:

That was my thinking when I bought in Putney in 2003, I was expecting house prices to crash back then as they were ridiculously high. Still the mortgage payments were less than the rent so it made sense to buy.

So I chose a desirable 1 bed flat in a good street in Putney rather than a 2 or 3 bed in a not so nice place in London. My thinking was that property in nice areas hold their prices better because wealthy people arent so reliant on credit.

I looked at past prices too. We bought for 235k in 2003. The flat sold for 191k in 1999 and 140k in 1993, so I though that was a steady progression and not entirely unreasonable.

I would say you should be looking to buy something in a good part of London at 2005 prices now.



Getting it at close to 2005.


It sold for roughly 195,000 in 2004 & a similar one sold in 2007 for roughly 285k



View Postwinkie, on 25 August 2011 - 08:16 AM, said:

I agree...also a small one bed place maybe fine for one person who is out working all hours to pay for it, but the chances are it may not be fit for purpose for as long as a larger two bed place...the cost of moving can easily be 20k in itself so you don't want to be doing that too often if you can help it. ;)


It will be a 2 bed with my Mrs & 2 kids

View Posttomandlu, on 25 August 2011 - 08:48 AM, said:

What's the LTV? What will the monthly mortgage payments be? Fixed or variable? How long is the term of the initial mortgage deal?

I don't think anything can be assumed.


10% deposit / 1200 PM repayment / fixed for two years. Cant see rates going up for a long time.

View PostSadman, on 25 August 2011 - 11:43 AM, said:

"near london"

Are we talking some riot ridden suburb or some tranquil middle class exurb?


In a tranquil middle class suburb

View PostBiddyboy, on 25 August 2011 - 11:53 AM, said:

What are you going to exchange for food during the depression starting next year?

Ok, that was a bit hard. :)

Bottom line is if you need to move do it, if you can wait do it. No harm in waiting a few months right now.


Been waiting a long time & if shit hits the fan again banks might reduce lending to 15/20 % deposit which will leave me saving up for another 5-6 years ?

If shit hits the fan like you say, then my PM's will skyrocket & I'll use some / all to pay off the flat in full
& the rest will go on a house with a garden (for food) further out, whilst I put the flat on rent ; )

& if it dosent skyrocket supply will continue to dwindle allowing me to swap it eventually for our deposit on a second home

precious-metal-investment.blogspot.co.uk

BBB @ Dec 5 2004, 05:30 PM: some credit crunch guys....not my idea of a credit crunch......is it yours?
''first this will happen, then this will happen'' you all said..kind of throws all your baloney theories out of the window doesn't it?

 Dorkins, on 02 May 2013 - 01:05 PM, said:

They will do anything to avoid suggesting that the size of the pie is not the real problem, it's the way it is sliced.

#15 User is offline   Si1 

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Posted 25 August 2011 - 12:39 PM

View PostChest Rockwell, on 25 August 2011 - 07:49 AM, said:

Sought not Saught! :blink:


that's phonetic North London spelling...

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