We have been thinking about buying a flat in London since 2002, but thought we would wait for the crash. We have waited 5 years for the predicted a crash, and what happened in the meantime? Property prices went up.

Therefore I can't help but feel , as we are entering 2007, that hopes for a crash are just wishful thinking on our part. Perhaps it is time for us to face reality.

I can afford to get on the property ladder now (nothing fancy, just a 2 bed flat). Bearing in mind that I am talking about the London market, I think it makes sense to buy for the following reasons:

1) Property prices are not going to rise at levels they have in the past. However there will be increases (albeit small , 0.6% per month, 7% p.a).
2) More immigrants are arriving and (surprisingly!) buying property. Our landlord recently sent a Bulgarian builder to fix a door at our rented flat and he had just purchased his own flat. Here we are dawdling for 5 years on whether to buy or not. This guy just walks in and takes the plunge. Stupid, I think not.
3) For the mediwum term, there will continue to be more demand than supply in London, especially with the EU now extended to Eastern Europe. Not all eastern Europeans do low level jobs, there a fair number of professionals too, and they are jumping on the property ladder, even if it only means a one bed flat.
4)Historically, housing prices have never crashed/fallen in an Olympic city. Gains are actually the norm.

As much as I would *love* to believe that there will be a crash, I think I need to stop kidding myself and buy now.

Very hard to disagree with your summary, Sarah; a nominal crash (in London, at least) seems like something of a pipe-dream. It is a shame that you came to that conclusion the hard way.

If you're in a position to purchase a two-bed flat, then it might not be a bad idea (especially as you will have the security of tenure that never comes from renting).
A lot of people on this site forget that London is very much a global city, and the rest of the world seems to have a very real desire to live in it.

Also, agree with your point on the skilled Eastern Europeans; I'm meeting more and more professionals such as analysts who hail from the old Eastern Bloc; indeed, I employ one of them. The idea that they all work in burger bars while sleeping ten to a room is utter bunk

Just my thoughts

I live in London also and agree almost 100% with the above but you won't have to wait long for someone to tell you on here that you'll be able to pick up a nice 3 bed semi for in chiswick for £75k in a couple of months time.

I've been renting and thus at the sharp end of London HPI for many years now and even with a big vested interest in a HPC in London I can't see any major downturn here for a while yet

In the medium term I reckon we can expect at the most stagnation or very small downward correction (but I expect to be fully slated and called a troll for saying this)

I am loosing faith too, but yesterday came across this weblink and discovered that the two areas I am watching, for the property types I want, prices dropped in the last twelve months. (N14, EN1)

What is interesting is the vast fluctuation of the prices of detached properties, which it seems to a person with no financial savvy, to be screwing up the overall results. I know this has been said before, here is some proof.

Hindsight is a wonderful thing to have, i live in Essex so its very similar for me also, but if i think it is different with flats!! Getting the train to work i see new build after new build after new build with "text space, and recieve a brochure", there is literally thousands of these new pads about to come into the market. With stricter mortgage lending coming into place and BTL's starting to bottle it, i reckon flats at least will start to see a slump in price!!!! But that is my useless and humble opinion based on hunches!

Look back in time to 1987. The stockmarket crash led to tens of thousands of City job losses and this was followed 18 months later by Great Crash 1. Stocks are running well now but inflation is out of the bag and IR will have to rise despite the threat to the housing market.

Houses are at the top of the cycle in London IMO. Buy at your peril.

BTW--why did anyone think there was going to be a crash in 2002? HPI was in its full throws of raging inflation and had only been rolling for 6 years. There was no need back then for 5 X income and mass IO such as we have had since 2004. I thought 2005 looked good but for Gordon's IR cut which gave new life to inflation for another year or so. He doesn't have that option any longer with inflation inside the threshold.

Whilst I argree with the above posters, a little more detail would be helpful. IMO London is more a collection of villages, rather than one continuous mass. Yes it is booming as a result of being an economic success and a magnet to the rest of the world. However, in order to take advantage of this continued success you will need to carefully target the area, development and/or property type. Conversely, in a downturn this choice will determine your resilience to significant losses.

For information, I FTB'd in London in late 05. I would approach buying at this point with caution.

Well, only yesterday I had a 630k mortgage approved, a 695k offer accepted on a covent garden flat, solicitor ready etc.

Then I just got cold feet and thought - what if I can't work? I always thought, being where it is, it would be easy to let out - but then I checked www.findaproperty.co.uk lettings section, and was totally shocked to find that for the same price as the interest (in my case 3000k a month), I could get 3 really quite large bedrooms, separate kitchen, compared to the one I was buying with only 2 small (3m x 3m - or 10'x10' for you old imperials) bedrooms (one of which had the combi-boiler in!), and a 6mx3m 'open plan kitchen/reception'.

I just decided it was crazy to spend 50% more in terms of rent vs interest payments, for 50% less. And I truly believe that prices really must be maxing out, except for the absolute top of the market (the 4 bed, £3m penthouses I mean).

I have seen properties sitting around on findaproperty for 3 months - in Covent Garden, and they haven't sold. Crazy crazy crazy.

And I think the overall thing is I feel so relieved that I haven't gone ahead, rather than lamenting it.

FYI I have a 3-bed property in Putney I bought in 2000 for 190k. Now worth 340k, but it is let out. I am going to change the mortgage end of this year to residential, and move in myself, if I am still in London.

Look at these 600k - 800k properties for sale:

http://www.findaproperty.com/searchresults...p;sp=1&p=20

Compared to these 600 per week - 800 per week properties for let, in the same area:

http://www.findaproperty.com/searchresults...nt=1&edid=0

Notice a difference? I mean, they are not even close!!

Have you ever been to a village? London is a sophisticated big city, villages are little places full of inbred yokels. Complete opposites. If you do go to a village, maybe you can get a job as the idiot.

You've made the right choice. That's a crazy price to pay, and £3k per month just leaves too much to fate IMO. Whereabouts in Covent Garden, if you don't mind me asking?

Hey - don't be so mean. Why are people so rude on here sometimes?

Firstly, even if he is wrong about London being a collection of villages, then just calling him the village idiot is not really called for. Disagree if you will, but constructively.

Further, I think he is completely right about london being a set of villages - that is its history. Ok, now they are more like towns, but it similar in principle. Each has it's own high street, own section of police, its own telephone exchange etc etc. And prices do tend to follow their own little local prices.

'Villages' or 'towns' in London I have lived in are South Kensington, Earl's Court, Putney, and Clapham. All have their own demographics, and their own little peaks and troughs in property.

wrong, security only comes if buy with no mortgage whether you rent from the landlord or the bank when you can't service the debt you know the result



Just ask yourself if I didn't buy it in 2002 when the cost of borrowing & house prices were cheaper why should I pay twice as much now when the cost of borrowing has also gone up minimum 50% and if the answer of this question makes sense to buy good luck.



when sh!t hits the fan he can give keys back to the bank and go back home, Can you?

You clearly do not live in central London. Leave it for the grown ups, there's a good chap.

Shelton Street, realtively quiet, very little pedestrian traffic, and light vehicle traffic.

I think the thing is, if it has been two bigger beds, and a separate kitchen, and the living area wider than 3 metres, I would have been happy to take the risk.

The property is one of those in the list of properties to buy I just posted earlier in this thread. There are a bunch in the 'new warehouse development'. I was looking at the 700k 4th floor one at the front, the smallest, but with the most natural light, and better south facing view.

Incidentally, I see the larger one on the same floor, previously advertised last november for 850k, is now being shown as 'new' for 825k...

Thank you for the defence. You pick up on the subtleties of my "village" description as its clear that those who actually live in the capital can appreciate the difference between Belgravia and Balham or Richmond and Islington.

Hard to grasp if all you do is travel in by train/tube and have the odd after work bevvy in the Pitcher & Piano/All Bar One in Leicester Square or Oxford Circus.

The other thing that went through my little mind was this:

Would I buy the place if I had hundreds of millions of pounds? 700k would be nothing - but I knew for certain that in that infintesimally unlikely situation, no - I wouldn't buy, I would rent.

I think the people buying now are the people like me and the original poster - people that can just about afford it now, but are scared they won't be able to in the future...

I know its easy to say this in hindsight but why!!!! You could have bought in 2002 and didn't? Thats crazy.

Every single house price survey for the last 5 years has shown an increase, at what point did you wake up and think, hold on a minute these surveys might be right!

It's never a good time to buy a house.

Interesting first post!

You say it yourself - it is easy with hindsight.

And the question he asks is about buying now. He's not asking people who think they are better than him to evaluate his decisions since 2002.

In my opinion, there are times its a good time to buy a home - now is probably not one of them. But who knows for sure? No one.

If you think you should buy then go and buy.

If only you knew .

Scandalous. Not bragging, but for comparison I got 3 a bed, 2 bathroom period flat in prime central London in Dec 05 for half the price of the flat you were looking at. With s/freehold and 1000sq ft, I thought I could live with giving it a lick of paint. You did well to walk away. Putney is a very fine part of the world to settle for a while, as I'm sure you already know.

I do now!!!
Same as previous ones I assume???

I spy, with my little eye, some things beginning with T...

Wow, if only I had bought then, crikey! I like Putney too, especially going for runs down by the river up to Hammersmith bridge, on a hazy mid-summer evening (eyes glaze over

But if I could get a nice place in Covent Garden for half the price, I'd happily trade a little extra space for getting rid of a 45 minute commute to the city.

I out Sarah as a VI EA, Rightmove Employee or Banker.

Quite a find Marcos.

Here is the same flat from the links you sent
£600,000

Now £550,000

Is only one flat, but those links you sent had many similar drops.

But am not building my hopes up, been let down too many times in the last 3 years.

Surprised no one said it earlier.

Edit: wish they'd stop doing it - It makes me even more bearish each time - how desperate are they?

Just want to say I feel sorry for anyone who is desperate to buy. It's a tough situation at the best of times.

Some thoughts -

1. Research 'negative equity'. Understand what it is and how it happens and how quickly. I lived in London during the last crash, rented a room in a flat that someone bought right at the top (with her dad as backer). Ended up in negative equity and it's devastating and can take years to resolve.

2. Look at the graph on the front page of this site, how would you have felt if you had bought in 1989 right at that peak and then seen prices drop and drop and drop for years afterwards? You may feel it wouldn't have been a problem as prices always come up again, in which case another tick in the 'buy' box.

3. Would you need to borrow more than 3.5x your income? If so, another reason to be cautious.

4. Immigrants - I doubt if your Bulgarian has just purchased his own flat. More likely he's got a 'fairytale' mortgage on it - which is different. There has to be a likelihood that should the UK economy start to suffer and other European Zone countries do better immigration could well go into reverse overnight.

5. The Dome. Wembley Stadium. The Olympics are ALREADY billions over budget and they've only just acquired all the necessary land - haven't started building anything yet!!!! When you say prices have never fallen/crashed in an Olympic City, do you mean post Olympics or post the city winning the games? Also, bear in mind how big many Olympic cities are? Montreal is tiny compared to London, Sydney has about 60% of London's population. Would it be possible for house prices on the Olympics side of London to do well but not so well on the other side?

6. We are heading into very stormy economic/geo-political seas and I don't think any of the old rules will necessarily apply in the future.

7. I think there will be a crash/serious correction, the current situation is unsustainable for so many reasons.

Good luck.

You mad? Why would you want to give up your job?

I think for London where house prices go will very much depend on what happens in the financial markets.

At the moment the financial markets are riding high, many are employed and there is a lot of money around. There are many risks though and at some point (who knows when) there will be a large correction.

Bargains will come in the HPC. Till then, enjoy!

What makes you say that?

As opposed to the oodles of security you get from knowing that the tenancy agreement you signed with your BTL landlord categorically prevents him/her from tossing you out on your ear with just 4 weeks' notice whether or not you've paid said "rent", discourages him/her from rocking up - anytime - with a managing agent to do an "inventory" and ensures that you, your family and your possessions aren't gonna be tipped into the street cos your landlord hasn't told his lender that he's renting their security out.

C'mon a first post stating (pretty much) buy now, as prices will keep rising. Why did this person search for "House Price Crash"
to just post that?

Also something someone on this thread said. Its a VI in the housing industry.

I hope so - but I also hope any HPC is not at the expense of the economy in general.

The good thing is, that now instead of dumping 60k or so on a deposit, I can now take the time to make the leap from being a IT contractor to running my own software company. If I had another mortgage to pay, it would be too much to risk.

You are far more observant than me. Reading it back i guess they are not asking a question to buy or not, its more of an opinion. I didn't realise (perhaps naively) that people came on here and did that. I have only come across people who have their opinions either way (i know what i like and i like what i know).

I guess there are a few EA's in disguise on here?

You have all missed it. They join, wait a few days, log on, post and immediately log off while their friends cheer standing around the monitor.

Ole!

You and me both Sarah. I had watched London property soar between 1999 and 2002 and was convinced of a correction 5 years ago.

I've well and truly missed the boat, not in terms of making a profit on a flat, but ensuring that I have enough room to breathe when the crash/correction comes. I've stuck it out for 6 or 7 years so far and I can categorically tell you now that I am prepared (and fortunate enough to be in a position to) to stick it out for another 6 or 7 years.

I am Bomber, the last bear that turns bull!

Nothing has changed...for 50 years you do the same sums...:
1) Do i want to live there
2) Can i afford it now..and if interest rates go up some.
3) Is my job reasonably secure..to the point where I won;t be pantsing it about my mortage every day.

If yes, yes, yes...go ahead....and don't listen to the doomsday predictors on here..They have been wrong for years....and in the long run only one thing is certain we will all be dead.

I've just bought somewhere..really enjoying it...couldn't care less if it plummets, co i'll sell it and buy a bigger one. which is why it won't happen..

Agreed. I want Great Britain to stay great.

As a recent FTB, I'm committed to reducing my mortgage asap, so that's my lot for the next few years. You sound like you're in a very advantageous position and are making the most of it.

I like how anyone who comes on here discussing a potential property purchase is deemed a troll. Yes, of course we know there are no genuine people buying houses right now. That's why prices are going up ... The behaviour on this forum is leaving a bad taste in my mouth.

amen

Now where have I heard that before?

Bye

Ole!

I've decided to come back and join the ranks of the minority of people who believe in an upcoming correction, yet think some of the bears on this forum are suffering from tunnel vision!

You have to be careful there - you'll see they are different properties - the cheaper one is on the 1st floor, the other is one floor up. They add 50k per floor.