longtermbuyer

Right or wrong you have to own the decision. Personally I think in your circumstance you would have been better off waiting. You didn't have cash burning a hole in your pocket and nor did you find a rare property that comes on the market once or twice in a year. I purchased for nearly 2x your purchase price in zone 1 but my piece of mind was worth more to me as my earning capacity is more important. £70k is good for your age but not uncommon for a junior/mid level software developer - I know many senior people (late 20s/early 30s) in IT making £150-200k in London (permanent) as technology is quite hot now. In finance I know many grad schemes are now starting on £60-70k. It's very strange how big the gap is now between London and other English cities. I truly wonder if this city trend will continue.

Based on the price you are paying. The "worth" means nothing - though at some later point while you have your mortgage you can ask the mortgage company to revalue your property if you think it is worth more than you paid and they will effectively change their value of it, hence lowering your LTV for when you switch product/remortgage.

Just wanted to come back with an update on this thread for anyone partially interested. I have since found an unmodernised property at a lower price (i.e. i can renovate to high standards and it's still cheaper than I would've paid previously) which I am planning to proceed on. Additionally I am now seeing a lot of distressed sales and actually have a few vendors on the backburner who are chasing me for offers, albeit still at their somewhat overvalued prices. Quite an interesting turn of events but I'm now trying to decide whether to take the plunge or keep hanging on (if prices fall enough then I could afford a 2 bed...). A big part of me just wants to close the deal and move on but it's also possible in 12 months properties will come up that I will wish I waited for - impossible to tell. 3 months ago I thought I would never find something so things change fast. I think a big thing people forget is the opportunity cost of life. I appreciate this is a "house price crash" forum but would love some thoughts from experienced members who understand the situation and that it's not all about money.

I have a few friends from work in Notting Hill but they bought properties I wouldn't have considered - above shops or top floor type stuff. The few I know with really nice places were bought by their parents years ago and handed to them.

Most need 2+ rooms so tend to live further out i.e. clapham or east depending on whether they were born in london and want to be near where they grew up or moved here. Where in zone 2 are these 400 1 beds? I've been looking at maida vale etc as a comparison often and it's certainly not cheap.

I understand what you're saying but oddly enough I can't stomach spending 400-500k on a place in zone 3 vs nearly double but in a prime area. The first feels like you are overpaying vs the second which is paying a high price for at least something desirable. Imagine you bought a really expensive ford mondeo vs a porsche. At least with a porsche you will feel like you paid a high price but got something rare, with the ford you will just feel like it's crazy that you must pay so much and end up with a ford mondeo.

Something I still fail to understand is that if prices are too high and people cannot afford it, who have been buying all these properties? It can't all be international buyers and to be honest I don't know that many people with the kind of cash I have who are actually willing to spend - i'm still buying tesco value soap constantly saving against rising prices. My thoughts are that only a small percentage of property that exists is sold. The people who have bought 5-10 years ago cannot afford to sell now because they cannot move up the next step and nor would they probably like to leave their area unless they have to. So there is just a shortage of properties trading hands and this artificial scarcity is driving up prices. If everyone who wanted to sell came on the market at once the true price could be discovered.

This is only true for the real prime streets and places worth £1m+. I haven't seen this translate into sub £1m. At best all that has happened is there are less of the super crazy asking prices and now they are "just" crazy. Notting Hill particularly because I live there now so I like the area, my friends live here, and at least perhaps the Whiteleys development will save me if there is a crash. South Kensington, Marylebone would be also of interest if it were not for the fact they are slightly more expensive.

The other problem is it can do the opposite as well. Speculators can determine value and bid on things that would otherwise not attract any attention. It is creating a more efficient market but I don't know if that's a good thing.

Same with leasehold - stamp is 30k. Trust me you wouldn't want to live on Queensway, at least not for that kind of money. At the end of the 18 months you'll be in the exact same position but perhaps prices have gone up or down 10% - and you will have 30k less to spend. We need a 50% drop to bring things back in line but it will only happen in real terms not nominally. The government will do all they can to keep nominal prices high and make people think they haven't lost money.

Sorry meant to say 4 on that last part. Average price drop won't necessarily translate to the property I am looking at. If I find the right place and it falls 10% it doesn't matter because I am not selling and don't have to worry about being in negative equity - you could argue that I could've bought for 10% less but I don't think it would have been available at that price so it's purely theoretical.

I would rather have 2 than 3. I don't think 1 will happen and 4 is the ideal case. Because even if 3 happens it doesn't mean I will be able to find the right property on the right street at the right price in that small window where prices are down 10%.

The question is will there be enough of this to drive a trend and how long will it take until it has some real effect. Life is short to be waiting multiple years on something that could or could not happen. Oddly enough a lot of the local agents believe things are overvalued and are quite blunt about it (though there's still the usual EA who thinks it's a sellers market) but the vendors don't really agree and simply refuse to list. Once they saw the prices after the peak in April everyone thinks their property is worth 20% more and if the agent doesn't tell them that then they rent it out - though speaking to some lettings teams they have told me that rents are decreasing because of this.

On average they probably have, but that specific property you were going to buy - that guy is not going to sell it to you at 50-100k less than last year. The figures are skewed by the properties that were never worth the prices they were asking and then also the higher end £1m+ market which I don't even care to look at. Sub £1m 1 or 2 bed in central London is a joke. Look at all the places in East London at these kinds of prices now - at least in NH/South Ken etc you feel like the price is somewhat justified as the area has always been considered decent. I think the BTLoons will pull out but i'm not sure if it will have enough of an effect to collapse. I think they will be selling of properties that no one ever wanted and some other BTLoon or property developer will go buy it because he thinks he's buying at the bottom.

It's just become an impossibility for most people. Some of my friends who were musicians or teachers will never dream of owning and will always be subject to paying rents determined by the market/landlord. Sounds like a first world problem to those outside of London but it's the same show in all the global cities around the world. People are attracted to the high paying jobs in the city but it comes at a big lifestyle cost. I'll probably never have a car again because you can't dream of affording a place with a garage or driveway. I have been looking at moving to other countries i.e. NY or HK or Singapore but it's the same story and it's even worse now the pound has lost value.