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Pro-crastinator

Homeownership Getting Me Down!

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Hello,

Quite glad I found this forum and have read a lot of what is on here.

Interesting to see some people like me who could have bought in 2009 but didn't. Yep, I'm kicking myself in the ass now as the money I have saved up for a deposit has increased much but is obviously worth less (but not worthless :))!

I'm starting to really doubt what i read in the papers these days. London house prices up 8% one day the next day, London in another housing bubble. I guess no one knows how the market will play out but are there any signs i can look for?

I'm looking around Surrey Quays, I have no knowledge of the area but it seems the closest I can get to London for sub £300k (1 or 2bed). Any views on this location?

I'm thinking of buying now regardless of the markets as it's just getting beyond a joke. As evidenced by my thread title - it is genuinely making me upset. Sounds silly, but i think some of the other people on who have been waiting for the 'right' time will get me. I'm Almost 35 and it feels pathetic that I haven't got this sorted...

Opinions on area, gameplan and markets would be appreciated.

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Forgot to say. There was a thread on getting EAs on side and the general overpricing on property. This was a really useful thread to make me feel less at the mercy of the EA and also to hold true to my cynicism of some house prices.

With 20-30% offer below list price rationale what do you guys reckon to surrey quays. is the area over priced? I feel like it is but perhaps I'm deluding myself as to what I can get (after being sucked in by the hype of part-buy s*****y looking new builds).

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Hello,

Quite glad I found this forum and have read a lot of what is on here.

Interesting to see some people like me who could have bought in 2009 but didn't. Yep, I'm kicking myself in the ass now as the money I have saved up for a deposit has increased much but is obviously worth less (but not worthless :))!

I'm starting to really doubt what i read in the papers these days. London house prices up 8% one day the next day, London in another housing bubble. I guess no one knows how the market will play out but are there any signs i can look for?

I'm looking around Surrey Quays, I have no knowledge of the area but it seems the closest I can get to London for sub £300k (1 or 2bed). Any views on this location?

I'm thinking of buying now regardless of the markets as it's just getting beyond a joke. As evidenced by my thread title - it is genuinely making me upset. Sounds silly, but i think some of the other people on who have been waiting for the 'right' time will get me. I'm Almost 35 and it feels pathetic that I haven't got this sorted...

Opinions on area, gameplan and markets would be appreciated.

I hear your pain..... Why Surrey Quay? I really like the area, but from a quick look at prices on rightmove I'd say that for somewhere without brilliant connections (unless close to Canada Water) the prices are high. I guess plenty of people with good salaries work nearby which can justify the cost. Where do you work and is your work location likely to change over the years?

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I think SQ has good connections relative to the prices in the area vs other areas (if that makes sense!). For me I can get home to my parents (SW Lon) via the overground and walk to Canada water to get in to town/connect with better options.

@ Gone to Ireland - I don't fully understand your question so I may not answer this properly. Essentially, whilst house prices can go up and down the 2008 crash has shown me that even those who bought at the peak and were in negative equity should be starting to things balance out. So fair enough they haven't made any money - but they're not down money. 3/5/10 years I just see myself completely priced out of London. It's a land grab and in 5 years I suspect that unless you want to live on a housing estate, no first time buyer will be able to afford it.

Proof for me is in the number of people commuting in. I can't even get on the bus train without it being already busy and I'm in the burbs!

Another worry is I work in the public sector. Pay freeze city! I'm at a point in my career where it will take a few years before I can make a leap to the next level (if indeed I can) so this is compounding the situation of my earnings/deposit devaluing the longer i leave it.

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3/5/10 years I just see myself completely priced out of London. It's a land grab and in 5 years I suspect that unless you want to live on a housing estate, no first time buyer will be able to afford it.

Looks like you plan to stay there for the long term 10+ years, so if that is the case and there are all of these non-first time buyers lined up to land grab then you had best buy now. Don't forget to pick up you government subsidy from Help To Buy in January.

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I caught a bit of Location Location last night, and something is going terribly wrong when doctors are looking at two bedroom basement flats in Twickenham at 435K. No wonder folk are losing interest in owning. I guess at one time young doctors would have been looking at a whole house in central London.

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I caught a bit of Location Location last night, and something is going terribly wrong when doctors are looking at two bedroom basement flats in Twickenham at 435K. No wonder folk are losing interest in owning. I guess at one time young doctors would have been looking at a whole house in central London.

There is just no linkage between prices and salaries anymore, but surely we will have to get back to that at some point? Cheap money is pouring into the market with low interest rates and HTB but that can only last so long, parental money is coming in as well but getting more and more diluted to the point where it can't increase prices any more.

In London, there is also the Russian/Arab factor but this could fall awya very quickly if somewhere else becomes more fashionable for them.

My only problem is just how long this will take to unwind. Twickenham is traditionally quite an expensive area, but I have been looking at the prices in much cheaper areas like Penge/Sydenham etc and the top prices there are approaching £400k for a 2 bed flat and £280k for a 1 bed. I know they are only asking prices, but they have literally doubled in 2 years!

My advice to the OP is only buy a place if you are convinced you are going to be happy in it for the next 10 years+. All bets are off at this stage, who knows how long the government can keep things pumped up? If you buy now and prices do crash it is a hell of a lot less painful if you are living in a place you are still happy in. If they don't crash you will have avoided your deposit eroding even more and taken advantage of cheap interest rates for a few years.

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Sounds just like the last days of the Celtic Tiger... All we need to Cam-moron to come out and say:

Sitting on the sidelines, cribbing and moaning is a lost opportunity. I don't know how people who engage in that don't commit suicide because frankly the only thing that motivates me is being able to actively change something.

Those foreign buyers will evaporate if prices start falling.

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There is just no linkage between prices and salaries anymore,

Similar to the rest of the economy, the fundamentals are gone.

Another question that you may like to ask yourself before you sign the contract is: Who am I going to be able to sell this too next? You admit that there will be no first time buyers left at these prices.

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. No wonder folk are losing interest in owning.

Unfortunately folk are not losing interest in owning. Unbelievably busy in every estate agent - real panic buying at the moment.

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There is just no linkage between prices and salaries anymore,

My fear is that there is a link between price and rentals (at least for anything up to 3 bedrooms and house share friendly). Seems to be running at a 5% gross return in general, somewhat less - maybe down to 4% - for fashionable areas.

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My fear is that there is a link between price and rentals (at least for anything up to 3 bedrooms and house share friendly). Seems to be running at a 5% gross return in general, somewhat less - maybe down to 4% - for fashionable areas.

Good point, especially about the sharers. In the SE London areas I mentioned, a 3 bed house could be used to rent to 4 sharers at £400 per month each. That is £1,600 total income compared to probably £1,100 renting it as a house. The price has probably bubbled up from £200k to £300k in the past couple of years, so that is a gross yield of 4.4% to rent as a house and 6.4% as a share.

In my own area, it is about 4% for flats but the price for houses has gone mad and rent have not caught up so it is more like 3%. I know of a house that recently sold to a BTL for £580k and is now rented out at £1,600 per month.

The thing is, does 4-5% represent a reasonable return if house prices do not continue to go up? I guess people are piling in at the moment because of the promise of 8% annual growth in house prices so yield matters less. If interest rates go up that could mean the increases stop and it also becomes more lucrative just to store money in cash - I'd not accept 5% with all the BTL hassles if I could start getting 3% in a risk free bank account again, why would I?

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Unfortunately folk are not losing interest in owning. Unbelievably busy in every estate agent - real panic buying at the moment.

I am seeing this as well. There has been some real comedy pricing from the EAs around here of late and there is only one house that has failed to sell and that is because it is almost £900 per sqft and without a garden! Even the idiots draw the line somewhere.

At the same time, I can almost understand why they are doing it. Constant media frenzy about house prices, no doubt a lot of pressure from peers and parents to buy and, above all, very loose lending a low interest rates.

In the example I gave earlier of the £580k house that rents for £1,600 per month, if someone has got a deposit of £145k and can borrow £425k at 2% then they are paying under half of the rental price on an interest only mortgage and removing their money from a bank account that is paying hardly anything. They also get the ability to start trotting out the cliches like 'on the ladder' and 'not paying dead money to a landlord' as often as they like.

Of course, in a normal market, interest-only payments are really just as 'dead' as rental ones, but if the market did somehow keep going up 8% a year then it would be a very good return for doing nothing at all.

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I am seeing this as well. There has been some real comedy pricing from the EAs around here of late and there is only one house that has failed to sell and that is because it is almost £900 per sqft and without a garden! Even the idiots draw the line somewhere.

At the same time, I can almost understand why they are doing it. Constant media frenzy about house prices, no doubt a lot of pressure from peers and parents to buy and, above all, very loose lending a low interest rates.

In the example I gave earlier of the £580k house that rents for £1,600 per month, if someone has got a deposit of £145k and can borrow £425k at 2% then they are paying under half of the rental price on an interest only mortgage and removing their money from a bank account that is paying hardly anything. They also get the ability to start trotting out the cliches like 'on the ladder' and 'not paying dead money to a landlord' as often as they like.

Of course, in a normal market, interest-only payments are really just as 'dead' as rental ones, but if the market did somehow keep going up 8% a year then it would be a very good return for doing nothing at all.

I'd add that rental prices and competition are going crazy too, and lots of people have sat on the sidelines due to job uncertainty and are pretty desperate now, especially those in cramped flats with children.

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I'd add that rental prices and competition are going crazy too, and lots of people have sat on the sidelines due to job uncertainty and are pretty desperate now, especially those in cramped flats with children.

That is slightly different in my area. I live in a road that is primarily flats that probably housed no kids at all 5 years ago. Now, I'd estimate that at least 50% of the flats contain at least one kid and everyone that moves in seems to have one as well so that ratio is only going up rather than down.

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Unfortunately folk are not losing interest in owning. Unbelievably busy in every estate agent - real panic buying at the moment.

Bad time to buy, we had panic buying over here in N.I , 6 years ago, with people camping outside EAs all night .

now they,re worth about a third, and a lot of people lives destroyed ,.

Hope it doesn't happen over there ,again like the eighties all over again.

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Hi thanks for the comments guys.

Some interesting thoughts.

@ Gone to ireland - I understand your question now.

The theory is to live in the flat for say 3-5 years and then keep hold of it and rent it out (which partly responds to your very good point about who will i sell on to next). I'm not wild with my money so I would hope to be able to raise some sort of deposit for a house further out of London. The point made is good in that it's made me think properly about long term. Trouble is I'm just not that good at that!

I didn't buy in 2009 as I was too lazy living comfortably at my folks. So I missed that boat through my own failiure to forward think (see my point above!).

YOu guys are much more hardcore on the numbers front. I just want a home of my own!

@Fazer, I here what you're saying about Ireland. I don't know how property works in terms of a crash. But is it not true that if those people can sit it out long enough the general cost of living/value of things will see it be worth something to someone. Although I guess the issue is that everything else has gone up in price too....

The help to buy scheme in Jan could be effective for me to use a smaller deposit and then redirect some funds to help my brother buy a property for himself. Though I'm not sure of the full implications of the scheme.

If we use the wonderful world of hindsight what happened in the run up to 2008? Things were getting more expensive then the whole lending situation in the US rippled over to everything and it crashed, right? But is the market a constant peak and trough setup where you just need to know when to go in and catch the right wave? So that is, there was a crash in the 90s and it took 10years or so to 're-crash'. With that [naive] logic whatis the rationale that the current 2013 levels will crash and what factors would we be looking for to warn of it? Surely with the US issue and bank lending issue these would have been learnt from and tightened up accordingly? So what will be the source of the crash?

Lots of thinking out aloud and questions there. I'm just trying to get my head around it all. What I should have done really is buy anywhere in 2009 and rent where I aspired to live... too late now (or is it?).

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What kind of percentage deposit do you have and what multiple of income would you be borrowing? This makes a lot of difference in case of changes in circumstance, local or national reductions in prices.

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I hear your pain..... Why Surrey Quay? I really like the area, but from a quick look at prices on rightmove I'd say that for somewhere without brilliant connections (unless close to Canada Water) the prices are high. I guess plenty of people with good salaries work nearby which can justify the cost. Where do you work and is your work location likely to change over the years?

surrey quays is a very well connected area, plus it is close to the river.

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Part of Surrey Quays is nice some aren't so. But then again most stuff are already priced in. It's close to Canary Wharf so if you buy in the right location then it should be easy to rent out.

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I caught a bit of Location Location last night, and something is going terribly wrong when doctors are looking at two bedroom basement flats in Twickenham at 435K. No wonder folk are losing interest in owning. I guess at one time young doctors would have been looking at a whole house in central London.

I vaguely recall reading a post on this site about a Doctor that bought a property called 'Shoemakers Cottage' . Says a lot when a highly skilled professional buys a home originally suited to a manual skilled worker.

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Additionally on this, is there an accurate measure fpr price per square foot for surrey quays? I ask as London at least seems to have a certain pricing scale per square feet which I think would help me weed out what and approximate cost for a property i'm interested in should be (obviously would need to take into account things like desireability, parking etc). Then if say one was 250,000 for 65sq metres and one was 310,000 for the same vicinity then I can know that in all likelihood the latter has been overpriced.

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For example: is this really worth £489k!?

http://www.primelocation.com/for-sale/details/30076579

Seems a lot for 90sq metres (granted a sort of riverside view).

Obviously this is not in my price range but I'm curious as to what it 'should' be.

Price is what you pay, value is what you get. It's up to you whether you want to hand over £489,000 in exchange for that.

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