Jump to content
House Price Crash Forum
BLT

What Is Going On ?

Recommended Posts

Hi All, Long time member and Lurker.

Since the early noughties, I've been waiting for the right time to jump on the roller coaster that is UK house prices.

With a very substantial deposit saved over the years, IR's at the lowest they can ever go, FFL and plus the other proposed schemes in the pipeline.

So on Fri evening me and the other half, decided we have to finally give in and buy.

Imagine our frustration when the changes to HTB2 were announced, sometimes if feels like you are destined to never own!

Anyway my rant is not about that, my sentiments have been echoed by plenty posters on other threads and For a.

However what is shocking, is the steep rise in asking prices I have seen recently, they are shocking.

This maybe a local anecdote, but my area of interest is Croydon. The area has been relatively flat over the past 5 years, although it is London, it's far away enough for the prices not to have been rising, but not that far that it has crashed.

I've been studying the house prices in this area since 2009, and can walk down many a street and start reeling out what a particular house sold for and when.

So the asking prices I have seen recently are just shocking.

Typical examples are entire streets that have never been able to get one house over the £250k stamp duty threshold, houses on these streets are now appearing in the £325k-£350k brackets.

The amount of attempted flipping I am seeing is ridiculous, houses I have seen sold for £170k earlier in the year, being put back on the market for £225K is an example I have seen, but is not untypical.

lots of places in around central Croydon and south croydon, a typical 2 up- 2down terraced house has been going for between £200k-£220k over the last few years, now they are all appearing well above the stamp duty.

My final rant, one of the most noticeable things I have noticed over the past year, tis that despite the market picking up. The number of properties coming onto the market has been constantly falling to all time lows.

Has our obsession with property finally reached the point, that when the market falling, no ones sells because they are "waiting for the market" to pick up.

But when it does finally pick up, they wont sell because "we don't want to miss out on further rises".

i.e. no one ever wants to sell because they don't want to miss out.

Share this post


Link to post
Share on other sites

How Many ‘Greater Fools’ Does It Take to Make a Bubble?

The latest findings suggest, however, that bubbles might be caused not by those who lack information but by those who have too much.

....

“People seem to be buying,” Prof. Camerer says, “because they think they can sell to somebody else who isn’t able to control himself as well as they can or isn’t as prescient as they are.”

Share this post


Link to post
Share on other sites

Whetther HtB2 is priced in already or not remains to be seen, but it has been a bull run in the past two years anyway. It would appear it cannot go up anymore, but how many times has that been said?

I am not that far away (Surbiton), and whilst the prices are a bit different here, the trends have been exactly the same. One road of terraced houses that I have been monitoring had a ceiling price of £500k up until the start of 2011, a couple sneaked over that level that year. By late 2012, the asking prices were routinely up to around £600k and now one has just sold for £700k.

That is a 40% increase in 2 years! A bit of an extreme example because smaller flats have hardly increased at all in that time, larger flats perhaps 10-15% and houses in the less sought after roads about the same.

The limiting factor on HtB2 is still how much the banks will be willing to lend in relation to income. It is all very well a couple on an £60k joint income now only needing a £20k deposit to buy a £400k home, but will the banks be prepared to lend over 6 times their joint income to help them secure it?

As much as Cameron would like to see house prices going up forever, it can't happen whilst incomes remain at the same level and the crash will be all the more nasty the longer they prolong it.

Share this post


Link to post
Share on other sites

Hi All, Long time member and Lurker.

Since the early noughties, I've been waiting for the right time to jump on the roller coaster that is UK house prices.

With a very substantial deposit saved over the years, IR's at the lowest they can ever go, FFL and plus the other proposed schemes in the pipeline.

So on Fri evening me and the other half, decided we have to finally give in and buy.

Imagine our frustration when the changes to HTB2 were announced, sometimes if feels like you are destined to never own!

Anyway my rant is not about that, my sentiments have been echoed by plenty posters on other threads and For a.

However what is shocking, is the steep rise in asking prices I have seen recently, they are shocking.

This maybe a local anecdote, but my area of interest is Croydon. The area has been relatively flat over the past 5 years, although it is London, it's far away enough for the prices not to have been rising, but not that far that it has crashed.

I've been studying the house prices in this area since 2009, and can walk down many a street and start reeling out what a particular house sold for and when.

So the asking prices I have seen recently are just shocking.

Typical examples are entire streets that have never been able to get one house over the £250k stamp duty threshold, houses on these streets are now appearing in the £325k-£350k brackets.

The amount of attempted flipping I am seeing is ridiculous, houses I have seen sold for £170k earlier in the year, being put back on the market for £225K is an example I have seen, but is not untypical.

lots of places in around central Croydon and south croydon, a typical 2 up- 2down terraced house has been going for between £200k-£220k over the last few years, now they are all appearing well above the stamp duty.

My final rant, one of the most noticeable things I have noticed over the past year, tis that despite the market picking up. The number of properties coming onto the market has been constantly falling to all time lows.

Has our obsession with property finally reached the point, that when the market falling, no ones sells because they are "waiting for the market" to pick up.

But when it does finally pick up, they wont sell because "we don't want to miss out on further rises".

i.e. no one ever wants to sell because they don't want to miss out.

Long time member and lurker here too. I've finally given up ever seeing an end to the insanely high prices being asked for houses, especially inside the M25. My wife finally convinced me we need to buy before the H2B kicks in - and what do you know, they bring the scheme forward.

Where we are looking in SW London (Twickenham, Hampton, Esher, Walton and surrounding) that supply has been poor but that it seems to be improving but at crazy money ~ +10-15% over 3 months.

Estate agents say they've had a surge of interest as a result of H2B. Whether this is entirely truthful and if so, whether it is pushing up prices is not yet clear but "Help to buy" seems to be anything but help.

I'm not sure if I need my sanity checking out before buying...

Share this post


Link to post
Share on other sites

Long time member and lurker here too. I've finally given up ever seeing an end to the insanely high prices being asked for houses, especially inside the M25. My wife finally convinced me we need to buy before the H2B kicks in - and what do you know, they bring the scheme forward.

Where we are looking in SW London (Twickenham, Hampton, Esher, Walton and surrounding) that supply has been poor but that it seems to be improving but at crazy money ~ +10-15% over 3 months.

Estate agents say they've had a surge of interest as a result of H2B. Whether this is entirely truthful and if so, whether it is pushing up prices is not yet clear but "Help to buy" seems to be anything but help.

I'm not sure if I need my sanity checking out before buying...

And yet the Media still talks about the possibility of a bubble - it is a fracking bubble already!!!

Between house prices,food and fuel prices I am increasingly worried by the future of the UK.

Share this post


Link to post
Share on other sites

And yet the Media still talks about the possibility of a bubble - it is a fracking bubble already!!!

Between house prices,food and fuel prices I am increasingly worried by the future of the UK.

That is what I can't understand either. We have reached the point when a small 3 bed terraced house in a zone 6 London suburb has sold for £700k. How on earth can that not be a bubble?

Even if the average salary in the area was £100k, then it would STILL be a bubble, the fact it is about a third of that just makes it an even bigger bubble.

I appreciate that the whole of the country isn't as mad as SW London, but I would be interested what the media would actually consider as a bubble price?

Share this post


Link to post
Share on other sites

That is what I can't understand either. We have reached the point when a small 3 bed terraced house in a zone 6 London suburb has sold for £700k. How on earth can that not be a bubble?

Even if the average salary in the area was £100k, then it would STILL be a bubble, the fact it is about a third of that just makes it an even bigger bubble.

I appreciate that the whole of the country isn't as mad as SW London, but I would be interested what the media would actually consider as a bubble price?

The situation is quite simple - lots of those journalists and politicians living in London, some of them on 100K plus and some of them on as 'little' as 35K to 45K, bought their houses 10 or 20 or longer years ago. They can't believe their luck - they have won the lottery.

They know they can carry on working in London, enjoy massive HPI and then, when they like, sell up in London and buy in, well, Swansea or wherever and still have 500K or more in the bank.

It is a lotto win.

Problem is, it is now impossible for 'ordinary' Brits to go work in London. You either pay most of your wages on rent or you take an ENORMOUS gamble on London prices never crashing. Even, as you say, on 100K a year you are buying into enormous leveraged debt. If it goes tits up you stand no chance of ever repaying those debts.

I keep getting IT agents offering me work in London on good rates but the rates simply mean I have a choice of the two options I just outlined above - neither appeals.

Share this post


Link to post
Share on other sites

Article in the evening standard saying that he thinks things are getting unstable.

We need it to pop right, but how long after a bubble bursting would we see a difference in the house prices? They don't just go from £400k to £250k in a day do they?

I'm like the o.p just getting so worried that things really won't stop that I can't help but feel I need to buy NOW or never (London).

It's actually causing me stress!

Share this post


Link to post
Share on other sites

All these reactions about rising house prices must be widespread now as I feel the same, having spent several years thinking that prices were overinflated already and expecting inflation to slowly erode the value of property outside prime central London.

What's quite scary is how a lot of young people seem to be getting desperate to buy in places that have only suddenly become popular with young professionals. They are all flocking to places like Bethnal Green and Whitechapel realising there aren't many central-ish places left in London that are close to affordable.

I saw a developer remove his new-build properties that were priced at about 500k and put them back on the market at 850k. A lot of sellers are in turn desperately pushing up asking prices in these areas. I've seen changes in just the last 6 months where sellers seem to be behaving like it's a seller's market all of a sudden.

What is puzzling me is, as a "young" professional with a number of years experience working in London and with a decent salary, I don't see that many affordable properties so I fail to say what graduates or youngsters with only a couple of years experience can afford anything at all without extending themselves like crazy or asking for a huge amount of financial help from Mummy and Daddy.

In the case of Whitechapel and Bethnal Green, these areas are only really seeked by young adults in their 20s and 30s who have been priced out of trendy Shoreditch and Old St. They still aren't areas where most young families would settle in private accommodation if they have the choice.

Share this post


Link to post
Share on other sites

By he I meant Vince Cable! (typing from my mobile).

Vince Cable is my MP. I shall write to him again and tell him to stop talking about this and actually do something about it.

Suggest hell-to-buy allowance is cut in half to £300k and stamp duty tax reformed to be more progressive (it's a small change with minimal risk of unintended consequences unlike a fairer land value tax which would be hard to implement).

I'm sure he'll tell me the Lib Dems are planning 270,000 new homes in London by 2018, but it's not much help today after 15 years of waiting to get on the property ladder and we're running out of time to start a family.

Share this post


Link to post
Share on other sites

Article in the evening standard saying that he thinks things are getting unstable.

We need it to pop right, but how long after a bubble bursting would we see a difference in the house prices? They don't just go from £400k to £250k in a day do they?

I'm like the o.p just getting so worried that things really won't stop that I can't help but feel I need to buy NOW or never (London).

It's actually causing me stress!

In the 1989 crash it was pretty quick. I remember being a teenager and a friend buying a flat in Surrey for 65k in 89 and it being worth 45k by 91. Figures don't sound big, but it was back then and a big percentage to lose very fast.

Same feelings of stress about the whole thing here too. I've sat here for so long thinking prices can't go up any further and find myself looking back to the year before kicking myself for not buying. So then I think I should buy now, but stress about the prices and a logical crash, while also fairly convinced that next year I'll kick myself again. Looking at Rightmove in my area (Twickenham/West London) just does my head in. To cheer myself up I look at prices in other parts of the country and tell myself if I just keep saving I can buy cash when I retire. Then I have another stress that other parts of the country will go mental, and then I'll have to keep working forever to pay my rent,... and so on. Argh.

Vince Cable is my MP. I shall write to him again and tell him to stop talking about this and actually do something about it.

Vince is also my MP. I've been meaning to write to him and you've reminded me to do it this week.

Share this post


Link to post
Share on other sites

In the 1989 crash it was pretty quick. I remember being a teenager and a friend buying a flat in Surrey for 65k in 89 and it being worth 45k by 91. Figures don't sound big, but it was back then and a big percentage to lose very fast.

The figures don't sound big, but it really illustrates the problem we have got ourselves into. I wonder how much that flat is worth now? £250k? £300k? How can something that was worth £45k only 22 years ago be worth 6 times that price now during a period in which the nominal wages of likely buyers has probably not gone up more than 2 times?

I know we have got low interest rates and a government who will do anything to prop up prices, but that is quite ridiculous.

Same feelings of stress about the whole thing here too. I've sat here for so long thinking prices can't go up any further and find myself looking back to the year before kicking myself for not buying. So then I think I should buy now, but stress about the prices and a logical crash, while also fairly convinced that next year I'll kick myself again. Looking at Rightmove in my area (Twickenham/West London) just does my head in. To cheer myself up I look at prices in other parts of the country and tell myself if I just keep saving I can buy cash when I retire. Then I have another stress that other parts of the country will go mental, and then I'll have to keep working forever to pay my rent,... and so on. Argh.

I think a lot of people are feeling the same. I posted on here before about a house I looked at for £500k in 2012 and an identical house on the same development selling for £675k earlier this year. That is a 35% increase in one year on top of already ridiculous prices. Even the same percentage drop that happened to your friend in 89-91 would only take this down to just below 2012 price - a level which most on here would agree was highly unsustainable in the first place.

Share this post


Link to post
Share on other sites

Agree with everyone's sentiments here. I have rented all my life. Early 2009 I was looking to buy in south east London - prices had come down but only marginally - maybe about 10 to 12 % since peak over around an 18 month period. Quality of stock was very limited and generally poor quality - everything still looked toppy. I had to,take some time away in the summer and in the space about 2 months the market turned and regained most of that 10% loss. I was now priced out of what I had planned to buy and ended up,throwing the towel in as the experience was so demoralising and made no sense whatsoever. 4 years later I'm shocked by what has happened.

Share this post


Link to post
Share on other sites

I think a lot of people are feeling the same. I posted on here before about a house I looked at for £500k in 2012 and an identical house on the same development selling for £675k earlier this year. That is a 35% increase in one year on top of already ridiculous prices. Even the same percentage drop that happened to your friend in 89-91 would only take this down to just below 2012 price - a level which most on here would agree was highly unsustainable in the first place.

I am looking in a slightly lower price bracket and was on the phone with an EA this morning who was telling me that that is exactly the price bracket that is going to be affected in London by the Help To Buy scheme (above 600k, the scheme does not apply of course), bearing in mind that people expect the scheme to have less impact in London where access to deposits has been less of an issue. I predict that this is mainly because families are more prepared to throw all their savings into a London property for their offspring and of course, the higher salaries that despite the cost of living in London, do allow people to save more in absolute terms.

I wanted to tell him he was talking rubbish and just trying to scare me but felt like he was making perfect sense.

Even young-ish professionals on very good salaries approaching 6 figures are extending themselves if buying a property at 500k, which might also explain why it's becoming less and less common to purchase a property alone.

I live in E1 in an area where a couple of years ago, outside social housing, only a few young professionals who wanted to be central would consider living and this was almost "socially unacceptable" i.e. most of these people's friends would be living in West London and North London.

Over the last few years as the Shoreditch crowd have spilled out of that area which could not house all of them, these areas have suddenly become hugely in-demand.

However this definitely isn't an area for middle-class families yet.

When 2-bed flats are going for 800k in an area like this, who's buying these? Sure, a young couple who are both successful City workers, come from wealthy families, want to live near the City/Canary Wharf will be able to afford this but who else? They represent a tiny minority of the population in that area.

Investors might buy these expecting a rental yield of 5% but am not convinced many people are prepared to put 40k/year down to live in this area.

Having lived in the area for close to a decade, I see a massive disparity between property prices (and expected rental yields from investors) and the type of people living there.

Sure I know plenty of young people who've got together and thrown all their parents' savings at that trendy warehouse flat when they were at 400-500k but don't quite see how even this extreme behaviour can survive with the same properties going for 800.

I feel like there's enough self-fulfilling speculation to expect rises for a couple of years but the realisation of all those investors that the people who were supposed to make them rich (i.e. tenants) don't actually exist. Investors can fight over new builds and further increase prices, but if you have to end up accepting 3% rental yields, you'll eventually have to give up.

Share this post


Link to post
Share on other sites

Evening standard article reports only three london boroughs sub £250k by 2018. Although the report is by Hamptons...

Then there is something else which sounds contrary to that scare story in the business section.

I do wonder though. Is a crash ever going to happen? it's difficult to put your life on hold for a day that feels like it's never going to come. :-(

As you can tell, I'm getting sweaty palms and thinking of folding my hand. It seems others are also thinking this by asking advice on this forum about buying despite this forum kind of saying that exactly the opposite is the wiser option.

Share this post


Link to post
Share on other sites

The figures don't sound big, but it really illustrates the problem we have got ourselves into. I wonder how much that flat is worth now? £250k? £300k? How can something that was worth £45k only 22 years ago be worth 6 times that price now during a period in which the nominal wages of likely buyers has probably not gone up more than 2 times?

For more context. The Surrey flat bought for 65k in 1989 was in Woking, The "friend" was actually my boyfriend at the time and suggested we buy together, I was of an age where that was way too much responsibility for me to get my head round and probably the single one best decision I ever made. I would have entered my 20's in huge debt. Mouseprice research in identical properties in the block is;

1989 - 65k

1991 - 45k

1998- 56,750

2001 - 73,500

2012 - 142,500

The price has basically doubled since 89, but in context of wages isn't obscenely out of line, dare I say, even "normal". Move it up the road to Surbiton and your figures would be spot on. Move it into central London and I can't even make the figures up.

Evening standard article reports only three london boroughs sub £250k by 2018. Although the report is by Hamptons...

Then there is something else which sounds contrary to that scare story in the business section.

I do wonder though. Is a crash ever going to happen? it's difficult to put your life on hold for a day that feels like it's never going to come. :-(

As you can tell, I'm getting sweaty palms and thinking of folding my hand. It seems others are also thinking this by asking advice on this forum about buying despite this forum kind of saying that exactly the opposite is the wiser option.

I have to fold my hand pretty soon (2 year timeframe), but my situation is forced by one single factor. Retirement. I've got a 4 in front of my age, and hard facts are if I want to retire ever, I have be mortgage free. In order to do that I have to buy something and get it paid off double fast. Anyone 35+ surely has to be thinking in those terms with a 25 year mortgage? I think the crash will happen, I have no idea when it will happen now, I can't wait indefinately. I can't afford what I need in London, so I'll most likely buy in Surrey, a flat, where the HPI hasn't been so severe. It might not be exactly where and what I want but I'm past caring, my sole aim is to be out of corporate work asap. I've looked at every which way to do this, even a BTL in another part of the country, while I can at least stay renting in London. I've dismissed it, but I can understand why people are doing it. Seriously, has anyone else thought this? Saying all this, I get the massive fear that the minute I fold we'll have another "1989", and so on... I wish I could relocate out of this area but my job (with gold-dust Final Salary Pension (sorry) is here) and my boyfriend is in the film media industry and it doesn't exist much outside Soho.

Share this post


Link to post
Share on other sites

Article in the evening standard saying that he thinks things are getting unstable.

We need it to pop right, but how long after a bubble bursting would we see a difference in the house prices? They don't just go from £400k to £250k in a day do they?

I'm like the o.p just getting so worried that things really won't stop that I can't help but feel I need to buy NOW or never (London).

It's actually causing me stress!

Many houses up and down the country did this a long time ago (2008) the owners and "owners" just have not realised the loss yet because low rates allow them to just sit there. A house is only worth what someone will pay you for it, and if volumes are half what they were there must be a lot of "pent up sellers"?

Share this post


Link to post
Share on other sites

For more context. The Surrey flat bought for 65k in 1989 was in Woking, The "friend" was actually my boyfriend at the time and suggested we buy together, I was of an age where that was way too much responsibility for me to get my head round and probably the single one best decision I ever made. I would have entered my 20's in huge debt. Mouseprice research in identical properties in the block is;

1989 - 65k

1991 - 45k

1998- 56,750

2001 - 73,500

2012 - 142,500

The price has basically doubled since 89, but in context of wages isn't obscenely out of line, dare I say, even "normal". Move it up the road to Surbiton and your figures would be spot on. Move it into central London and I can't even make the figures up.

A good decision indeed. Amazing really that the flat (in real terms) was still worth less in 2001 than it had been in 1989. It is a shame that more people buying now aren't a bit more aware of this type of thing and just look at the post 2000 movement of house prices to give them confidence that houses prices only ever go up.

Of course, houses prices do only ever go up in the long term, but it is a hell of a long time to be 'under water'.

You are right about the difference in Surbiton. A similar example that I have seen (1 bed Victorian conversion):

1997 - 65k

1999 - 85k

2007 - 240k

2013 - 275k

In 1999, this flat was probably 30% more expensive than the Woking one, but now almost double the price.

I have to fold my hand pretty soon (2 year timeframe), but my situation is forced by one single factor. Retirement. I've got a 4 in front of my age, and hard facts are if I want to retire ever, I have be mortgage free. In order to do that I have to buy something and get it paid off double fast. Anyone 35+ surely has to be thinking in those terms with a 25 year mortgage? I think the crash will happen, I have no idea when it will happen now, I can't wait indefinately. I can't afford what I need in London, so I'll most likely buy in Surrey, a flat, where the HPI hasn't been so severe. It might not be exactly where and what I want but I'm past caring, my sole aim is to be out of corporate work asap. I've looked at every which way to do this, even a BTL in another part of the country, while I can at least stay renting in London. I've dismissed it, but I can understand why people are doing it. Seriously, has anyone else thought this? Saying all this, I get the massive fear that the minute I fold we'll have another "1989", and so on... I wish I could relocate out of this area but my job (with gold-dust Final Salary Pension (sorry) is here) and my boyfriend is in the film media industry and it doesn't exist much outside Soho.

That sounds sensible to me. Flats really have not been as badly affected as houses. I only really have knowledge of the Kingston/Surbiton area, but I remember 10 years ago flats were higher priced than houses per square foot, now houses are at least 50% more expensive. That is crazy when you consider how much flats have gone up in my example above.

Flats have tripled in value in nominal terms since 1999 but houses in the most sought after areas have gone up at least 4-5 times. Back in 1999, when those 1 bed flats were £85k, £125k would have bought you a Victorian terraced house which would now be £600k. So, the differential has gone up from £40k (47% extra to buy the house) to 325k (118% extra) in 14 years!

In those days, the terraced houses were higher end FTB-buys (2x25K grad salary earners around 25 years old). Today, those FTBs would have to be earning 2x100k salaries to buy it without parental help and there aren't many of those at 25 (or any age!)

I am sure this is the same for many other outer London areas.

I doubt that this will make flats any more resilient when the crash does come, but it certainly makes the comparative bargains now. Presumably the long term investment potential of the house would be a bit better, but how far can the differential stretch? If a 2 bed house becomes more than twice the price of a 2 bed flat of the same size, surely people start buying flats?

Share this post


Link to post
Share on other sites

Evening standard article reports only three london boroughs sub £250k by 2018. Although the report is by Hamptons...

Then there is something else which sounds contrary to that scare story in the business section.

I do wonder though. Is a crash ever going to happen? it's difficult to put your life on hold for a day that feels like it's never going to come. :-(

As you can tell, I'm getting sweaty palms and thinking of folding my hand. It seems others are also thinking this by asking advice on this forum about buying despite this forum kind of saying that exactly the opposite is the wiser option.

I saw that article in the Standard, but I wonder how much truth is in it. My borough (Kingston) is listed as one of those where you can't buy a 2 bed flat for £250k now, and that is just not the case. Sure, a decent 2 bed flat in a good part of Kingston or Surbiton is way above that now, but that makes up probably about a third of the borough and the other areas like Chessington, Tolworth and New Malden rarely have a flat going above £250k.

Add to this the really small 2 beds in the nicer parts which would be below £250k as well and I can't even see how the average price for the borough would be that high, let alone saying that no 2 bed flat can be bought for £250k.

In fact, I have just checked Zoopla and there are at least 10 with asking prices of less than £250k and that is just in Kingston itself, without taking the cheaper areas into account.

Share this post


Link to post
Share on other sites

That sounds sensible to me. Flats really have not been as badly affected as houses. I only really have knowledge of the Kingston/Surbiton area, but I remember 10 years ago flats were higher priced than houses per square foot, now houses are at least 50% more expensive. That is crazy when you consider how much flats have gone up in my example above.

Flats have tripled in value in nominal terms since 1999 but houses in the most sought after areas have gone up at least 4-5 times. Back in 1999, when those 1 bed flats were £85k, £125k would have bought you a Victorian terraced house which would now be £600k. So, the differential has gone up from £40k (47% extra to buy the house) to 325k (118% extra) in 14 years!

In those days, the terraced houses were higher end FTB-buys (2x25K grad salary earners around 25 years old). Today, those FTBs would have to be earning 2x100k salaries to buy it without parental help and there aren't many of those at 25 (or any age!)

I am sure this is the same for many other outer London areas.

I doubt that this will make flats any more resilient when the crash does come, but it certainly makes the comparative bargains now. Presumably the long term investment potential of the house would be a bit better, but how far can the differential stretch? If a 2 bed house becomes more than twice the price of a 2 bed flat of the same size, surely people start buying flats?

If it sounds sensible to you, then that's good enough for me. I've always respected your views on here with respect to this ongoing fiasco. If the crash comes after I capitulate I'll take it as my payback for escaping 1989, accept the peaks and troughs along the way, and focus on simply having a mortgage paid off. Most people in the 40's age bracket I know have started to do the same. Posters on here too.

Touching on your point about FTB buys. In 1997, in my 20's, I bought a 3 bed Victorian semi in Chertsey, Surrey, priced at £115k. That was a 15k deposit and 2.5x joint salary. A door to door salesman knocked on my door and asked if my Mum was in, apparently I didn't look old enough to own it! Today's price for that house £380k. You'd be looking at a 76k 20% deposit and two 20somethings on 38k each at FOUR times joint salary to buy it now. Anyone that harps on about how it's always been a struggle to buy is talking rubbish, from my early experiences it was easy. Any baby boomer that says it was a struggle gets laughed at by me. This is an inside the M25 HPI example, London is simply shocking.

Interesting stats re flats, I have no concept of how normal people can afford a house anymore.

Share this post


Link to post
Share on other sites

Touching on your point about FTB buys. In 1997, in my 20's, I bought a 3 bed Victorian semi in Chertsey, Surrey, priced at £115k. That was a 15k deposit and 2.5x joint salary. A door to door salesman knocked on my door and asked if my Mum was in, apparently I didn't look old enough to own it! Today's price for that house £380k. You'd be looking at a 76k 20% deposit and two 20somethings on 38k each at FOUR times joint salary to buy it now. Anyone that harps on about how it's always been a struggle to buy is talking rubbish, from my early experiences it was easy. Any baby boomer that says it was a struggle gets laughed at by me. This is an inside the M25 HPI example, London is simply shocking.

Absolutely agree. I am sure it was quite tough in those days, but it is in a totally different league now. Baby boomers in the 1970s had higher interest rates to deal with, but they also had sensible banks who would only lend 3x single salary and house prices and incomes actually had some type of relationship.

The simple answer to baby boomers who say it is tough is to ask them how they would afford their first time buy now, let alone the house they are living in now. You vould buy a decent semi in lots of parts of outer London for sub-£10k in the 70s at a time when the average London salary was about £3k. Today, those houses are,say, £400k, and the average London salary is £35k maximum.

The ripple effect is clearly propping up prices for now, but it can't last forever. That house in Chertsey for £380k is extortionate, but it looks cheap to me because I'd have to pay £600k for that house in my area. Those £600k houses look cheap to people from Fulham because they'd have to pay £1m in their area etc etc. That can't last too long, though, because the only people buying in central London now are foreign investors or people just moving from one part of central London to another. Certainly no one that is likely to move out to Surbiton or Chertsey in the near future!

Interesting stats re flats, I have no concept of how normal people can afford a house anymore.

No, it is impossible without parental help or truly exceptional income. I wonder how it will turn out in 20 years if nothing happens to stop this?

Area have completely changed as a result. Streets of standard houses that used to house plumbers and electricians now have Porsches and Ferraris stansing outside and senior execs living inside. I think the 1970s residents of those houses would be having a good laugh about who is living there now!

Share this post


Link to post
Share on other sites

Evening standard article reports only three london boroughs sub £250k by 2018. Although the report is by Hamptons...

Then there is something else which sounds contrary to that scare story in the business section.

I do wonder though. Is a crash ever going to happen? it's difficult to put your life on hold for a day that feels like it's never going to come. :-(

As you can tell, I'm getting sweaty palms and thinking of folding my hand. It seems others are also thinking this by asking advice on this forum about buying despite this forum kind of saying that exactly the opposite is the wiser option.

I've been a massive bear since 2007, going so far as selling to rent back then (which was probably the worst financial decision of my life, I was commiitted to the HPC mentality though).

I ended up buying again last year (combination of baby, and starting to realise that the government would seemingly do anything to prop up prices) and seem to have caught a mini-wave again. I'm very nervous owning a house though. Part of me wants to sell again and rent, but I can't up end a wife and kids as easy as I could just myself back in 2007.

On the flipside to my bear views I still see masses of young professionals in London, reaching the end of their 20s/30s, having a baby and wanting to buy somewhere so moving a bit out to try and buy a flat or little terrace, which in this limited supply is driving prices up. I also don't see interest rates going up any time soon. Then there's the madness of HTB being pushed by our government, and by my anecdotal experience lapped up (or at least desired to be lapped up) by people.

Basically I see arguments on both sides. Not a nice environment for my younger siblings to be in their 20s for.

Regarding £250k+ flats, there's plenty of them here in Walthamstow this year (if they're in a period property), which is far from a Kingston and is a place I doubt Hamptons even knows exists. Loopy.

Share this post


Link to post
Share on other sites

For more context. The Surrey flat bought for 65k in 1989 was in Woking, The "friend" was actually my boyfriend at the time and suggested we buy together, I was of an age where that was way too much responsibility for me to get my head round and probably the single one best decision I ever made. I would have entered my 20's in huge debt. Mouseprice research in identical properties in the block is;

1989 - 65k

1991 - 45k

1998- 56,750

2001 - 73,500

2012 - 142,500

The price has basically doubled since 89, but in context of wages isn't obscenely out of line, dare I say, even "normal". Move it up the road to Surbiton and your figures would be spot on. Move it into central London and I can't even make the figures up.

Single datapoints are a bit risky.

For example, this place is in nice decorative order, £300/sq ft terrace with a small garden in Woking's Pakistani enclave.

http://www.rightmove.co.uk/house-prices/detailMatching.html?prop=26892873&sale=451582&country=england

2007: £211k

2008: £250k

2013: £250k

Similar:

http://www.rightmove.co.uk/house-prices/detailMatching.html?prop=16927746&sale=676246&country=england

1999: £79k

2001: £112k

2006: £186k

2013: £224k

Meanwhile, a mile away, in a non-ghetto area:

http://www.rightmove.co.uk/house-prices/detailMatching.html?prop=37681055&sale=49399313&country=england

1157 sq ft

2005: £282k

2006: £348k

2013: £471k

And planning application to upsize it more:

http://caps.woking.gov.uk/online-applications/applicationDetails.do?activeTab=summary&keyVal=MTBSBSRU39000

Another:

http://www.rightmove.co.uk/house-prices/detailMatching.html?prop=24914952&sale=49057544&country=england

2000: £260k

2005: £367k

Two extensions http://caps.woking.gov.uk/online-applications/applicationDetails.do?activeTab=summary&keyVal=IMJLWARU11000 http://caps.woking.gov.uk/online-applications/applicationDetails.do?activeTab=summary&keyVal=J7A8TXRU11000

2006: £585k

2013: £670k

This one hasn't been done up:

http://www.rightmove.co.uk/house-prices/detailMatching.html?prop=26464056&sale=48574487&country=england

1999: £228k

2001: £390k

2013: £490k

Meanwhile flats:

Flat 5, Humberstone Court, 4 Monument Road, Woking, Surrey GU21 5LX

£190,000 Flat, Leasehold 20 Aug 2013

£185,000 Flat, Leasehold 26 Aug 2010

£192,000 Flat, Leasehold 14 Jun 2006

£199,950 Flat, Leasehold 02 Mar 2004

Flat 26, Bramwell Place, 99 Chertsey Road, Woking, Surrey GU21 5BL

£280,000 Flat, Leasehold 05 Aug 2013

£329,950 Flat, Leasehold (New Build) 30 Jan 2004

8 Delta Road, Woking, Surrey GU21 5HL

£160,000 Flat, Leasehold 01 Aug 2013

£168,000 Flat, Leasehold 30 Apr 2008

£154,000 Flat, Leasehold 03 Nov 2004

The flats have lost money in real or even nominal terms, but houses have appreciated quite nicely.

Edited by bambam

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now

  • Recently Browsing   0 members

    No registered users viewing this page.

  • The Prime Minister stated that there were three Brexit options available to the UK:   224 members have voted

    1. 1. Which of the Prime Minister's options would you choose?


      • Leave with the negotiated deal
      • Remain
      • Leave with no deal

    Please sign in or register to vote in this poll. View topic


×

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.