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GloomMonger

House Price Insanity

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It's another anecdote, but had to share this craziness. Went to see a good friend yesterday in Peckham/Honour Oak area of south east london. They bought a 3 bed mid terrace house about 3 years ago for £320k. At the time I thought they were insane for buying a terraced house, with shared entrance hall, no off street parking, no garage, no downstairs loo, and only 1 room width wide, in a very average bordering rough area of london. The garden is 40feet by 10 feet. You walk straight in to the living room, turn left is the kitchen. Nicely refurbished, 2nd floor loft conversion, quality fittings. But, £320k? 3 years ago I thought they would regret it.

They have just put it on the market for £630k! Three EAs valued it between 600 and 675! My friend admits it's crazy and they don't want to move but a growing family means they need to upsize. Who the hell would pay that for what was probably built for a low paid factory worker?!

I don't understand it.

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Only £600k? If that was in comparable part of North London (say Finsbury Park or Wood Green) a house like that would be well over £1m.

I live in Arnos Grove, which at least is on the tube, and 600k will buy a decent sized 3 bed semi with garage and large garden. South East london is on another planet. I guess Clapham, Balham and Dulwich are so far out of reach, the money is moving to Peckham, Catford etc.

Edited by GloomMonger

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I live in Arnos Grove, which at least is on the tube, and 600k will buy a decent sized 3 bed semi with garage and large garden. South East london is on another planet. I guess Clapham, Balham and Dulwich are so far out of reach, the money is moving to Peckham, Catford etc.

Catford?? I know I've been out of London for a while, and I have no desire to offend the good burghers of Catford, but Catford???

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...

I don't understand it.

Nope. Me neither. Above all I don't understand (assuming it sells) how you can take a 300 grand tax-free windfall and be dumb enough to buy another (London) house? How many years would they have to work to earn that? I know moving is a big thing for some people but they are moving anyway. Even if they have only 20% equity in the original 300k they have nearly 400k cash when the place sells. That would buy outright in most of the UK with quite a nice place. Sure you have to quit your job but you are now a grand a month better off post tax. Whearas buy a new, bigger place in London and the mortgage will go up.

Here you go - less than half a mile from the station.

http://www.zoopla.co.uk/for-sale/details/33132018

I used to live in Haywards Heath and commute in - it's not brilliant but you can do it. Not meant to be a cunning plan Baldrick, but just an illustration of what's possible. If I were your friends I would be looking at something like this and getting off the mortgage treadmill ASAP. Hey, they might even watch their old property halve in value and get to laugh not only loudest but longest - good luck to them. People paying that kind of money to buy a modest house in London need their bumps felt.

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None of these places are 'London' anyway. If it takes you more than 15 minutes to get to Waterloo Bridge or The Houses of Parliament you're not in London.

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I live in Arnos Grove, which at least is on the tube, and 600k will buy a decent sized 3 bed semi with garage and large garden. South East london is on another planet. I guess Clapham, Balham and Dulwich are so far out of reach, the money is moving to Peckham, Catford etc.

Catford gone to the dogs

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The worry is what happens to this equity. Are people cashing in from the expensive areas and buying in the up and coming areas, then rinse and repeat?

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None of these places are 'London' anyway. If it takes you more than 15 minutes to get to Waterloo Bridge or The Houses of Parliament you're not in London.

I agree, there's plenty of places outside the M25 which are better connected to London public transport than these zone 2+ black spots in south london. And I should know as I've lived in both!

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