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Charles_Darke

Just Started Process Of Buying A London Flat - Should I Change My Mind?

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I moved to London just over 5 years ago and thought house prices were too expensive to buy. They just kept getting worse. Every few months, I'd think of buying and convinced myself (and by others) that a house price crash was just around the corner. It never came.

I've moved 5 times in the last 5 years. Some of the houses were great (less than £100pw for a £420k house!), but a few times I was forced to move by the Landlord (sale of house/refurbs etc.).

Now I'm coming up to the end of my lease, and I'm thinking, is now the time to buy? Sure it's at the top of the market, but the crash I was waiting for hasn't come and may never arrive.

I found a one bed flat for £275k (incl. parking space) which is 10 mins from where I'm renting. I think the price is outrageous, but is quite good compared to some of the others I have found. The other factor is that the sale will complete only in December of 2006.

I haven't put down a deposit yet so can still change my mind (losing only 300 quid in various fees already paid). One thing that made me rethink was finding this site. Also, my parents are also wary of me buying at this time. They told me that they've noticed something of a mini-recession in the North West (they own a retail shop and have remarked that customers are noticeably poorer - I guess the credit boom is coming to an end as many people have reached the limit of the borrow to live lifestyle).

If prices stay flat for the next few years, I don't mind buying since it would be nice to have a place of my own and be settled. However, if prices are to crash in the next year (or maybe next 2 years) then I would of course prefer to wait. But I've already waited 5 years.

Anyone recommend economical data etc. which can help make a decision on this? I've got a few weeks before I need to put down the deposit. Thanks.

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Guest Guy_Montag

I moved to London just over 5 years ago and thought house prices were too expensive to buy. They just kept getting worse. Every few months, I'd think of buying and convinced myself (and by others) that a house price crash was just around the corner. It never came.

I've moved 5 times in the last 5 years. Some of the houses were great (less than £100pw for a £420k house!), but a few times I was forced to move by the Landlord (sale of house/refurbs etc.).

Now I'm coming up to the end of my lease, and I'm thinking, is now the time to buy? Sure it's at the top of the market, but the crash I was waiting for hasn't come and may never arrive.

I found a one bed flat for £275k (incl. parking space) which is 10 mins from where I'm renting. I think the price is outrageous, but is quite good compared to some of the others I have found. The other factor is that the sale will complete only in December of 2006.

I haven't put down a deposit yet so can still change my mind (losing only 300 quid in various fees already paid). One thing that made me rethink was finding this site. Also, my parents are also wary of me buying at this time. They told me that they've noticed something of a mini-recession in the North West (they own a retail shop and have remarked that customers are noticeably poorer - I guess the credit boom is coming to an end as many people have reached the limit of the borrow to live lifestyle).

If prices stay flat for the next few years, I don't mind buying since it would be nice to have a place of my own and be settled. However, if prices are to crash in the next year (or maybe next 2 years) then I would of course prefer to wait. But I've already waited 5 years.

Anyone recommend economical data etc. which can help make a decision on this? I've got a few weeks before I need to put down the deposit. Thanks.

Really only you can make that decision. There are people here who are absolutely convinced a HPC is just round the corner & there are those, who like myself, feel that everything points to it, but nothing in life is certain. Then, of course, there are those who think we're deluding ourselves.

Have a look at places like upmystreet.com, nethouseprices.com & so on. See which way the trend is going in your part of town.

Think about which way interest rates are heading, for the first time in umpty months we had someone voting for a rise. Look at international interest rates - they are all on the way up. Consider how high rates can go before you can't afford to pay your mortgage.

How secure is your job? Could it be subject to off-shoring? Could you be replaced by a Romanian? If so could you find another job? Would you be happy letting a room out to a lodger to help ends meet? Do you plan to keep this place for 10 year, or is it just a bacheoler pad until you meet someone & start a family?

Don't just buy because you feel pressured, take a step back & think.

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I moved to London just over 5 years ago and thought house prices were too expensive to buy. They just kept getting worse. Every few months, I'd think of buying and convinced myself (and by others) that a house price crash was just around the corner. It never came.

I've moved 5 times in the last 5 years. Some of the houses were great (less than £100pw for a £420k house!), but a few times I was forced to move by the Landlord (sale of house/refurbs etc.).

Now I'm coming up to the end of my lease, and I'm thinking, is now the time to buy? Sure it's at the top of the market, but the crash I was waiting for hasn't come and may never arrive.

I found a one bed flat for £275k (incl. parking space) which is 10 mins from where I'm renting. I think the price is outrageous, but is quite good compared to some of the others I have found. The other factor is that the sale will complete only in December of 2006.

I haven't put down a deposit yet so can still change my mind (losing only 300 quid in various fees already paid). One thing that made me rethink was finding this site. Also, my parents are also wary of me buying at this time. They told me that they've noticed something of a mini-recession in the North West (they own a retail shop and have remarked that customers are noticeably poorer - I guess the credit boom is coming to an end as many people have reached the limit of the borrow to live lifestyle).

If prices stay flat for the next few years, I don't mind buying since it would be nice to have a place of my own and be settled. However, if prices are to crash in the next year (or maybe next 2 years) then I would of course prefer to wait. But I've already waited 5 years.

Anyone recommend economical data etc. which can help make a decision on this? I've got a few weeks before I need to put down the deposit. Thanks.

I think now would be an ideal time for you to buy. Unemployment is rising and house prices are at all time highs. Hurry while stocks last.

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Think about which way interest rates are heading, for the first time in umpty months we had someone voting for a rise. Look at international interest rates - they are all on the way up. Consider how high rates can go before you can't afford to pay your mortgage.

How secure is your job? Could it be subject to off-shoring? Could you be replaced by a Romanian? If so could you find another job? Would you be happy letting a room out to a lodger to help ends meet? Do you plan to keep this place for 10 year, or is it just a bacheoler pad until you meet someone & start a family?

Don't just buy because you feel pressured, take a step back & think.

Thanks for the advice, all good things to consider. One thing that made me feel better about buying is that for the last couple of years, I've been living with my GF and she's got a new job in August which will be better paid and so we will have 2 reasonable salary streams (this will be a flat for us to live together). The job market in my sector is very bouyant so I have no fear of losing my job and could get another one reasonably quickly if I did.

I think it is good advice to step back and think. I feel I have been pressured into it a bit. Friends of mine bought when we moved down to London at the same time, and they just recently sold making £80k profit which is being used to buy a new flat to live in and deposit on a BTL investment (they are very bullish of the market and keep telling me to buy now or miss out again).

(and we're buying in London because that's where we both work)

Edited by Charles_Darke

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Thanks for the advice, all good things to consider. One thing that made me feel better about buying is that for the last couple of years, I've been living with my GF and she's got a new job in August which will be better paid and so we will have 2 reasonable salary streams (this will be a flat for us to live together). The job market in my sector is very bouyant so I have no fear of losing my job and could get another one reasonably quickly if I did.

I think it is good advice to step back and think. I feel I have been pressured into it a bit. Friends of mine bought when we moved down to London at the same time, and they just recently sold making £80k profit which is being used to buy a new flat to live in and deposit on a BTL investment (they are very bullish of the market and keep telling me to buy now or miss out again).

(and we're buying in London because that's where we both work)

275K and complete in dec 2006? New build then. Where is it located in London and what is the square footage ? Then we can see if its good value or not. Personally I would not touch new build and I'm a bull.

Edited by mercsl

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Of course it is your decision, but I think you have already answered your own question. I too thought London was overpriced in 2001, but wasn't in a postion to buy unless we delayed starting a family. No regrets but we will buy in the next 2-3 years, hopefully and inbetween add to our deposit. By then, we won't have nursery fees to pay either which is costing us a lot more than a mortgage would.

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I think it is good advice to step back and think. I feel I have been pressured into it a bit. Friends of mine bought when we moved down to London at the same time, and they just recently sold making £80k profit which is being used to buy a new flat to live in and deposit on a BTL investment (they are very bullish of the market and keep telling me to buy now or miss out again).

Even though the market has been flat for the past 2 years, sentiment is still fairly bullish amongst the masses, as you have observed.

However, that doesn't mean they're right to be bullish - we're talking about sheep here with bugger all knowledge about how international economics work.

If you really do have to buy now, I'd fix your mortgage interest rate for as long as you can.

Also, remember that the more you borrow, the more you have to repay in interest. For every £1 you borrow that's £1.70 you pay back - multiply that by what you've borrowed, and that'll be the amount you have to pay from your incomes (net of all taxes and all household bills) every month throughout your entire working lives.

Also consider whether or not you need a larger property in the future to support a family and whether or not you will even be able to afford to move up the "ladder" with prices this cripplingly high.

Edited by Warwickshire Lad

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If you are buying as a home to live in, you shouldnt be bothered about a house price crash really :) as long as your job is secure. Go for it.

If you are an invester then its very different.

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Good advice from Guy Montag. Also check out the graph on the home page - what do you think is likely to happen next? Check out housing markets and underlying economies in the US, Australia and Ireland, how do they compare to here. Check out the news feeds, this is a good one - look at the business option:

http://www.newsnow.co.uk/

Economic news in the UK does seem to be undereported, and frequently given a postive spin that seems to be at odds with reality. A more global perspective on economics is always useful, and sometimes reports on the UK situation from other countries tend to be more free of bias.

To me, the current housing scenario feels even shakier than in 1989, mainly due to the amount of debt in the system. I sat that crash out and bought in 1991, missed the worst, but still watched my property decline in value until around 1996.

Is the flat in a good area? After the last crash, good property in decent locations still sold. If it's in a lousy position it might be unsaleable for 10 years. If/when prices become more affordable people just miss out the 'first rung' of entry level properties to go for something more desirable.

That's a lot of money, it's worth calculating how many years of net earning it represents. At £50,000pa it's probably about 10 years of one income, not taking into account interest repayments.... or bills.... or eating.... or anything else really. It's worth doing a lot more objective research before diving in. You wouldn't be contemplating an interest only mortgage I hope, as you'd never pay off the initial loan, and you can't rely on inflation eroding the debt.

TLM

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If you are buying as a home to live in, you shouldnt be bothered about a house price crash really :) as long as your job is secure. Go for it. If you are an invester then its very different.

This can't be right. A house is the most expensive thing you will ever buy. If you buy today, it will probably be at the expense of investing in a pension. And you have no certainty that you will even get your money back.

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I moved to London just over 5 years ago and thought house prices were too expensive to buy. They just kept getting worse. Every few months, I'd think of buying and convinced myself (and by others) that a house price crash was just around the corner. It never came.

I've moved 5 times in the last 5 years. Some of the houses were great (less than £100pw for a £420k house!), but a few times I was forced to move by the Landlord (sale of house/refurbs etc.).

Now I'm coming up to the end of my lease, and I'm thinking, is now the time to buy? Sure it's at the top of the market, but the crash I was waiting for hasn't come and may never arrive.

I found a one bed flat for £275k (incl. parking space) which is 10 mins from where I'm renting. I think the price is outrageous, but is quite good compared to some of the others I have found. The other factor is that the sale will complete only in December of 2006.

I haven't put down a deposit yet so can still change my mind (losing only 300 quid in various fees already paid). One thing that made me rethink was finding this site. Also, my parents are also wary of me buying at this time. They told me that they've noticed something of a mini-recession in the North West (they own a retail shop and have remarked that customers are noticeably poorer - I guess the credit boom is coming to an end as many people have reached the limit of the borrow to live lifestyle).

If prices stay flat for the next few years, I don't mind buying since it would be nice to have a place of my own and be settled. However, if prices are to crash in the next year (or maybe next 2 years) then I would of course prefer to wait. But I've already waited 5 years.

Anyone recommend economical data etc. which can help make a decision on this? I've got a few weeks before I need to put down the deposit. Thanks.

Like you we thought houses were too expensive a few years ago. My husband and I have 2 children and are very keen to be settled in our own house, but we're going to rent for the forseeable future. We can't seem to let ourselves be tempted to buy (although we've seen some houses we really like) as we feel we'll be making a mistake financially. Friends and relatives tell us house prices may go up and down and in the end you'll get your money back, but if you buy at the right time I'm sure it makes a difference to your lifestyle. Only my opinion though. You have to make your own decisions.

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London is not a normal marketplace for housing - especially with the Olympics coming. Atlanta saw houses appreciate 20% every year for the 4 years leading up to the actual event. I think Athens was the same.

Saying that...interest rates are on the rise, and that should put a damper on prices. One would hope anyway.

Edited by Pluto

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You dont say whether you have the ability to save?

I have to be honest... LONDON is a totallly different fish to the rest of the country. I cannot see a MAJOR correction there, as there are outsiders that will buy property even you cannot afford it. If you were to say its £270K for a house that me and my girlfriend can be happy and start a family then I would say "Go for it, as long as you can afford it with IR at 7%".

But a flat? Lot of money and certainly not a family home.

If you are prepared to move out a little then I feel that you would have a better chance should there be a correction. If you insist on staying in London, and you are happy with a flat then I would consider holding fire and when IR rise I would expect a LOT of amatuer BTL's to sell up once the HPI goes negative. Its all a gamble.

Good luck whatever you do

TB

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Guy Montag has answered your question well.

Your post reminds me of when i'm playing poker - keep getting crap cards and folding, but they would of won the hand had i of played them. And when i get a decent set of cards, like ace pair, someone beats me on 3 of a kind 2s. The thing i'm trying to say is, it's a gamble either way you play it, and it's about your attitude to risk. Personally, i would rather not buy at that price, and then risk a crash (which is possible - to which degree of percentage of certainty noone knows).

Put it this way - if you buy and it crashes, you know it's not going to be nice. i.e. if you play your hand now... it can go either way - either win big time whilst we all sit on the sidelines backing out... or lose big time with a crash.

OR

Don't buy now and continue waiting. Don't risk the former - but effectively go nowhere with your life in respects to your goal of having a home for yourself and your partner.

That said - if a kid comes a long - moving up the rungs is going to be nigh on impossible, given that getting on the first step is crippling enough.

Don't think i've really added anything to help here - other than to say it's a gamble - make sure you make the decision as informed as you can be - but in my experience, irrespective of what the 'best' decision is at the time, more often than not it's the wrong decision down the line - but hey ho i'm a pessimist..

Goodluck, and i guess the real question is:

Are you feeling lucky ? Well are ya ? ;0)

Lewis

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I moved to London just over 5 years ago and thought house prices were too expensive to buy. They just kept getting worse. Every few months, I'd think of buying and convinced myself (and by others) that a house price crash was just around the corner. It never came.

I've moved 5 times in the last 5 years. Some of the houses were great (less than £100pw for a £420k house!), but a few times I was forced to move by the Landlord (sale of house/refurbs etc.).

Now I'm coming up to the end of my lease, and I'm thinking, is now the time to buy? Sure it's at the top of the market, but the crash I was waiting for hasn't come and may never arrive.

I found a one bed flat for £275k (incl. parking space) which is 10 mins from where I'm renting. I think the price is outrageous, but is quite good compared to some of the others I have found. The other factor is that the sale will complete only in December of 2006.

I haven't put down a deposit yet so can still change my mind (losing only 300 quid in various fees already paid). One thing that made me rethink was finding this site. Also, my parents are also wary of me buying at this time. They told me that they've noticed something of a mini-recession in the North West (they own a retail shop and have remarked that customers are noticeably poorer - I guess the credit boom is coming to an end as many people have reached the limit of the borrow to live lifestyle).

If prices stay flat for the next few years, I don't mind buying since it would be nice to have a place of my own and be settled. However, if prices are to crash in the next year (or maybe next 2 years) then I would of course prefer to wait. But I've already waited 5 years.

Anyone recommend economical data etc. which can help make a decision on this? I've got a few weeks before I need to put down the deposit. Thanks.

What are you waiting for?? Buy now! buy buy buy now! Don't you know that if you don't but now you will never ever ever ever ever ever be able to buy again?

"If prices stay flat for the next few years, I don't mind buying " What a BTL failing portfolio Titt!

Next troll please do some research first........

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If you are buying as a home to live in, you shouldnt be bothered about a house price crash really :) as long as your job is secure. Go for it.

If you are an invester then its very different.

That's only true to some extent. If a crash is going to happen within the next year, then it would make sense to hold off and buy later or at least negotiate a bigger discount.

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That's only true to some extent. If a crash is going to happen within the next year, then it would make sense to hold off and buy later or at least negotiate a bigger discount.

If you are seriously intent on living in the place as soon as possible, why not offer a heavily discounted price with a potential top-up payment to meet his asking price in 6-12 months based on the Haliwide indices?

Too complicated or worth considering? I guess it depends if your vendor (and solicitor) are open minded.

The fear of a crash is like the proverbial tail wagging the dog - if you like the place, strike a deal and get on with it (with downside protection).

I wonder if any estate agents have thought of this as a value added product they could offer to keep sales ticking over? Silly qn.

JY

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Guest Winners and Losers

I don't care if you rent or buy. Just living in London means you're supporting HP's and that's alright with me!

:)

Me, me, me. :rolleyes:

Change the record. :P

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275K and complete in dec 2006? New build then. Where is it located in London and what is the square footage ? Then we can see if its good value or not. Personally I would not touch new build and I'm a bull.

If it is new-build then, depending on the location I'd really advise against it. I've recently bought in London so it's not a kneejerk anti-buying argument from me.

But new-builds are hideously over-priced. If it's £275K for a one-bed then it needs to be somewhere pretty amazing to not be overpriced (where is it?). Most areas you can get decent traditional 2-bed flats for less than that. I paid £185 for a 2-bed in an OK postcode, if I'd had £275 I could have bought something bigger or a much higher quality 2-bed.

I can see a crash in new-builds even if the rest of the market stagnates. They are being bought by the buy-to-let brigade and by 20-somethings who don't seem to have thought through the fact that today's "new executive apartment" is tomorrows "old flat in a block". If it's not a place you could live in for ten years (ie have kids there?) then it's a real risk.

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But new-builds are hideously over-priced. If it's £275K for a one-bed then it needs to be somewhere pretty amazing to not be overpriced (where is it?). Most areas you can get decent traditional 2-bed flats for less than that. I paid £185 for a 2-bed in an OK postcode, if I'd had £275 I could have bought something bigger or a much higher quality 2-bed.

I can see a crash in new-builds even if the rest of the market stagnates. They are being bought by the buy-to-let brigade and by 20-somethings who don't seem to have thought through the fact that today's "new executive apartment" is tomorrows "old flat in a block". If it's not a place you could live in for ten years (ie have kids there?) then it's a real risk.

It's near London Bridge/Borough (Long Lane). You can see a few new builds around this area (e.g. The Rise, Tanneries and Lant Street).

You don't get a lot of flat for the money though, about 550sqft for a one bed one bath apartment with combined kitchen/living space. But the location is central.

(overpriced? isn't every property over-priced at the moment?)

Edited by Charles_Darke

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Buy now only if you can afford it. Fix the mortgage for as long a period as you can. That way if you have kids and your girl stops work you can make the payments a little easier than chasing a variable rate upwards.

London will be a little more protected than the rest of the country when the coirrection kicks in.

Most importantly buying houses are like buying second hand cars..........take 20% off the asking price then round it down to the next whole number and then make an offer.

Buy cheap - sell high.

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You don't get a lot of flat for the money though, about 550sqft for a one bed one bath apartment with combined kitchen/living space. But the location is central.

(overpriced? isn't every property over-priced at the moment?)

I think you have answered your own question. Don't buy it.

Imagine being stuck in a 550sq ft box for several years because you can't offload it to anyone.

JY

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(overpriced? isn't every property over-priced at the moment?)

No. I think there are serious imbalances in pricing within London, and new-builds are illogically high. You see gardenless new-builds for £275K up the road from a decent garden conversion flat for £200K. It doesn't make sense.

Borough - wouldn't want to live there myself, but it might not do too badly if prices fall. It has the advantage of being central, and I think that in the centre, the new-build argument is less clear. People don't really expect more space or a garden there, so a flat is more logical. So maybe it's not as overpriced as some of the new-builds, although £275K is still plenty high for a one-bed. Personally I wouldn't buy one though - if I really wanted to live there I'd be more inclined to rent and wait.

Can you see yourself living there for ten years? A one-bed isn't a big space to share with someone else, and is hopeless if you ever want a child. Last time prices fell, it was the smallest places that were hardest to sell - once prices are falling, no one sees the need to buy the poky little places just to get on the ladder any more.

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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