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agh100

Flat In London Or Buy-to-let House In Kent?

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Hello,

My girlfriend and I are currently renting a 1 bed flat in Forest Hill, London. We wish to continue living in this area for up to 3 years, but we no longer wish to put all our money into renting.

Our plan was to buy a 1 or 2 bedroom flat in Forest Hill for around £165k, and then in around 3 years time move back 'home' to Kent where we could afford to buy a 2 or 3 bed house. However we are worried that if we buy in forest hill and house prices crash we will get into negative equity and be stuck in a small flat until prices rise again. We believe Forest to be a fairly nice up and coming area, and we should have around a 15% deposit - so we would only be in negative equity if the value of the property fell below £140k ish in the next 3 years.

We considered continuing to rent our current flat in london and also buy a 2/3 bed house in Kent which we can then rent out until we are ready to move back home. That way if house prices do go down, we will at least have a larger home that we could move into when we are ready. Obviously this option is not without its difficulties such as.. would we be able to charge a rent that could cover the mortgage and general maintanence fees? how would we cover the mortgage during periods when the house? Would the mortgage lender let us do this?

Are we right to be cautious about buying in london, or is it unlikely that prices will fall that much..?

If anyone has any thoughts or advice on any other possible solutions, it would be greatly appreciated?

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Do you think maybe you've come to the wrong place? :unsure:

With rental yields so low you are almost certain to make a loss.

My view is that, worst case, prices might go up by maybe 2% for next few years, best case is prices fall by up to 50%. Is it worth gambling maybe a 6% gain against a 50% loss?

Sit back, save and wait until your £165,000 will actually buy you somewhere to live.

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Do you think maybe you've come to the wrong place? :unsure:

With rental yields so low you are almost certain to make a loss.

My view is that, worst case, prices might go up by maybe 2% for next few years, best case is prices fall by up to 50%. Is it worth gambling maybe a 6% gain against a 50% loss?

Sit back, save and wait until your £165,000 will actually buy you somewhere to live.

AGH 100,

Im a new member on here aswell, i occasionally look in to see what people are saying (to get another perspective) but dont post replies. However, i know the area you are talking about very well so will add my comments. Be very careful about taking advise from some of the people on this board you will only get ridiculous replies such as the one above. Prices in Forest Hill will not go down by 50%. I rent out a flat in nearby East Dulwich, the area is undergoing an incredible transformation, the dodgy kebab shops etc are going with smart new restaurants and bars moving in but there is still some way to go which is why i think this is a solid area to invest in. Its not quite the same in Forest Hill but the east london line extension (open in 4 years) will almost certainly help to safeguard your investment. This is a good area of London to invest in. I would recommend this over buying a place in Kent on the train line extension alone.

Prices have rocketed in the area so the real value is not there. It would be difficult to make serious money on buy to lets but you are looking at this as a temporary place to live before you move to kent.

All the usual rules of housebuying should apply to your decision - can you afford the place, good location, can you do the place up a bit, what if interest rates go up 1% etc etc.

If you do buy in Forest Hill, my guess is that in a few years you would not have made an absolute killing but you would have paid off 3 years on your mortgage and may have made a modest profit. I would guess the worst case scenario is you stand still. But most of all, you should buy your own home if you feel its the right thing to do, forget about this obsession with house prices and live your life rather than wasting away on message boards moaning about everything. Good Luck.

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And if you get a repayment mortgage, you will have paid off about £8.5K off the capital in three years too - so you could take a bigger hit/have more equity (to lose).

I should go for the historically better area - if prices fall, it's the edgy bits that have risen most that fall fastest and furthest.... (all IMO)

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And if you get a repayment mortgage, you will have paid off about £8.5K off the capital in three years too - so you could take a bigger hit/have more equity (to lose).

I should go for the historically better area - if prices fall, it's the edgy bits that have risen most that fall fastest and furthest.... (all IMO)

Absolutely, and 3 years is a lot of rent money to pay someone else.

Also, in 3 years you could rent the place out then buy somewhere in Kent. Theres a strong demand for rentals in the area, last time i advertised, the first person who saw it took it and paid top price.

p.s - i didnt mean you AGH re my comment above on message boards

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Hello,

My girlfriend and I are currently renting a 1 bed flat in Forest Hill, London. We wish to continue living in this area for up to 3 years, but we no longer wish to put all our money into renting.

Our plan was to buy a 1 or 2 bedroom flat in Forest Hill for around £165k, and then in around 3 years time move back 'home' to Kent where we could afford to buy a 2 or 3 bed house. However we are worried that if we buy in forest hill and house prices crash we will get into negative equity and be stuck in a small flat until prices rise again. We believe Forest to be a fairly nice up and coming area, and we should have around a 15% deposit - so we would only be in negative equity if the value of the property fell below £140k ish in the next 3 years.

We considered continuing to rent our current flat in london and also buy a 2/3 bed house in Kent which we can then rent out until we are ready to move back home. That way if house prices do go down, we will at least have a larger home that we could move into when we are ready. Obviously this option is not without its difficulties such as.. would we be able to charge a rent that could cover the mortgage and general maintanence fees? how would we cover the mortgage during periods when the house? Would the mortgage lender let us do this?

Are we right to be cautious about buying in london, or is it unlikely that prices will fall that much..?

If anyone has any thoughts or advice on any other possible solutions, it would be greatly appreciated?

You're in the wrong place looking for a balanced response, there are people on here with hidden agendas!. Agree with Soho Blue if you want a house then go for it. Don't know the area at all so can't give advice on the investment side. Try putting an advert in the local paper saying you've a property to rent in that area and see how many calls you get, not the most scientific method but does give some indicator for demand.

There maybe some tough times ahead but what goes down must go up! (People ignore the rising half of the cycle on this forum!)

Best of luck!!

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Have you thought of building a house of your own in the garden of your current rented property? Landlords are usually very relaxed about this sort of thing.

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I grew up in the Medway towns in north Kent. Don't buy a house there - it is the rrsehole of the world, home of the chav.

Since they shut the dockyard the place has been a hotbed of unemployment.

The rest of Kent is expensive, but Medway is cheap for a reason.

Medway - the compost heap of the Garden of England.

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I rent out a flat in nearby East Dulwich, the area is undergoing an incredible transformation, the dodgy kebab shops etc are going with smart new restaurants and bars moving in but there is still some way to go which is why i think this is a solid area to invest in.

If you had said a large pharmacutical company with a range of advanced patents you would have my kudos.

Smart resaurants and bars?

You need to polish up on economics 101.

Where exactly does GDP growth come from? Oh I'll just tell you... It's supposed to come from growth in production capacity.

Sounds like a future unemployment (and thus high crime) hotbed to me, but what do I know?

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Absolutely, and 3 years is a lot of rent money to pay someone else.

So is 3 years worth of interest payments to the bank.

In most places around the UK now, it is cheaper to rent than to pay the interest portion of a mortgage on equivalent properties. Even if prices don't crash, but stagnate you would still be better off renting for a few years and saving the difference.

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I am praying for a collapse in prices - that said my advice is buy somewhere in an upcoming area that needs some work to get kerb appeal and then sit out any falls that may come along.

Of course a better idea would be to get out of the UK - two reasons for saying this:

1) you will see the world and especially the UK in a different way, and

2) in all likelihood you'll find better work and living in say the USA or EU.

The UK has many great attributes, but has clearly failed all fairness tests for the young. The only way things will change is by an exodus of taxpayers and change in fiscal and public policies. The USA is heading there and the UK will inevitably follow as the demographic bow wave peaks around 2020. Instead of being overtaxed and having all your rights stolen from you by NU Lab you should work in a lower tax country (USA perhaps?) and then return after the storm.

Edited by bpw

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If you had said a large pharmacutical company with a range of advanced patents you would have my kudos.

Smart resaurants and bars?

You need to polish up on economics 101.

Where exactly does GDP growth come from? Oh I'll just tell you... It's supposed to come from growth in production capacity.

Sounds like a future unemployment (and thus high crime) hotbed to me, but what do I know?

That might be true over a wide area (i.e. commutable distances) but most people prefer to live near good schools and nice restaurants than bloody great factories and industrial estates :ph34r:

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That might be true over a wide area (i.e. commutable distances) but most people prefer to live near good schools and nice restaurants than bloody great factories and industrial estates :ph34r:

Teenage angst aside, that is where everyone wants to live but....

It's not sustainable, it's economically hollow, it's sure fire bubble reasoning.

Look, I have nothing to prove, I am an honest hard working Brit[PERIOD]

I am embarrassed by the lack of understanding that fuels this mess. I love the UK more than anyone. Way more than anyone I know.

BUT I know (yes KNOW) what is on the horizon, I can warn you all I like... however (short of an election) I am powerless to help.

I do not want an economic downturn, I really don't. It will hurt too many people I love.

I only hope to inform the very few, and very well informed people I know who I believe can drag us kicking and screaming back to the place our inginuity and ambition deserves us.

This my first post I have ever made where I am over the drink driving limit, I hope my honesty comes accross.

Flame away...

.

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Keep your renting better.

In the USA house price crash is very close, in many areas it already started.

http://www.naplesnews.com/news/2006/apr/18...y_project_hold/

"It's not a factor of the product at all," he said. "It's the market. The market has totally collapsed."

He's returned deposits worth about $40 million. That was for 20 units."

And about area in general:

http://news.yahoo.com/s/nm/20060717/us_nm/...rty_sandiego_dc

And here you can find some terrible graph about insolvencies...

http://www.housepricecrash.co.uk/graphs-in...nsolvencies.php

Raising a bit, huh.

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That might be true over a wide area (i.e. commutable distances) but most people prefer to live near good schools and nice restaurants than bloody great factories and industrial estates :ph34r:

they do indeed, but unless they already have sufficient folding, the primary thing is to be within distance of work. If you can't get the money in, you can't do the rest.... - if you can afford to only through work, you go for a compromise of work/schools/etc. and if money is irrelevant you can do whast you want.

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Teenage angst aside, that is where everyone wants to live but....

It's not sustainable, it's economically hollow, it's sure fire bubble reasoning.

I was agreeing with you - employment prospects and productive capacity are fundamental to the long-term health of the economy... BUT if those were in place house prices tend to be boosted by good local facilities and people will travel to places of work.

Look, I have nothing to prove, I am an honest hard working Brit[PERIOD]

I am embarrassed by the lack of understanding that fuels this mess. I love the UK more than anyone. Way more than anyone I know.

BUT I know (yes KNOW) what is on the horizon, I can warn you all I like... however (short of an election) I am powerless to help.

I do not want an economic downturn, I really don't. It will hurt too many people I love.

I only hope to inform the very few, and very well informed people I know who I believe can drag us kicking and screaming back to the place our inginuity and ambition deserves us.

So why don't you stand for election? Seriously. Its certainly something I've considered. Unfortunately none of the major parties seem to get close to my beliefs. The Lib Dems have some good ideas such as land taxes but none of them seem willing to offer a radically different alternative or even much of a coherent vision for the future.

This my first post I have ever made where I am over the drink driving limit, I hope my honesty comes accross.

Flame away...

.

I think that can be forgiven :D

Unless of course you were driving and posting at the same time which is bloody stupid and dangerous and really can't be condoned... :lol:

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If you had said a large pharmacutical company with a range of advanced patents you would have my kudos.

Smart resaurants and bars?

You need to polish up on economics 101.

Where exactly does GDP growth come from? Oh I'll just tell you... It's supposed to come from growth in production capacity.

Sounds like a future unemployment (and thus high crime) hotbed to me, but what do I know?

Ok, East Dulwich also has some of the best schools in London and a new community hospital will be opening there in a few years.

I'm afraid the link from nice restaurants to 'crime hotbed' is a tad odd.

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Ok, East Dulwich also has some of the best schools in London and a new community hospital will be opening there in a few years.

I'm afraid the link from nice restaurants to 'crime hotbed' is a tad odd.

Because during a credit crunch or recession they will become crack dens, unless there is a source of global type employment nearby keeping lots of local people rich.

Edited by ?...!

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Forest Hill is massively overpriced already and SE London is likely to suffer if there are falls - people still prefer areas with a Tube like Balham, plus they don't have the South Circular running through them. The Easy London line extension has been touted as some sort of Second Coming of Jesus for ages. The current E London line is slow and isn't exactly bursting with frequent trains so I think enthusiasm over it is a bit misplaced - the train will still be a better option and a lot faster to boot. oh - and though FH has good primary schools (I should know as I work in one..) local secondary schools aren't up to much and competition for places in any apart from the near-failing ones is very fierce since Lewisham borough closed an entire school and forgot to replace it...

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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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