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London...to Buy On Not To Buy


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We have been thinking about buying a flat in London since 2002, but thought we would wait for the crash. We have waited 5 years for the predicted a crash, and what happened in the meantime? Property prices went up.

Therefore I can't help but feel , as we are entering 2007, that hopes for a crash are just wishful thinking on our part. Perhaps it is time for us to face reality.

I can afford to get on the property ladder now (nothing fancy, just a 2 bed flat). Bearing in mind that I am talking about the London market, I think it makes sense to buy for the following reasons:

1) Property prices are not going to rise at levels they have in the past. However there will be increases (albeit small , 0.6% per month, 7% p.a).

2) More immigrants are arriving and (surprisingly!) buying property. Our landlord recently sent a Bulgarian builder to fix a door at our rented flat and he had just purchased his own flat. Here we are dawdling for 5 years on whether to buy or not. This guy just walks in and takes the plunge. Stupid, I think not.

3) For the mediwum term, there will continue to be more demand than supply in London, especially with the EU now extended to Eastern Europe. Not all eastern Europeans do low level jobs, there a fair number of professionals too, and they are jumping on the property ladder, even if it only means a one bed flat.

4)Historically, housing prices have never crashed/fallen in an Olympic city. Gains are actually the norm.

As much as I would *love* to believe that there will be a crash, I think I need to stop kidding myself and buy now.

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We have been thinking about buying a flat in London since 2002, but thought we would wait for the crash. We have waited 5 years for the predicted a crash, and what happened in the meantime? Property prices went up.

Therefore I can't help but feel , as we are entering 2007, that hopes for a crash are just wishful thinking on our part. Perhaps it is time for us to face reality.

I can afford to get on the property ladder now (nothing fancy, just a 2 bed flat). Bearing in mind that I am talking about the London market, I think it makes sense to buy for the following reasons:

1) Property prices are not going to rise at levels they have in the past. However there will be increases (albeit small , 0.6% per month, 7% p.a).

2) More immigrants are arriving and (surprisingly!) buying property. Our landlord recently sent a Bulgarian builder to fix a door at our rented flat and he had just purchased his own flat. Here we are dawdling for 5 years on whether to buy or not. This guy just walks in and takes the plunge. Stupid, I think not.

3) For the mediwum term, there will continue to be more demand than supply in London, especially with the EU now extended to Eastern Europe. Not all eastern Europeans do low level jobs, there a fair number of professionals too, and they are jumping on the property ladder, even if it only means a one bed flat.

4)Historically, housing prices have never crashed/fallen in an Olympic city. Gains are actually the norm.

As much as I would *love* to believe that there will be a crash, I think I need to stop kidding myself and buy now.

Very hard to disagree with your summary, Sarah; a nominal crash (in London, at least) seems like something of a pipe-dream. It is a shame that you came to that conclusion the hard way.

If you're in a position to purchase a two-bed flat, then it might not be a bad idea (especially as you will have the security of tenure that never comes from renting).

A lot of people on this site forget that London is very much a global city, and the rest of the world seems to have a very real desire to live in it.

Also, agree with your point on the skilled Eastern Europeans; I'm meeting more and more professionals such as analysts who hail from the old Eastern Bloc; indeed, I employ one of them. The idea that they all work in burger bars while sleeping ten to a room is utter bunk

Just my thoughts :rolleyes:

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We have been thinking about buying a flat in London since 2002, but thought we would wait for the crash. We have waited 5 years for the predicted a crash, and what happened in the meantime? Property prices went up.

Therefore I can't help but feel , as we are entering 2007, that hopes for a crash are just wishful thinking on our part. Perhaps it is time for us to face reality.

I can afford to get on the property ladder now (nothing fancy, just a 2 bed flat). Bearing in mind that I am talking about the London market, I think it makes sense to buy for the following reasons:

1) Property prices are not going to rise at levels they have in the past. However there will be increases (albeit small , 0.6% per month, 7% p.a).

2) More immigrants are arriving and (surprisingly!) buying property. Our landlord recently sent a Bulgarian builder to fix a door at our rented flat and he had just purchased his own flat. Here we are dawdling for 5 years on whether to buy or not. This guy just walks in and takes the plunge. Stupid, I think not.

3) For the mediwum term, there will continue to be more demand than supply in London, especially with the EU now extended to Eastern Europe. Not all eastern Europeans do low level jobs, there a fair number of professionals too, and they are jumping on the property ladder, even if it only means a one bed flat.

4)Historically, housing prices have never crashed/fallen in an Olympic city. Gains are actually the norm.

As much as I would *love* to believe that there will be a crash, I think I need to stop kidding myself and buy now.

I live in London also and agree almost 100% with the above but you won't have to wait long for someone to tell you on here that you'll be able to pick up a nice 3 bed semi for in chiswick for £75k in a couple of months time.

I've been renting and thus at the sharp end of London HPI for many years now and even with a big vested interest in a HPC in London I can't see any major downturn here for a while yet

In the medium term I reckon we can expect at the most stagnation or very small downward correction (but I expect to be fully slated and called a troll for saying this)

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I am loosing faith too, but yesterday came across this weblink and discovered that the two areas I am watching, for the property types I want, prices dropped in the last twelve months. (N14, EN1)

What is interesting is the vast fluctuation of the prices of detached properties, which it seems to a person with no financial savvy, to be screwing up the overall results. I know this has been said before, here is some proof.

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I live in London also and agree almost 100% with the above but you won't have to wait long for someone to tell you on here that you'll be able to pick up a nice 3 bed semi for in chiswick for £75k in a couple of months time.

I've been renting and thus at the sharp end of London HPI for many years now and even with a big vested interest in a HPC in London I can't see any major downturn here for a while yet

In the medium term I reckon we can expect at the most stagnation or very small downward correction (but I expect to be fully slated and called a troll for saying this)

Hindsight is a wonderful thing to have, i live in Essex so its very similar for me also, but if i think it is different with flats!! Getting the train to work i see new build after new build after new build with "text space, and recieve a brochure", there is literally thousands of these new pads about to come into the market. With stricter mortgage lending coming into place and BTL's starting to bottle it, i reckon flats at least will start to see a slump in price!!!! But that is my useless and humble opinion based on hunches!

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Look back in time to 1987. The stockmarket crash led to tens of thousands of City job losses and this was followed 18 months later by Great Crash 1. Stocks are running well now but inflation is out of the bag and IR will have to rise despite the threat to the housing market.

Houses are at the top of the cycle in London IMO. Buy at your peril.

BTW--why did anyone think there was going to be a crash in 2002? HPI was in its full throws of raging inflation and had only been rolling for 6 years. There was no need back then for 5 X income and mass IO such as we have had since 2004. I thought 2005 looked good but for Gordon's IR cut which gave new life to inflation for another year or so. He doesn't have that option any longer with inflation inside the threshold.

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We have been thinking about buying a flat in London since 2002, but thought we would wait for the crash. We have waited 5 years for the predicted a crash, and what happened in the meantime? Property prices went up.

Therefore I can't help but feel , as we are entering 2007, that hopes for a crash are just wishful thinking on our part. Perhaps it is time for us to face reality.

I can afford to get on the property ladder now (nothing fancy, just a 2 bed flat). Bearing in mind that I am talking about the London market, I think it makes sense to buy for the following reasons:

1) Property prices are not going to rise at levels they have in the past. However there will be increases (albeit small , 0.6% per month, 7% p.a).

2) More immigrants are arriving and (surprisingly!) buying property. Our landlord recently sent a Bulgarian builder to fix a door at our rented flat and he had just purchased his own flat. Here we are dawdling for 5 years on whether to buy or not. This guy just walks in and takes the plunge. Stupid, I think not.

3) For the mediwum term, there will continue to be more demand than supply in London, especially with the EU now extended to Eastern Europe. Not all eastern Europeans do low level jobs, there a fair number of professionals too, and they are jumping on the property ladder, even if it only means a one bed flat.

4)Historically, housing prices have never crashed/fallen in an Olympic city. Gains are actually the norm.

As much as I would *love* to believe that there will be a crash, I think I need to stop kidding myself and buy now.

Whilst I argree with the above posters, a little more detail would be helpful. IMO London is more a collection of villages, rather than one continuous mass. Yes it is booming as a result of being an economic success and a magnet to the rest of the world. However, in order to take advantage of this continued success you will need to carefully target the area, development and/or property type. Conversely, in a downturn this choice will determine your resilience to significant losses.

For information, I FTB'd in London in late 05. I would approach buying at this point with caution.

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Well, only yesterday I had a 630k mortgage approved, a 695k offer accepted on a covent garden flat, solicitor ready etc.

Then I just got cold feet and thought - what if I can't work? I always thought, being where it is, it would be easy to let out - but then I checked www.findaproperty.co.uk lettings section, and was totally shocked to find that for the same price as the interest (in my case 3000k a month), I could get 3 really quite large bedrooms, separate kitchen, compared to the one I was buying with only 2 small (3m x 3m - or 10'x10' for you old imperials) bedrooms (one of which had the combi-boiler in!), and a 6mx3m 'open plan kitchen/reception'.

I just decided it was crazy to spend 50% more in terms of rent vs interest payments, for 50% less. And I truly believe that prices really must be maxing out, except for the absolute top of the market (the 4 bed, £3m penthouses I mean).

I have seen properties sitting around on findaproperty for 3 months - in Covent Garden, and they haven't sold. Crazy crazy crazy.

And I think the overall thing is I feel so relieved that I haven't gone ahead, rather than lamenting it.

FYI I have a 3-bed property in Putney I bought in 2000 for 190k. Now worth 340k, but it is let out. I am going to change the mortgage end of this year to residential, and move in myself, if I am still in London.

Edited by Marcos Scriven
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Well, only yesterday I had a 630k mortgage approved, a 695k offer accepted on a covent garden flat, solicitor ready etc.

Then I just got cold feet and thought - what if I can't work? I always thought, being where it is, it would be easy to let out - but then I checked www.findaproperty.co.uk lettings section, and was totally shocked to find that for the same price as the interest (in my case 3000k a month), I could get 3 really quite large bedrooms, separate kitchen, compared to the one I was buying with only 2 small (3m x 3m - or 10'x10' for you old imperials) bedrooms (one of which had the combi-boiler in!), and a 6mx3m 'open plan kitchen/reception'.

I just decided it was crazy to spend 50% more in terms of rent vs interest payments, for 50% less. And I truly believe that prices really must be maxing out, except for the absolute top of the market (the 4 bed, £3m penthouses I mean).

I have seen properties sittign around on findaproperty for 3 months - in Covent Garden, and they haven't sold. Crazy crazy crazy.

And I think the overall things is a feel so relieved that I haven't gone ahead, rather than lamenting the fact.

FYI I have a 3-bed property in Putney I bought in 2000 for 190k. Now worth 340k, but it is let out. I am going to change the mortgage end of this year to residential, and move in myself, if I am still in London.

You've made the right choice. That's a crazy price to pay, and £3k per month just leaves too much to fate IMO. Whereabouts in Covent Garden, if you don't mind me asking?

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Have you ever been to a village? London is a sophisticated big city, villages are little places full of inbred yokels. Complete opposites. If you do go to a village, maybe you can get a job as the idiot.

Hey - don't be so mean. Why are people so rude on here sometimes?

Firstly, even if he is wrong about London being a collection of villages, then just calling him the village idiot is not really called for. Disagree if you will, but constructively.

Further, I think he is completely right about london being a set of villages - that is its history. Ok, now they are more like towns, but it similar in principle. Each has it's own high street, own section of police, its own telephone exchange etc etc. And prices do tend to follow their own little local prices.

'Villages' or 'towns' in London I have lived in are South Kensington, Earl's Court, Putney, and Clapham. All have their own demographics, and their own little peaks and troughs in property.

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If you're in a position to purchase a two-bed flat, then it might not be a bad idea (especially as you will have the security of tenure that never comes from renting).

wrong, security only comes if buy with no mortgage whether you rent from the landlord or the bank when you can't service the debt you know the result

We have been thinking about buying a flat in London since 2002, but thought we would wait for the crash. We have waited 5 years for the predicted a crash, and what happened in the meantime? Property prices went up.

Just ask yourself if I didn't buy it in 2002 when the cost of borrowing & house prices were cheaper why should I pay twice as much now when the cost of borrowing has also gone up minimum 50% and if the answer of this question makes sense to buy good luck.

2) More immigrants are arriving and (surprisingly!) buying property. Our landlord recently sent a Bulgarian builder to fix a door at our rented flat and he had just purchased his own flat. Here we are dawdling for 5 years on whether to buy or not. This guy just walks in and takes the plunge. Stupid, I think not

when sh!t hits the fan he can give keys back to the bank and go back home, Can you?

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Have you ever been to a village? London is a sophisticated big city, villages are little places full of inbred yokels. Complete opposites. If you do go to a village, maybe you can get a job as the idiot.

You clearly do not live in central London. Leave it for the grown ups, there's a good chap.

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You've made the right choice. That's a crazy price to pay, and £3k per month just leaves too much to fate IMO. Whereabouts in Covent Garden, if you don't mind me asking?

Shelton Street, realtively quiet, very little pedestrian traffic, and light vehicle traffic.

I think the thing is, if it has been two bigger beds, and a separate kitchen, and the living area wider than 3 metres, I would have been happy to take the risk.

The property is one of those in the list of properties to buy I just posted earlier in this thread. There are a bunch in the 'new warehouse development'. I was looking at the 700k 4th floor one at the front, the smallest, but with the most natural light, and better south facing view.

Incidentally, I see the larger one on the same floor, previously advertised last november for 850k, is now being shown as 'new' for 825k...

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Hey - don't be so mean. Why are people so rude on here sometimes?

Firstly, even if he is wrong about London being a collection of villages, then just calling him the village idiot is not really called for. Disagree if you will, but constructively.

Further, I think he is completely right about london being a set of villages - that is its history. Ok, now they are more like towns, but it similar in principle. Each has it's own high street, own section of police, its own telephone exchange etc etc. And prices do tend to follow their own little local prices.

'Villages' or 'towns' in London I have lived in are South Kensington, Earl's Court, Putney, and Clapham. All have their own demographics, and their own little peaks and troughs in property.

Thank you for the defence. You pick up on the subtleties of my "village" description as its clear that those who actually live in the capital can appreciate the difference between Belgravia and Balham or Richmond and Islington.

Hard to grasp if all you do is travel in by train/tube and have the odd after work bevvy in the Pitcher & Piano/All Bar One in Leicester Square or Oxford Circus.

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The other thing that went through my little mind was this:

Would I buy the place if I had hundreds of millions of pounds? 700k would be nothing - but I knew for certain that in that infintesimally unlikely situation, no - I wouldn't buy, I would rent.

I think the people buying now are the people like me and the original poster - people that can just about afford it now, but are scared they won't be able to in the future...

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We have been thinking about buying a flat in London since 2002, but thought we would wait for the crash. We have waited 5 years for the predicted a crash, and what happened in the meantime? Property prices went up.

I know its easy to say this in hindsight but why!!!! You could have bought in 2002 and didn't? Thats crazy.

Every single house price survey for the last 5 years has shown an increase, at what point did you wake up and think, hold on a minute these surveys might be right!

It's never a good time to buy a house.

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I know its easy to say this in hindsight but why!!!! You could have bought in 2002 and didn't? Thats crazy.

Every single house price survey for the last 5 years has shown an increase, at what point did you wake up and think, hold on a minute these surveys might be right!

It's never a good time to buy a house.

You say it yourself - it is easy with hindsight.

And the question he asks is about buying now. He's not asking people who think they are better than him to evaluate his decisions since 2002.

In my opinion, there are times its a good time to buy a home - now is probably not one of them. But who knows for sure? No one.

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We have been thinking about buying a flat in London since 2002, but thought we would wait for the crash. We have waited 5 years for the predicted a crash, and what happened in the meantime? Property prices went up.

Therefore I can't help but feel , as we are entering 2007, that hopes for a crash are just wishful thinking on our part. Perhaps it is time for us to face reality.

I can afford to get on the property ladder now (nothing fancy, just a 2 bed flat). Bearing in mind that I am talking about the London market, I think it makes sense to buy for the following reasons:

1) Property prices are not going to rise at levels they have in the past. However there will be increases (albeit small , 0.6% per month, 7% p.a).

2) More immigrants are arriving and (surprisingly!) buying property. Our landlord recently sent a Bulgarian builder to fix a door at our rented flat and he had just purchased his own flat. Here we are dawdling for 5 years on whether to buy or not. This guy just walks in and takes the plunge. Stupid, I think not.

3) For the mediwum term, there will continue to be more demand than supply in London, especially with the EU now extended to Eastern Europe. Not all eastern Europeans do low level jobs, there a fair number of professionals too, and they are jumping on the property ladder, even if it only means a one bed flat.

4)Historically, housing prices have never crashed/fallen in an Olympic city. Gains are actually the norm.

As much as I would *love* to believe that there will be a crash, I think I need to stop kidding myself and buy now.

If you think you should buy then go and buy.

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Shelton Street, realtively quiet, very little pedestrian traffic, and light vehicle traffic.

I think the thing is, if it has been two bigger beds, and a separate kitchen, and the living area wider than 3 metres, I would have been happy to take the risk.

The property is one of those in the list of properties to buy I just posted earlier in this thread. There are a bunch in the 'new warehouse development'. I was looking at the 700k 4th floor one at the front, the smallest, but with the most natural light, and better south facing view.

Incidentally, I see the larger one on the same floor, previously advertised last november for 850k, is now being shown as 'new' for 825k...

Scandalous. Not bragging, but for comparison I got 3 a bed, 2 bathroom period flat in prime central London in Dec 05 for half the price of the flat you were looking at. With s/freehold and 1000sq ft, I thought I could live with giving it a lick of paint. You did well to walk away. Putney is a very fine part of the world to settle for a while, as I'm sure you already know.

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