Thoughts about London property post Brexit?

[Felina]

I dont want to jump in the grave of anyone who will be adversely affected by Brexit, and there will be many. But thinking selfishly of my own situation, I would love to move back to London in a year or two with my DH. He has a life limiting illness and we are currently in a Hertfordshire backwater (albeit with 30 minute direct train to central London, but being ex-Londoners it is feeling more and more of a backwater as our DCs grow older and fly the nest).
We have always felt we would never afford to move back to London but now we realise we only need a 2 bedroom flat, and there seem to be properties in zone 1 or 2 on sale at the moment for a similar price to our larger house out here in Herts.

Now is not quite the right time, but if it was, I think we would jump at the chance. Obviously we would have to sell our house first, which could take ages. Another 2 years would be the right time. It would be good to be close to big hospitals and have less of a sense of isolation especially for my DH. He has friends in london and so do I.

Am I being unrealistic to hope that maybe this trend will continue and in a couple of years it might still be possible or even more doable? Or is now the window of opportunity (in which case it won't happen as the timing is wrong).

Obviously no one knows! It's all in the lap of the gods and I wish the referendum had NEVER even happened. But can I just ask for anyone's feelings on this? I'm turning it over and over in my mind and theres no one to talk to about it in real life.

Prices may plunge where you are too.

Yes indeed they may well.

At the moment however, they haven't in comparison to London. Hence my post about this being a window of opportunity right now

I've been a home owner in London through two property slumps and unfortunately I think it's impossible to predict durations. During the first slump around 1990 we were actually in negative equity for a couple of years before prices increased sharply post 1993. During the financial crash in 2009 we sold at the bottom of the market at the beginning of the year and made a small profit, but by the end of the prices had rebounded and you could practically see them going up week by week. We were out priced on properties we had viewed in the summer by the time winter came around
If I had to make a prediction I would say that the soft London Market will be quite shortlived as it is mostly caused by uncertainty. Once something has actually happened with Brexit then I think prices el will start to stabilise and ultimately rise again

PuppyLucky I think actually that makes sense. It's the uncertainty.

I'm in a similar situation to you but haven't needed to sell our Hertfordshire house (also on a 30 min train to London) to buy in London. This is just as well as the market is completely dead!

We are buying in z2 North London and the prices for 2 beds has dropped a little, and there's quite a lot on the market due to new builds so people have to price competitively to sell.

On a different note, my parents have swapped their 5 bed Herts house for a large flat in z2 and are loving it! Free travel, lots of free museums to do, parks, volunteering opportunities.

I don’t see a huge reduction coming, but if you’re selling a house to move to a flat that’s doable.
I bought a two bed in Fulham for £660k just before stamp duty change in 2016, I put £40k into it and I’ve just had it valued at £675k, so lower than I paid taking into account improvements and well lower if you add the stamp duty. However the agents said if I could I should rent it then sell in a couple years time, when they expect I’d get my money back - so not a huge increase but I’d break even. As I let it for £25k a year still a good investment.
I think there are always dips and stalls but the market is forever increasing. An ex council house in Putney I bought for £145k in 1999, sold two years later for £240k, now see those houses selling for £600k+.

Does Herts HAVE backwaters? Especially one with a 30 min train to London?

Yes the fact that we are downsizing considerably (size wise not price wise) will always be in our favour.

Yes it's a back water to me! Nothing going on, I'm not into the life anymore. No diversity. People think they're better than they are. I miss the anonymity of London and the feeling that I'm a few tube stops away from home rather than a few tube stops then change at a major London terminal.

Will you need a mortgage or would you be buying outright? Do you have civil service jobs or onesexposed to Brexit/economic turmoil?

Lived through the Irish property crash and a few points apply. One, when prices tumble they do so more at the high end, but anyone who can avoid selling does. Two, banks get really wary about lending in a market which is going down so unless your credentials are impeccable you may struggle to get a mortgage. Three, properties in good locations hold their value the most.

So, given many people in Hertfordshire commuter towns are just there because they can't afford to be in London, you'd expect that those towns would see more of a drop than London prices. Equally it may be that lots of people who would have bought two beds in London will now hold out for three beds and that class of property will fall more.

Not a direct comparator, but in Dublin one bed apartments that people bought to get 'on the ladder' dropped like a stone. I think the only sensible advice is think about your ideal outcome, your worst case scenario and don't try to play the market. If your priority is being in London and there's a point where you know you could afford the repayments then don't hold out thinking you'll find the sweet spot; the exact point at which I thought 'god that's actually affordable' proved to be the bottom of the market.

Will you need a mortgage or would you be buying outright? Buying outright. We will do a "straight swap" (minus sunstantial moving costs of course).
Do you have civil service jobs or onesexposed to Brexit/economic turmoil? No definitely not.

Your experience of the Dublin market is interesting, especially the point that when you felt in your gut that it was affordable did turn out to be the bottom of the market.

We are trying to do the opposite, swap a two bed in London for a family home a bit further out.

The house will probably cost a bit more so I'm hoping for an even price fall across both categories.

Me and DH have both quit the Civil Service for private sector work this year so I'm hoping no deal hurts the property market more than the jobs market.

Winebottle perhaps we should swap!
I hope jobs aren't affected. I have 3 DCs who will soon be in the jobs market and I'm worried about the future for them. It's a very uncertain and worrying time.

Personally I think regardless of Brexit we are in for yrs of slow growth. The market started to slow due to the tighter lending criteria introduced after 2008. It has loosened up somewhat however people are wary because of Brexit & stamp duty. A lot of the market has been driven by huge growth over the last 10 years however a lot of areas have now gentrified in terms of prices so the bottom rung is now much higher & it’s harder to make these fast gains.
Plus I think young people/young families will be drawn to other cities & with the rise in remote working & tech industry there will be fewer who “need” to work & live in London.
If interest rates do rise then that could cause some falls particularly in the new build flat market but I don’t know if they will rise for yrs.

Uncertainty is affecting the market atm with people that dont have to move sitting tight

Some Ea s that I speak to believe there is a pent up demand that will cause a rise, if and a big if Brexit happens either way as people may know what they are faced with

A bit of certainty (confidence ) and the still chronic shortage in supply should push the market back up in the mid term

I think that rising prices in recent years have been fuelled by the Help to Buy scheme. In the next few years there will be increasing numbers of people who will need to pay off these loans. Many will be expecting to remortgage to be able to do this. If house prices don't rise enough for them to do this (for whatever reason) and/or interest rates have risen significantly, then I think there could be some real problems with the housing market in some areas.

I heard that if inflation starts happening then interest rates will rise but I'm no economist and don't even understand those implications.

Just a straight swap of properties in order to ensure as good a quality of life as possible in old(er) age is what I want, no desire to use property as a way to make a quick buck here. Although of course i would want the DCs to benefit from sale of said property once we pop our clogs.

If we stay put we will be rattling around in a house way too big for our needs and I don't want that. I've seen my parents and inlaws remaining in massive houses in case "people come to stay" but all they do is accumulate junk, and limit the number of large family houses on the market for people who really need them, that is, families with young children. I don't want a big garden anymore, it's too much bother. I would love a terrace/balcony/courtyard with a few container plants to tend, like I had when I lived in London pre-DCs. Sorry, rambling!!

There are thousands of very bog standard homes in zones 3 & further that now cost at least a million. It’s one thing if you bought in the 80s for 50k. It’s one thing if you got on the ladder in the 90s & have 600k equity. It’s one thing if you bought in the early 00s & have a lifetime tracker mortgage. It’s another thing if your relying mainly on earnings to pay such a big mortgage. Plus even for those who can afford it they may want more space, parking & a bigger garden. I don’t see how it’s sustainable personally.

It says in the paper today (Sunday Times) that the fall of the £pound means property here is now more affordable for foreign house hunters. Also, that there may be a bounce after brexit and another bounce if BJ reduces stamp duty. That second point was an anecdote from an estate agent though, and they're always talking the property market up.