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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Original poster

To think that the London property market has reached its peak and it would be better to defer buying for a few years?

34 replies

wildswans · 17/05/2014 21:48

We were hoping to buy a 'crash pad' - nothing fancy, it would just make life easier for us because DH works long hours as a lawyer in central London and would save on commuting. I had thought that this might be a bit unrealistic, given the current descriptions in the media of shortage of homes/a feeding frenzy/sealed bids etc. But no, there are loads of properties for sale, some at semi-reasonable prices (with a bit of flexibility), in zone 1, and a significant amount have dropped their prices.

I haven't dipped a toe in the water yet - I am just at the looking stage - but was just wondering if that was also the impression of others who are looking to buy now. Sometimes, it's hard to distinguish reality from the media hype! It's such a big commitment that it's hard to know what to do for the best.

OP posts:
AElfgifu · 17/05/2014 21:50

Depends where you look and what you want. The differences in price between similar properties half a mile apart can be astounding.

WooWooOwl · 17/05/2014 21:56

I don't have any expert advice, but I don't think property prices are ever going to drop to a level that it would make putting off buying worthwhile. If you can do it, do it now.

Prices might stagnate, but there will always be more demand than supply in London in our lifetime.

SuperSophie · 17/05/2014 21:57

Seriously, would anyone in their right mind invest hundreds of thousands of pounds on the advice of a few complete strangers from Mumsnet?

If your husband's a lawyer in central London, he knows lots of people who are well-qualified to advise him on this subject.

End of thread.

(but it won't be)

Original poster
wildswans · 17/05/2014 22:02

Thanks Sophie, but my husband is a lawyer not an EA, so not sure why you think he has lots of people to advise him. People on MN who are also looking to buy at this time - when everything is uncertain (as I see it), are well qualified to express an opinion, based on personal experience.

OP posts:
WooWooOwl · 17/05/2014 22:07

Even people formally qualified to give advice can only give an opinion on a situation like this.

CraicWhore · 17/05/2014 22:14

My husband and I have been having this conversation today. We came to the conclusion that while the market may 'slow' it is extremely unlikely that we would find ourselves in negative equity so we should buy now.

Changebagsandgladrags · 17/05/2014 22:14

I think there are some good deals to be had if you have the cash. Lots of building in the Pimlico/Victoria/westminster area that means there will be competition for buyers.

But in the average family home type of place or FTB, no I think it's still a sellers market.

londonrach · 17/05/2014 22:15

I think it's over priced at moment but fir some reason the prices keep going up. Know a lot of people are now struggling to afford rent and mortgages but weather they effect the market I don't know. We getting a lot of people from France and other European countries moving to my part of London as it's seen as safer than Paris etc. I do know done of the estate agents are muttering about peak now but it's london and who knows what going to happen. My uncle lived in London in the 1980s and says people forgotten that prices fall and rise. I think you need a little crystal ball.... Good luck

LaurieFairyCake · 17/05/2014 22:15

How are they cheap? Confused

It's 300k for a studio in zone 1. Have you found some bargains I've missed Grin

londonrach · 17/05/2014 22:17

Sorry my tablet auto corrected a lot.

FamiliesShareGerms · 17/05/2014 22:18

What are the circumstances that would lead the Londin market to crash, and how likely are they to arise? If you can confidently answer both those Qs you can predict the future housing market..,

FraidyCat · 17/05/2014 23:06

There is an article on the Telegraph quoting OECD saying UK house prices are 30% overpriced. Since London is up a lot since 2007 and the rest of the country is apparently down, I suppose that means London is a lot more than 30% overpriced. I doubt anyone can predict if or when London will stop being overpriced.

www.telegraph.co.uk/finance/personalfinance/houseprices/10827469/House-prices-countries-with-the-cheapest-and-most-expensive-property-markets.html

Another Telegraph article showing the difference between London and the rest of the country.

www.telegraph.co.uk/finance/personalfinance/houseprices/10812771/House-price-heatmap-its-still-winter-in-the-regions.html

Maybe rent?

gregsageek · 17/05/2014 23:07

I own a flat in a nice part of London (Zone 2) which I rent out, and the tenants are just leaving now. According to the estate agents, the rental market is relatively slow, because lots of professional buyers have bought all the (particularly 2 bed) flats, and so there is a glut of them. On the flip side of this coin, there are very few flats to buy, so the prices to buy are going up. Also, of course, interest rates are so low. I am thinking about selling my flat in a year or so, but definitely not now, as I think I will get a lot more in a year. Once interest rates start to rise, this will clearly have an effect, but how much or how quickly is anyone's guess. I would also say that, when we went to sell our house in 2007, this was when the market turned, and it literally did so over a fortnight. Overall, I don't think you will do yourself a favour by waiting to buy in Central London - if you can afford it, and are happy with the price, I would do it now.

AgaPanthers · 17/05/2014 23:34

London prices generally are fucking insane. My parents are selling my grandma's house, near a dual carriageway, a nondescript suburb, dated 3 bed terrace, and apparently it might go for £500k. Who the fuck has that kind of money to live in a bog standard terrace? Certainly not most of the neighbours.

As for central London itself, it was ludicrous years ago, now it's just insane.

The fact is that you can rent lovely apartments in very prime central locations for barely pennies on the pound. Supply far exceeds demand. The sales market is one for the greater fool.

CogitoErgoSometimes · 17/05/2014 23:36

YABU... If I had a tenner for every time I'd heard someone say that house prices had peaked I'd be minted. Local buyers may be a bit thin on the ground but there is a brisk trade from overseas buyers

fluffymouse · 18/05/2014 00:07

When you say reasonably priced what do you mean? That term is open to interpretation.

People have been saying the market has reached its peak in London for years. As some parts of London have gone up 25% in the past year I bet they are regretting not buying. London has so many foreign investors that prices will remain high.

Original poster
wildswans · 18/05/2014 07:04

Thanks for your replies. I was hoping to come within a budget of £600k, but if we could buy for less, then so much the better. Ideally a one bedder, although I have seen some 2 bedders in N1 just within budget - some are ex LA, but then so is the Barbican! I would prefer zone 1 - ideally WC1 or W2 - WC2 would be marvellous but probably out of budget.

I am afraid that I am old enough to have witnessed the 1989 crash in London, so people are naïve if they think it can't happen again. We bought just after we got married and paid a mortgage at high rates for a number of years and then sold at a loss - we were trading up, so it meant that it was easier to find a house that we could afford, although we had to find a 100% mortgage (you could find them in those days). The market was as it is now - a feeding frenzy, a sure fire bet, prices could only increase - and then it crashed, almost overnight.

I don't claim to be an expert but the prices of houses in relation to earnings are unsustainable. I am not talking about Chelsea and Holland Park, which are indeed a different market, but I just don't believe that the oligarchs want to live in Walthamstow or even Stoke Newington.
The signs are that the market is cooling, but I don't know whether to buy now or in a few years - I don't need to buy now, although I probably would if I found the right property. However, I would not be prepared to go to an open day, enter into a bidding war, or go to sealed bids. It's mad!

OP posts:
ilovejesus · 18/05/2014 07:19

Everything were looking at has gone up in price by at least a couple of hundred thousand in the last few months. I can only hope it goes down again.

Laquitar · 18/05/2014 10:20

The oligarchs might not want to buy in Walthamstow or Stokey but if they buy in Islington, Highbury, Hagerston, Eadt End, then the more ordinary folks move to Walthamstow etc then these areas become unaffortable too.
It is getting worst and worst. In every area. I dont see the prices going down in the near future.

gamerwidow · 18/05/2014 10:33

I would hold off. I personally think the whole country is on a housing bubble which will burst the second interest rates go up.

AgaPanthers · 18/05/2014 10:53

Why the fuck would an oligarch want to live in Hagerston?

P

NinetyNinePercentTroll · 18/05/2014 11:02

People have been saying the same thing as the OP for years. Prices have seemingly kept climbing in London (which has a market of its own and is not representative of the UK market in general). If they'd have bought years back rather than procrastinating, they'd be ok. That flat they could just about afford in 2004 has now shot out of their price range and they are 2 steps behind where they were originally, trying to outwit the market.

Sallyingforth · 18/05/2014 11:22

Anyone buying now had better have a plan in place for when interest rates go up. That's when it will get really interesting.

Nancy66 · 18/05/2014 11:41

I can see prices freezing or slowing down from next year. I don't see them dropping though. there's too much money in London for that to happen.

Laquitar · 18/05/2014 12:23

Aga
their children do. In those lux penthouses and apartments. Aparently it is 'cool' area with 'cool' developments, close to the city.