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

[wildswans]

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.

We bought a 2 bed in NW1 on your budget a couple of years ago, so if you're happy with a 1 bed then although prices have risen, I think you should be able to find something within your budget in zone 1. If you're prepared to consider ex-LA, there are blocks around Covent Garden and Euston Sq which sometimes have flats come up for sale.

E.g. www.rightmove.co.uk/property-for-sale/property-46296059.html

I'd say that the market does seem to have cooled a bit within the past month - lots of very high asking prices on RM were crazy but have dropped after a couple of weeks. For us, we're happy to stay where we are for at least 10 years, so even if prices drop then it's not an issue. DH has had a pay rise and I will be earning more in the next few years, so we'd be comfortable with an interest rate rise. I'd be more wary of buying now if you know your income might drop (e.g. going on mat leave or retraining) or if you intend to start/expand your family. We only have one ds but a lot of friends are finding themselves stuck by having a second child, we don't want to put ourselves in that position but it seems to be a priority for some.

Not sure about reaching it's peak yet. But it won't be sustained. I would imagine that the current warnings about a bubble are worth listening to. If interest rates go up even by a small amount a lot of people will be in deep trouble. Hence the determination to keep interest rates as low as possible.

its

I bought a London flat in 1989 and sold it for the same price in 1998. (So at a loss after inflation.) For nearly ten years I live with the risk that if I were out of work I wouldn't be able to pay the mortgage, be forced to sell at the worst possible time, and then have a huge debt hanging over my head, or be forced into bankruptcy.

I would be terrified of buying in London now, if I were depending on a job to pay the mortgage. If I were a cash buyer I'd merely be afraid that about a third of my investment might go up in smoke overnight.

The market is overheated now, it will change when interest rates start to go up.

I think you have to look long term. This may be a bubble and it may burst but are you likely to ride the bubble out and keep the flat long term? I would factor in a sensible rate rise and then look at the rental. Would you be able to cover the mortgage with rent if need be? I know its a crash pad but things change. You need to see if it could pay for itself if need be. Alternatively look for a 2 bed and a lodger. I personaly think property is a good ling term investment, especially London property.

That's sensible advice thanks Woodpecker. I personally think that the market will not carry on rising, especially after interest rates go up, but it will probably be a 'soft landing'. I want to buy on a long term basis, as I envisage my DC will need to be in London - at least for a while - when they graduate in the next 2-3 years - but I don't want to pay over the odds. As someone up thread said, I could do with a crystal ball really!

I don't think central London will crash. It's the so-called up and coming areas you need to watch.

I definitely think it will cool a bit when interest rates go up, esp if Help to Buy is reigned back (you should compare £600k with £650k properties if poss, as the cap on Help to Buy is £600 so may have an impact).