The property market looks like its going to collapse and that's a good thing

[Ellreejeee]

Surely this madness is going to end soon and it will benefit the country?

Shed for sale in Somerset in someone back garden for 150k. Look at the pictures www.rightmove.co.uk/property-for-sale/property-37137567.html

London is insane, most overvalued many are saying www.bbc.co.uk/news/business-34676643

The average london house has earnt 2 pounds an hour for the last decade. And that's tax free if its your own home!

I don't know how we'd clamber onto the property ladder now

You buy in an area you can afford. It might not be zone 2.

What is the obsession with zone 2 and having everything ready to walk in to.

My first flat in London was one where the previous people had painted the windowless shower room and everything in it black. It might not have been out of the ikea catalogue but in 10 months it went from £17000 to £27000. Friend thought we were mad. The same friend who is still in rented accomodation 30 years later. I have bought a house that had shit smeared up the walls and on every available surface. Nothing that paint stripper, bleach and elbow grease didn't sort out.

Whilst a certain section of society are going to insist on holding out for their dream 2 bedder in zone 2 then another section of society are going to quite happily continue to take their rent each mont until they can afford this pipe dream.

(Just for clarity assured shorthold tenants can agree any fixed period they like with a landlord and some landlords even negotiate a 10 year term. In cities it is often the tenant not the landlord who wants a one year commitment only because they might meet a new boyfriend or get married or move for work to a different city or country. You can have as long as you pay the rent 10 or even 15 year assured shortholds).

Deo - some BTL lenders specify that they want ASTs of six months, for their benefit. So mortgaged landlords aren't totally free to negotiate longer tenancies. I've had this from Halifax and Skipton (so fairly representative of the market, I'd think).

I think it's a little unfair to say everyone who didn't buy young did so because they refused to accept a crappy flat or area. Many people keep waiting for a crash, or think of they keep saving for a few more years it will be easier to buy.

There was a location location recently where a couple had saved for 9 years to get a huge deposit but prices rose faster than they could save. They were understandably picky having saved so long plus she was pregnant. I just kept thinking if only they stopped saving at £50k and got on the ladder five years ago they would be in a much better position

20 years ago I could buy a 2 bed flat in zone 2 west Hampstead for 75k doable on graduate salary of 23k. A teacher coukd buy a small flat in kentish town and eork locally. So it s not unrealistic to expect to buy similar today in the area on a reasonable salary say 50 k. But you can't. Because the price rise is obscene.

AS previously pointed out though 20 years ago London's population had been falling for nearly half a century, house prices were still more expensive than the rest of the country.

Over the last 20 years the population of London has grown year on year, which makes the scarce resource of housing more expensive.

Really MN I shouldn't have to explain basic economics all the time. Its not a "bubble", it's basic economics higher demand than supply, price rises.

Bank of England indicated today that interest rates won't rise until 2017...

Cest
A teacher could buy a flat in Kentish Town 20 years ago because it was a total shithole that no one wanted to live in.

A teacher can still buy a flat today in somewhere like Plaistow, which is probably the current equivalent of Kentish Town back then.

But everyone seems to want the gentrified places at pre-gentrification prices.

True sparechange...when I moved into Maida Vale back in the day people said:" why on earth would you want to live there?" lots of the now posh buildings had squats in them.

Looking at a lot of young people I work with, a lot also want the same standard of housing as their parents have now, not that their parents started in.
But again... the reason why Kentish town was cheap 20 years ago is London had been suffering from a falling population, there were plenty of houses to buy in these areas, now there aren't as there is a growing population. Its fairly simple.

Even in 2017 interest rates will only go up half a % or a quarter, it will be more than a decade from now or more that we will see the base rate back at a 2006/7 level of 5% if not longer.

That then links into why pensioners are in this "triple lock" situation, their savings are going to be worth nowt.

Thought you might be interested in the latest UK house prices forecasts to 2020:

Kentish Town has gone up in the world since I bought my first flat there 19 years ago for 73k. It's so posh now that MNHQ is based there

Never believe predictions, ever..

Kentish Town is terribley lovely these days, actually half the stuff that attracted people to it at first, like the live music venues, have gone!

Lurker I think everyone understands that London is crowded and there is a squeeze on housing.

Ourblanche so Scottish islands are uninhabitable are they?

Maybe you need a lesson on the highland clearances.

The problem in Scotland is large landowners owning a ridiculous proportion of land.

I saw a programme a few years ago that attempted to explain why Londons property prices were so high compared to other cities in the uk and they then went to other countries around the world and compared the Capitol city house prices to that of other cities in the country. The conclusion was, (I can't remember the %ages exactly) that in some where like France, Germany Italy, the capitol city had 40% of the jobs, finances etc and the other 60% was shared out between the other major cities in the country. This was more or less the same in other developed countries throughout the world. London on the other hand took 80% of everything and the other 20% was shared out between the other larger uk cities like Manchester, Birmingham etc The only way it appeared to tip the balance was for the other larger cities to attract and create more jobs and wealth in their areas at the expense of London. But getting people to move out of London when all said and done was the biggest stumbling block. From the people interviewed no one wanted to upticks and go and live anywhere else.

I bought very young (I'm 50) and I did live in some crappy areas (outside of London) initially, and commuted in. It took me three or four property moves before I finally got to live somewhere I actually liked and aspired to. It also took me equally as long to get to the point where my house was furnished with brand new stuff chosen by me and not stuff that was passed on to me or bought second hand or in some way a huge compromise.

I do think young people are much more fussy and choosy these days.

If I were a FTB now i think I'd be buying in any area I could afford then renting it out for a bit while continuing to rent in London (or wherever) with a view to saving anything made on the rental income towards a bigger deposit later down the line, when I would sell the first place, hopefully have more savings and some capital gains as well.

You buy in an area you can afford. It might not be zone 2.

But this is getting further and further out of London. Junior staff at work earn decent salaries, work incredibly long hours but won't be able to afford to buy in London because prices are spiralling ever upwards. Because just what they want at the end of a 60 hour week is an hour / 90 minute commute home. And these are well-paid professionals. What about all the other people who work in London (including NHS staff / retail workers etc) who earn much less. They're buggered.

We had to buy in zone 5 30 years ago as only place could afford. I know it's hard today. my older children have bought and it's very very very difficult. y son's purchase just fell through as HS2 is going to be built in the field behind the house!

The Northern Powerhouse - attempt to ensure places like Manchester, Newcastle, Leedsm, Liverpool thrive and export manufactured goods, the move of the BBC up to Salford, HS2 are all attempts to try to solve the fact that people move to the SE for jobs. My ancestors moved to the NE for jobs (mines).

In theory the internet means many of us can work anywhere but even for me several times a week I have to be physically somewhere in the middle of London.

I don't think the property market is going to collapse in London as interest rates are staying low and we have huge increases in population. There is a very big shortage of property. My son has given up until next year as the second anything is put on the market at his price range (very low) it's snapped up.

We bought in zone 5 too. Over 10 years ago. When we sold, we had to stay in zone 5 because we needed more space, a 2 up 2 down wouldn't work anymore for a family of 4. Once you buy further out, it's hard to move in closer.

People are older when they buy their first house because it takes time to get a deposit together. This means they have less time to make all these different property moves before they start having children which really clips your wings and slows you down.

I think the Northern powerhouse is a great idea and long overdue. I hope they allocate enough funding and resources to really get it going.

We stayed here too.
The other big problem these days is massive stamp duties so moving every 2 or 3 years as you get promotions within a profession which plenty of parents in relatively high paid jobs used to do has become much harder.

I wouldn't even swap this house when I get older to a luxuty flat of the same price because I am not going to give the state loads of stamp duty. I'll stay put.

People are older when they buy their first house because it takes time to get a deposit together. This means they have less time to make all these different property moves before they start having children which really clips your wings and slows you down.

When we came to London dh and I both earned tiny amounts. I earned £1200 per year. The mortgage we were offered was virtually 1/2 the lowest cost of the tiniest studio flat. Dh and I worked as many jobs as we could, going from one job to the next to raise enough to buy the tiniest grottiest studio flat qw didn't go out, and were completely exhausted but after a year we had raised the amount we needed.
A freinds dd was talking about how she needed to earn more money but when I suggested that the local launderette was looking for someone and / or she might try the local pub as they were also short handed she was horrified.

I have moved in and out of London over the years. At one point dh was doing a 2 1/2 hour commute, running a business and studying for exams on evenings and weekends.

Those who think Zone 2 is the only place to live because otherwise you have a 90 minute commute in must have blinkers on. Dd and dh both work and go to school in central London. Dhs commute in to work, door to door, he works in the City is 45 mins and dd gets to school in 34 mins. We are not in any Zone, we live outside of London.

I was nearly 30-40 miles outside of London a few months ago looking at different areas and found a station that gets you into Central London within 25 mins, that is door to door. The houses were very very affordable, Think 4 bed houses all done up for the average price of a 1 bedder in everyones favourite Zone 2.

Yes your travel expenses are more but when you consider the cost of your extra mortgage and the fact you will need to stay in rented for that much longer it starts to look affordable.

Good point about the stamp duty Deo.

Door to door? In 25 minutes? Where to where exactly Oliversmum? We looked and never found anything like this. But it may be where my husband and I work/worked in London. Also, further out, say St Alban's with a fast train in, is also expensive. That fast train in is factored into the price, and being close enough to the station to keep the commute short also raises house prices.

Fast train from Harrow to London is about 20 mins but as you say it depends where your work is once you're in there. It has just about always been an hour door to door or 45 mins if you're lucky frmo out here in zone 5 to central London now and 30 years ago. I even remember the days of the smoking carriage on the London underground so I go back a very long way.

On stamp duty my children's father made a generous donation to one of their purchases of £10,000 - 100% of it went on stamp duty for the small starter flat in zone 2. Stamp duty should not in my view start on properties until they are about £500k and even then only be 1% on all purchase values if we have to have that tax at all.

I didn't say people had to live in zone 2 but when you're leaving work at midnight and are due back at 8/9 the following morning (on average - later nights and earlier mornings happen frequently) a 90 minute journey home isn't so great.

Stamp duty is an absolute killer. My parents first house in the 70s cost a third of what we've just spent on stamp duty.