To think London house prices are unjustifiably high

[Alanis126]

I was recently visiting London, where I once lived. It was a big big struggle financially and I wasn't sorry to leave. House prices have been stratospheric for 20 plus years and while there have been some small declines in recent years, I saw a central and fairly nice but ordinary sized flat which cost £1m. There are of course many properties costing way more. There are a couple of things in particular that I don't get. Forgetting the £1m central flats, even a very ordinary property in a quiet zone 5/6 area without much in the way of social amenities was £400k plus. While some people have family money, I think it is fair to say most people start their working lives with no or negative net worth. For many the early/mid twenties will be the lowest point if their income and when they most would like to or benefit from having access to social amenities. When even rent in a grotty house share is £800 plus bills, I don't see how it becomes feasible to live while you are trying to build a career. I know there are other cities but what if you have a job in an industry only existing in London? If houses are £2m or £3m then does it matter anymore what the price is? Could they be worth £5m, £10m,£150m? And while I accept people may still choose a London lifestyle, if someone has London equity and doesn't enjoy their job, is it only fear of being priced out for good that stops them relocating and having a total change of lifestyle?

""A good few people around my area live in very overcrowded accommodation that they shouldn't be in (sublet for example) which makes it affordable"*

There are licensing schemes for hmos (I think these can vary between boroughs? not sure) - it would be interesting to know how effective these are in preventing overcrowding, and how many hmo landlords do and don't register.

From Enfield you could easily go to Enfield Chase or Southgate, or Enfield lock and change at Tottenham Hale.

But hey, again compromise, lots of people who can't afford to buy where they rent aren't willing to do that and throw up significant barriers like you do.

If you live in FP and the under ground goes down then the OG and busses are going to be rammed, so we are back to the original problem you identified with other areas.

Again though, FP was affordable 10 years ago if you bought smaller ex council property which .any MN netters wouldn't abide, oh and 10 years ago FP would have been "grim".

It's bonkers money where I live to rent and buy. We pay £2k for a 2 bed. I don't want to spend all my 20s and 30s living in a crap flat in an area I don't like. Would love to buy but it would be £600k upwards, I just had a baby so not at full earning and there's no way we could get a mortgage even if we could save 60k deposit. Id rather keep living somewhere nice and rent next to a great primary school to get my little boy in then hopefully buy in my mid 30s

Just noticed is 25% share

www.rightmove.co.uk/property-for-sale/property-75715357.html

@malylis

I don't think you know how far apart those places are or how busy they already are with suburban commuters. I actually know people who have tried what you are saying and nearly got sacked for it.

My ex lived in FP, if one line goes down, you are fine because of all the other possibilities including Manor House.

But this is nice in Woolwich www.rightmove.co.uk/property-for-sale/property-70849702.html

I'm very aware of where those places are. If you usually get the Enfield Town station line then Southgate and Enfield Chase are easily reached by a walking ( Chase is a max 15 min walk) or by any number of busses.

If you use the Soutbury/Turkey St line then Enfield Lock and Ponders end are easily accessible.

I know people who live in Enfield very well and they manage just fine.

If both lines at FP are off Manor House won't do you much good. If only one is off the entire station is rammed.

It does say cash buyers only though - not clear why from the details.

So there you go, this is exactly what I said about London and especially MN types who whinge about it. You can't afford to live where you want, (which is always essentially z 1 to 2) and throw all sorts of barriers up without really investigating possibilities.

You'll be renting a while, whilst those who make compromises will end up with all that nice equity.

The median property price in London is £472k.

I’m in one of the cheaper boroughs where 1-2 bed flats start from 200-250k so they are within reach of lower paid professionals such as teachers or architects.

People in genuinely low paid jobs, like shop assistants or nursery nurses need to rely on social housing or HB.

Although this is slightly off topic, it is related. The point being that it is very expensive to move. And I mean both trading up and trading down. I am recently retired and my DC have moved out and have their own place. This means I should be able to downsize, but the costs of moving mean this is unlikely to happen. I live in a 3 bed semi, but when you add in stamp duty, solicitor fees, estate agent fees, removal fees, and then probably the cost and effort of redecorating, possibly have to change furniture and put in a second toilet, etc. Then moving becomes too expensive.
Similarly, those who live in a 2 bed house, will find it cheaper to extend, thus reducing the availability of smaller houses, which are suitable for first time buyers (as well as those like me, who wish to trade down.
It is noticeable how many 2 bed houses and bungalows have been extended.

@Lostatsea1988, sorry I was unable to return to this thread until this evening. Having the talent to get to university and get on a graduate scheme is still a privilege. It doesn’t mean you haven’t worked hard, but some people will never be able to manage a degree and then a grad scheme in what sounds a high paying field. If the 1988 refers to your date of birth you are also still young at 31. Appreciate I may have this wrong. Moving to London and living in a grotty room for a few months before starting a well paid grad scheme is not clawing your way from the bottom.

You say you had to move away to start your career and now will be in a position soon to move back home and raise a family. Unless your family live in a place even more expensive than London (can’t be many if any places like that in the UK, presuming your parents don’t live abroad) then that is not the same position as someone born and raised in London moving away to Nottingham when they are young. Even if they earn reasonably well eventually they will never be able to return to London as they will have been massively outpriced.

It is standard for the Capital to be more expensive and commuter towns of thriving cities than other areas but the ever widening gap is creating a far too big wealth gap. I wouldn’t want to see a huge housing crash due to the misery of negative equity but there are so many problems - which I am too tired to detail although others here have described them well on this thread - with the inflated housing market here In the UK that I hope prices can at least slow down further. Obviously some people have done v well out of the inflated housing market but at the expense of those on lower incomes who can’t have secure housing. I don’t blame individuals for making use of the opportunities but I don’t support the current inflated housing market and the policies that produced it.

Regarding your Cornwall comment, Cornwall needs investment not young people being forced to move away. The disparity in wealth across various regions in the UK is wider than other Northern European countries and another problem.

Thank you @toomuchtroubleforme for answering my question about your son.

Maddening- that really isn’t nice not to mention it’s ugly plus says cash buyers only

People in genuinely low paid jobs, like shop assistants or nursery nurses need to rely on social housing or HB.

True. The problem is the social housing stock is reducing in London as across the UK and HB rates have been reduced since 2010 (the Local Housing Allowance was reduced by George Osborne from the median price in an area to the lowest 30% and housing benefit rates have been frozen too for the last few years) meaning there is a shortfall in HB in London and other more expensive areas.

• correction - should be ‘there is a shortfall in HB rate to rental price’

Of course the prices are insane. I’m a single mum living in zone 6, just on the South London / Surrey border. You’re looking at over 500k for a family home. I earn 44k a year which isn’t a bad salary at all but I can’t buy here on that. I’m from north wales originally and I’d move back tomorrow if it wasn’t for the fact I’ve teenage kids settled into an excellent school. I’m saving ready to purchase back in wales and I know I’ll get a 3 bed searched for 200k. Impossible here

One thing I also wonder is, those people who find the current London house prices ok, or just something you have to live with, is there a ceiling on what is acceptable? It may be unlikely but were prices to go up in the next 10 years by another 5 to 7 % a year while wage inflation remains low ypu could be talking about average London house prices being £1m and the cheapest studio flats £500k. If there is no unacceptable level of prices then is it ok if 2 bed flats cost £3m, or £15m, or £120m? Genuine question.

London prices are justified for the private sector. A newly qualified solicitor in a big law firms earns c. £40k in Bristol, £70k in London, so 75% more. I'd say comparable 2 bed flats are about 100% more (say £3-400k Redland vs £6-800k South Hampstead). BUT there are way more legal jobs in London, so it's substantially easier to get that £70k London salary: hence the price difference.

@mrsshardlake surely that’s not so much the private sector as it is only very specific professions?

Well I used figures from my profession. But I'd suspect many private sector jobs have similar weighting. Public sector obviously doesn't!

London's the capital city of a wealthy nation, of course it's expensive. I don't know what the solution is, here or anywhere else, but let's not get the idea that it's unique to London.

Definitely not a problem unique to London. Mumbai Central’s property prices are higher (as you don’t get upstairs rooms or garden usually). But Mumbai does have rental property available to suit most budgets because of shared accomodation. There’s no real stigma around single people of any age living in dorms / hostels / shared accomodation or rooms until they get married. Same applies in Hong Kong and South Korea too. Perhaps London needs a similar culture shift.

is there a ceiling on what is acceptable?

The market decides what’s acceptable.

No point speculating about some imaginary increases. Prices aren’t rising at 5% and 2018 saw some spectacular falls of up to 20% in the most expensive boroughs.