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?

@malylis

Crouch End to Oxford Circus is about 20 mins. w7 bus then viccy line 5 stops.

Malylis wants us to agree that transport and services are as good in the suburbs as it is in the surrounding boroughs of C London like Hackney, Haringey, Islington, Camden, Southwark, etc but it just isn't true. Even my son's autism peer group would not exist as in you can only be part of it if you live in one of 5 boroughs. Enfield autistic kids have very little outside schools and I would have to take him everywhere.

@Oliversmumsarmy

Perhaps as part of my rent but I don't have to shell out for it on top of my mortgage either as an extra monthly bill or total price. Same for windows, plumbing etc. I really don't believe in stretching to buy. I've seen too many people inclusing friends of mine have to grow up in poverty so their parents could pay their mortgage. Doesn't make sense to me

Ha in what world does the W7 take 20 mins? At 3 am? Nope even in a car during the day it will take you half an hour. You really don't know what you are talking about

Transport links outside if z 1 to 3 are fine, depending on where you are, transport links in z3 and 4 can be sketchy, depending on where you are. Wilesden Green to Marble Arch is half an hour, its 40 mins from Enfield town. Dalston is the same, Stoke Newington ? Takes even longer.

Southwark? Oh aye Dulwich is really well connected, not.

You don't really know London

You dont

Btw coming down the Stroud Green road can take 15 mins alone.

Crouch End isn't well connected.

I used to find Crouch End, while a lovely place, a nightmare for transport when I lived there a few years ago. No tube station = bus to station and stuck in traffic. Mainline rail station (ironically on one of the mentioned Enfield lines) terribly unreliable, trains cancelled constantly. Lots of steps at the stations= difficult for pushchairs. So although theoretically I lived closer to central I find it easier to get there now I live further out. I also dislike the noise pollution of the inner zones.
Having said that it's also a lovely place to live with nice apartments and woodland but out of my reach for buying, if renting there works for you as it did for me for many pre-mummy years @GailCindy , it's the right choice for you and your family.
It's all about priorities and I wanted easy access to London, the security of owning and a less urban area so 10 or 15 minutes extra on the train doesn't bother me. My area is still expensive just more accessible and more choice for those on 'normal' salaries. Whatever that means in London

GailCindy

You do realise that rents are more expensive than a mortgage repayments.

A friend who walked into a council house at age 18 has (apart from a period of time in the early 90s) always paid more rent than we have mortgage.

At one point my mortgage was just over £200 per month. She pays £850

I have also only used a plumber when something has gone wrong and that is covered under my house insurance policy.

Even my boiler is insured.

I have never in 40+ years of home ownership had a huge maintenance bill that I was responsible to pay for

@Oliversmunsarmy then you are lucky. One of my friends' needed a new roof for her house. That wasn't cheap...

Needing a new roof, again I have in the past (early 80s) argued with the insurance company that they are liable for the interior and if I left it they would end up paying out more and have asked them and got a contribution.

It also depends on how long your friend has lived in the house

If it is for a short period of time then surely the surveyor would have picked up on the roof needing doing

If she has been there a long time then yes she might be needing to pay for a new roof but probably doesn’t have any mortgage to pay and can probably get a loan to make the payments more manageable

Surveyors just shrug their shoulders if you find something after you moved into a property. Friend had a full survey, over a grand. Moved in the place was riddled with damp. No recourse.

I doubt you’d get a contribution now for a new roof, more likely to put your premium up because youve hinted you’re not intending to maintain your property.

what happens to working people who rent after they retire? The only people I know here in rhe northwest are all home owners, apart from from a couple who have been in social housing all their lives.

How do retired people pay for their accommodation costs if they’re no longer earning the salary to cover expensive rent? Pension income is usually quite a small amount compared to a working salary. Renting in London is really expensive but there are plenty of other areas in the country where monthly rental is way more than a monthly mortgage payment would have been. If you’ve bought you have usually paid off your mortgage by the time you retire. Housing costs are not even a factor, except for maintenance costs. So most people can manage on a much smaller pension income.

How are all the renters going to cover their rent in retirement, possibly for years and years?

The only retired people I know are home owners.

Londoners do get London weighting in many jobs - I know it's not much, but it's something. I used to live in Bristol many years ago. We had a 2 bed victorian terrace. We sold it for £33k (It was 25 years ago!). That same house is now £330k. It went up £100k IN ONE YEAR!! The problem in the wages in Bristol (and insert any other town outside of the SE) are waaay behind, so more people move further and further out and have to commute in - in fact within months of the news that the severn bridge tolls were gong the house prices with an hour of Bristol had quadrupled. It's not just London, although that is the extreme.

Some people have weird ideas about zones 5-6... I am in zone 5 and can walk to more stuff than I was able to in zone 2, eg shops, restaurants, cinema, gyms, library, swimming pool, tennis clubs, rugby, cricket, climbing centre, golf course, parks and playgrounds as well as the countryside. You really don’t need a car in many parts of outer London.

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?

As above, we’re in outer London. We’ve got equity/are well off. We really like it here as you can still have a massive house in 0.5-1 acre+, green belt countryside is a 10-15min walk away, stunning hills for hiking/mountain biking are a 20 min drive and it’s only 1h drive to the beach. Loads of amenities, central London under 30mins for culture and entertainment, best schools in the country easily accessible.
Not sure why you’d want to live elsewhere.

On the other hand renting in London suddenly looks like really good value. Imagine letting someone live in you £1million property for on £3k a month!

How are all the renters going to cover their rent in retirement, possibly for years and years?

Housing benefit and pension credit.

So how is the country going to afford all those extra benefit payments, then?

Same as it does now, I guess.

No, if the number of retired renters is going to increase massively compared to what it is now then the cost of all the extra benefit over years amongst so many extra households is going to be unsustainable. It’s the younger generations who would take the tax hit.

it’s not even just the covering of the rent with the extra housing benefit. Many pensioners sell their homes to pay for their nursing home costs. So this will also be an increased extra burden on the tax payer, as well as the housing benefit of the slightly younger people well enough to stay in their own homes.

A higher number of retired home owners is advantageous to the tax paying population. They are paying for their own accommodation. Paying out rent costs for years and years to private landlords just lines the pockets of wealthy people who no doubt will do all they can to minimise the tax they pay.

If you have a social conscience most people prefer to pay for their own expenses in life and prefer to have benefits going towards the most vulnerable. I do not think it is a good idea AT ALL to widen the definition of “vulnerable” to mean most of the retired population, simply because they can’t afford to pay for their own housing cost out of their pension income.

@JoJoSM2 my experience of outer London is similar, it's absolutely the best of both worlds.

In London it’s always felt like a balance between proximity to centre and space. Since having dc anyway. We’ve got a house as big as we need as close in as possible. Would love to be in further but you can more than double price each time you skip a zone.

Some people have weird ideas about zones 5-6... I am in zone 5 and can walk to more stuff than I was able to in zone 2,

No one said anything about not been able to walk to amenities in zone 5, it entirely depends on what amenities you want. You can't compare Sutton high street to Northcote road, Lordship Lane, Tooting high street, Brixton village, Wimbledon high street, in terms of buzz for example. I would travel to all of the above to meet friends, go for food, have a drink, see a film, do a spot of shopping. I wouldn't travel to Sutton for that.

You really don’t need a car in many parts of outer London.

Again dependent upon the area.

Not sure why you’d want to live elsewhere.

Well since the house prices are still relatively affordable in your part of the world I say a fair few people don't want to.

I don't want to offend anyone but I think the insistence that you should be happy to live in outer zones as they are great, blah, blah is weird.

in 0.5-1 acre+, green belt countryside is a 10-15min walk away, stunning hills for hiking/mountain biking are a 20 min drive and it’s only 1h drive to the beach. Loads of amenities, central London under 30mins for culture and entertainment, best schools in the country easily accessible.

Are you an estate agent as this sounds like it's lifted from property pages?

Where I live wouldn't suit many people but I couldn't give a shite as it's about my needs. I'm happy with my choice & don't need to sell it!

@gigiblanks

Yes, a couple of people said that you’d need a car in outer London. Which you don’t.

Other than that, I was answering the OP’s question about why we’re happy where we are and have no intention of moving elsewhere.

If inner London suits you better, then that’s fine. I live in an area where house prices are well into 7 figures so clearly we are here out choice not because we could afford a house elsewhere (but yes, Sutton has the full spectrum of property prices).

Not really London specifically but house price related.

I’ve not read the full thing but a few pages ago someone said nowadays young people instantly want a family home rather than getting on the ladder with a one bed flat, then trading up a few years later, repeat etc.

I was convinced by my parents that the traditional way was the way to do it so 2 yrs ago we bought a small 2 bed with the intention of trading up later. Then literally weeks later they scrapped stamp duty for first time buyers so now people I know are just saving a bit longer and stretching themselves on borrowing to go straight for the 3 bed semi and never paying SD and I don’t blame them tbh.

I don’t think we will end up any better off for having started small once moving costs and stamp duty are taken into account.