To expect guaranteed profit from zone 2 flat?

[nessus]

I need some input / handholding as my crystal ball is currently in for repairs...

Planning to move back into London from 'naice' Kent (west).

I'm looking for a 2 bedroom garden flat with share of freehold in zone 2 conservation areas with decent transport links.

Have my eyes on Shadwell / Camberwell / Limehouse / Brockley

Hoping to get something for 550k but could stretch to 600k

Which of these areas is the safest best i.e will most likely sell for at least 800k within 5 years?

Thoughts, links, suggestions, dissent all welcome!

Friends of mine have bought a flat in east London. It’s gone down in value post pandemic. No such thing as a guarantee at all.

What makes you interested in those areas? What sort of area are you looking for? I’m a Londoner and none of those areas would particularly appeal, but appreciate you may be after different things.

In any case, I think it would be unrealistic to expect such a big gain in 5 years - particularly on a flat. Flats are less desirable now, because of the pandemic. And a flat in a converted house, Share of Freehold situation can be a bit knotty/complicated.

Wow…. Just no! Can’t see anywhere on London making those returns. More likely to be losing that much I’d say.

What does "niace" mean?

Live where you love. For £600k you can get a 3/4 bed house in the most expensive areas of Kent. Even more for your money elsewhere.

Life is too short to be living in a dive (as I personally feel your list is) just to try to make money. Make money from a job and live somewhere nice at the same time.

I'm in Zone 2 in a much nicer area than your list - you will not get anywhere near such a profit, if any.

Just before the Brexit vote in 2016 a flat on my development sold for £700,000; recent sales of similar are under £600,000.

I’m also in a much nicer part of zone 2 than your list, and 2 bed garden flats around me go for circa £700-800k
And 5 years ago, they were going for exactly the same

Over the same time period, 4 bed houses have gone up around £100k, so there is a definite bias against flats

If there hasn’t been any uplift around here - very safe, loads of green space, on the tube and overground, v chichi high street - there sure as hell isn’t going to be any in Camberwell or Limehouse
If anything, those areas are going to suffer from the London flight

Your list is all areas that people go to because they can’t afford their first choice area. If the first choice areas are dropping in price, the ‘areas of last resort’ will fall even faster

We have a flat in zone one. The value has gone up about 20% in eight years - on paper at least. Things don't seem to be selling at all in our building at the moment.

Of those, Brockley. But I think you would be better off with a large maisonette or small house somewhere like West Norwood, Streatham.

This sort of thing -

www.rightmove.co.uk/properties/115798631

@Classicblunder

Never in a million years will that be worth £800k though

I doubt it would be worth £500k in 5 years either

And OPs motivation seems to be price uplift over anything else

[quote SW1amp]@Classicblunder

Never in a million years will that be worth £800k though

I doubt it would be worth £500k in 5 years either

And OPs motivation seems to be price uplift over anything else[/quote]
Property prices in the area have risen quite substantially in recent years - I think with the rise of WFH, leafier bits of zone 3 are a safer bet than zone 2 which is why I would pick Brockley over the other options the OP mentioned.

I agree though that nowhere is likely to see that kind of rise

Nowhere. With interest rates going up, I assume London property will be going down in price rather than up. Most of the uplift in recent years has been due to lower interest rates, so I dont see how they can go up really.

Also consider that unless you are not going to have a mortgage your actual profit is reduced by the money you pay in interest on that mortgage. Not so much in the past, maybe more in the future.

There is no guaranteed profit in property. In fact there is quite a big risk of loss. Buy what you can afford and accept it may be worth less in 5 years or may be more. Ensure it has a very long lease or is freehold, and that it has a garden.

I’m London born and bred. If I were to buy in zone 2/3, I’d go for Stratford (the E20 postcode, not E15)
I reckon it’ll be at least 15/20 years before it’s as shitty as the rest of east London.

Buy where you want to live. You can get a 2-bed non-garden ex-council flat in lovely leafy parts of zone 2 for £550K at the moment which is a bargain compared to 2018. Good luck.

My DD & partner bought a house in Camberwell in March 2021 for £800K which was originally priced at £875K. All the ones they looked at were cutting the price to get a sale

There is no way in hell you can expect to make that much money in that time frame! It might happen, but you'd be extremely lucky.

Buy where you like the area and want to live, not to make money. I think Brockley probably the safest bet out of those.

Isn't the dip meant to be coming next year...??...the end of the increase cycles...??...i lived in camberwell....hated it...busy and noisey....and mugged 3 times...in shops...!!!...that was 12 years ago.

Nicer area:

www.rightmove.co.uk/properties/115206533#/?channel=RES_BUY

www.rightmove.co.uk/properties/113308118#/?channel=RES_BUY

www.rightmove.co.uk/properties/99454844#/?channel=RES_BUY

@Egghead68

And having lived in Camberwell in the past I wouldn’t want to do so again.

Ahhh Camberwell... did you know that the bus stop outside McDonalds is the most dangerous in the UK?

One of the problems with the UK housing market is that people see their homes mainly as an investment rather than a place to live.

There are no guarantees - find something you feel comfortable in, in a place you like for a price you can comfortably afford

You have really misunderstood the supply/demand of the london property market.

There are too many two bedroom flats. They are unaffordable at current prices for the people who would want to live in them (young ftb) and the bottom have fallen out of the buy to let market due to tax changes/reduction in foreign investment.

The move to more wfh has also reduced demand for families to live in London.

You go ahead and sink 600k in camberwell (!). If you are lucky you won't lose £ for £, you probably will in real terms

One of the problems with the UK housing market is that people see their homes mainly as an investment rather than a place to live.
This. It’s obscene to think about the roof over your head as also gaining you £200k in five years.

@whosaidtha

I'd be extremely surprised you could make 200k in 5years. Seems very steep to me. Maybe 50k is more realistic

We did, in Forest Hill, but we bought in 2012 and sold in 2017.

That sounds to me like a very big expectation. If you hold on to it for 10 to 15 years probably. Five not very likely. But its anybodys guess.