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!

What a silly question

No one can guarantee a profit on anything, shares, houses, nothing

No one can see into the future to see what’s going to happen in five years time, otherwise we would all be doing it

You just have to find somewhere you like, buy it and see what happens

I can't see 2 bed flats in those locations being £800k in 5 years time. But stranger things have happened.

@MrsColon that was 4 years ago though. Very different market now.

To be clear, it was possible to make such sums. DH and I made £215k in 3 years on a two bed in kilburn but it was a different time.

A friend is buying a London flat and it's just been downvalued by the mortgage lender (i.e. not worth the offer she made). You're not going to get a 45% increase on the current insane market prices in 5 years.

Lots of people I work with in London of all ages are moving out a bit (Kent, Essex, Surrey). Very strong expectation that most of us will only be in 2/3 days a week, and if that is the case, a longer commute is possible. This will inevitably impact flat prices in London in particular. I think your calculation on return is very optimistic. Add to this a rise in interest rates which could see more supply as people sell up. I really would not gamble on this.

Savills are forecasting a smidge over 12% uplift in London to 2025. 7%is in this year so the market looks as if it is at best stagnating.

Sorry but I think you've missed the boat with London now. Prices can't get any higher without being flat out laughable. Even people who have money to throw around have their limits. I think prices will remain stagnant or actually drop in London. I see prices rocketing the way you're hoping for in smaller cities like Sheffield.

@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!

Why do you think you’ll get 7.5% growth year on year for 5 years, in a high market with people moving out of the city for flexible working?

For the first time I could sell my zone 5 house in a non trendy area and swap it for a zone 1 flat in some areas! The different used to be crazy, I could now move to camberwell and lose a single bedroom

I had one flat on my road in the Dulwich area have that sort of uplift over a few years, but the profit wouldn't have been close to that. They:

• bought a top floor flat that was a total fixer upper
• the flat had a shared garden. I suspect upstairs paid for all the landscaping.
• did a massive loft conversion which added an office and a very large roof terrace
• everything else was renovated including adding quite a large Neptune kitchen

I think they would have made a profit, but had to spend a lot to get it.

Another one coming on and saying I don't think you will get that uplift on a flat in those areas now in that time span.

Firstly it's a relatively short time span, secondly I don't think you are in the era where it was potentially possible which was years ago and lastly I think 2 bedroom flats are not as an attractive proposition now and many leap over them straight to the 3 bed house in cheaper area.

Combine all of those factors and I don't think it's realistically achievable and I'm ex London and understand London pricing and the market.

Agree with others that it's highly unlikely for you to make the profit you want.

Buy a house, profit much more likely though I would say that you would still be extremely lucky to make that much profit in your time frame.

Our zone 2 ‘lock up & leave’ in a very desirable area (not just saying that, it has everything - the green space, vibrant shops & high st & epic transport) has gained about 25k in the last 8 years since we bought it. I’ve previously never made less than 75% increase on original purchase price on 3 London properties…..those days are sadly gone!! Best advice is buy somewhere you want to live - if you want to others will & it’s demand that’ll drive up prices…

Why don't you hope you get what you put in back and any extra is great.

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

That McDonalds is notorious. I think you can get any gear (if that’s the right term) you like in there.

And the park was a no-go area when I lived there because of the muggings.

@hotmeatymilk

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.

This.

Also, imagine the outrage if OP was asking to profiteer from housing in Cornwall.... London has locals too.

Instead of looking to profiteer from and contribute towards the public health housing and homelessness emergency (a crisis at its most acute in London) why not buy a home to live in, in an area where you want to live.

So much food for thought - Thank you all.

Absolutely agree with the old adage buy/live where you love as it has served me well up to now.

Funnily enough, I lived in Camberwell (actually it was Loughborough Jct proper..) pre-DD and even at its roughest it was calmer than the parts of south London I grew up in! Having lived all over 'sarf from Croydon to Kennington, fair to say I have a measure of this side of the river. East is a different kettle of fish altogether...research research and more research for sure (to include more purpose built options - thanks for the tip!).

The irony of selling what people leaving London are clamouring for is not lost on me and this next move is definitely a considered one that is not purely profit driven. Lots of life changes afoot and it is more about "buying well" whatever that means!

I live a bit further east than limehouse and there are so many new developments going up. From my window I can see a dozen blocks being built. People have a lot of choice with new build flats here, with all the help to buy and shared ownership incentives. I can't see the market rising too much, with this much stock coming available.

That said rents are rocketing back past pre covid levels, so who knows.

Crikey, the only place I would want to live less than Camberwell would be anywhere near Coldharbour lane!
You won’t be making any profit there any time soon
It’s going to be decades until it shakes off the Murder Mile nickname, even with Brixton Village

They’re fairly safe areas for a profit because they’re still a bit shit. But, the flat market is flagging as people realise they value space now. A property on the commuter belt is a safer bet.

Even without Covid changing the way we live and work, you've missed the boat with Limehouse and Shadwell. Limehouse has been overpriced for years and Shadwell became 'up and coming' 5 years ago so any opportunities for relatively quick gains have already happened I'm afraid.

@GertrudePerkinsPaperyThing

Camberwell may well have peaked because it was already very overpriced in 2010

Although Boris Johnson moving from Camberwell to SW1 may well have made Camberwell a little more desirable than it was pre-2019.