Buying in London. Come here and share your stories

[Flowers2014]

So we are trying to buy in London and the market is crazy. Everything that we've seen has gone for 10%-20% over the asking price. Because of DP and his work we can't go too out of London which is making this whole process much harder than it needs to be. We have a good budget but in this market it's just not enough.

I'm tired by the process now so we are taking a break from it. We have until Nov to move out of out rented flat so we are going take the spring off and try again in the summer.

Anyone else in the same boat of trying to buy in London? Come share your stories with me!

I really want to see what happens when a Labour government comes in.
Or when people realise that helping your children on the mortgage ladder was the best use of your pension.

I'm convinced euthanasia will become law within 10 years just because it will make economic sense.

not was, wasn't

Not being political, just interested as to why you think Labour would change this. The Blair years were the years of the biggest housing boom (and bust under Brown for everywhere except London). Has Ed suggested he would regulate? If so, he will not be the next PM as the population, for some reason, love House Price rises.

'Not being political', but Thatcher deregulated the banks so they got into the easy mortgage game, she also started right to buy, reducing social housing stock and pushing rents up. Among other things.

Granted, Labour didn't do a lot to change it.

The worst thing she did regards North/South housing divide was decimate local industries with her obsession with competition and careless destruction of the mines and unions. If we still had industry around the country people wouldn't all be clamouring to buy in London and the benefits bill would be a lot lower.

There is nothing between the parties on the housing market is my point so holding out for a saviour if there is a change in government is probably not a strategy.

Yes I agree Spotty.

But it will change, it's just a matter of time and when it does there will be no going back. Our levels of debt are so astronomically high at some point the creative accounting will simply fail to compute. When property becomes bricks and mortar and a roof over your head again, when it holds no more value than that, we will all have the same wealth again. Those with bigger houses will simply have higher heating bills.

-Pound is down 30% which is why it is such a good investment for foreign exchange; Labour is reliant on the unions for donations and is therefore less inclined towards foreign money.

-Labour doesn't do tax cuts. The biggest jump in London property prices occurred last year just after the 50% limit was cut to 45%.

-Property lobbying brigade (Help to Buy builders etc) concentrates on Tory politicians. Check out their non-executive directors. No Labour politicians in bed with the likes of Barratt just yet, I believe.

-Labour needs a win. For the first time in two generations, more people rent than own. If your manifesto declares it will improve the rights of tenants, you suddenly have an electorate on your side.

By the way, rent yields in London are falling, not rising. You can rent a house supposedly worth £1.5m for about £700 a week now. Everyone is banking on capital growth so tenants are being subsidised by their landlords.

Pound is down 30% against what?

Since when?

Rent yields in London are due to increase, not drop.

www.savills.co.uk/research_articles/141563/174316-0

One of the properties linked above belongs to friends of mine - they previously had it on the market 18 months ago (at the same time as we sold our similar property) for £150k less (and I heard today they've accepted an offer for 30k more than asking price, making it nearly £200k more than we sold ours for). Absolute insanity. They are now moving right out of London and I don't blame them at all.

Rent yields are most definitely not falling in London!! My family owns 7 properties that are rented out all over london and all rent yields are going up and up. where do you get your info from thesaurusgirl out of interest?

I don't think this is tulip fever as the fundamentals are broadly there - low interest rates, favourable exchange rate for foreign investors etc. However it does seem to be on heat at the moment..

I can think of some scenarios which would take the heat out of the market:

• rapidly rising exchange rates which at the moment is not expected because inflation is in check
• rising unemployment (which seems unlikely)
• any change in tax policy, e.g. tax on rental property, change in tax treatment re: offsetting costs including mortgage interest against rental profits
• More punitive tax regime, e.g. landlord tax or similar.

The last two are unlikely even for a Labour manifesto as the country has become one of landlords above a certain age (probably 45+?) where people started to hold onto property rather than selling it.

I do think the market is overheated though. I recently heard of a flat for sale in a council block which after service charge would yield 3.5%. This is too low for professional buy-to-let people which suggests the market is fuelled by FTBs at the lower end.

Finally, the recent pension changes have probably not helped at all.. If people can take their entire pension fund in one lump, where will they put it? Not in equities which has had bad press, but in property. And so the cycle continues..

We live in crazily popular area of SE London where house prices have increased by 30% in a year. The rental costs however are the same as last year. We live in terraced house and the same house next door has just been let out for the exactly same rent as the rent we signed up for last year. And rents remain unchanged for other streets as well, despite extra school in the area being rated outstanding recently.

I admit I only followed rental prices for 3+ bed houses, not sure about 1 bed or 2 bed flats

I wonder if the London increases will spread further out?

Much as people keep banging on about London as the only place of employment in the future, I can't quite believe that. Just because Google have their HQ here, doesn't mean everyone will want to do that.

I've lived in London for 20 years now and I've never known anything as insane as this.

Properties in my road that go on the market get snapped up within 24 hours. No matter how greedy the EAs are in setting the price they always seem to go over and to sealed bids.

I live in an area of London where very very ordinary 3 bed terraces are going for around £1.2million.

I just have no idea where the money is coming from. It's ordinary middle class families who are buying the properties, not Russian oligarchs. Are they really earning the £400k a year that they'd need to get a mortgage (and, yes, many seem to be first time buyers.)

Nancy, where do you live? The road I grew up on used to have houses owned by teachers, engineers, a taxi driver, a photographer etc. now the houses go for over 2mil. My family home (dad bought in 1950s) was bought by a banker. Sad as 'ordinary' families are very much priced out. (This is Wimbledon btw).

we're wandsworth, so not too far away

Well the banks are offering mortgages 5x incomes plus help from the bank of mum and dad... And I'll let you do the math as to how ordinary people are stretching to million pound homes! We have been assuming 5% as a worst case scenario for interest rates and are only going for a mortgage that we are comfortable with at that level. I wonder how many people are burying their head in the sand with the possibility of rising rates and basing their purchases on current rates and what they'd be paying at the moment...

Are you sure Bambi75? Prices are rising much faster than rent, ergo yields are falling.

I read this just out of boredom curiosity (I'm off work with a throat infection!)

I knew London prices were high but I'm at how high!!

We bought a 4 bed detached newbuild house in Glasgow in 2012 for £167k!

I really feel for you all, it sounds a horrendous way to have to deal with things!

Nancy66: Many fairly ordinary (non-investment banker) professional families can afford to buy 1.5m houses simply because their current homes have inflated in value so much and low interest rates have enabled them to overpay on mortgages. They could afford their current homes because each of them previously owned a flat in London which also inflated in value. I know many people this applies to, theyre ordinary professionals, not earning mega bucks (by London standards) and not from wealthy families.

An another poster said, if you arent already part of the cycle you are unlikely to get on it (investment bankers/trust fund offspring aside).