London Prices

[SarfEasticated]

Hi all, am still languishing in a small flat in SE4, hoping against hope that someone wants to offload their gracious home for the same price as our flat - anyone know of any bargains?

I thought the prices would be due to go down soon, as interest-only mortgages aren't so easy to get, and apparently the market is 'cooling'.

What do you all think?

[RCheshire]

If you got an IO back in 2006 there's a very good chance you wouldn't be able to remortgage onto a fixed (assuming you've not paid down the capital and therefore reduced LTV) without a hefty jump in interest rate.

And no, the lack of stress testing and permitted "self cerfication" was a big part of what lead to the banks' problems

[PossumPoo]

I agree Iseen, a lot of people would like house prices to crash, but with a crash generally comes other economic factors such as mass unemployment etc. So if the houses come down, there is a possibility that there will be no one able to buy anyway!

The government need to look at cooling London, but how they do this I have no idea! HTB up to £600,000 seems ridiculous to me.

[SarfEasticated]

I have no desire to see people losing their homes or jobs, I would just like everything to be a bit more realistic.

[BillnTedsMostFeministAdventure]

Interest only mortgages may be extended in some way rather than banks shooting themselves in the foot by flooding the market.

In London, haven't most prices gone up enough since 2006 or whatever to make LTV look ok still?

[BillnTedsMostFeministAdventure]

Are you selling your flat and moving out of London? If house prices go down then won't your flat's value go down too?

[TurquoiseDress]

I live in South London and we rent a tiny flat, we have a baby who is a few months old.

We're currently saving for a deposit and the long term goal is to buy a family home. We're not in that much of a panic about buying although everyone around me seems to be!

My mother goes on at me all the time about how we're being selfish with our baby, raising him in totally unsuitable accommodation (the flat is small but it's our home!)

She doesn't seem to realise that if we were in a position to buy tomorrow then we would!

The thing that scares me, is looking at SE London prices we could barely afford a 2 bed flat in suburbia- places like Beckenham/Bromley which we don't know that well but feel would be a good place to put down roots.

A 2 bed flat would be too small- we'd like another baby in the near future if possible.

Negative equity scares me- everyone telling us just do it, prices will only go up etc...what if we're stuck in a propert in a few years time and cannot sell unless it's for a huge loss?

This is what makes us continue to rent for now- despite the relative instability and the perception that we somehow do not have a 'proper' home

Apologies for the ramble! I for one am hoping that property prices calm down a bit and become a bit more realistic.

[Stokey]

Turquoise - remember negative equity is only a problem if you want to sell.

If you can buy a 3-bedroom house so it will be big enough for your growing family, you can stay there for 10-20 years whether prices go up or down. My brother bought in 2008 just before the crash and was in negative equity for four years (and this is in north London hotspot). But he has now sold and made a tidy profit because he didn't have to sell when the market was low.

In your position, I would move further out to get a house if you can.

Judging by the state of the economy - continued quantative easing - I would say interest rates are unlikely to rise for the next year or so at least. Remember any growth we're seeing at the moment is heavily manipulated by governments pumping money into the system. Once this ceases interest rates are likely to rise, but the ECB is going to start QE today, so it may continue for some time yet.

[Stokey]

Oh and in northeast London the market is easing too.

I am hearing that prices are going for asking price rather than offers over, and are staying on the market for longer.

[LaurieFairyCake]

I think interest only is a great thing if you live in London. 'Buy' somewhere, raise your kids, sell in 25 years and you will likely have enough to buy outright in another part of the country.

25 years ago a 2 bed garden flat in Clapham was about 25k, now going for 500k plus.

And prices wouldn't need to rise like they have done (I don't believe they will) but probably still enough to walk away with enough to buy a retirement place.

[BillnTedsMostFeministAdventure]

Few mortgage deals last 25 years though, so intermediate LTV points are important for remortgaging.

[TurquoiseDress]

I think a lot of my circle of friends & acquaintances, aged early to mid thirties, have experienced only the positives of the recent property market.

Some have made an absolute killing on the increase in price in property eg friends bought their house in 2010, have just sold it making over 100k in less than 4 years.

To them it means they can move out to Kent and afford a much bigger property than they could afford in South East London.

With negative equity my OH is trying to sell his flat up North which is in NE...trying to sell without losing a shitload of cash...such a different world to London.

Yes we'd prefer to hang on and keep saving and aim to buy a 3 bed house. Although realistically we can only afford to buy a flat, it just wouldn't meet our needs.

Plus even if the value went up by x amount, everything else in the local area would have done the same.

I think if you're selling up to move out of London, these are the people who are benefitting massively from the recent boom.
Those trying to move up the ladder are struggling despite the breath taking price increases.

We're happy it makes sense to hang on with renting for now, despite seemingly everyone telling us to just get on and buy- as if it's that easy!!

[Littlepicklehead]

Hey Sarf I remember your threads from a while back and you are in a similar situation to us and in a neighbouring postcode.

We tried to move and it all fell through, we are now waiting for a decision on planning permission for an extension (touch wood we've had positive feedback so it should be fine).

Could you consider this (I.e. Are you ground floor or do you have loft space?). If you have decent equity in your property to enable you to borrow more on your mortgage it's a far cheaper way to get space and you should recoup the cost when you do sell. It's not an easy or quick process, but I feel a lot of relief that we are not paying £25k in fees and stamp duty and can reinvest that money straight back into our property.

Worth considering anyway. The market might be cooling slightly here, but the leap from 2 bed flat to 3 bed house is still too big a leap for us, especially with the new mortgage lending rules.

[unrealhousewife]

OP, what price can you pay? I'm in N. London?

Turquoise, I recommend you look for a ground floor flat with a big garden. You can extend out and build a studio for dm to sleep in!

[SquallyShowers]

Gosh, its not 'easing' at all where I am (far north, leafy suburb of London). One bed flats were 200-240k roughly in my area. There is nothing on for less than 250k this year. Since we moved here in 2007, a 4 bed semi has gone from 500-550k to nothing under 700k and most are more like 800k. Its not even a 'hotspot' area, FGS!

We were thinking of buying a one bed flat as a buy to let, with a good deposit bit still substantial mortgage, but its starting to look like that wont be possible. Prices are going up and up, its viewing day-bunfights and going above the asking price for every single decent place. Madness.

Not the same quandry as people trying to buy a family home, I know, but still...

[crazyboots]

Still crazy where we are too. We are under offer (SW London) above asking and had two asking price offers rejected in the last week for London/Surrey borders.

Properties I've noticed which are sticking are those needing a lot of work, priced as highly as those with a really nice finish. On a couple of properties, once we've added the cost of replacing bathrooms, kitchen, remodelling to make kitchen decent size, skimming artex the final cost is way way over what could be achieved for the house.

Think we're going to look further out in Surrey, parts of the market there look a lot slower in comparison. Lots of houses massively overpriced I think, in anticipation of fallout from London which hasn't been forthcoming. Such a headache, but at least we're under offer.

[crazyboots]

Yes Iseen both are under now offer, one at asking to a cash buyer and one above asking. Had two viewings cancelled as well as properties already gone. Nothing else to look at so hoping our buyers are patient.

[crazyboots]

I suppose the buyer insists its taken off the market? Isn't that pretty normal, or am I being gullible? Once we accepted a firm offer I wouldn't accept anymore viewings.

[SarfEasticated]

Hi everyone - sorry for lack of response - hey Littlepicklehead !

It is the jump from flat to house which would actually be hard for us whatever the relative house prices were, and as we are getting older the mortgage terms are getting shorter/more expensive too. And we both work in publishing so not really likely to get huge pay rises.

I had a plan that we would port our existing mortgage plus equity and then get an interest only mortgage for the rest we needed to get a house. Turns out they don't give interest only mortgages any more. So frustrating cos we love where we live, the school, have nice friends, don't want to have to start all over again somewhere new.

We could get an extension, but wouldn't give us much extra space, as neighbour said he would be worried about lack of light.

It all feels rather futile. I wish I had bought a house somewhere cheaper before DD was born, then we could have stayed there for ever.

[unrealhousewife]

One of the properties I always slightly regret not buying was a ground floor of a semi with a massive garden in a great area. It is now worth a lot more than my house,when I looked it was about half the price.

Might you find something like that? Also check if your friends are moving for secondary, a lot of people do.