Is now the worst time to buy a house in London?

[adriennewillfly]

I'm about to get married to my lovely partner after an 18 month engagement and it can't come soon enough! We're really interested in buying a house to start a family but now we're looking around, everywhere is so expensive.

I'm lucky to be in a well paid job, and have stashed away £100k. We're hoping to get a 4 bed house (or 3 bed with potential to convert the loft) in the Walthamstow/Highams Park area. Initially we were looking to spend around £450k, as that was the sold prices in the area 9-12 months ago, but asking prices have shot up to £500k+ (as have some of the sold prices).

I know we're lucky to be in a position to save this kind of deposit, but I'm really nervous about this purchase. It seems like we're on the tipping point, similar to 2007. I know a couple of economists in high-level banking roles, and privately they're expecting a major economic meltdown in the Far East soon.

Part of me doesn't want to get ripped off, but the other part of me wants a nest for my family.

I absolutely hate the idea that I've had to work really long tough hours, and given up so much for this deposit, just to give it along with the next 25 years of my earnings to a pensioner who's had a cushy 9 to 5 public sector job with a final salary pension.

Could really do with some emotional support!

[adriennewillfly]

Apologies for any offence to public sector workers. Just feels like my generation is being royally screwed by the London housing market and I'm misdirecting my frustration.

Really appreciate the responses so far!

[sparechange]

When I bought in 2004, everyone told me it was the top of the market, and I was mad. I sold that place for nearly double what I paid for it in 2008 and bought somewhere else. When the crash came, everyone told me I had bought at the top of the market and was going to lose loads of money when I came to sell.
I sold that one in 2013 for nearly double what I paid for it, and yet again, was told that I was buying at the top of the market, prices were unsustainable, the crash was around the corner.

While London property is not a guaranteed one-way bet, there hasn't ever been an area that has 'ungentrified', and family homes don't fall out of favour. If you were buying a newbuild on an estate based on Crossrail2, I would be wary. But what you are describing is a sensible property move, that will serve you well over the coming years.

[adriennewillfly]

How about Notting hill and Brixton for areas that "degentrified"? Admittedly it's gone back the other way now, but they went from middle/upper class to slums and back again over the course of 100 years!

[sparechange]

I can bore you with the history if you want but neither Notting Hill nor Brixton were particularly desirable places when they were built! The developers had a 'build it and they'll come' mentality with the big houses, but very soon afterwards, the houses were being lived in by multiple families...

But look at the big waves of gentrification in the 60s/70s/80s, and since.

Nowhere has had coffee shops and gastropubs opening up in droves only for them to shut down when the naice people move elsewhere... The population of London is growing, rather than shrinking, so people are looking for more and more naice areas, rather than wanting to shrink back into the original desirable places.

I guess your concern is whether Walthamstow is going to drop in value, rather than London dropping in value, but I think it is vanishingly unlikely given that once a place is up, it stays up. The riskier bets would be places like Plaistow which have just never quite made it past the first stages of gentrification
(NB please don't sue me in 10 years time )

[Applesauce29]

Yes, the London population has soared massively in recent years due to immigration (mainly), and a slight impact from older people living longer.

I don't know Walthemstow that well but its proximity to Newham would put me off. This area has the highest rate of tuberculosis in the Western World (mainly due to high level of asylum seekers), which means babies born in neighbouring boroughs have to have to bcg (which left mine with a horrible scar on his arm). Also, the number of HMO's is rising in these areas, population denisity is increasing, and public services (schools, hospitals etc) aren't keeping up, which means that people with social problems don't get as much help, so the area gets worse!

Also I'd say Eltham and Charlton have de-gentrified since the blackwall tunnel approach expanded and the masses of council tower blocks were built there!

[Wincher]

I'd say definitely go for Highams Park over Walthamstow (and I live in the latter). I think it has definite room for growth in the market there - lovely suburban properties on green and leafy streets, lots of lovely open space etc, great secondary school, and very much up and coming. Walthamstow is lovely but a bit edgier and the properties are smaller for less money.

[Aliceinwonderlust]

As awful as it sounds I don't think your deposit will be big enough. We have a bigger one than that and earn 100k but would struggle to get a mortgage of 4x salary.

That said we sold our London house 2 years ago and prices have remained almost static since. That's central London thought every area is different

[adriennewillfly]

My broker indicates that I'll be fine. As I'm a contractor, they seem to be happy to lend 4 times my annualised day rate at the moment.

Whereabouts in central London did you buy?

[Aliceinwonderlust]

We sold, that was in Westminster. Good to hear they're ok to lend it