London property prices are STILL going up!

[teapotl]

I live on the zone 2/3 border in what is now considered a desirable part of London (but didn’t used to be). I’ve been keeping an eye on the market over the past 4 years and property prices in my area have continued to rise and rise. I thought the London market was meant to be falling due to Brexit and now Covid, but it doesn’t seem to have had any effect at all. Will London prices ever plateau or are they just destined to go up and up forever?

House prices always increase in the long term. Therefore, if you want to buy go ahead and buy. No point waiting for a drop

Oh I completely agree. I remember people saying how sorry they felt for people who had bought at the height of the market in 2008, before the huge crash. If you had bought a property in zone 2/3 London at the very peak in 2008, you’d have made an absolute killing by now. I’ve seen properties round my way quadruple in value since then.

Likewise with Brexit - I’ve seen places in London that were sold in 2016/17 come back on the market for £100-£200k more just two or three years later.

Soon £1 million for a two bed flat (or should I say 1 bed plus a box room as they often seem to be) will be the norm in the London burbs.

but i do still wonder - how many people can afford to pay 700k for a two-bed flat and WHY

I know. If you work in the City then sure, I can see how it’s doable. But surely there’s only a finite number of people on those sorts of salaries? A starter flat in my part of London (one bedroom, no outdoor space) will now set your back £450-500k.

set you* back

@teapotl if you compare London property prices to equivalent cities like new york, hong kong, singapore, frankfurt, tel aviv, London house prices is not that expensive.

I used to live in Berlin and i compare my 2 bed flat in london zone 3, an equivalent apartment in a similar suburb in berlin is more expensive. Same with new york.

High property prices is a global problem.

London house prices is not that expensive.

I know that London prices in global comparison are ok. I have lived in those other megacities, but London's affordability is still rubbish. There are also huge divides between those that own a portfolio of properties and those that struggle to get the one

OP, what do you mean by prices going up? Asking prices are basically irrelevant. Actual sale prices are what matters, but it takes the land registry about 2 to 4 months,

That's my view, my area of zone 2/3 has had stagnated prices since maybe 2014 where they peaked.

They may actually be more demand around the 600-700k mark as this is not too much of a reach for good earners whereas the 1.2m houses are harder to get as its harder to build up equity now.

@doolallyboo - but is everyone basically resigning to living in 700k two-bed flat from now on till retirement? because that definitely isnt the british dream

The big issue is will that 700k 2 bed have gone up much in value in 3 yrs etc. i don't think so.

My very personal view is that all this hype about a revolution coming, the cities are dead, everyone will work from home etc is just hype.

It won't be everyone at home & deserted cities but I do think there will be a shift. I know loads of people not going back till Jan 2021. Dhs big city firm are looking at rotas from Sept so probably 6-8 days a month. I also know lots of people who have never wfh (companies against it) who now want to do it & can prove productivity hasn't been affected.

We are going to see how it plays out & are considering a move. Commuting for 1-1.5 hrs 1-2 days a week is preferable in some ways to a 40 min squashed journey on the tube.

Soon £1 million for a two bed flat (or should I say 1 bed plus a box room as they often seem to be) will be the norm in the London burbs.

How? what will people be earning to support this?

@Greenhats10 no I agree. If I had that budget & was looking now I would want to future proof as much as possible.

@doolallyboo - indeed - the world is on the cusp of a massive global recession and people in London are just buying up those uber-expensive two-bed flats (am bitter because we've been outbid one too many times this past month, but seriously this is getting ridiculous)

I think there is pent up demand & some people in secure jobs probably want to act now rather than wait later.

It could also be that the people who traditionally pay for the 2 bed luxury flats along the river now want maisonettes with gardens.

This has been a trend for a while but some wealthy people have been pushed out of traditional areas by wealthier buyers. My inlaws sold a property in Wandsworth last yr to trustafarians. The parents paid 1.1m in cash for their 2 x 20 something sons.

A big issue in the London market for myself & my peers is the fact we are stuck on the ladder. We have good jobs & equity but more space is 1.2-1.3m and that's too big a jump.

Even if we could manage it, that would be a lot of disposable income tied up & we would still only get a terrace with no off street parking.

Last yr quite a lot of my neighbours/friends went to other cities/home counties. A few did actually have budgets of 1.3m but they wanted a big proper house & garden for that.

How? what will people be earning to support this?

I have no idea. But four years ago people where I live were saying ‘how?’ at the thought of a two bed flat selling for £650-£700k. It seemed completely ridiculous - now it’s the norm.

That's my view, my area of zone 2/3 has had stagnated prices since maybe 2014 where they peaked.

Whereabouts do you live - perhaps I should move there! It’s a totally different story in my part of London.

@doolallyboo well i read a stat somewhere that 1 in 5 british women wouldn't have children and this number is likely to grow so the 2 bed flat may be quite suitable. Also there may be more people planning 1 child families like myself (its been growing for the past 10 years). I always read on MN that many people think of 2 children as the maximum nowadays, rather than the 'norm'. Also if there is an increase in home working and people are going to be in the office one day a week, perhaps they might want those expensive flats as pied a terre.

Also I think there would be more income inequality in my generation as a millenial. the top 5% would enjoy increased earnings that would enable them to afford uber expensive multiple properties .As for how many people can afford those expensive properties, well the Asian middle class is growing every year and Beijing properties are far more expensive than those in London.

Beijing alone has a population of 21.54 million people, never mind about shanghai and other first tier cities; or those in other top tier asian cities with high econimic growth.Their property prices are going to explode (if they haven't already), and this makes London a very attractive proposition.

My inlaws sold a property in Wandsworth last yr to trustafarians. The parents paid 1.1m in cash for their 2 x 20 something sons.

Sigh... oh to be a trustafarian!

700k is not outlandish because a couple on 70k ish each wouldn't be that unusual & they could borrow 4.5 x & would likely have a good deposit.

@teapotl SW but the prices for a flat start at 650k already & have done for some while. It just seems other areas have caught up.

@teapotl SW but the prices for a flat start at 650k already & have done for some while. It just seems other areas have caught up.

Well I think so many people live in flats esp in London, realsijg the need for space or outdoor space, wfh more so need for separate office space means more demand for houses that have that space than an flat would ....

I have a spare guest room and haddlg anyone stays over, I'm now chasing it into an office/ library room cos at the moment I work from my dining table in the lounge and I'm basically in that room morning ro night cos its then where I chill and watch TV, meanwhile upsatira has now become the only time I go their to sleep. So makes sense to use the spare bedroom

@Greenhats10 London's affordability is rubbish because our salaries are relatively low, even for professionals. But we also have lower costs; our american counterparts in New York have double whammy of high housing costs and high medical insurance which sucks away so much money so I actually think we Londoners are better off. In London, the main cost is housing. Even private school is more common in New York than in London.

In places like Paris and Frankfurt too, the salaries might be higher but the taxes are higher, so less disposable income for housing. Singapore is more expensive if you aren't buying government built housing (and you also have to pay for medical costs). Hong Kong housing is crazy expensive. buying an apartment in Tel Aviv often needs 30% deposit. In America (as mentioned before), non housing expenses can be crippling, like for medical care. I can't really think of another city like London which has Anglo style taxes (generally less than in continental europe), is a global financial hub with a lot of professional workers, universal healthcare and where it is relatively common to take out large 90% mortgages.

Maybe i am biased cos I own a london flat, albeit a £400K one. I also know I couldn't have afforded to buy in many other global cities. I could have afforded a government flat in singapore but only because I am a citizen, I need a million to afford my own flat on the private market.

@Desiringonlychild undoubtedly women are having less children or none. I know quite a few, However the ones I know quite like extra space for home working/hobbies etc.

I don't know what income the top 5% are meant to earn but I'm certainly aware of wage stagnation. Lots of jobs that pay 100k paid the same role 10 yrs ago. I think about half a mill people earn over 120k & the highest earners tend to be late 40s early 50s.

Of course people can pay 1m for a flat if they like, it's just not desirable to me.