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?

at the moment prices for a half-decent two-bed in a half-decent area are definitely 650-700 and people are paying that, but will they be able to afford the next step on the ladder.

@Desiringonlychild - we are definitely thinking that we cant have two-three kids as a three-bed semi is probably out of reach and cramming two kids in a two-bed flat/house indefinitely seems a bit man.

but in terms of Beijing prices - let's see how Beijing responds to the latest London directive regarding Hong Kong...but definitely those hutong houses that I was hoping to buy in 2006 are well out of my reach now

I read an article about a potential exodus from NYC as residents were put off by the high impact of Covid & the protests. Plus I think remote working traditionally wasn't popular in America but they had to embrace it so people now have more choice.

@Greenhats10 good luck & fingers x you find somewhere.

We have 3 beds (2 dc) but I want a semi & I really want a wide house with more living space so leaving may be the best option for us as I would realistically need 1.8m for that! 🤣

@doolallyboo local british buyers aren't the norm in places like Chelsea, foreign buyers are the norm. Maybe this would be the case in London.

I talked to my Singaporean parents about how glad my flat has a communal garden and they just seemed confused (their own garden is very neglected and they view it as a burden). I asked them why don't they take up gardening and my dad said he rather spend his time during covid looking up new property deals. I told my aunt in singapore how I bought a london flat in zone 3 and she kinda sniggered; my mum tried to rescue me from her sniggers by explaning 'zone 1 is very expensive'. My aunt has a lot of friends who bought in London and her daughter also studied in London so its not like she doesn't know anything anout London- just that the norm for Singaporean buyers is to buy in London and only in zone 1/2. Some may buy in manchester but generally city centre developments. So anything outside that is strange and weird; they definitely wouldn't be interested in somewhere in zone 5 and beyond.

Historically lots of wealthy British buyers lived in Chelsea & the like.

Historically lots of wealthy British buyers lived in Chelsea & the like.

Historically lots of wealthy British buyers lived in Chelsea & similar. And yes as I said this is no longer the norm as they have been pushed out.

I get their concern about zone 5 & the like. To be honest I would rather another city as I like lots of amenities on my doorstep & most areas in zone 5 etc don't have high streets & options that I like.

sorry my app is crap!

On a separate note I do wonder how the redundancies will play out. On one hand we apparently have thousands of job losses & industries hit really hard but some are saving money & relatively secure.

@Greenhats10 which area is this? My area is east finchley, its zone 3, i think its quite nice... my 2 bed flat was 400K and its 1920s purpose built. East Finchley station is 20 mins from central London, i can walk to the heath and highgate woods, Muswell Hill, 4 outstanding schools within 0.5 miles. The only con is I don't want to leave and the next step on the ladder- 3 bed house is £1 million so I have to stay in my flat forever cos it doesnt make sense to move just to be in a more expensive flat.

@Desiringonlychild - well pretty much most areas around East Finchley are now 650k plus....same as SW/W London...where I grew up in Southfields (which apparently now has a village - who knew) are trying to sell flats for 650k...and even places in SELondon are now catching up

@doolallyboo - I also love facilites - why dont lots of local areas in London have any or at least lots dont.

“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.“

Honestly I know some posters on here are detached from reality but...

Pandemics and global recession/depressions aside, what world do you think we live where the average person living in a London suburb will have a household income of £250k? I have a flat in zone 3, I look forward to my £200k pay rise soon.

Ridiculousness aside let’s look at some actual stats shall we, instead of ‘my friend who’s an estate agent says all the £800k studios flying out the door”.

The peak of prime London property was in 2014. Here’s a nice chart highlighting that fact.

www.rbs.com/rbs/news/2019/08/limited-supply-supports-prime-property-prices-in-london.html

The drops of prices in London and the south for the last year have been masked by the fact of rises in the whole UK average (which has now turned negative reported by Nationwide)

www.gov.uk/government/news/uk-house-price-index-for-january-2020

So all in all, no we won’t be seeing £1million flats as the ‘norm’ in London suburbs anytime in the near future. (Unless of course we have run away inflation post-COVID on the back of all this QE, in which we will all have much more to worry about)

Don’t forget foreigners and property developers buy up a lot of property. It might be a false rise at this stage, we don’t yet know how any of us will be affected by the economic crisis.

@doolallyboo another i point i forgot as to why people buy up £600k flats rather than £600k houses in the home counties; many of these couples are still childless, they might have a vague idea as to family size but given that you don't know your fertility until you get pregnant, it seems premature to move to a nice family area and find out that you can't actually have children. So at the risk of paying more stamp duty, its better to buy a home in a london neighbourhood you like with some good schools and proximity to central london, that you would like without children. After all, it takes time to birth children and for them to grow up. I am fully expecting to take years to conceive my only (and maybe even have lots of problems) given that DH and I have used the withdrawal method successfully for the past 7 years.

@Lightscribe a lot of London FTB have help from family. you may not have help, and DH and I didn't have help but thats not representative of the whole. I know in other countries- israel and china- property prices are not representative of salaries at all, and they seemed to be keeping up. Its very unfair of course for the people without family support, but that is capitalism and British people here seem to be broadly supportive of this method of providing housing for the masses. If you look at MN threads about people who can't afford houses, the advice from posters seem to be overwhelmingly 'cut your cloth, move further out, live on beans on toast; i did that to afford my home and you should to'. Sound advice no doubt, but this also means that we are basing people's ability to afford a roof over their head solely on their earning and saving power. Some people might afford their homes by eating beans on toast, but many others would rely on parental help as we rarely start out with equal circumstances. As isaiah berlin said 'In a lake stocked with minnows and minnow-eating pike, freedom for the pike means death to the minnows."

"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."

Yes, precisely, we are talking about short term. What happens after that is anyone's guess. Buying a house is a long-term commitment.
Even if I were told I'll work from home till Spring 2021, I wouldn't use this as a reason to buy in the middle of nowhere: what if in 12 months I have to start going back to the office? What if I can work from home now but for whatever reason I need to change to a job that requires me to be in the office more? That's too much of a risk for me. Even if I had to go to the office only half the time, it would still not be worth it for me to live too far out.

Renting in the middle of nowhere to get a big house, maybe, because renting is a short term commitment, but not buying.

DH's company have always been very anti wfh, they didn't trust the staff to actually work, although as the people he works "with" are based all over the world, he's always worked remotely with them, just was forced to do it from a Central London office.

Anyway, they have seen the error of their ways, staff have all worked just as hard, if it harder at home without the big time drain of the commute and they've now announced that when the office lease expires at the end of the year they will not renew. That's an office of 300 people now all working from home . They are hoping to find a small conference suite with a few hot desks and staff will only go in when necessary, which DH expects to be c. once a month.

"So all in all, no we won’t be seeing £1million flats as the ‘norm’ in London suburbs anytime in the near future. "

I agree, but, to put things in perspective, global cities are always very expensive for most ordinary locals. I'd be curious to see what the stats are about average property prices vs average salaries in places like Paris New York San Francisco etc, but I am pretty sure they are quite unaffordable for most ordinary people.

Leaving aside the squillionaires, the CEOs, the singers football players etc who buy £10m houses in Chelsea Mayfair etc, my impression is that the people who buy property in London at prices which are out of reach for us mere mortals are a combination of:

• people with very high salaries: a couple of, say, two NHS consultants can easily take home > £200k a year, ie > £10k net per month. Managers in lots of businesses. Not to mention partners at law firms, big accountancy firms, traders, investment bankers, etc

• people with a good but not outrageous salary, but who have a large deposit because they were , well, lucky: this can be anything from an inheritance, a lucky investment years ago, etc, the bank of mum and dad, etc

• people with family money

• people who bought years ago in areas which were undesirable and affordable, and their properties have appreciated massively over the years. I know ordinary people on average salaries, in their late 40s- early 50s, who bought 20-25 years ago in areas like Hoxton, Brixton, Balham etc, then 10 years ago sold and bought massive >£1m houses in the home counties.

@UltimateWednesday , what I meant is that most people I hear wanting to move far out do not have the same certainty that they'll continue to work from home long term as your husband.

My reservations about remote working long term are:

• how do you train juniors, trainees etc remotely? Or people with experience but who are new to the organisation?

• what if you don't have a home office? I am lucky enough to have a spare room, ergonomic chair etc, but many people don't have the room and the gear, might share the property with flatmates from hell, etc.

Yes, precisely, we are talking about short term. What happens after that is anyone's guess. Buying a house is a long-term commitment

are we though? I personally wouldn't move until I had concrete plans. However I think it's naive to assume we will return to 9-5 everyday in the office. Why do I think that? Because all big companies care about is the bottom line. Plenty of these companies have incurred heavy costs, a friend who is a banker at Lloyd's told me that the impact of canx fees on overdrafts is in the millions. If companies can off set this costs they will. If productivity isn't affected by remote working then it will save costs.

Also who's talking about buying in the middle of nowhere? I would like the coast personally.

A lot of people who work in the likes of Magic circle firms, investment backs, Big 4 etc already would have had some access to remote working & it's very normal in tech industries. It's not crazy to see that it will grow.

Why would a job change require more office working unless you changed industry? I had 3 jobs offers last yr, all involved 3-4 days a month from home. It's pretty standard.

@ParentOfOne

interesting article on living in NY on 100K (looks a lot tougher than london tbh) www.businessinsider.com/what-its-like-living-in-new-york-100000-salary-reality-2019-2?r=US&IR=T#the-median-home-value-in-the-five-boroughs-of-new-york-city-is-closer-to-650000-according-to-zillow-22

DH and I bought in London. Dh grew up in london and we lived with his mum who owns a house in zone 3 north london for 3 years, saving £20k per annum. Thats who we afforded a £400K 2 bedroom flat with 70k deposit. Most people our age who bought lived with family for a period of time despite being able to afford rent.

Much of London's property market (outside of the uber rich) has been driven by equity, I know some people who made 700k plus in 3 yrs. The issue is now many people are making the same gains & even with a good salary lots of property is too big a stretch.

how do you train juniors, trainees etc remotely? Or people with experience but who are new to the organisation?

This is definitely an issue although my brother started his job at a law firm 3 wks before lockdown. It's been a struggle for him but he's been very well supported & obviously has experience of the role.

I don't envisage companies completely switching to remote working but a mix & more smaller hubs as opposed to one big office.

@NotSuchASmugMarriedNow1
"House prices always increase in the long term. Therefore, if you want to buy go ahead and buy. No point waiting for a drop"

Yes and no. The UK is full of areas where house prices have remained flat over the last 10 years, ie they haven't even kept up with inflation.
In London less so, BUT I agree with the poster who said that the peak was around 2014-2015:

• with newbuilds it is more common (that they depreciate): I have seen quite a few newbuild flats that were sold at a loss after 3-4 years, or which appreciated much much less than non-newbuilds in the same area

• even with non-newbuilds, if you bought around the 2014-2015 peak and then have had to sell, you will have been lucky getting the same price, which means you didn't even recover the stamp duty

By the way, if you buy a property to live in, the real calculation shouldn't be whether the property appreciated but how much it cost you vs the alternative of renting. There can be situations where the property depreciates but buying may have still been cheaper than renting.

what if you don't have a home office? I am lucky enough to have a spare room, ergonomic chair etc, but many people don't have the room and the gear, might share the property with flatmates from hell, etc.

I think this is actually a push for remote working. Why would you pay high rent in a flat share & work from your bed when moving outwards might afford you more space & a proper office?

We have a small office because DH already works a bit from home but we actually need more space if this becomes the norm, ideally we both need 2 screens!

@bilbotoy a desk actually takes up very little sq m space. My DH and I live in a 2 bed flat (our second bedroom doesn't actually have anything in it but a single bed and laundry). DH has his desk with dual monitors in the reception room, i have my desk in our bedroom (its a 120 cm by 60 cm desk so there is space for dual monitors, but I only need 1 monitor). We also have a printer.

I guess though our home is more functional than aesthetic. We have 2 bookshelves, a dining sofa, a dining table and dining chairs in the reception; a wardrobe, a double bed with underbed storage, standing lamp, clothes rail and a tiny dressing table from futon company in our bedroom, a single bed in the second bedroom, plus the two desks (1 in reception, 1 in big bedroom). Thats it. The second bedroom is kept as minimal as possible to accommodate the future baby's needs. We kept an empty space in the reception for a future baby play area/piano.