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?

We think house prices always increase because we have an increasing population and therefore increasing demand. However, there are localised slumps that don't recover or take decades to recover, when for example to main industry in an area closes and peope have to move away for work. So, it's no inconceivable that the same could happen in London if masses of people no longer work there.

If you're 300 calorie hungry, eat 300 calories. If you're bored/fed up, which is what most snacking is, find something else to do.

Oops!

@Desiringonlychild I don't understand why you are telling me about the sq footage of a desk? Your living arrangements & lifestyle are completely different to mine & it's great that yours works for you as it should.

We need a separate office as we do have because we have dc including a toddler & like to separate work from home so I would never choose to work in my kitchen or living room. My house & furnishings are very practical & functional but not minimalist in the slightest.

I do wonder if a lot of people are buying before low deposit mortgages are harder to come by or before they lose their jobs and this increasing prices.

At first thought it might seem illogical to get on to the housing ladder or upsizing before getting made redundant. However buying is still cheaper than renting and I expect that over the coming months and years private landlords will find it easier to evict tennants, rather than big banks who will be seen to look like the bad guys if they try and repossess houses.

I think prices will come down when the reality of job losses and restricted lending kick in. But for the time being with all the money the government have given out they are kicking the can further down the road. But there is only so far they can kick it.

@UltimateWednesday that would assume that the only reason why people stay in London is for work. There are many people who don't. The orthodox jewish community in my area certainly don't stay in London for work, they stay in London because of the synagogues, the family connections, the schools and to a lesser extent the kosher shops and the eruv. It is very difficult for a community to move to a completely different area; the Satmar seem to have done this with Canvey Island but Stamford Hill is still very highly sought after. There are also lots of other communities like the orthodox Jews , london is very diverse and multicultural for a reason!

Also many Londoners don't earn high salaries that justify them staying in London but they seem to stay in London nonetheless. They must have their own personal reasons.

However buying is still cheaper than renting and I expect that over the coming months and years private landlords will find it easier to evict tennants, rather than big banks who will be seen to look like the bad guys if they try and repossess houses.

Excellent point, I think it will be unusual nowadays for a bank to "take" a house from you at a cheap rate. They will likely do everything in their power to get you to pay back what you owe whether that's interest only mortgages or lifetime mortgages etc.

Yes of course there are other reasons to be in London but if all the people who are mostly there for work were to move out (they won't but a significant proportion could) it would have a huge impact on demand and therefore price.

The Jewish community on Canvey Island surely demonstrates that they too do look for opportunities to live in cheaper areas. Many of the community in Stamford Hill probably do work in London? So isn't it the case that that's the area they choose if they need to live in London but if they don't they do have other options, which would increase as more moved out? Plus that aspect only supports prices in a very specific area.

I don't think London will see housing become worthless, as in Detroit for example, but I do think there could be a very significant downturn there, even if the property market nationally holds its own.

Population is interesting as we have an older population & a dislike of immigrants (in some quarters).

I was born & raised in London to immigrant parents so have no ties to anywhere else & obviously appreciate the multicultural aspect although lots of those areas have become less diverse as gentrification has happened. I like being close to family & it's been a godsend with small dc however the vast majority of my childhood friends & their parents have moved outwards for more space, less pollution, congestion etc.

Also there is the element of increased taxation & what that will hit. It won't be those 0.1% thought!

I’ve already posted about this on another thread, but earlier this year I bought the flat I had already been renting for a few years. Also in London zone 2/3 borders. Overnight I went from paying £1600 pcm rent to less than £600 pcm mortgage. One of the drivers for buying was definitely the need for security and stability in the event of hardship, although at the time I thought that was just Brexit-related (hollow laugh).

I saved my deposit by living in a house-share, not a flatshare, for years before I moved here (originally with ex-partner). Also living very frugally, almost embarrassingly so.

Then the mortgage is for 30 years, not the usual 25.

The mortgage is part repayment, part interest only.

I earn a lot for someone my age, and people radically underestimate how much some people earn. The person above who thinks 2 NHS consultants in London earn £200k between them had underestimated by about £100k. A plumber who does bathrooms and boilers can easily be earning that on his own. Even a PA/secretary to senior management working 9-5pm can be on £50k.

@breadcakebiscuits can I ask why you chose a low monthly repayment?

In reply to all those questioning the appeal of London, we’re not just here for the museums, we’re here for the people. My family all live in a very picturesque and prosperous part of the NW, but it’s utterly stifling if you’re not married with children and working for your dad.

@bilbotoy I needed the flexibility. I can always overpay on the mortgage, but I cannot underpay. I could lose my job and still pay the mortgage on benefits. I certainly wouldn’t have been able to afford the rent in the same circumstances.

makes sense & I didn't think about the fact your are a solo buyer. I do think it's unfair that many can afford mortgages vs rent but struggle to get the deposit together.

You are so right @ParentOfOne about managers. I work part-time and have been doing my 3 days from home since the lock-down begins.

My role can be done remotely as it mainly copywriting and research. My company has a tiny London office where social distancing is not easy to implement. We have an old-fashioned, older man as a CEO who seems to have an issue with remote working and is finding every reason to try to get me back to seat in that office. In the end it is all about his need to have his 'minions' in one room for his own benefit. There are plenty of managers like that around unfortunately who think that people slack unless they are under their nose and who the ego boost of having their team in one place. So I think that remote working still has a long way to go.

I am moving our of the capital anyway...I put my flat on sale 10 days ago and have been really surprised at how many viewing requests I have had so far!

@teapotl

If Brexit and a global pandemic don’t take the heat out of the London property market I don’t know what will.

Completely agree about stamp duty too @jimmyjammy001.

Brexit may have the opposite effect in London as the fall in the pound makes the London market more attractive for overseas investors.

There was already pent up demand due to Covid, what Rishi has done is stimulate the market further, the break on stamp duty is going to have a huge impact and it will filter all the way uP.

As a pp said, the price of propert always goes up,because the value of money goes down. Those who hang about waiting for a crash are almost always disappointed.

"As a pp said, the price of propert always goes up,because the value of money goes down. Those who hang about waiting for a crash are almost always disappointed."

Sadly this is true and I bet the government know what they are doing. Giving out as much money as possible to try and keep the housing bubble pumped up. Its disgusting.

@UltimateWednesday the satmar are a bit of an outlier. They are a fairly poor community (generalization) but they shun secular education and this doesn't have a good effect on earning power.
They are also much more insular and closely knit- hence easier to move together as a community.
The more mainstream Jewish communities haven't really moved out possibly because they are better educated and more ability to afford a decent home I. London/borehamwood. Anecdotally, my MIL is in that community and there is a lot of parental help.

I’m the only one of my peers who has had no financial help with my deposit.

Ironically my parents could afford the deposit but chose not to give it to me, possibly because of the same horror of debt and over-reaching that afflicts a lot of country people.

I find it very frustrating when people of our parents’ generation go on about their “worries” that their children won’t be able to afford homes of their own. You’ve been gifted half a million quid of unearned equity over the last three decades, perhaps on the council house that you bought at sub-market value. Why not spend some of it on improving and securing your kids’ housing situation?

It’s so much easier to blame Polish immigrants or Chinese investors than it is to take a long hard look at fiscal policy and the financial hardships caused by selling off government-owned housing stock.

@ParentOfOne

"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.

It’s not a choice between London and the middle of nowhere. I live in a small, pretty riverside town with lots of amenities less than an hour from King’s Cross.

The five bed detached house opposite with parking and a garden sold during lockdown for its £600k asking price to someone who had money left after selling a two bed London flat. Local estate agents claim this is a sellers’ market now with demand outstripping supply.

I have noticed in my area loads of houses have come on the market this week. Would say buyers have loads of choice. Not London though.

I let one go, now wondering whether I should have just gone for it.

We still have to go through 12 months of likely recession though, with job losses ams brexit still to go. Are pp on here confident prices will still go up in that context? Interested to know, I was thinking I should wait a year to see how the lands lies but maybe not?

I don't know. But if you look back to articles from the 80s and 90s, people were complaining London was too expensive. People always wanted more space for their children. People often moved and found jobs that would work for them in their new homes (their own businesses, freelancing or a better commute); or they just sucked it up and commuted. In short, most people never let a London job get in the way of a bigger home if that was what they wanted. So whatever way home working goes, i think that would always be the case. People who want to move out of London would always find a way and home working might just give them an extra reason (but they would probably have found another way if there wasn't covid)

But London house prices have been going up since that time. No one 'needs' to live in islington, chelsea or camden for a job when a there are the likes of Finchley, Wimbledon and Greenwich to commute from. But the prices in those areas far outstrip the zone 3-5 suburbs when you aren't actually saving much time.