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?

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)

tbh we probably would never have considered moving further than zone 4 or just making do with what we had. Covid has definitely made us rethink things as I doubt this will be the last pandemic.

I've always been turned off by a daily long commute however not all commutes are equal & if you only have to do it x2 a week than you may be more open.

The gov has done a lot to stimulate the market, keep rates low, help 2 buy but we haven't really ever got back to 2013/2014 levels.

Interested to know, I was thinking I should wait a year to see how the lands lies but maybe not

I don’t even think thr Bank of England could predict that one with any certainty. The break on stamp duty shows the government will bolster the market.

Waiting a year may play in your favour, it may also see you priced out. Don’t gamble if you can’t afford to loose.

And typically people who wait, loose. And then spend the rest of their days waiting for a crash to happen as they were priced out and missed their one opportunity.

@bilbotoy this is my second pandemic and i am only 27. When I was 11, I was in Singapore and SARS hit us in a bad way. The fatality was far higher but not as many people got infected. We were sent home from school for a few weeks and missed our exams. When we did go back to school, we took our temperatures twice a day and it was all very strict. Covid is totally different though. During SARS, our parents still went to work but now everyone is home working.

The next pandemic would be completely different.

What happened in Singapore with Sars & Covid are quite different to what happened in the UK imo.

"We think house prices always increase because we have an increasing population and therefore increasing demand."
That's only part of the equation, though. Planning permits, mortgage availability and lending regulations, interest rates, attractivity to foreign investors (for legitimate to shady reasons) all play a huge part.

"However buying is still cheaper than renting"
In the long run, almost always yes, but in the short to mid term not always. You need to run your numbers. If you have to move 2 to 4 years after buying there are many, many scenarios in which buying will have cost you more than renting.

"Overnight I went from paying £1600 pcm rent to less than £600 pcm mortgage"
Yes, but with a partially interest-only mortgage

"In reply to all those questioning the appeal of London, we’re not just here for the museums, we’re here for the people"
Totally agree. My opinion may be unpopular with certain crowds, and it may even offend someone, but, if you are not white, British and pro-Brexit, the farther you venture from a large urban centre, the harder it can be to integrate in the local community. This of course doesn't mean that everyone outside of London is cut from the same cloth, but that, statistically, the odds are stacked against you.

I have heard black (British) families saying they don't want to move to the countryside and end up sending their children to schools where they would be the only black pupils (or thereabout), and I think it makes a lot of sense.

@Desiringonlychild your quite dogmatic in your posts & your replies.

If you believe that Covid will have no impact on property prices, remote working won't change at all & that people don't specifically chose to live in London for their jobs & would only consider leaving because they were going to anyway then thats fine. Just chill, your flat cost 400k (that's not expensive for London) you will be fine.

@ParentOfOne BAME communities are getting pushed out regardless though. Look at Brixton which has changed dramatically.

@bilbotoy maybe because i am BAME and DH is Jewish- thats why moving isn't such an easy option.

I used to believe that house prices would crash because of a covid recession, but after what the chancellor just did, i am less sure.

This is interesting because we live in a very popular area with London leavers. Pretty, great schools, an hour to the City etc. Nothing on the market is moving. Our estate agent said that very few buyers are coming out of London atm and the predicted post-Covid push out of London just hasn’t materialised.

what's that got to do with it? I'm BAME too as is DH

I never thought there would be a crash. I think the scale of the governments invention shows the shit the economy is in. I read the impact is the equivalent of loosing 18 yrs of growth! The legacy of the 08 recession was wage stagnation & some would argue it took 10 yrs to see green shoots.

Also let's not forget that it is human nature to convince others and yourself that whatever choice you made was the best one ever. Any feedback on where one lives must be taken with truckloads of salt.

I am so sick and tired of hearing people that wherever they live is best and that they would never look back etc etc. This goes both ways: I know a childless couple who has been renting a tiny shoebox for 15 years in a very expensive part of central London but they "would never consider living anywhere else " etc etc (just imagine the equity you could have repaid over 15 years) and I have also heard loads of times from people living very far out that their trains are reliable, their commute isn't too bad, etc. Why people blatanly lie on commuting times I will never understand, but I have heard such pearls of wisdom as "from Bromley it takes me half an hour to get to north London" or "Guilford is lovely, and it never takes me more than 40 minutes to get to Canary Wharf".

t I have heard such pearls of wisdom as "from Bromley it takes me half an hour to get to north London" or "Guilford is lovely, and it never takes me more than 40 minutes to get to Canary Wharf".

This is so true. My tube journey to the city is about 25 mins but I have to get to & from the stations, wait for a non packed tube, walk slowly up the escalator. But everyone further out than me apparently has a quicker journey!

Yes, but with a partially interest-only mortgage

I meet this attitude a lot. Why does it matter that it’s partially interest-only? I have choices now. I can choose how to spend that spare £1000 pcm, whether it’s on early repayment of my mortgage, or investing in a business, or in another repayment vehicle that spreads risk. I had no such choices as a renter, and a whole lot more risk.

Now I have security of tenure, which I never had when I was renting, with the stress and expense of regular moves. The security of housing means I can really go for it career-wise, because not so much of my mental load is occupied with money worries and the chronic low-level stress of shared housing.

I wonder if the best strategy for Rishi Sunak is to incentivise the banks to begin lending 100% mortgages again.

Perhaps it could be a government-owned bank?!

@allbreadcakebiscuits what attitude are you referring to?

I happen to have a partially interest-only mortgage, too, so you don't have to convince me about its merits. But please bear in mind that not everyone qualifies for it, so it's not really a feasible option for most people.

Also, interest only means we will still have debt outstanding when the mortgage ends, so we must have a way to repay it - either from other savings or by selling the property. Yes, it's a very banal concept, but loads of people in the past went for interest only mortgages without understanding what they were getting into, so it makes sense that lenders and regulators are way more cautious about this now.

@breadcakebiscuits

Could be interesting if he did. I think that people realise it is not going to go down and they have to take their chance.

I would say that I have been watching one beds in London on Rightmove and the same ones circulate but now they are being relisted at a higher price (usually the original price) so I think sellers are anticipating a knock down due to covid and factoring that in to the asking price.

Property log shows the history (thank you to whoever on here put me onto it) so you can see exactly the listing prices.

With a 100% mortgage, I could buy now.

@ParentOfOne

But you could put that money into other investments, isn't that what she is suggesting?

It is risky but works for some people, no?

All I am trying to say is that, if you qualify for the stricter criteria and fully understand what an interest-only mortgage means, by all means, do consider it, because in certain situations it can make a lot of sense.

BUT bear in mind that most people will NOT qualify for an interest only (even if only partially interest only) so that cannot be portrayed as a mainstream option available to most people. That's all.

@ParentOfOne The attitude that interest-only or partially interest-only mortgages are a drawback at best or a desperate option at worst.

They’re not, because of the flexibility they give. I think a lot of people have been frightened off them because of the mis-selling scandal, but you’d have to be exceptionally stupid not to realise in this day and age that the capital sum will need to be repaid one day.

But please bear in mind that not everyone qualifies for it, so it's not really a feasible option for most people.

My understanding is you have to be a pretty high earner to qualify? I know some interest only want 100k income.

I’m not a mortgage lender or mortgage broker so I’ve no idea what the qualifying criteria are, but I had no difficulty in obtaining one.

"The attitude that interest-only or partially interest-only mortgages are a drawback at best or a desperate option at worst."
And you inferred that from what? Again, I happen to have one myself! Chill down and don't be so touchy :)

The fact that you got one easily is totally, completely and utterly irrelevant , unless you elaborate on your circumstances and how they compare to those of the average borrower!

So why did you single out that particular detail @ParentOfOne?