London prices

[intwrferingma]

I've lived in the sticks too long. And don't k is what to advise DD. She is thinking of buying her first flat in London. Decent deposit (thanks sadly to all four grandparents dying on the last couple of years and skipping the generations for inheritance). And v good and stable job.
But I have no idea which direction prices are going. She could wait. But should she?

Sorry to be vague but any views would be interesting

London house prices have increased consistently for years. If she can buy now, I would recommend it. Smaller flats without gardens seem to increase in value less than other properties, but it's still better than renting as you're not paying someone else.

Can you give more details of her budget and where she's looking? People may be able to give more useful advice that way, as prices change quite a bit by area.

Personally I wouldn’t wait. I think it’s good to get on the housing ladder when you can, to start building equity and stop losing money on rent. I also don’t think London prices are going to fall. We bought our flat in 2016 and paid over the asking price - we thought that was the top of the market (pre-Brexit etc), but have just sold it for more than we paid. Also if your DD waits she’s likely to get stuck with a higher mortgage interest rate. V hard to predict the future but I personally wouldn’t hang around and pay money in rent when I could be in my own place and building equity.

But I would think carefully about what kind of flat to buy - there are a few threads on here where people are struggling to sell flats that have no garden/outside space, because people want different things post pandemic. Personally I’d buy a bit further out to get outside space/more loving space, to hopefully secure a good resale.

Good luck to your DD!

I agree. Buy as soon as possible, but a two bed with a garden, even shared if possible. She can get a lodger if needed then. But offer lower.

Very interesting. And all telling them same story! Thank you.
Her budget is up to 800k (bc high I can scarcely believe) and she wants two bedrooms and a balcony. And loves Clapham and Brixton, where she already rents. It's possible - but I didn't want her to risk unnecessarily.

I’d strongly encourage a garden at that price…. Everyone I know without gardens and flats in those areas have really struggled to sell.

Blimey, with that budget, I’d be looking at houses instead! More scope to increase in value and unlikely to need to move again in future…. Is your DD likely to get married/start a family in coming years? If so, I’d seriously consider a house - speaking from experience, once you have a baby you want a house pretty quickly, and moving costs £££ with stamp duty etc. I wish we’d bought a house years ago and avoided the need to move from flat > house.

also, 800k on a flat seems crazy to me, and I live in London…more of a risk of not getting the money back when you’re paying such a high price for a flat… but obv depends on what/where your DD wants…

Our part of London is flooded with Hong Kong buyers right now. The family houses are all being sold off market (apart from the overpriced developer's new builds/quirky homes). I don't know about flats but if she bought a conversion on a high floor then she may get permission for a Juliet balcony if it had extension potential. Floor to ceiling windows definitely bring the outside indoors especially if you have a decent view.

She could get one of those brand new luxury development flats with top spec appliances and a balcony with that budget and move straight in. Not sure how well they sell after though.

£800k is a good budget for a flat with a garden in Clapham and Brixton. It is not a great budget for a house in those areas, unless she is happy with a doer-upper or ex-Council. Definitely go for a 2/3 bed flat with garden/balcony!

london flat prices are depressed and I think it’s a great time to buy. For that budget I’d buy a nice two bed for around £450k and use the rest for a small buy to let that will give her some income in future years.

@TeachesOfPeaches brand new appeals because in theory there is nothing to do. her 24 year old brain would fry if she had to replace a boiler! But as you say.. resale value? i have no idea!

Up to 800k if she topped up with mortgage. If she wanted to buy cash more like 500k. Or a shade less. I think she is inclined not to take out a mortgage. But no matter.. there's some really good insight on this thread. We left the London market 15 years ago so are clueless. So thank you

I think it's a good time to buy a flat in London. As others have said, prices are depressed with memories of lockdowns and people subsequently wanting a garden, but that won't last forever - memories fade and flat prices will recover. And there are advantages to a flat if she's not keen on DIY! Though watch out for service charges on flats; some are eye wateringly high!

E10 / E11 here...purpose built 2 bed with garden and long lease..999 or share of freehold all steady at 550k ish...sold in hours...waiting lists for them...

new build flats with no garden not selling...lots going up tho...

new builds lose value instantly...avoid...plus service charges can be high..avoid !

If she has spare cash then get a rental also with the other money over...plus money is still cheap to borrow so i would borrow some of the purchase price on a long term fixed rate and invest in another property to let out.

I would tell her to go for something like this- the same kind of things always rent/sell and Wimbledon is a safe bet.

Garden plus home office etc

www.rightmove.co.uk/properties/107189717#/?channel=RES_BUY

I love that Wimbledon flat!

When I got my first London flat in similar circumstances at the age of 25, in Brixton, I pushed up to the limit of our budget and took out a mortgage and rented my spare room out to friends. If she's got a good job she has the option of living alone or covering any mortgage payments with rental income. She also has a bigger foot on the ladder to get more equity in future.

I've never known prices to ever go down in these areas, I keep a keen eye on RightMove!

I would not consider buying anything without a garden now, it's such a great selling point and you can add a garden office etc. There are some absolutely beautiful garden flats in the area. I would look at Poets' Corner between Brixton and Herne Hill, or the pockets between Brixton and Clapham North, some really gorgeous big Victorian houses converted to flats.

Buy now. Flats aren't selling in London but this won't last. Ideally I'd advise her to get a house with that budget, even if a slightly less desirable area.

Much better to use her cash paying off her own mortgage, building equity, rather than the drain of renting. At London prices her rent is presumably very high anyway.

Plus, her cash will reduce in real value due to inflation at current savings rates.

She could get a small house in Brixton for that budget - avoid ground rent and service charges. And rent a room to a friend or lodger.

The market may be cooling a bit - that doesn't mean prices are falling, it just means they are not rising as steeply as they have been.

And yes - good idea to get a favourable mortgage deal while she can!

I'll agree that flats aren't selling so well - the prices have stayed down in my area while houses have rocketed upwards. I have seen a couple of clever conversions recently where garden flats have been extended backwards creating a groovy indoor/outdoor living space with an extra bedroom from the old living room at the front. That's what I'd do if I was moving, buy a flat with a share of the freehold, a big garden and parking so I could relax and spread out when required.

The flat is lovely, but the location less so - it's sort of in between Raynes Park and Wimbledon (and very close to the main rail line into Wimbledon station which might be noisy), and not much round there; Raynes Park is OK, but not really great for shopping, which your DD might miss! Somewhere further into Wimbledon would be better.

If I was young, free and single, and with a budget of 500K, I'd go for this one

Great location, near the tube (Northern Line) and easy access to Morden Hall park as well as good shops and places to eat. Merton Abbey Mills is a quite quirky place too.

She could consider Stockwell as well. Walking distance to Clapham and Brixton. Loads of tube lines (Stockwell, Vauxhall, Oval, Nine Elms, Battersea). Lovely park in the middle and might be a shade cheaper than Clapham.

EG:

www.rightmove.co.uk/properties/85438413