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

I would be careful about the flat.. A friend just sold his 2 bed in South London with 10% discount vs what he paid 5 years ago. His estate agent explained this just just the way things are post covid.. People want even a tiny bit of a garden

If she has a good salary, I would definitely recommend she chooses to get a (comparatively) small mortgage to top up her budget. £800k she could get a lovely flat in a nice area (and stay in Clapham if she loves it), £500k she would struggle to find anything with two beds in the area unless it is ex-council in a less desirable location. How do the repayments on a mortgage of £200k compare to what she currently pays in rent?

I know a few people who have thought they've got bargains with ex council flats in London and had terrible problems either with neighbours or with huge costs of refurbishments. Some even ended up selling after only one or two years which clearly is a huge expense.

I think at her age, getting a nice two bed flat with a balcony or terrace if possible, so she could have a flat mate or potentially would have space for a partner and a baby in the future, would be sensible. Also, if she is living alone and can afford to live in a nice area she is used to, do that, don't move out in order to get a family home when you don't yet need one! She will be able to sell up and move in her thirties if she wants to.

For 800k in Brixton she should get a two bed (at least) with a garden. In a better area. That's a lot for a flat.

Sorry - when I said "a better area" I meant that she should look at the nicer parts of Brixton.

I know one beds are retaining their value in that area but they havent massively jumped either (currently selling one).

I do think that it might be sensible to wait for a bit to see if everything settles down with that much money.

With 800k she can totally buy houses in London. Won't be a big one, but easily a two bedroom with a garden in a decent location. Or she can get a fancy flat.

I would suggest searching now and offer sensibly but avoid joining bidding wars. House price growth across the country has slowed down. Interestingly London flats have gone up (but they got hit very hard during the pandemic so now just start to recover lost ground).

The London flat market near me (central/east London) is starting to recover, partly because rents are going through the roof so landlords are starting to buy up properties again. Now is a good time to buy. I don't think flat prices will bottom out like this again and already prices are starting to rise again where I live.

www.rightmove.co.uk/properties/123689627#/?channel=RES_BUY

This is a terrible buy. Ground rent is £500 and doubles every 20 years, plus the service charge will be massive. One to be avoided.

And yet, @Newpuppymummy isnt this the type of property that gets snapped up by foreign investors (and may stay empty)? I don't understand anything anymore!
But your post has given me food for thought re new developments.
The one DD has looked at has a service charge of £3 per sq ft (it has a fair amount of communal outside space as well as the balcony which may account for that I suppose). But Yes there's no way of knowing how that will increase..

hence why I posted. That’s a new build of the spec that she’s looking for and the costs involved. The ground rent/service charges are insane

I own a decent size 1 bed with a garden in Brixton that's worth about £550k so she should be able to get something nice for that budget. I agree with PP's - the modern blocks terrify me a bit - they can have good facilities but they'll often be smaller, have massive service charges, you'll be very limited in what you can do with them and I'd worry about the situations where they sit half empty because overseas investors have bought the flats as investment properties but don't do anything with them. That's just a personal preference, however!

At a similar age I lived in a flat in the next block to this one. It is ex LA but convenient for the common/tube/restaurants/bars/supermarket etc.
Not got the same kerb appeal as victorian conversions in the same road but good size rooms and a lot cheaper. DH said was a lot easier to decorate than his previous period flat!

www.rightmove.co.uk/properties/122089733#/?channel=RES_BUY

www.rightmove.co.uk/properties/85487427#/?channel=RES_BUY

In a friendly area a v short bus ride to Brixton www.rightmove.co.uk/properties/78936675#/?channel=RES_BUY

I would go for a 2-bed flat with a garden. With two beds, she has the option of letting out the other room to a friend, so it could earn her a little income. You won't get much change out of £800k (if any) if you're looking for something like that in Clapham. I would suggest she consider Balham, where her money will go slightly further. It's gentrifying at an alarming rate, but is still quite buzzy and young. Plus it's on the overland and Northern Line, so it's good for commuting. Something like this could work well. It's in a lovely part of Balham, has a large garden and scope to extend, which could add a lot of value.

www.rightmove.co.uk/properties/122607653#/?channel=RES_BUY

Although they're absolutely crazy, sadly, I don't think London property prices are going down anytime soon.

Another one here who would be looking for a 2 bed garden flat. I would opt for a Victorian conversion- build quality tends to be much higher than a lot of new developments, less concern about charges and more likely to hold its value. There are some very shonky new developments which look swish (gym on site etc) but have been done incredibly cheaply.

My view on the market is that, if you’re buying a home and intending to live there for a reasonable period, there is no point thinking too much about timing. It’s very hard to get it right and provided you’re planning to be there for a while and aren’t over-extending yourself, the right time to buy is the one that fits your personal circumstances.

If she’s young with a good job, I’d take a mortgage and get bigger and better. It doesn’t have to be a mortgage that stretches her beyond comfortable, but one which means she’s paying off a bigger and better property for the future.

Yes, £500k is a great budget for a first time buyer, but we can see it buys a flat and not even necessarily a large one ir one in best area. Paying a mortgage is normal. A young person with a good salary doesn’t have to live mortgage free like a successful 50+. Instead they should be pushing themselves. Taking on perhaps a £700k property will mean she can probably miss out a rung. If the ladder and avoid the expensive costs of moving. That £700k property will rise in value in absolute terms more than a cheaper property, meaning when she moves out of London or to another property in London, she has more options. You have to be looking at the idea of your first property being your starter and not final position when you start young and have prospects.

Amazing for her that she has this huge deposit, even if it’s through sad circumstances related to bereavement. This shouldn’t make her complacent though and think she needs no mortgage or to do work on a property or to expect to work to fund property. If she does that, in 10 years, thus amazing start she’s got will be lost and she will be stuck where she is, rather than be able to look to the next thing and next stage.

Foreign investors have totally different reasons for buying. For many/most of them, they just want to get their money out of their home countries (China, Russia etc) and into something relatively safe that their governments can't touch.

Gorgeous. Wimbledon is lovely too.

@HundredMilesAnHour wicked isn't it? Must skew things so much :(

I would not recommend buying a new build. As somebody who works for a housing developer I would advise against for the following reasons:

They are piss poor quality - I just did a luxury block that Sheikhs were buying and the stone was the cheapest stone you could buy

They often have issues with them (mechanical or bathrooms usually)

The service charge is high and increases every year

They are normally on a development with no parking provision like you would street parking

Due to Grenfell the fire regs are changing consistently and apartments that I completed last year are already non-compliant with the latest regs regarding materials etc. Selling an apartment as part of a block will be problematic in years to come because of the fire regs.

They are usually box-sized!

No opportunity to extend and add value.

She will get much more for her money and potential re-sale value if she bought a period property, they will not de-value in London.

I agree with all this. Also re having to replace a boiler etc- I think we all feel like that starting out but actually you learn to get competent at that stuff by doing it.

With that budget she needs to put her long term hat on.

She should look for something freehold (or share of) and with a garden.

My SiL has a 2 bed flat in Brixton without a garden and they are proving hard to shift at the moment. People are still renting in those areas but not buying.

I moved to Penge at 24 and at the time thought it was sooooooo boring. Everyone around us was a family or old. All my friends rented in Clapham and pre Uber I hated getting night buses.

BUT now I'm 38 and have a family and I love this area. It's also changed so much with new train lines, more of a 'vibe' and more young people. She could get one of the gorgeous little 2 bed cottages here and be there for years and years.

www.rightmove.co.uk/properties/85449336

This is in a beautiful gated collection of alms houses.

All of these are great added in the last 24 hours, all with gardens:

Earl’s Court

Earsfield

West Ken

If she is willing to do a few miles out of Clapham. Still really nice areas

I would definitely not go with a new build. Apart from the fact they tend to be by very busy roads/right next to railways lines etc., they have been riddled with problems and I'd be worried about whatever the next cladding scandal was going to be. Victorian conversion any day. A Victorian garden flat in Clapham/Brixton and surrounds is very future proof too - we brought our first baby home to my original flat and most of our friends did the same.