London experts: is now a crazy time to upgrade?

[Houseporn]

We have been searching for two years for the right house in a handful of target streets in a ‘nicer’ area than ours.

Potential new area is far more expensive despite dodgier transport links. However, it’s in zone for a few great state schools and close to leading independent schools (one DC already catches bus there but it’s a longish journey and I expect homework will pile up in years ahead, making a 5pm return to home a bit too late).

Very little stock on, a bit going off-market though but not enough to satisfy demand. I figured we would wait for the market to slightly cool/tank and then hope the spike in rates is offset by lower asking prices.

However, a decent house in the perfect spot has just come on. We are viewing it this week.

Mortgage on new place will be a shock on paper - stamp duty is astronomical and would buy a one bed flat alone on fringes of London.

We are both ‘high earners’ but mid 40s and 50. We would be going from end of terrace Victorian to big semi in decent area.

Brokers have told us that we more than qualify for a massive mortgage, even on interest only, as we owe current house outright and have two rentals (both with mortgages but with about half a million equity in both combined).

Love our current street, OK about our current house (though feels too narrow to me) and area is well connected, lovely homes but a bit gritty. Mediocre secondary schools will always suppress values here so over time, I suspect our price rises are capped which could imperil an onward move.

Current set up works for now (14 years so far) but the longer I stay, the more I think ‘is this it?’. And also, the older we get, the more the chance to upgrade slips away.

Is now a crazy time to put in an offer in? Bear in mind that this new area is massively in demand and while nowhere is recession proof, it attracts people with money and I don’t get the impression anyone living there is desperate to sell. While our area is ‘cool’, our price point is perhaps more vulnerable as it’s a second-time buyer type place whereas we are looking at forever home.

Looking for feedback from people familiar with the London market as it is so idiosyncratic!

@sopsmum That’s an interesting fact. Is it evidenced anywhere handy?
Someone asked upthread what the point of this whole thread was and it’s to get different perspectives. I’m very indecisive about it all. I’m restless and a bit meh about my house but probably just because I have lived here for so long. I have not been ‘inspired’ by any particular area except maybe Dulwich as it makes sense for schools. I wish we had thought of this five years ago!

If a recession comes due to Covid + Brexit + fuel and food inflation etc, you could potentially get a bigger house for less. But you’d get less for your own house too so it may not make any odds. If interest rates rise majorly you could be paying double.

I reckon that if (when) a London drop happens, it will hit “up and coming”, not quite gentrified areas harder than well established “desirable” areas. So it may actually be a good time to sell your up and coming area house while you can get a good price for it, and shift to a safer (in price terms) area.

My concern would be schools - what is your plan if your other child doesn’t get into the Dulwich schools? Sure you have thought about that however.

Sorry it's anecdotal although I feel sure I read an article
In the times about it. I just know that the area I live in (relatively affluent, professional lots using independent schools etc) just stopped rising after 2008 rather than an actual dip. Friends that lived in similar areas in London experienced the same.

We sold for more than we paid (about a month before the financial crisis) in 2011 having paid tonnes off the mortgage due to lower borrowing costs.

On the other hand many people in poorer areas in my city were still underwater against their 2008 purchase prices. Affluent areas tend to have greater buffers of cash and so whilst the odd person might have to make an emergency sale the majority can sit tight and that tends to stop prices falling.

It's an extremely depressing moment, we appear to be on the brink of recession, the only certainty is uncertainty. Are you in bulletproof jobs like surgeons or something? Can you comfortably afford the mortgage on one salary? Paying top of the market for a family home is one thing, but it's super important to have resilience in your finances.

Agree 😂
Just do it, you have almost zero risk with so much apparent wealth so get on with it. Worst case might have to sell one of your other houses!

Rentals are 400k so not mansions and have mortgages on them! Zero inheritance coming to either of us (basically no windfall or cushion coming from elsewhere).