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Original poster

A bad time to buy in London right now?!

24 replies

Tweeeezer · 07/07/2022 17:03

I don’t know if anyone can answer this, but I keep reading conflicting things about whether house prices will fall.

Is now a bad time to buy in London? Prices rocketed in the last few years and some areas we were considering, we now can’t afford. We sold late last year and have been renting in our current area for a variety of reasons, but are ready to buy. Should we keep renting and see what happens? Or make the leap?

Interest rates being what they are, renting isn’t much more expensive (month to month anyway) than owning at the moment!!!

OP posts:

NewbieOnHolidays · 07/07/2022 20:21

Following, in similar position

StuckInARug · 07/07/2022 20:31

London has seen much slower growth than other areas of the UK, so my thinking is, it may be a bad time to buy in London, but not as bad a time as for buying in other areas of the UK!

TheYearOfSmallThings · 07/07/2022 20:35

It's hard to know - even though London increases have been less it was still 7%. If you rent another year and they go up by "just" another 7% next year that's still tens of thousands.

knickersniff · 07/07/2022 20:45

I think it's a bad time to buy full stop . We are not in London but close . Essex .. not much is moving now and being reduced. Lots coming back on the market obvs the banks down valued .
I don't think they'll be a crash but I don't think many will sell in this climate so nothing will move . Estate agents must be clutching at straws right now

SD25 · 07/07/2022 22:14

It pretty much hasn't been a bad time to buy a. HOUSE in London... Ever.

SafelySoftly · 07/07/2022 22:21

It’s a good time to buy, I was more worried about inflation wiping out savings. Just buy what you can afford with a significant interest rate rise.

Original poster

Tweeeezer · 07/07/2022 23:28

SafelySoftly · 07/07/2022 22:21

It’s a good time to buy, I was more worried about inflation wiping out savings. Just buy what you can afford with a significant interest rate rise.

Yes this is on our minds! We’d probably just about find something in an area we like, so it’s a case of: do we wait to see if prices are going to drop and get a better home? Or is that a big risk and prices don’t drop and suddenly we can afford less?

I bought my first place in London about 6 months before the credit crunch. It was fine in the long term, but I was in negative equity for a while and it was tough realising that I would have been able to buy in a nice area (my first flat was not in a nice area!) if I’d waited a little bit.

OP posts:

plugee · 07/07/2022 23:30

I don't think so boy but smart eg future proof & don't overpay.

However the days of making loads of equity are gone.

RogueV · 07/07/2022 23:30

I’d buy

plugee · 07/07/2022 23:31

is it a house or flat?

Original poster

Tweeeezer · 07/07/2022 23:33

A house - and hopefully one we won’t need to leave! (Although we can’t afford anything big or substantial, of course!)

OP posts:

plugee · 07/07/2022 23:35

I think that's less risk

plugee · 07/07/2022 23:36

I've bought recently

plugee · 07/07/2022 23:36

reduced my budget & went a bit further out so I got something big enough should we get stuck there

Original poster

Tweeeezer · 07/07/2022 23:37

When we sold (a flat with a garden, zone 2, desirable area, late last year) it went over asking price and into “best and final”. Is that still happening?

I’ve lined up some viewings this weekend in a few neighbourhoods we’re keen on. They’re all more expensive than I had anticipated and all are sort of a compromise, and we can’t afford to go over asking price on any! 😬

(The age old problem - London is incredibly pricey!)

OP posts:

plugee · 07/07/2022 23:51

I went over by 25k but being chain free was what made us attractive

easyday · 07/07/2022 23:52

My friend just sold her semi a couple weeks ago to best and final. I'm three streets away in a terrace and I paid just under ask last summer. Things didn't sky rocket but market is still brisk (SW London). Still a number of skips outside etc so people are investing.
Interest rates are still incredibly low. Market may flattened a bit but I don't expect a dip so big that out of reach neighbourhoods suddenly become affordable.

Donotgogentle · 08/07/2022 00:06

I’m no economist but I think whether house prices will fall and whether now is a bad time for you to buy are different questions.

What’s your LTV - would you be risking negative equity if prices fell? As pp says they’re still rising in London but that may reverse.

Can you fix your mortgage medium term to deal with affordability and the likely increase in interest rates?

Given inflation is running about 9% and may go even higher, keeping your money in cash is also a risky option.

Original poster

Tweeeezer · 08/07/2022 02:12

Our deposit is about 35% of the value of the properties we’re looking at (I think!).

OP posts:

Donotgogentle · 08/07/2022 08:17

That sounds like a pretty healthy buffer against price falls.

Unless you’re an investor I personally don’t think it’s worth trying to guess the market. You need a home to live in first and foremost.

I have friends who sold up and moved area about 5 years ago and decided to wait to buy as they thought prices would really drop after Brexit (they did, for a bit). No way can they afford to buy in the area they’re renting in now. If you’re in it for the long term and can definitely afford it ime it’s best to press on.

SausageAndCash · 08/07/2022 08:53

Well yes, London is pricey, as you know from having sold your flat at above asking and in a bidding war!

Yes, it is still happening because there are not enough properties on the market. The increase in prices may have slowed, but increase is still happening.

I would buy rather than lose value if your capital to inflation while paying someone else’s mortgage.

plugee · 08/07/2022 08:58

I think you will be fine as you have a good LTV

Beviolinar · 08/07/2022 09:13

Always a dangerous game to try and time the market. If you see a financial product advertised they always say something like "previous results do not guarantee future returns" and that's true of houses too - no one can predict the future, and the closest people have to enthusiastically endorsing the market is at the end of a long run of prices increases. But it's never ever clear if you're going to buy before a correction.

As someone who sounds like you're going to stay awhile, I think you're in a great position. If you can find a property that works for you, go for it. Maybe interest rates will rise further and push the market slight down, maybe the won't. Either way you'll be on a five year fix, living in a house that will long term be a good investment.

Starseeking · 08/07/2022 09:41

The house I'm buying now in West London was on the market for 10% more 18 months ago (previous sale fell through due to Covid).

Similar houses are going on the market for 3% more than what I agreed 3 months ago.

I plan to stay at least 5 years for the first fix of my mortgage, and most likely more than that.

My deposit is 15%, and the mortgage is 23% of my net pay. Overpaying during the 5 years will put more distance between my LTV and equity.

In summary, I think it's fine (but then, given the above, I'm biased!).

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