One bed flat purchase in Ealing

[Claregalway]

Close relative is FTB. Is it worth holding off for another year (still paying rent) to buy. They can’t afford a 2 bed or house in the area and don’t want to live futher out and commute. Worried that it’s all on a downward trajectory - but seems to have been since Bexit - any indication when / if this might reach a trough for 1 bed flats. Or are we just going to see more and more released by LLs?

@Claregalway that’s for central London only, sorry I don’t know much about Ealing so can’t really say. Your relative can work out the trend in the area by researching sold prices in the last 10 years - time consuming but doable. Anecdotally I know a couple of people who recently bought a large one bed with a nice garden in the suburbs, at a ridiculously high price (in my humble and biased opinion). So perhaps that sort of flat is what holds value better.

Renters are more secure now because of the RRB. The saying ‘you’re throwing money away renting’ doesn’t really apply these days and for a long time people have believed the fallacy that you can’t go wrong with bricks and mortar. But you can, in multiple ways, as many flat owners all over the country who’re now struggling to sell are finding out.

That depends if you buy a flat to actually live in or with the expectation that you’ll sell and make money. I don’t think renting is “throwing money away” and I support the RRB, there are many reasons renting might work better for someone than buying and that’s a valid choice. But if you know you want to be in a particular area, are happy living there long term in a flat and don’t expect to make a profit if/when you sell, plus the potential for the mortgage to be cheaper than rent (not always) I don’t think it’s a bad idea. You don’t have to subscribe to the idea of a housing ladder.

Not necessarily. If the buyers deposit is modest and prices continue to fall then they quickly become a mortguage prisoner. Unable to move. Thats a problem, particularly as a young person stuck in a 1 bed with a mortgage that also ties them in to leasehold charge. Better to rent and save if the flat market continues to soften. At least your life can remain flexible that way.
Many buyers realise this is a strong possibility which is why they are getting difficult to sell. That and of course the fact that prices haven't finished re setting to match the new normal cost of borrowing.
At least a couple more years of falls to come imo.

you seem almost gleeful about it

I suppose they need to do that maths and guesstimate if the property would likely fall in value more than 2-3 years rent which might be 50-75k for a one bedroom?

Sorry maybe a bit less that’s what they are paying for a 2 bedroom rental currently - for 2 people. One bed rental in the area maybe 20k / year

You're not necessarily better off having hundreds of grand in your home when investing the same amount over that period would've netted millions in savings / pension. I'm not saying don't buy, but investing nearly 100% of your money in a single property that can fall in value & has service fees is a risk.

Also when they want to move on in a few years and their flat has lost 100k in value they'll very much not be ahead of the game.

One beds are also notoriously hard to sell vs 2 beds.

Well yes, who wouldn"t be gleeful about cheaper property for working people?

That"s right, the money isn"t "in" your home the way it is in a bank account, so many people got themselves very confused over that. At least with stocks you can bail out at the click of a mouse or tap on a phone, with property you are stuck when prices start to slide.