Why is this studio so reasonable? Is it area

[Thatwaskindoffun]

My DC is a first time buyer ideally looking to buy not rent in London, yes I know London is massive and it varies from place to place. I know nothing about buying in London at all and just assumed anywhere would be out of their price range but it seems I might be wrong.

As an example, yes this is a studio but other than that is the area awful or is there something else I’m missing as there seems to be more available in their price range of £200k than I expected

https://www.onthemarket.com/details/19249305/

Has you son ever lived in London? If not, I think it is particularly mad to buy in an area he doesn’t know at all, in a city he doesn’t know. I completely understand not wanting to waste money on rent, but there are advantages too. If he rented for say, a year, he’d get a feel for the city and the different characteristics of various neighbourhoods. He’ll have worked out his routine and what is most important to him to have nearby. If he rents a room he might find like minded people and build a social group. He will know what matters most for his commute (I can go to work without the tube for example, and it is so much nicer).

On top of all of that, buying a bedsit in which he would live AND work in most of the week, with limited interaction could end up being very lonely. I would hate to live, sleep and work in one room 3 days a week. And what if he hates the job? Or living in London altogether?

He’s 23 - that is a great time in life to be flat sharing, at least for a year while he figures things out.

I agree with @CuriousKangaroo that it's a good idea for him to rent for a year. It seems like jumping the gun to lock himself into an area and a flat straight away. I'd advise him to suck up renting for a year and make a point of spending time really getting to know the city, strolling all the various neighbourhoods, before making a decision.

Re @KeepPumping's advice. They're not totally wrong about being careful about mortgage debt in that I think your son would outgrow a studio very quickly and it could be difficult to sell on, even at a loss. Flats are definitely not having a strong moment. That said, you can decide how much London property advice you want to take from someone who, under various names, has been gleefully predicting a London housing market crash for eons, and who has never lived in London (and I believe still lives at home).

Look at any property thread. That poster appears on all of them insisting every property is overpriced, that the five-bed mansion in Belgravia is really only worth £50 because their shed in nowheresville was worth £50. Also that everywhere in London is a deathtrap/overpriced/controlled by nameless faces etc.

Rather like the comedy cartoons which appear in the regular paper - you see them, have a laugh, you move on.

You are giving him good advice to rent first. But as you say - you cannot force it. I would keep giving the advice but also around the risks of leasehold/services charges and buyers regret if he finds he doesn't like the area in six month's time. Flats are not going up in price atm, it could cost him more to buy and move within a year or two than to rent for a while.

The photos were taken in the spring so something is putting viewers off. Visit the area day and night and ask about service charges. It has a long lease so that's not the problem.

Good advice.

Then you change your username again to some funny numbers and keep pretending that everything is A OK, nothing to see here in the housing market over multiple threads, LOL.

To be fair, the issue with almost every property posted on here is the price, because that’s often the only thing people can change. Endless posts telling people their house has a funny layout/no garden/is on a busy road etc are just roundabout ways of saying drop the price.

London prices are down significantly over the last couple of years, especially for modern leasehold flats. No point denying the evidence in front of you

Loads of posters want to deny reality, it is ridiculous to think that hanging some new curtains will sell an overpriced house.

A friend of DD’s is struggling to sell his one-bed new-build in Croydon. Now on at 170k and he paid I think 250 for it just about five years ago.

There must have been something wrong with your friends daughters search strategy or she had no realistic budget because at any one time there are literally thousands of rooms available to rent in the capital.

Also, are you familiar with the property market as it currently is? Because a large number of people are trapped in their flats they can’t sell because flats have fallen out of favour.

Pertinent to OP’s child, there’s also the issue of the FTB effectively throwing away the benefits of being a FTB, if their property purchase turns out to be a dud.

I agree with @KeepPumping “renting is wasted money” is a tiresome phrase to hear, and in my view very outdated.

Absolutely agree with the advice to rent for a period first of all,get his bearings, settle into the job, make some social connections via work/gym etc.
He may find he’s happier north of the river, he can gather some info on his work commute from colleagues etc.
This particular flat is not in an especially bad area, I’d class it as Upper Norwood. It wouldn’t be my favourite commute to certain parts of central London.
I was born in Brixton, grew up in Streatham then lived on the borders of Upper Norwood/Norbury. I have friends living close to that flat and DH went to Sylvan school.
Can you tell us where his work is based, then you’ll get some more relevant suggestions of areas, either to rent or buy if he feels he must.

A one bed new build in Croydon, what could possibly go wrong?

I agree with others buying a studio flat which he can't then sell or has to sell at a significant loss, is much more of a 'waste of money' than renting. I rented in house shares for a good 10 years and I'm very glad I did.

It's not too bad for a starter home but there's room for hard negotiation. It was bought for £126k 3 years ago. If we allowed £15K each for bathroom and kitchen, then it shouldn't be more than £155K. The post code seems to do quite well in price (houseprices.io).

How on earth is what it was bought for relevant? It’s what it’s worth now that matters.

Its very relevant in working out its value currently. The last thing you should do in todays world is look at the advertised price and assume thats its value. That figure is just the agent and the seller agreeing on the maximum some mug who knows no better might pay. Its very important not to overpay.
There is another way though - and thats to get a RICS valuation survey. That costs money - so its better to do your own research first.

It's one of a number of factors to be reckoned. It was marketed at £200K and didn't sell. It was marketed at £180K and didn't sell. If it was marketed at £150K then I think it would sell, based on the value of other property around the area and its area360 stats.

Landlords have sold in droves due to the increases in risk not being worth the returns. There are easier ways of making money now. Add to that, the hold up in the leasehold reform bill which has been challenged by freeholders, and the poor publicity surrounding management companies of flats and the lack of recourse within current legislation, all of which has led to the perfect storm. This has esulted in reductions of flat pricing all over the country.

It's a good time to buy but only if you're looking for long term gains - 10 years plus.

We're FTBs in west London and had exactly this reaction when we started looking - some pockets really do have studios under £200k. Things we learned to check before getting excited about any one flat:: the lease length (anything under about 90 years gets awkward for mortgages and resale), the service charge and whether it has jumped in recent years (ask for the last few years of accounts), and the ground rent. Studios also have a smaller pool of buyers when you come to sell, so pick the best-laid-out one you can rather than just the cheapest - you don't want to loose the saving on charges. Lovely that your DC can buy at all in London though, we felt the same disbelief!

Shirley and Kenley are not London by a YP's Standards surely?

You need to show him that older wiser people who have spent a lot of time in London don't agree with buying straightaway.

Being personally responsible for a year of rent - let's say 12-18k - is a big first step, and not to be dismissed lightly.

Being responsible for a 200k flat is a whole different thing. Anyone who lived through one of the last 2 downturns in housing prices will tell you the worst was the small flats.

What if he pays 200, and then doesn't make it through the job probation?

What if he loathes London with a passion?

What if his company gets bought out/downsized/merged and he's out of a job?

What if he pays 200 and then finds everyone he gets on with lives in a completely different part of London?

What if he pays 200 and then in 2 years it's worth 160?

What if he pays 200 and then he finds he's in the middle of a house upgrade/the block needs attention, and he's on the hook for 2000/5000/7000 contribution to a new roof or repainting the entire block?

All these things happen everyday.

I grew up in London, I saw my parents buy there, I rented 7 times in 10 years before buying my own house in the arse end of nowhere, so I'm not talking out my ears. I made a fortune from mine, but only by being savvy.

We're not being killjoys, we're being realistic.

I would not buy a top floor studio given the summers we are having.

Interest rates higher then, but if rates get cranked back up the OP will lose money, I would say they also overpaid 3 years ago.

It is only worth now what someone will pay or can borrow, and buyers will be aware that higher rates equal lower house prices, say you bought in 2020 and are trying to sell now, the value of the property has fallen, trying to add 50k or whatever just marks you out as a timewaster/difficult seller. Houses bought during super low interest rate periods lose value when rates rise.

www.propertyinvestmentproject.co.uk/property-statistics/uk-interest-rate-history-graph/