London house prices?

Author
Discussion

TheBMWDriver

Original Poster:

591 posts

153 months

Tuesday 22nd December 2015
quotequote all
So what do people think london house prices are going to do? I want to buy a place in london (I work from home) but I am worried the prices will tank soon.


LeoSayer

7,299 posts

243 months

Tuesday 22nd December 2015
quotequote all
I'm predicting a 40% drop in the next 5 years - similar to what happened in the late 80s and early 90s.

I have consistently predicted that since 2005.

2Btoo

3,410 posts

202 months

Tuesday 22nd December 2015
quotequote all
Tank? Not a chance.

The rise may slow in some areas. But the upward trend won't stop. The availability of jobs and the desire of people from all over the world will ensure that.

mgtony

4,014 posts

189 months

Tuesday 22nd December 2015
quotequote all
Each year you think they can't get any higher, they just keep going up.
I knew we couldn't be far from a 3 bed semi near me in E17 reaching the £1million mark, and spotted this last night:

http://www.zoopla.co.uk/for-sale/details/39033434?...

Not exactly the pristine victorian house you'd expect for that budget! Seems like they got a deal on a job-lot of radiators!! smile

Rangeroverover

1,522 posts

110 months

Tuesday 22nd December 2015
quotequote all
I've been listening to people at various times since the 90's saying they are going to sell, then rent and wait for a price correction.............still waiting for it to happen.

If you can afford it, do it while money is cheap, it might stagnate and as often happens the crap won't sell at speccy prices, the good correctly priced stuff will still sell; the only thing I would avoid is "off plan" developments

k-ink

9,070 posts

178 months

Tuesday 22nd December 2015
quotequote all
Foreign investment has died. Mortgages and bonuses down. 41k new flats coming on the market next year priced over £1m, which will be impossible to sell. Once a development falters and the banks foreclose it will be a turning point. A correction is on the way.

Electronicpants

2,623 posts

187 months

Tuesday 22nd December 2015
quotequote all
mgtony said:
Each year you think they can't get any higher, they just keep going up.
I knew we couldn't be far from a 3 bed semi near me in E17 reaching the £1million mark, and spotted this last night:

http://www.zoopla.co.uk/for-sale/details/39033434?...

Not exactly the pristine victorian house you'd expect for that budget! Seems like they got a deal on a job-lot of radiators!! smile

Hackney

6,811 posts

207 months

Tuesday 22nd December 2015
quotequote all
London house prices are mental. They've been mental for a while. They'll stay mental.


delta0

2,334 posts

105 months

Tuesday 22nd December 2015
quotequote all
It's an age old question. You fall into one of two camps as a result. Those that just get on with it and buy and end up being very happy, and then those that don't buy and become obsessed that the house prices will fall. You will be in the market for 25 years so the sooner you get into the market the sooner you become mortgage free rather than paying someone else's mortgage.

newbie29

247 posts

129 months

Tuesday 22nd December 2015
quotequote all
From what ive seen, there is a correction over 5 years or so.

When it falls it never falls below the last lowest point (not even close) hence everyone remembers the fall but not how much the property prices have risen example if we get a 10%-15% dip bad news sells well and it will be embedded into everyones mind, however they quickly forget that over the years they have risen by example 40% .

generally it will always rise over time, no matter how many dips we get.

numtumfutunch

4,705 posts

137 months

Tuesday 22nd December 2015
quotequote all
k-ink said:
Foreign investment has died. Mortgages and bonuses down. 41k new flats coming on the market next year priced over £1m, which will be impossible to sell. Once a development falters and the banks foreclose it will be a turning point. A correction is on the way.
Ive thought that for a long, long time but as long as interest rates stay low and the government insist of propping up the bottom with gimmicky ISA's and right to buy etc it isnt happening anytime soon

Although nobody under the age of 45 or so will remember the fall in value of London property in the 90's
A friend of mine bought a 1 bed in Docklands in 95 off plan which immediately gave her negative equity until 8y later - its prob proper bonkers now though

Cheers


ukwill

8,871 posts

206 months

Tuesday 22nd December 2015
quotequote all
LeoSayer said:
I'm predicting a 40% drop in the next 5 years - similar to what happened in the late 80s and early 90s.

I have consistently predicted that since 2005.
hehe

louiebaby

10,651 posts

190 months

Tuesday 22nd December 2015
quotequote all
I know this isn't quite the point of the thread, but if you work from home, you will get a lot more for your money outside London. After living in Clapham for 5 years and cashing out to Devon, I've seen both sides.

When we were younger, London was a cool place to live, and we made the most of what it has to offer, but as we got older we stopped doing so, mainly when we had our first son.

However, even when younger, I'd have preferred to have lived elsewhere, saved the cash / had a bigger house, and traveled in when required. Hell, London City has a number of interesting options if you need to get into the smoke now and then:

http://www.londoncityairport.com/travelandbooking/...

Back on topic, I would expect prices to stabilise over the next few years, but what do I know?

Michaelgeeky

29 posts

100 months

Tuesday 22nd December 2015
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Really a cliche. Don't expect to see any drop. If there's any, it must be a miracle.

ColinM50

2,630 posts

174 months

Tuesday 22nd December 2015
quotequote all
Increase in prices minimum 10% year for next ten years

gibbon

2,182 posts

206 months

Tuesday 22nd December 2015
quotequote all
House prices could drop in London, of course, however it would take a significant external factor to cause this. If you can predict this near random event, then well done, you are either smarter or luckier than almost anyone else, and should probably go work at a fund/investment house etc.

However, as we are politically and economically placed currently, I believe prices will slow in growth but continue their upward trajectory. Normal pricing rules dont really apply to london anymore, there is too much excess money and wealth in the system. First time buyer metrics have no real effect or sadly relevance, the fast majority of people where the normal metrics apply, who harbor London centric lives, will sadly just have to look at property which is smaller, and further away from the center of London. The government knows this, hence long term infrastructure developments.

Edited by gibbon on Tuesday 22 December 11:53

IATM

3,779 posts

146 months

Tuesday 22nd December 2015
quotequote all
Hackney said:
London house prices are mental. They've been mental for a while. They'll stay mental.
It actually blows my mind that there are people crazy enough to spend that much money on some of the rubbish properties available in london

fastgerman

1,911 posts

194 months

Tuesday 22nd December 2015
quotequote all
Reports in respectable papers (i.e. not the Mail) state 40% increase in next 5 years for the South East.

Reasons:
- Popular/fashionable investments over shares
- Soon to be tax advantages for companies
- Supply and demand i.e. not enough houses being built and oversees investors.
- 1 Hyde Park (most expensive development in London) has only 6 residents paying council tax (out of 36) although the building has fully sold. This means the owners have just bought them as investments and not even living there or letting them
- cheap credit
- Most expensive properties owned by Mittal (Steel Tycoon), Chinese, Arabic and Russian investors, therefore not based on UK tax payers wealth

I don't see any reasons that this would change in 2016

Harry Flashman

19,283 posts

241 months

Tuesday 22nd December 2015
quotequote all
Lady F and I have just bought a house in SW London (inner Zone 3), despite my preference to move out. We kept my house (Dulwich - also Zone 3) - living in it at the moment whilst the new house is refurbished over 6 months. This is proving to be financially interesting, as we are not getting rent from it!

Some thoughts, all just opinions:

- Victorian and Edwardian houses still seem to be in very high demand. They were 30-40% more expensive on our street (we bought a 1920s house). I see them continuing to be pricier than their counterparts, especially as they are limited stock, and increasingly targeted by companies allowing energy efficient refurbishments to bring them up to date.

- new build flats I think will be more challenged, due to the sheer number being constructed. Even the "luxury" ones are no better than the right to buy ones in terms of core construction; they just seem to have better fittings. These are going up everywhere at a cost to local conveniences: petrol stations/consumer industrial spaces (e.g. garages) are disappearing to build these small developments, for example.

- flats generally may be challenged as the buy to let restrictions come into play. People may well lose properties that make no margin when they no longer get tax relief. There are quite a few of these folk, who leveraged one home to buy another, also debt financed. That said, in almost-prime areas (Clapham, Camden etc) the rental values achievable may mitigate this?

- Anything with off street parking is a good buy, as councils increasingly put parking restrictions on so far unrestricted roads, and increasing numbers of flats with no parking stress capacity on side streets.

- Outer London (Zones 4,5,6) are catching up with Zone 3, and even parts of Zone 2. I think the smart buys are here, where fares are controlled, as both Crossrail and Thameslink services from North to South and East to West improve. Crossrail has already seen big price rises. Thameslink, because it is so awful and the improvement not publicised, has not by so much.

- SE London is the one to watch, specifically places like Catford. Grim centre, lovely Victorian streets of houses nearby. Watch for middle class local pubs opening - really!

- I think when interest rates rise, prices will stagnate for homes bought with big debt as mortgages become harder to service. However, the negative equity/interest only/100% mortgage scenario should be less these days.

In conclusion, I think the 40% rise predicted for London is not likely. Outer London and home counties (particularly underpriced Essex), quite likely. The flow of money out of London may slow, as you are no longer able to swap your house for twice the house an hour on the train from Central London.

Zone 2 & Nice Zone 3? Stagnation, possible corrections.

Prime London, correction. But hardly any effect as the people who own these houses probably do so without debt, or can ameliorate the so far efficient debt they used to buy them.

All personal opinions, and not predictions! Sadly for us personally, I see stagnation. I wanted to buy in Essex, Lady F wanted to stay near our friends in Streatham/Clapham/Brixton/Dulwich: all areas which have seen massive (and arguably unjustified) price rises.


Edited by Harry Flashman on Wednesday 23 December 00:11

Harry Flashman

19,283 posts

241 months

Tuesday 22nd December 2015
quotequote all
mgtony said:
Each year you think they can't get any higher, they just keep going up.
I knew we couldn't be far from a 3 bed semi near me in E17 reaching the £1million mark, and spotted this last night:

http://www.zoopla.co.uk/for-sale/details/39033434?...

Not exactly the pristine victorian house you'd expect for that budget! Seems like they got a deal on a job-lot of radiators!! smile
Good lord!

And not even big...1500 square feet, which means that even at best post extension you are looking at 2000 square feet. And next to some monstrosity as well...