How Far Will House Prices Fall? [Volume 6]
Discussion
Joey Deacon said:
Sorry didn't understand what you meant, yes we deliberately wanted to avoid the flat first step on the ladder. We do actually live in KT6 and I did actually look at buying a flat behind the station in KT5 in 2006 as a Rental but ended up buying a 3 bedroom house in Hampshire for less. I am very pleased I did as flat prices seem to be the same or less than they were five years ago.
The days of flats in KT6 going up £30K a year are long gone.
How much capital would you have paid off in that 5 years though, whilst having somewhere to live etc. The days of flats in KT6 going up £30K a year are long gone.
Jezza30 said:
This is possibly, actually definitely the most cringe post I have ever read on PH.
I think this take is unfair, and smacks of jealousy. He was responding to a question of how people save £100k deposit without mum and dad - he replied with a real world example of saving hard for 3 years whilst he temporarily had a high income. The “only” was written to be relative to £100 - so he was talking about saving £100 on a salary of £140. It’s very much not the same as saving £25k on a salary of only £35k, but you get the picture.I totally get that there are the world’s smallest violins for a man saving £3k a month, during a national pandemic when the world’s going to s
t, but it’s still financial discipline. He didn’t spaff it all on a lease motor or whatever.Edit: added clarification about the only statement.
Edited by BurtonLazars on Tuesday 23 February 13:53
kingston12 said:
I'd say that they are all in a similar position. That type of flat would have been a bit more expensive to start with, but still don't seem to be selling very well.
BTL yield is also quite low because the extra value created by those 'extras' doesn't seem to be fully reflected in the rent e.g. a £350k flat in a block in a relatively poor position might rent for £1,400 a month where as a much more expensive one with garden/parking in a better area might get £1,600. I'd expect the latter to be much easier to rent out though, even if it doesn't get much of a premium.
I would say the only flats around here that seem to be selling are the older pre 1930s flats in attractive blocks in good locations. Anything 60s and newer (which this flat is) seem to be a really hard sell right now unless you are really realistic with the price.BTL yield is also quite low because the extra value created by those 'extras' doesn't seem to be fully reflected in the rent e.g. a £350k flat in a block in a relatively poor position might rent for £1,400 a month where as a much more expensive one with garden/parking in a better area might get £1,600. I'd expect the latter to be much easier to rent out though, even if it doesn't get much of a premium.
We were renting a 2004 flat on a main road with underground parking for £1295 a month before we bought, that the landlord tried to sell (hence why we bought) . It was up for £460K and in the two months it was listed it did not get a single viewing. As soon as we handed in our notice he decided to rent it again and he had 8 viewings booked the first day and it went to the second person who viewed it.
Interestingly enough he paid £317k for it in 2007, when houses in our road close to the river were selling for £280K. The flat also had an elevator so I suspect the service charge was £200+ a month. Doing the math, BTL would just not make sense as you would need a massive deposit just to get the mortgage. After paying the mortgage and service charge you would be left with nothing.
I personally would not be buying a flat right now unless it was in a great location in a beautiful building.
okgo said:
Joey Deacon said:
Sorry didn't understand what you meant, yes we deliberately wanted to avoid the flat first step on the ladder. We do actually live in KT6 and I did actually look at buying a flat behind the station in KT5 in 2006 as a Rental but ended up buying a 3 bedroom house in Hampshire for less. I am very pleased I did as flat prices seem to be the same or less than they were five years ago.
The days of flats in KT6 going up £30K a year are long gone.
How much capital would you have paid off in that 5 years though, whilst having somewhere to live etc. The days of flats in KT6 going up £30K a year are long gone.
I suspect even paying the £47K in rent we are better off having bought the BTL house over a flat to live in. I still have the BTL so that is still rental we are getting each month.
Plus, as I said earlier we would have had to sell the flat (not easy at the moment) and would 100% missed out on the house we bought last year.
Joey Deacon said:
Not having anything to sell was also a massive advantage when buying our house as the sellers wanted a quick sale. We initially offered under the asking price and were told there were 3 offers so they wanted our best and final offer. I offered the asking price, sent over our deposit and mortgage offer proof and explained that we were in rented accommodation and were ready to go.
They accepted our offer an hour later, there was no chain and we got the keys 2 months later. If we had a flat to sell we would 100% of missed out. 6 months later the house opposite has just gone under offer after being listed for £70K more than we paid.
Yep, the seller of our current place wouldn't accept any offers from buyer who needed to get involved in a chain. We owned a flat at the time, so just kept it and rented out for 18 months before selling it.They accepted our offer an hour later, there was no chain and we got the keys 2 months later. If we had a flat to sell we would 100% of missed out. 6 months later the house opposite has just gone under offer after being listed for £70K more than we paid.
It worked out well for us because it was a truly mad time in the market which went up nearly 30% in that time, but I'm not so sure I'd do that at the moment.
BurtonLazars said:
Jezza30 said:
This is possibly, actually definitely the most cringe post I have ever read on PH.
I think this take is unfair, and smacks of jealousy. He was responding to a question of how people save £100k deposit without mum and dad - he replied with a real world example of saving hard for 3 years whilst he temporarily had a high income.I totally get that there are the world’s smallest violins for a man saving £3k a month, during a national pandemic when the world’s going to s
t, but it’s still financial discipline. He didn’t spaff it all on a lease motor or whatever.Jezza30 said:
Its not jealousy - I do okay thanks and know plenty of people who have saved similar amounts without leaning on serious salaries or BOMD. But only on PH could someone be so laissez faire about that sum of money p/a. This thread has moved from genuine discussion over values to brag among internet friends.
You misread the thrust of the post - "only" referred to the time period of 3 years not the amount earned.Generally on this thread we have avoided the accusations of willy waving that pervade the rest of PH and I for one would like to keep it that way.
NickCQ said:
Jezza30 said:
Its not jealousy - I do okay thanks and know plenty of people who have saved similar amounts without leaning on serious salaries or BOMD. But only on PH could someone be so laissez faire about that sum of money p/a. This thread has moved from genuine discussion over values to brag among internet friends.
You misread the thrust of the post - "only" referred to the time period of 3 years not the amount earned.Generally on this thread we have avoided the accusations of willy waving that pervade the rest of PH and I for one would like to keep it that way.
Generally on PH the only people that boast about their money are the ones that don't have any and will therefore avoid any attempts to make them back up their claims. On the other hand, if it emerges that someone is doing well for themselves as a natural part of a discussion, it will bring out people that are embittered and jealous and all of the old chestnuts about how no-one can be worth that much/must have inherited the money, etc. You'll always get this if you mix people who are far apart on the spectrum, whether it's in a pub or on the internet.
Jasandjules said:
I kind of hope so as I would like to try my hand at a BTL.... I do wonder just how long these prices can rise, they are frankly ludicrous around here and I am out in the sticks.
Prices have probably always seemed ludicrous at any point in time. Our first house was £20K and colleagues thought I was mental. We had to queue up to get it, and still missed out, only getting it as someone dropped out. We had to beg for a mortgage.Sheepshanks said:
Jasandjules said:
I kind of hope so as I would like to try my hand at a BTL.... I do wonder just how long these prices can rise, they are frankly ludicrous around here and I am out in the sticks.
Prices have probably always seemed ludicrous at any point in time. Our first house was £20K and colleagues thought I was mental. We had to queue up to get it, and still missed out, only getting it as someone dropped out. We had to beg for a mortgage.Jasandjules said:
True but I "only" paid 140k for a 3 bed house when I was a FTB. Now a 3 bed around here is 380k...
People who bought their house ten years ago for what we just paid are now sitting in £1 million+ houses. That truly blows my mind. We could scrimp and save for the rest of our lives and still never be able to afford one.Joey Deacon said:
Jasandjules said:
True but I "only" paid 140k for a 3 bed house when I was a FTB. Now a 3 bed around here is 380k...
People who bought their house ten years ago for what we just paid are now sitting in £1 million+ houses. That truly blows my mind. We could scrimp and save for the rest of our lives and still never be able to afford one.I reckon the actual average price for a 'house' in London is £1m. I've just looked at South, North, West and East and based on SOLD prices over last year and they're coming out on average at about £1m with thousands of transactions.
If you want a laugh - the average house price in West London for ALL property types is £1.1m, and for for a terraced/semi det house its £1.4m and there were nearly 3000 sales last year. In South London (it is including east and west too) there were 4000 sales last year of normal houses with the average at £1m.
So back to my point about the average salary of homeowners in London, it ain't going to be 40k.
If you want a laugh - the average house price in West London for ALL property types is £1.1m, and for for a terraced/semi det house its £1.4m and there were nearly 3000 sales last year. In South London (it is including east and west too) there were 4000 sales last year of normal houses with the average at £1m.
So back to my point about the average salary of homeowners in London, it ain't going to be 40k.
Shnozz said:
Joey Deacon said:
Jasandjules said:
True but I "only" paid 140k for a 3 bed house when I was a FTB. Now a 3 bed around here is 380k...
People who bought their house ten years ago for what we just paid are now sitting in £1 million+ houses. That truly blows my mind. We could scrimp and save for the rest of our lives and still never be able to afford one.Shnozz said:
It also shows just how much the London -v- non-London wealth gap has widened. There are properties I am looking at in a Northern city that are on the market for within a few percent of what they bought them for in 2006/2007. Until 2016/2017, most of them would have still been in negative territory.
Mad Gainz....45, Auckland Road, Kingston Upon Thames, Greater London KT1 3BQ
Terraced
£837,500 24 Nov 2020 Freehold
£395,000 1 Apr 2010 Freehold
£248,500 4 May 2004 Freehold
117, Ditton Hill, Long Ditton, Surbiton, Surrey KT6 5EJ
4 bed, detached
£900,000 28 Oct 2020 Freehold
£575,000 9 Dec 2011 Freehold
31, Bond Road, Surbiton, Greater London KT6 7SH
4 bed, detached
£915,000 7 Oct 2020 Freehold
£476,000 5 Jan 2012 Freehold
Missed the address!
£925,050 2 Oct 2020 Freehold
£575,000 1 Dec 2011 Freehold
£410,000 26 Sep 2002 Freehold
£338,166 20 Jul 2001 (New Build) Freehold
okgo said:
So back to my point about the average salary of homeowners in London, it ain't going to be 40k.
Homebuyers will be earning more than £40k, sure, but there will be a lot of homeowners that have purchasing power that is significantly detached from their salary due to previous gains.Gassing Station | News, Politics & Economics | Top of Page | What's New | My Stuff