Is it safe to buy my first home near London at this time?

GDB2222

AlexMac wrote: »

And over time, everything works out OK; a mate of mine bought a flat in Lewisham at the height of the boom in the late 80's; 2 years later it had lost 35% of value. So when he had to move again, he rented it out and 10 years later, by the time he sold, it had recovered and he was well in profit.

The boom years may be over but you have to live somewhere!

I'm a little concerned about the 'it will be okay in the long run' approach. People advising on shares used to say that, which encouraged share prices to zoom up to astronomical levels. Currently, UK share prices are 30% off their peak, which was 12 years ago. Japanese shares are 80% off their peak, which was nearly 30 years ago. Japanese property prices are well down from their peak. And, there are other examples. The OP has specifically asked for advice about timing, eg buying now rather than in a few years' time.

londonlydia

Personally, if I was just looking to moving to a general area the size of where you're looking, I would buy in a catchment of a good primary and secondary school.

Regardless of economic security, good schools can keep localised areas up in price. Many poeple will spend what money they do have securing their kid's futures. I live in the catchment of a great primary in Welling, SE london, and my house's road has steadily increased in price since purchase in 2006....and I'm sure it's because of the schools (Bexley also has grammar schools which are very popular).

Buying near proposed transport is also a good idea, as that usually adds a few pounds on. There's going to be cross-rail in abbey wood, which currently is actually quite cheap, so that's an option.

GDB2222

Round here (in London) a 3 bed house in NW2 will be about £350k to buy, or £370/week to rent. If you buy and mortgage interest is at 5% (on 95%), that will cost you £320/ week, but you have to pay for insurance and maintenance, which could easily cost the extra £50/week. You also have the gain/loss if prices go up/down.

I'm not sure what the mortgage rate would be with a 5% deposit, though. I could be a bit high or low. Despite that, I would not say that buying is all that much cheaper or more expensive in terms of weekly outgo at the moment. The OP is right to be worried whether prices will go up or down.

DalePie

Dxhawk wrote: »

My wife and I have been renting for around 10 years and would love to buy. We would need to go for a 95% morgage as do not have enough deposit for anything else and looking at 2/3bedroom house or flat in South/South East London.

Biggest fear I have is ending up in negative equity due to the ecomomic issues, and also have to consider job security etc too.

What are peoples opinions on buying at the moment?, would you or would'nt you? How dangerous is it at moment?

I wouldn't worry too much. The market has fallen massively and probably won't go much further. Buying in London has to be safer than many other places in the country too.

I would buy, given the fact the market has fallen you might end up in very positive equity!

Lizling

Depends where. London isn’t one homogenous market and neither is the rest of the south east. In some areas, like Kensington, prices have been rising and maybe that’s a bubble, but in every other area I’ve looked at (South and West zone 3-5) they’ve been static for the last 2 years.

Other than in the Olympic area, I can’t see much changing in London over the next couple of years except renting getting more expensive as the housing shortage worsens – interest rates aren’t going up any time soon, the economy isn’t going to get back to the old ‘normal’, London will still be where a lot of the jobs are – so now seems as good a time to buy as any.

Further out though, looks like the cost of commuting by train will be going up again. Presumably a lot of people factor in their commuting costs when they decide where to buy.

Short version: house prices probably won't change much but rent could go up further.

I'm putting my deposit where my mouth is and trying to buy.

GDB2222

When the Olympics end, won't there be a large number of flats put on the market?(The olympic village.)

Lizling

Yes, but not a large enough number to influence the prices right across London imo. That said, if the OP is starting to look now, the chances of him/her buying before the Olympics finish are very low anyway.

Conrad

IMO we're at market bottom unless Spain etal collapse the Euro, but even then it would only be a temporary lull as UK would be viewed a safer place to invest than much of Europe.

Read old news headlines going back to the 70's. Always things looked dire on many front - OPEC crisis, WW3 nuclear threats, many middle east wars, IRA bombs, strikes, 3 day weeks, Tracks like 'Ghost Town' and '1 in 10' telling us everything was going down the pan.

But you know what, life goes on and in time that once high house price shrinks away.

undetterred

brit1234 wrote: »

London is a bubble on a bubble it is going to pop at some time. My best bet is going to be after the Olympics starting in the Eastern side. On top of that the foreign safe haven money will stop at some time. Much of it ist now going into Germany but a fair bit is still coming to London.

Its clearly a ticking time bomb, best advice is to keep saving that deposit.

What next when the olympics fails to achieve falls,.

geoffky

dalepie wrote: »

i wouldn't worry too much. The market has fallen massively and probably won't go much further. Buying in london has to be safer than many other places in the country too.

I would buy, given the fact the market has fallen you might end up in very positive equity! :d

how old are you!!!