Surbiton - utter madness

meanmachine_2

So one of the areas I keep a beady eye on is Surbiton.

18 months ago, average for a 1 bedder was 175K. To rent was 750pcm.

Now prices are 215K, and rent has gone up to 780pcm.

Someone explain to me how any of this works.

A 215K mortgage is 950 a month (interest only). And that's before this week's rate rise.

Remember this is Surbition - a nice suburb, but in zone SIX.

kingkano

Too many available for rent keeps the rental price down while most people would prefer to buy (of which there isnt many places to buy because they are all bought by BTL lol) which pushes the purchase prices up..... easy? Obviously there is alot more to it me thinks.

Feanor

hey,

I live in Surbiton at the moment, and i can confirm it is utter madness! We are currently trying to buy a place, but we cant afford anything we want in Surbiton. SOME 1 bed flats are going for almost 300k, its so bonkers. Anything that does come onto the market literally sells within a few days.

I know its in zone six, but it gets to waterloo in 17 minutes and it genuinely is a lovely place to live. I can see why many people want to live here. But we are having to look further a field to get more for our money.

Sarah.

meanmachine_2

Sarah you have my sympathies.

A mate bought in Surbiton a few years back for 90K.

They sold in 2005 for 150K.

That same property is now on the market for 230K!!

Crazy - because the market was dead in 2004/5.

Ah well. You either join the insanity or stay out and wait for the nonsense to end.

keeperbear

You are talk about the insane prices in Surbiton, but then talk about how nice the place is. Prices are going up because people want to live there. It is 17mins away from Waterloo and a University town to boot. Property prices are a function of demand and supply, and I would rather buy a one bedroom property in Surbiton than a similar property for the same price in Manchester.

215k for a one bedroom property in Surbiton is quite reasonable, especially when you consider the relative property prices outside of London.

As for the comparison between buying and monthly rental prices, this is an artificial comparison. For a £150 a month extra, I would gladly buy over renting.

meanmachine_2

keeperbear wrote: »

You are talk about the insane prices in Surbiton, but then talk about how nice the place is. Prices are going up because people want to live there. It is 17mins away from Waterloo and a University town to boot. Property prices are a function of demand and supply, and I would rather buy a one bedroom property in Surbiton than a similar property for the same price in Manchester.

215k for a one bedroom property in Surbiton is quite reasonable, especially when you consider the relative property prices outside of London.

As for the comparison between buying and monthly rental prices, this is an artificial comparison. For a £150 a month extra, I would gladly buy over renting.

Sadly, too many people think like you.

You're not technically buying if you only get an IO.

I wonder how many of these same people would be quite so happy to pay over the odds on an I/O for a place if its value was going in the opposite direction.

I suspect zero.

Ah well. Let the bubble continue to inflate...

baby_boomer

meanmachine wrote: »

Now prices are 215K, and rent has gone up to 780pcm.

So it's still a yield of 4.35% compared to the FTSE100 yield of just under 3% and a RPI linked annuity rate for a 65 year old male of just 4.46% (with 0% return of capital).

I accept that geared property investments could unwind rapidly in the event of a crash.

But prospective buy-to-letters would also have their eye on that FTSE yield as they look to buy up stock [for retirement income] in any property downturn.

Feanor wrote: »

[You can] get to waterloo [from Surbiton] in 17 minutes.

Cool.

Gorgeous_George

meanmachine wrote: »

So one of the areas I keep a beady eye on is Surbiton.

18 months ago, average for a 1 bedder was 175K. To rent was 750pcm.

Now prices are 215K, and rent has gone up to 780pcm.

Someone explain to me how any of this works.

A 215K mortgage is 950 a month (interest only). And that's before this week's rate rise.

Remember this is Surbition - a nice suburb, but in zone SIX.

4.35% isn't a bad return and I guess the tenants in Surbiton are rather nice people. However, I doubt any serious BTL LL would bother with such a small margin.

Now, someone with loadsamoney, or a sizeable inheritance looming, who wants to give their kids the option of living in Surbiton may well commit to a BTL - just in case the 'bubble' doesn't pop anytime soon.

For many people, on less than £30K such as myself, it does seem to be a ridiculous sum of money.



GG

baby_boomer

Gorgeous_George wrote: »

For many people, on less than £30K such as myself, it does seem to be a ridiculous sum of money.

Over time the buy to let investors may increase their stakes because the sums make more sense to them than to you or mean machine.

olly300

Gorgeous_George wrote: »

4.35% isn't a bad return and I guess the tenants in Surbiton are rather nice people.

Lots of them are students.

mingymoo

meanmachine wrote: »

So one of the areas I keep a beady eye on is Surbiton.

18 months ago, average for a 1 bedder was 175K. To rent was 750pcm.

Now prices are 215K, and rent has gone up to 780pcm.

Someone explain to me how any of this works.

A 215K mortgage is 950 a month (interest only). And that's before this week's rate rise.

Remember this is Surbition - a nice suburb, but in zone SIX.

I'm amazed at the spike this year. People have latched onto the relative value in property prices before 2006 and short journey time into London Waterloo. It will be interesting to see the prices for this development since I would not be surprised to see it sold out.
http://www.surbitonplaza.com/