Would you buy a house in London today?

TickersPlaysPop

To answer your question we need to know a lot more information.... not because we are nosey ! Advice on buying a house needs to consider the individuals whole financial situation .....

What is your age
What is your job and salary?
Do you have dependants?
Do you have any loans inc car hire purchase, how much and what % interest?
What is the property value
How much deposit do you have
How much extra savings/ ISA investments do you have?
Do you have a pension, how much in it
Do you have any family support available if the worst happens?
What mortgage offers have you had and what are the details % etc

These are the things poeple here should be asking you before jumping to advise yes or no to buying a London property.

To take this to the extreme to emphasise my point, if you were a millionaire deciding to buy a £400k flat in London.... the answer would be of course.... Yes!

Lyncroft

Renting in London but flat being sold. Am coming into a bit of money but not enough to buy in London but enough to buy in the Milton Keynes area where with a bit of maneouvering at work I could be relocated to. Could buy a nice freehold house there with garden but away from family and friends. No idea what to do!

TickersPlaysPop

Hi lyn

See post above.... things you should consider to help make your decision .... my feeling is that there is less risk of house price drops in Milton Keynes compared to London.... but the truth is nobody knows what will happen!

Running_Horse

Bought both my houses at the peak of the market (1989 & 2007), and it worked out financially both times.

But what is happening in London right now looks insane. If I was in that position I would be very very nervous and cautious about investing that much money.

Your circumstances and risk strategy might be different.

Gangaweed

Not sure.

It's hard to say what a fair price is, given that there isn't exactly a freely operating market.

Thrugelmir

Never had a desire to live in London. Prefer the shires......

padington

If you ask me ...

Londom will carry on rising on average for a couple of years, rents will go up even faster. Looking beyond that, really couldn't say. Mostly depends on politics and taxation.

There will be a pause for breath at some point with prices going sideways for a while rather than a crash I should imagine.

IveSeenTheLight

padington wrote: »

If you ask me ...

Londom will carry on rising on average for a couple of years, rents will go up even faster. Looking beyond that, really couldn't say. Mostly depends on politics and taxation.

There will be a pause for breath at some point with prices going sideways for a while rather than a crash I should imagine.

I'd agree, hence why if you plan to live in London and can afford to buy (Even if only planning to stay 5 years), buying would be far better than renting.

Jason74

I think in the case of London, it's absolutely impossible to say what is going to happen next. In most of the UK, it is a fairly simple case of demand for homes outstripping supply, combined with cheap money and a recent daramatic increase in Mortgage availibility via HTB. The results of this are pretty predictable.

All of the above applies in London too of course, and if anything the demand / supply imbalance is more acute. But it's not the whole story. Much of the London market is driven by foreigin investment and speculative behaviour in a way that isn't present in the rest of the UK. That has led to a situation where the London market nolonger bares any meaningful relation with the earnings of people who live in those areas, and where for many owners, their property is seen in the same way as a share portfolio.

That scenario is inherently more volatile than one where people are buying homes for their own occupation to live in, and that kind of market can turn very suddenly. I'm not saying that will happen of course, although there are some signs in the data and press reports that it might be (albeit these have been seen before, only for the market to power ahead). Just that it can. And the fact that it can makes London an inherently higher risk play than anywhere else in the UK right now imho. Especially at curent prices, which imho are not remotely supported by local fundementals.

AndyGuil

Jason74 wrote: »

I think in the case of London, it's absolutely impossible to say what is going to happen next. In most of the UK, it is a fairly simple case of demand for homes outstripping supply, combined with cheap money and a recent daramatic increase in Mortgage availibility via HTB. The results of this are pretty predictable.

All of the above applies in London too of course, and if anything the demand / supply imbalance is more acute. But it's not the whole story. Much of the London market is driven by foreigin investment and speculative behaviour in a way that isn't present in the rest of the UK. That has led to a situation where the London market nolonger bares any meaningful relation with the earnings of people who live in those areas, and where for many owners, their property is seen in the same way as a share portfolio.

That scenario is inherently more volatile than one where people are buying homes for their own occupation to live in, and that kind of market can turn very suddenly. I'm not saying that will happen of course, although there are some signs in the data and press reports that it might be (albeit these have been seen before, only for the market to power ahead). Just that it can. And the fact that it can makes London an inherently higher risk play than anywhere else in the UK right now imho. Especially at curent prices, which imho are not remotely supported by local fundementals.

Only 3% of the property in London is foreign owned. Foreign purchases now are not any higher than they have been. The issue is simply alot of people wanting to live in an area with a limited number of properties available. London weathered the credit crunch, its fundamentals are better than most places, certainly better than anywhere else in th UK.