Should I buy in London or wait?

jbmadd

Perhaps this is a common question, but I'll ask anyway for some fresh thoughts.

I live and work in London and at the moment I rent. At some point in my life I would like to own the property I live in, mainly for the freedom and independence it gives (to change things, rebuild, etc)

I only work in London because it's where I could find a job and I have no intention of living here forever. Eventually I think I will either move out to a commuter town around London or even further into the future retire up north somewhere.

I imagine I will want to live in central (ish) London for around the next 6 years or so as I'm not completely settled into work.

So my dilemma is whether I should buy a small flat in London with the aim of selling it in around 6 years' time or whether I should just continue to rent for that period and perhaps buy somewhere out of London after 6 years. My biggest worry with buying a (very) small flat in London is that in 6 years prices have fallen for whatever reason and I've then lost a load of money and can't afford what I would like outside London.

All my friends keep saying that London house prices never fall and it's a safe investment, but with such large increases recently I just see it as too volatile. I would be much more comfortable if prices were moving very slowly upwards. Also I feel that my friends are more tied to London for the long term and so could ride out any dips.

lisyloo

In a similar position.
DH could only find a job in London after a long time looking.
We have a home elsewhere but find it better to both live in London during the week rather than horrendous commute (circa 5 hours) or live apart.

Currently using serviced appartments but some are really tiny for 2 people (last one you even had to sit on the toilet at an angle).
Thinking of renting. I am nrevous that about buying but also feel that prices may not fall as there is so much demand for London.

padington

You need balls to buy in London right now but I'm of the opinion that those with balls, over a five year period, will do very well.

When is the exact best time to jump in ? Often when everyone is saying they are scared.

Either way, as long as you can pay if rates go up, after 25 years you and your future genes will own the home ( if free hold ) forever.

In that respect, it's a no brainer compared to enslaving your family to rent possibly forever in the place they call home.

However I appreciate it's nice to buy in at the right moment and horrible to do so at the wrong moment but the truth is, in the short term no one really knows, it is a total gamble but for the long term it's a given things will only get more pricey in my book, which will eventually leave some families barred from ever owning a London property without much luck on their side.

The train might reverse first but it will eventually leave the station for good.

However if the London train is bit fracking pokey, why not go somewhere else ?

botchjob

This board is littered with bitter people who thought the housing market couldn't possibly keep going the way it has and who thought they could outsmart it by waiting it out. More fool them. Buy when you can. Live in it. Get on with other things. Fact is that ANYONE who has bought in London during the past decade hasn't regretted it. If your sums stack up then no point in hanging about.

BarleyGB

London presents a real dilemma at the moment, whats the risk of missing the boat if prices continue to rise vs how would you feel sitting on a 10, 15, 20% drop for a few years.

Like others have said, if its for the long term then I cant see prices being lover in 5, 10 years. I think there's to much demand to sustain any long term price slide.

With what you've explained and assuming youre buying a home for the long term I think id take the chance, as an investor id still be inclined to buy just outside London as I think the prospects in and around the M25 / commuter belts are higher as the London ripple effect spreads.

AndyGuil

Buying a house is a life long investment. It takes you out of paying rent and gives you the opportunity to build equity that you may want to release later and/or the possibility of being mortgage free one day. Waiting delays being financially secure, it delays being mortgage free and it delays you moving to your next dream home if you are going to move again.

PasturesNew

I'd do it. What's the worst that can happen...? You have to stay there, earning bigger money, for a year or two more than expected.

What's likely to happen? ... time will pass and before you know it it's more than 6 years and you're not ready to move out just yet.

Do it, then you know where you live, you know it's yours, you can relax and decorate. Nobody to answer to.

padington

AndyGuil wrote: »

Buying a house is a life long investment. It takes you out of paying rent and gives you the opportunity to build equity that you may want to release later and/or the possibility of being mortgage free one day. Waiting delays being financially secure, it delays being mortgage free and it delays you moving to your next dream home if you are going to move again.

To be fair buying in at the top of the market can also seriously delay you moving on to your next dream home but yeah the best time to buy anywhere is almost always better starting today rather than tomorrow and in London's case historically even more so.

Also Jmadd, don't bank on doubling your money every ten years. Anything can happen. As Andy says , simply bank on paying your mortgage off after 25 years and being rent free eventually.

N1AK

padington wrote: »

When is the exact best time to jump in ? Often when everyone is saying they are scared.

If everyone was really scared then we'd be seeing prices fall not continue to rise quite rapidly

If buying in London and selling in London in 6 years for the same price would work out cheaper (including all costs) then I'd risk it. You can't know what house prices will do for certain and I wouldn't invest in property, but buying has benefits and if it lowered costs then I think it's the better option.

IronWolf

Some areas of London, like Clapham and Balham are priced absolutely ridiculous at the moment and I wouldn't touch them with a barge pole. For the prices there you could buy in Westminster.

If you want an idea of whether prices are sustainable look at rental yields, they are hitting 3% in some places which is too low.

The flat I used to rent has gone up in value by £100k yet the rent has dropped, the market there is clearly detached from reality.

Out,_Vile_Jelly

Buy somewhere you like and would be happy to live in for a few years rather than worrying about possible future value. Or take advantage of the fact that you can rent in much nicer areas than you can buy in London, and save to buy when you move on.