London Has Peaked

Crashy_Time

ukcarper wrote: »

Well I would consider £400 for a room bad value compared to £0 for a 4bed house to myself. The yield on that property was 1.5% which would equate to a rent of £200 a month on an average priced house or £125 a month on a £100k house I suppose there are plenty of properties like that around.

So would I, so I rent a flat instead.

ukcarper

Crashy_Time wrote: »

So would I, so I rent a flat instead.

So you say now

lisyloo

nothing like being on the hook for a highly leveraged I.O bet at all

My I/O mortgage is about £100pcm (rate 0.99%).
I've been making a profit on it for the last 6 years.

wotsthat

Crashy_Time wrote: »

My rent has been average 400 p.m for many years, simply because the demand just isn`t there to raise it any further. This is basically pocket change, nothing like being on the hook for a highly leveraged I.O bet at all.

Renting or a liar loan IO mortgage - are they the only two options?

£400/ month is indeed pocket change but for even less you could now (or thereabouts) own the flat you live in, have at least the same amount of cash and be adding that £400 to your stash on a monthly basis. Probably have managed a couple of moves in that time too. So, yes, pocket change but good value - maybe not.

You've prioritised being debt free over home ownership (fair enough) but it's silly to pretend this hasn't imposed a financial cost especially when there's so much hindsight available.

danothy

Okay Crashy, give me some life advice. I am currently renting a flat. I have no consumer debt to speak of, just a student loan that is serviced via PAYE. I have some savings which I am adding to each month. The flat below the one I currently live in is identical to mine, for sale, and priced quite optimistically. I have the following options open to me:

Option 1:
Keep paying monthly rent, where I am now or in another property, forever, hoping that in retirement my savings cover my rent and living expenses.

Option 2:
Buy the flat below me with a 25 year capital repayment mortgage using my savings as a deposit. With a 3.5% interest rate the mortgage repayment on the flat below the one I currently live in would be the same as my rent now (assuming I paid full asking price).

Option 3:
Buy some other property (e.g. a freehold 2 bed end terrace in my area) that is priced about the same as the flat below me. Again, uses savings as deposit for a 25 year capital repayment mortgage. With a 3.5% interest rate the mortgage repayment on such a property would, again, be the same as my rent now.

Which option should I take, Crashy, and why should I take it? Bear in mind though before you answer that this is a real life situation and decision. There is nothing hypothetical about it. If you're negligent in your assessment your advice will cause harm.

antrobus

lisyloo wrote: »

My I/O mortgage is about £100pcm (rate 0.99%).
I've been making a profit on it for the last 6 years.

My I/O mortgage is about £18 pcm.

Bubble_and_Squeak

Libber wrote: »

Rightmove index for January: +1.4%
Halifax index for December: +0.9%
Nationwide index for December: +0.2%
Land Registry index for December: +0.6%

Bears like positive numbers, right?

rightmove trend is downward
halifax doesn't really reflect london
nationwide will get revised down (as usual) when the next figures are released
land registry is incomplete and several months behind the curve

Bubble_and_Squeak

danothy wrote: »

Okay Crashy, give me some life advice. I am currently renting a flat. I have no consumer debt to speak of, just a student loan that is serviced via PAYE. I have some savings which I am adding to each month. The flat below the one I currently live in is identical to mine, for sale, and priced quite optimistically. I have the following options open to me:

Option 1:
Keep paying monthly rent, where I am now or in another property, forever, hoping that in retirement my savings cover my rent and living expenses.

Option 2:
Buy the flat below me with a 25 year capital repayment mortgage using my savings as a deposit. With a 3.5% interest rate the mortgage repayment on the flat below the one I currently live in would be the same as my rent now (assuming I paid full asking price).

Option 3:
Buy some other property (e.g. a freehold 2 bed end terrace in my area) that is priced about the same as the flat below me. Again, uses savings as deposit for a 25 year capital repayment mortgage. With a 3.5% interest rate the mortgage repayment on such a property would, again, be the same as my rent now.

Which option should I take, Crashy, and why should I take it? Bear in mind though before you answer that this is a real life situation and decision. There is nothing hypothetical about it. If you're negligent in your assessment your advice will cause harm.

buy a place you want, not any ol' rubbish to "get on the ladder" or "save money on rent"

Bubble_and_Squeak

tkane wrote: »

Same in NE London. I save most properties I find interesting/look sensibly priced even If I have no interest in placing an offer...I'm shocked myself at how much has gone SSTC despite being a complete bull.

People being sidetracked by feeble price reductions in the centre, I would advise them to buy now before the election because this is really as good as it's going to get for buyers.

an interesting claim.
asking prices are down according to rightmove.
over 25% of entries on rightmove have been reduced against under 5% which have been increased in the areas i monitor.
i only look at houses, though so maybe flats are still rising whilst houses are facing downward pressure.

danothy

Bubble_and_Squeak wrote: »

buy a place you want, not any ol' rubbish to "get on the ladder" or "save money on rent"

You weren't asked.