Is now a good time to buy in London?

graham3182

I know it's a million dollar question and no one has a crystal ball but I'm hoping to gather as much information as possible.

I have recently moved back to London after two years working overseas, in that time I inherited an amount which would be enough to buy a small place in London outright. One of the key reasons for moving away was the frustration of renting in London for the last ten years, so the new money has changed all that and I came back.

I had put in a couple of offers on a one bed flat, but neither accepted. I then saw a much bigger two bed flat last weekend, put in an offer which was accepted. The first place has since come back and said they would accept my second offer if I was still interested. The same amount for both.

Both are ex council in different estates but the same area, and both about 50:50 council and private. The one bed is in the ground floor of a five story block, the two bed on the fifth floor of twelve story block. I'm happy with it as the second bedroom brings many opportunities...to rent it out for extra income, more space to have family & friends stay, use as a study/storage etc, but one day I will want to sell it. I know some lenders do not loan on larger blocks but have looked at the land registry details of the four properties sold within 2014 (all for a siliar amount as I offered), one had NatWest, one Santander, and the other two had no lenders so clearly there are big lenders that do.

So back to the ultimate question, should I buy now or are prices likely to fall in the coming months? I cannot ignore the question of what I would do with myself, I wouldn't want to commit to a 12 month rental so would need to carry on staying with friends. Which isn't really ideal for an extended time but if it saved me thousands of pounds by delaying a purchase that would make up for it!

My only experience of the mortgage market was to be told that having no recent UK work experience I would need to wait 3-6 months. So I don't really know to what extent the recent changes have affected the market...is it like 2008/09 when lending seemed to virtually stop over night and resulted in a year of falling prices, or nothing on that scale?

cloo

Nothing like on that scale I'd say... lending did slow a bit with the intro of MMR, and the market is rising more slowly but no big changes. I've been market watching for us for the last 6 months and definitely in the last 3 months prices have stalled and we're starting to see some prices being reduced, although I still think top notch, great condition places in popular spots are still commanding above asking price (though maybe not as much as earlier this year). So it's a better time for buyers now that 3 to 6 months ago, but not necessarily super easy. Lending is, I think, still going strong.

SuzieSue

I wouldn't buy an ex-council flat (house would probably by ok) because I have heard too many horror stories about people being forced to stump up tens of thousands of pounds for repairs.

Also, there was a tv program a couple of weeks ago when the council decided a demolish a block of flats and the people who had bought them were offered nothing like the market value so they weren't able to buy anything else in London.

Errata

From te Huffington Post

London house prices leapt by 21.6% annually in August to mark the strongest annual growth seen in the capital for 14 years, according to Land Registry data. The increase came as property values across England and Wales pushed up by 8.4% annually, representing the largest annual increase seen since September 2007.

IceScraper

Would I buy in London? Yes


Would I buy an ex council leasehold property? Not a hope in hell. Research service charges and one off charges on council properties

Owain_Moneysaver

graham3182 wrote: »

the two bed on the fifth floor of twelve story block.

Either a lift, or a flat roof, ring some alarm bells.

Both are potential very high maintenance costs.

A 2-bed flat on the fifth floor without a lift will be undesirable especially to young families with a pram, which will probably be a large part of the target market when you come to sell.

Francesanne

Owain_Moneysaver wrote: »

Either a lift, or a flat roof, ring some alarm bells.

Both are potential very high maintenance costs.

A 2-bed flat on the fifth floor without a lift will be undesirable especially to young families with a pram, which will probably be a large part of the target market when you come to sell.

Friend sold her ex council property in W2 area because maintenance costs were extortionate & she just couldn't afford the escalating costs.