Is £250K for a 1 bed flat about right price for West London in traditional terms?

elliotwave

If the median wage for London is about £40K then there are plenty of folks earning 50K+ so at 4 times salary + a healthy deposit ...£250K is in traditional terms fairly priced?

I guess it boils down to the numbers of people in London earning 50K or above...probably quite a lot? Could argue that the corresponding property type should above starter level ... 2 bed rather than 1 bed...

Thrugelmir

If a one bed flat rocks your boat then I guess it offers good value.

PasturesNew

elliotwave wrote: »

I guess it boils down to the numbers of people in London earning 50K or above...probably quite a lot?

There's probably a lot of couples earning £50-60k between them too.

the_flying_pig

elliotwave wrote: »

If the median wage for London is about £40K then there are plenty of folks earning 50K+ so at 4 times salary + a healthy deposit ...£250K is in traditional terms fairly priced?

I guess it boils down to the numbers of people in London earning 50K or above...probably quite a lot? Could argue that the corresponding property type should above starter level ... 2 bed rather than 1 bed...

if your question is simply, is the current relationship between london HPs & london pay pretty much the same as it ever was? then emphatically no, it's trivially easy to prove, with referenced to published data, that the relationship that existed even a few years ago has been completely smashed.

whether or not this means that prices are [your words] "about right" or "fairly priced" is another matter & a much harder question.

elliotwave

I'm not saying the market is not overvalued in general, I think it is, but there still seems to be some 'fair' value in terms of multiples of median wages. I live in west London which is probably the worst of all and the properties I am looking at are £250K to £300K (but are only one beds)

IronWolf

Wages dont really matter, look at rental yields to see whether prices are getting ridiculous or not.

hildosaver

A quarter of a million for a one bedded flat? Just let that sink in.

Loughton_Monkey

elliotwave wrote: »

.... but there still seems to be some 'fair' value in terms of multiples of median wages.

I've bought several houses in my lifetime. I believe I paid on (or about) the fair value for each of them.

At no stage in the buying process, however, did I find the need (or benefit) in waving my payslip, or that of Mr Median down the road, to justify a lower price.

I sold my 9 year old XJ6 last year. Got £6,800 which I considered 'fair'. That's a year in which 2,476,435 new cars were registered in UK. Just imagine that there had been a worlwide car strike, and only about 250,000 had been made for the previous 5 years. The 'fair price' for my car would have been a bit higher wouldn't you think?

chucknorris

hildosaver wrote: »

A quarter of a million for a one bedded flat? Just let that sink in.

That would be in a cheap area, I wouldn't want to buy a flat in such a cheap area. I'm not saying that I wouldn't buy in a cheap area (if I was in the market to buy) but it would have to be a house in such an area. But obviously I understand one can only buy what they can afford, the point I am making is that £250k is very cheap.

the_flying_pig

IronWolf wrote: »

Wages dont really matter, look at rental yields to see whether prices are getting ridiculous or not.

based on yields London property is certainly overpriced.


anything much higher than a 4.0% gross yield has become rare in the better areas. a good number of people have clearly been buying/not selling with further price increases, rather than fundamentals, in mind. That and/or being super myopic in terms of interest rates. I don't know what the best part of a year of flattish prices might do to dent this belief.

Conrad

Too much emphasis on income multiples is a misnomer. There is much more to price than this. I meet a high proportion of people with cash earnings, so official earnings statistics are highly misleading.


In the end demand is extremely robust and London is seen as a safe haven investment (just as I predicted in 2008 when all the bears scoffed at this notion UK was a safe haven).