Opinions on buying a flat in London in the next year

taracauc

A few people on here have said that right now the housing market in London is inflated and it would be wise to wait until housing prices come down. I'd love to hear a few more opinions on this. Is the London market likely to cool off? Would it be wise to wait a year or 2?

lovehackney

Obviously no one can predict what is going to happen to the housing market, but there are three reasons why London is expensive 1. It is regarded as an attractive place to live, by both people in the UK and from abroad; 2. Foreign investors regard it as a safe haven and therefore somewhere to invest and 3. There is a limited supply of housing, and despite the government's promises for XX more houses by 20XX these will still not keep up with forecast demand - or the fact that there hasn't been enough new houses built for years (haven't got the stats to hand, but it's a long time).

So, the question is - do you think any of those things are likely to change in the next two years, applying downward pressure on house prices?

I suppose leaving the EU / curbing immigration somehow would possibly deal a bit with 1. and 2., but ultimately my personal opinion is that there is only going to be upward pressure on house prices.

Whether you trust the opinion of a stranger on the internet, is another thing!
For full disclosure, I own a (mortgaged) flat in London that I bought last July. Regardless of whether house prices continue to go up, I think they're unlikely to go down - and better to be paying off my mortgage than lining a landlord's pockets.

[Deleted User]

I'm in a similar position to lovehackney, having bought with mortgage last July. I chose not to wait because:

a, afraid prices would rise further in the near future
b, fairly certain my purchasing power would _not_ rise in the near future. I am working in a job with only below-RPI payrises, and no promotion on the horizon, and it leaves me little spare each month to build up deposit.

Basically putting these 2 things together, I thought that prices would probably go up, whilst my budget would stay the same, and therefore better to buy asap. Time will tell whether I am right or wrong about house-prices, however my point is that the answer depends on your own evolving circumstances as well.

Jhoney_2

I think if you are moving into London, sooner is going to be cheaper than later overall.

If your going in the other direction at some point (as I will be), you can take a bit more time.

I read today that there is a slow down on property available for sale, which will mean that prices are pushed up further - I have no idea how extensive the report was though. Click on beeb news business page today.

I have owned my place for 10 years and it has more than doubled in price in the last 3-4 years.

macman

There is absolutely no evidence of a cooling-off, let alone prices coming down. The lifting of the threat of a mansion tax has already brought in increased activity at the the top end of the London market, and the imminent arrival of Crossrail will boost prices in all the areas served by it.
Curbs on immigration/leaving the EU (which would probably be at least 4 years away should the referendum go that way) will not affect the market for buyers, since most immigrants here for work will be renting, not buying-unless you are considering buy to let.
Finally, interest rates will not rise for another year now, so mortgages will continue to be at historically low rates, while wages are beginning to rise faster than inflation.

Grenage

Looking at the pricing trends over the last few decades (and years), I would buy as soon as you can afford the purchase; I can't see that there's a bubble to burst. A year or two is only going to cost you a lot of money.

tizzle6560

I completed on my flat last September in SW London, Zone 3 and did so more because it was a viable option at the time and didnt want to lose any more money through paying rent.

If you can afford to do it now, I say go for it 100%. Knowing that a place is yours for the next however many years, is worth all the time, effort and money!

Also I just cannot see prices declining in the foreseeable future. Demand is through the roof in London and only ever going to increase.

Get in early and go with it.

cloo

I remember in the early 00s having a workmate who was 'waiting for the market to fall' in London... it took another 5 years for it to do so and even then, it would have fallen to much more than it had been 5 years previously.

If you're planning to stay put for a bit, buy if you can. We bought literally at the peak in 2007 and we knew it was the peak, but also that we'd be OK given we'd be there a bit and we had a decent deposit. As it was, we were there for about two years longer than planned, and we sold our place at over 50% more than we paid for it. One agent who gave us a valuation told us 'What market crash? It was a bit slow in 2008-09, but basically it was business as usual with prices going up' - that's London.

gaz141

Saw on the news this morning that London prices have started to rise again for the first time in seven months, so the cooling of the London market didn't last very long

cloo

Threat of mansion tax removed, I guess, helps top of market. I know it was stopping some people from selling, such as my in-laws who have a house that could breach the £2m mark within a few years (and they're not mega rich, they've just been there a long time).

bouicca21

Track it back as far as you like - property prices go through a cycle of rise, stasis and a bit of a fall back, then rise again.

The real question is how long do you expect to keep your new property? If short term you may be caught by the dip, if medium to long term, no worries.

I speak from experience. In the 70s I saved and saved for a decent deposit to get a really nice place. Then there was a massive rise in prices. After all the scrimping, I ended up being barely able to afford a house that would have been within my reach when I started out.