Worth selling now? Thoughts on London property market in 2017?

booksurr

no one can give you any advice which is worth listening to on the question you have asked as it is pure guessing, which you may as well do yourself

one thing for sure though consider taxes carefully:
- if you keep it on and at a later date buy somewhere else the 3% SDLT premium will apply to you
- if you are a basic rate taxpayer the changes to mortgage interest relief have no impact on you at all. If you expect to become a higher/additional rate taxpayer then your calculation is already bust
- you are realistic in saying CGT is a tax on profit, but if those profits are needed to fill the void left by the rental income loss why did you bother carrying on anyway?

Nike79

booksurr wrote: »

no one can give you any advice which is worth listening to on the question you have asked as it is pure guessing, which you may as well do yourself

one thing for sure though consider taxes carefully:
- if you keep it on and at a later date buy somewhere else the 3% SDLT premium will apply to you
- if you are a basic rate taxpayer the changes to mortgage interest relief have no impact on you at all. If you expect to become a higher/additional rate taxpayer then your calculation is already bust
- you are realistic in saying CGT is a tax on profit, but if those profits are needed to fill the void left by the rental income loss why did you bother carrying on anyway?

Thanks a lot.
I know there is no definite answer to my question just wanted to hear the general views of those who are in a similar situations as well as the BTL investors or those in a property business and see whats their tactics are going to be once the changes are implemented.

Im quite puzzled myself as i didn't except to move out of the property in the next few years but life had other plans so now I'm on the crossroad and need to make a choice amongst two options, both not being the desirable ones:)

i would have sold it by now but a bit hesitating as I mentioned there is a chance i may need the property at some point.

I believe that the strategy BTL investors chose (massive sale of BTL stocks and putting up the rents instead) will decide the market trends in 2017.

Nike79

economic wrote: »

news/media is just that - news and media. you shouldn't listen to anything they say.

supply problems have always existed in London. its just that demand went up a lot over the last few years. and demand can easily collapse again - driving prices lower.

I dont really mean to act as advised by any particular source of information but i believe its important to listen to what the media, analysts and people in the property business say/think as knowledge is the power which will help me to make my own informed choice.

This forum has been really helpful as there were some tax related points i haven't really thought about despite reading a lot on the matter:o

As i have followed the price trends in London in the last 20 years the property kept rising in the last 20 years depiste falls and stagnation periods which didn't last more than a year to two.

I hole the trend will continue:A

brit1234

Its difficult to say. Logic says prices should continue to fall and spread outwards however just when you think they will fall some big intervention comes in out of no where.

I believe central London prices and luxury flat prices will continue to fall. The far east property investors are now clearly pulling out due to their econic crisies in the various countries. Russian sanctions are hitting top end of the market as well. There is also huge amounts of properties being built everywhere, majority luxury aimed at investors.

However then you have Help to buy propping up the lower end of the market. Now for London that is giving a 40% deposit pushing prices up at lower end of the market.

No one really knows what the effect on the lower end of the market by the buy to let changes and stamp duty changes, we should see by summer. Then there is the interest rate rise which might come but it wouldn't suprise me if it is put back yet again.

There is also increasing talk of a 2017 international recession which will could include house prices props again.

economic

Nike79 wrote: »

I dont really mean to act as advised by any particular source of information but i believe its important to listen to what the media, analysts and people in the property business say/think as knowledge is the power which will help me to make my own informed choice.

This forum has been really helpful as there were some tax related points i haven't really thought about despite reading a lot on the matter:o

As i have followed the price trends in London in the last 20 years the property kept rising in the last 20 years depiste falls and stagnation periods which didn't last more than a year to two.

I hole the trend will continue:A

no if you are listening to the media you might as well ask a 8 year old kid for advice. media is all BS and you got to remember they will write anything just to sell.

the only thing you can do is come up with different scenarios if prices fall or rise by this much what impact will it have on you and other circumstances like tax liabilities, opportunity cost etc etc and then make a decision based on that.

for example I'm selling my flat to buy in a better prime area as I believe when prices fall my current area will drop more then a prime area and will make it difficult to sell later on so I will buy somewhere where I intend to stay for a very very long time.

cashbackproblems

If you intend to move back to the flat then I would rent it out, if you sell you lose out financially but then also prices will increase in the future making it harder to get back on. But as mentioned if you rent this out and buy somewhere else you need this extra 3% on top of everything else.

Rates are going up, BTL's are being pushed out this imo will stop prices increasing silly amounts, but the demand is there!

economic

I'm not sure its the BTL investors who caused prices to rise silly amounts. the rise between 2012-2014 in London was due to pent up demand from FTB. you saw generally up and coming areas outperform prime areas.

there is demand out there from buyers (not only BTL) but that doesn't mean prices will go up massively. buyers are careful what they buy and how much they spend now. the silly period in 2014 wont happen again.

question is will prices fall a lot from here or will they rise gradually or stay flattish.

no one knows what will happen of course but my bet is that real prices will start falling now. property is no longer a good investment in London. I would only buy to live in a place for the long term as there are tax advantages of owning own residence, the government is out looking for ways to tax as they get more and more desperate (worsens when the economy declines).

phatwa

I wouldn't rely too much on the idea that the bottom of the market will hold up. You're correct there is demand now, but when/if credit dries up, the banks stop lending, and the market dives who will buy? Who will want to?

Your decision but I'd look to sell this year. I think 2017 is going to be mayhem. There was a Telegraph article yesterday explaining why: telegraph.co.uk/finance/property/house-prices/12087971/UK-house-price-to-crash-as-global-asset-prices-unravel.html

DaftyDuck

There's a rule to investment that a chap I know extolled to me (in much clearer terms than I have below), and his understanding of it (and ability to explain it well ) accounts for why he is approximately 1000 times richer than I am (as a mortgage-free multiple-house owner....).

"If there's any information on how any future market will behave then people richer than I, brighter than I, and better advised than I, will exploit it before I can. Thus, for the majority, the playing field is even".

So for him (super rich, extremely bright, handsome, witty and healthy*; the !!!!!!), any forecast that others can see pretty much invalidates any advantage that forecast may have. That leaves Insider Trading and its variants, and a cosy prison cell (or the Bahamas) ...

That is also why predictions are so often wrong: once made, even if valid, human action pretty much acts to make the prediction invalid anyway.

Anyway, my prediction : Prices won't fall, or only by a piffling amount. They will go up, but not quite as much as in the last few years. Things that will affect them will be: (1) changes in oil price and the ensuing instability that'll cause, (2) the outcome of the Euro vote which, if the UK withdraws, may have a seriously pronounced affect on commercial activity and multinational involvement** (3) a serious recession here (4) the coming apocalypse and (5) the imminent return of our Lizard Overlord.

Oh, and there are another 127 events on my "to consider" list...:rotfl:



* Sorry chapesses; he's taken
** One massive multinational company I currently work with has a clear - and rapid - exit policy in place should we vote to leave... they'll take around 7,000 highly-paid employees with them, some from London, some from a provincial City!

Nike79

DaftyDuck wrote: »

Anyway, my prediction : Prices won't fall, or only by a piffling amount. They will go up, but not quite as much as in the last few years. Things that will affect them will be: (1) changes in oil price and the ensuing instability that'll cause, (2) the outcome of the Euro vote which, if the UK withdraws, may have a seriously pronounced affect on commercial activity and multinational involvement** (3) a serious recession here (4) the coming apocalypse and (5) the imminent return of our Lizard Overlord.

Oh, and there are another 127 events on my "to consider" list...:rotfl:



* Sorry chapesses; he's taken
** One massive multinational company I currently work with has a clear - and rapid - exit policy in place should we vote to leave... they'll take around 7,000 highly-paid employees with them, some from London, some from a provincial City!

Im not so worried about apocalypse and other 127 reasons to consider. recession wont bother me either as its natural boom and bust of economic cycle and it wont last forever.

During 2008 crisis i could have a good chance to snap cheap deal but got spooked that the crisis will bring the apocalypse, yet one didnt happen the economy recovered and the property which costed £150 K then I got for 340 K now and in a meanwhile had to live a miserable conditions paying rents and enriching someone's pockets.

I personally think out of thousands reasons why the prices might be adjusted there is only one which is worth considering: tax changes on BTL, but again the BTL gurus can increase the rents to make up the loss, so I'm not sure who is going to suffer again at the end of the days.

P.S. I don't personally believe BREXIT will happen any time soon though its more likely EU fall apart in the long run.