Buying a studio flat in London

AnnaDanishek

I don't think it is a good time to buy any kind of a propety in London. In the UK home prices have gone through the roof, exceeding pre-crisis levels already long ago. A study by the OECD shows this location is overvalued and economists in Sweden have been raising the alarm since last year over the extreme risk of an imminent collapse. So you'd better to wait for several years till prices will go down

ruelle

Several years?? Don't think I want to wait THAT long.

economic

listening to "economists" is a bad idea. their forecasts are based on flawed ideas. listening to newspapers is even worse - when their main goal is get as many readers as possible.

these arguments seem to be mainly based around mean/median wages relative to prices. this is complete BS argument. property is transacted at the margin ie if there are enough people who can afford to buy, they will buy if they want to. makes mean and even median wages irrelevant.

prices may go down or may go up who knows. take a risk either way however only you wil assess which risk is greater and which risk you are willing to accept. not an easy decision.

economic

ruelle wrote: »

Several years?? Don't think I want to wait THAT long.

yes several years over the space of a lifetime of say 80 years is a long time. life's too short and some are even shorter.

how old are you?

ruelle

38. Gotta get a move on!

economic

ruelle wrote: »

38. Gotta get a move on!

yes the earlier the better I would say. there's so many factors on whether you should buy or not and only you can decide. since you seem to be have undecided still I wonder what the real reason for holding back is??

please don't let all this talk of a bubble in London dissuade you. clearly they have gone up because people can afford them. no idea what will happen to prices from here but either way you are taking some sort of bet.

a lot I think could depend on your future lifestyle, family/kids, job location, future earnings etc.

theres a lot to think on balance which only you can do.

economic

look if you want my view here it is:

I think we are heading for a recession. I also therefore think employment has peaked and should decline from here. Once EU vote is done(we will stay in) there maybe more supply on the market. however that may not mean prices fall. we are still in low rates and I just don't see higher rates for years. I would personally take advantage of this and buy. however unless you find a good buy I would wait for the supply to come on so you have more choice and can find something better.

I bought my flat a month ago after selling my previous one. I know its so hard to find the right property that ticks all the boxes so I just went for it. I got what I think is a good price to. its in Highgate btw and properties do not come on that often here especially a period conversion like my one.

so since you seem undecided and you know you have paid a bit more then its worth, I would wait till after EU vote and see the supply.

I would definitely buy something eventually however (if you can afford) as everyone needs a home. there are also tax advantages to owning - you pay no capital gains when selling (not really an advantage for you as yours is a studio) and imputed rent in that you live rent free i.e. receive rent which you "pay" to live where you own on a pre-tax basis. this has a huge advantage long term. which is why it always makes sense to own your own home.

ruelle

Thanks for your input, economic. Yes, I definitely want to buy in London. It's just whether I want to buy this studio. I guess I have doubts because of the size and I'm wondering how quickly I will outgrow it depending on my future plans.

Given my tiny budget realistically this may be all I can afford at the moment unless I move a bit further out to a not so nice area in London. I guess part of me hopes with all this economic uncertainty that prices will plateau and I could potentially keep looking without the worry of being priced out but that's a big risk.

cashbackproblems

I have been looking to buy in London over the last 6 months and anything close to the tube sells quick. Without knowing what you paid it is hard to know whether its a good deal.

But the comments above saying buy buy buy quick quick quick are hysteria, the market has cooled down this month and you have to think whether you can see yourself living there for a number of years, your place will go up but so will the next place you buy. Plus if you hold onto the property you will be faced with a 3% extra stamp duty

Does you budget allow you to buy a 2 bed in a commuter town? Walthamstow is quite a good location so I guess for what you are paying you can get more further out. I currently live in a studio and its grim for one person, cant imagine what itd be like for two or even a small family

ruelle

My offer was £218k and it's a 10 min walk to the tube. Which areas in London are you looking at?

I'm from the suburbs so I'd rather not move back there.