How much can house prices keep rising ?

_CC_

steampowered wrote: »

The key to your phrase is 'supply and demand'.

While I accept that supply is constrained, people cannot demand what they cannot pay for, surely?

While prices to incomes are high across much of the country, mortgage affordability is well within historic norms (except for the likes of London) thanks to very low borrowing costs.

cyantist

Philuk wrote: »

It’s getting tiring to read the same rhetoric from mortgage free old boomers usually located well out of London. The average Londoner is not an “out–of–touch” spoiled youngster spending all their money on iphones and Ibiza holidays. Reality is that the average multiple on income from what I would call non-Brexit area (London, Oxbridge, SE) is between 12 and 16x, 4 times more than historical level. And if your “mate” on a single 26k is effectively located on south Birmingham, he can indeed commute to London for about 5k after tax money (+1k on TFL for tube connection to work). The market has totally dislocated from its base, transaction only happens between home owners swapping homes. You can reduce your phone and pub bill to 0, you will still be 3 life away from saving the 150k deposit you need for a 3-bed terraced house in Zone 6 at 500-600k.

In general I agree (apart from you're being a bit optimistic with the 5+1k commuting costs from just South of Brum!). People were telling us we'd have to move further out and suggesting places to live where for both DH and I to commute in to London would be costing 12k a year.

A ridiculous deposit is needed to buy anywhere near London, but we managed to do it when we were earning 65k. That might sound a lot but it's not compared to a lot of couples our age both working in London.

If you're single, or earning much less than the average London wage for a couple I don't think you can expect to buy a 3-bed house in London. But as mentioned there are flats and 2 bed places available much more cheaply.

It's not easy but it's certainly not impossible.

steampowered

_CC_ wrote: »

While prices to incomes are high across much of the country, mortgage affordability is well within historic norms (except for the likes of London) thanks to very low borrowing costs.

I agree.

Do these two facts not indicate that the property market may well be in for a slowdown when interest rates rise?

Philuk

martinsurrey wrote: »

exactly, Woking is an example of a place outside of the city with great links.

http://www.rightmove.co.uk/property-for-sale/property-45384297.html

http://www.rightmove.co.uk/property-for-sale/property-45746097.html

http://www.rightmove.co.uk/property-for-sale/property-45277965.html


2-3 beds for under £350k, less than a mile to the station (easy walk/bike) and a 28min direct train to Waterloo, faster than a lot of places in London!

That's nowhere near London, I can post some flats in Reading or Hastings as well. In between walking a mile, planning for 5 margin with the trains, and TFL to work, your commute will be much closer to 3 hours than 56min...3K season ticket plus TFL 1.2k, so 8.4k per household a year, or 160k on 20 years if that's the forever home.


By the way, the 3 beds are super small (65sqm), and their price have quadruple since 2000.

AdrianC

Philuk wrote: »

That's nowhere near London, I can post some flats in Reading or Hastings as well. In between walking a mile, planning for 5 margin with the trains, and TFL to work, your commute will be much closer to 3 hours than 56min..

I notice you ignored the ones I mentioned INSIDE THE M25 and near to THE TUBE.

Linton

steampowered wrote: »

The key to your phrase is 'supply and demand'.

While I accept that supply is constrained, people cannot demand what they cannot pay for, surely?

Its very simple - prices are at the level they are now because enough people can afford to pay for them. For prices to fall you would need a large increase in supply, which seems unlikely within the M25 or a significant drop in wealth or access to credit for the general population. In the latter case there will still be roughly the same number of people who want to buy but cant afford to.

Its easy to disprove me - just show that a significant number of houses on the market in the London area are failing to sell.

ukcarper

Philuk wrote: »

That's nowhere near London, I can post some flats in Reading or Hastings as well. In between walking a mile, planning for 5 margin with the trains, and TFL to work, your commute will be much closer to 3 hours than 56min...3K season ticket plus TFL 1.2k, so 8.4k per household a year, or 160k on 20 years if that's the forever home.


By the way, the 3 beds are super small (65sqm), and their price have quadruple since 2000.

But thousands of people commute from that area and further out I did.

Philuk

AdrianC wrote: »

I notice you ignored the ones I mentioned INSIDE THE M25 and near to THE TUBE.

I am sure they are some very deprived area where you can get a pad for that budget, but with probably also the most socially distressed people that London has to offer. i mean a house is more than 4 walls, schools, neighbours, criminality. But you re right technically there are some places for 300k in the most undesirable areas.

Philuk

ukcarper wrote: »

But thousands of people commute from that area and further out I did.

I am not saying it is impossible, I was trying to reply indirectly to the OP on whether price can keep rising.

marksoton

steampowered wrote: »

The key to your phrase is 'supply and demand'.

While I accept that supply is constrained, people cannot demand what they cannot pay for, surely?

Agreed. Which implies there are people who can afford it.

After 10 years living and working in London i'm still no further clued up to where these people come from and generally what they do. But someones paying them enough to afford the property.