How much can house prices keep rising ?

westernpromise

Leveraged BTL has not made sense in London for a very long time, but neither does buying for foreign workers only intending to stay here for a short time. So they rent instead.

I have let out four properties over the years. At one point I had three rented London properties simultaneously, one cheap, one middling and one high end. I now have just the latter, and over the last 12 years of renting, I don't think I've ever let that one to a Briton. It lets to professional couples, and they all stay a few years then rent somewhere with a garden when the children come along. There may have been the odd partner there who was British, but generally the tenants aren't.

The other three in contrast were let to Britons. It was the very, very poor quality of Britons as tenants that dissuaded us from keeping those on. The typical British tenant is, generally, dirty; entitled; destructive; ignorant of what they have signed up to; and reflexively dishonest. This wasn't my experience of just one. It is my observation of all of them, every single one, over 21 years. These aren't JSA claimants either. These are accountants at PWC, TV cameramen, bankers, ad agency people, HR management. The dirtiest of the lot, who never cleaned the bath in a year, was an FCA employee.

I can envisage a 2-tier market developing in which only grot is ever let to Britons and the good stuff only goes to foreigners.

GreatApe

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.

you can buy a 3 bedroom flat in inner zone 2 for £400k right next to the three biggest employment hubs in London which are the city/westminster/docklands. eg

http://www.rightmove.co.uk/property-for-sale/property-59567231.html

It is not cheap but you are within walking distance of very high paying jobs without the need to pay for transport. You can also greatly improve the inside of a property to very high specs. You are probably looking at saving 10h a week on comuting and some £1.5k a year on transport. Over a working life of 40 years that is 20,000 hours savved and £60k in transport, double that if it is 2 people.

Something like that is good value imo and wont go down in price much at all. All the future high paying jobs will still be in the city/docklands/westminster as that is where the multimillion pound offices are being built. Not in Luton not in Stoke not in Newcastle

GreatApe

marksoton wrote: »

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.

the largest group is inter-generational wealth and sideways movers.

The second largest group are couples on decent incomes. 2 people on £50k each can get a mortgage of £450-500k plus the deposit they have saved. This gives access to a lot of 1-2 bed properties in inner London or 3 bed in outer. £50k pa is not rare in London

You then have high paid workers, I am going to a wedding early next year the couple are both 30 and one is on £120k and the other £150k to give a total income of £250k which would allow then to bid/buy homes in the £1m+ mark. Neither is even that high up in the companies they work for

There is also a huge number of business sales in Places like London, eg the fintech and other tech companies they are all in London. When software startup sells for £50m shared between 10 people that instantly allows those 10 people who might have been poor before hand to buy expensive property. This is also true in other expensive places like cambridge, the ARM sale for billions will inject a lot of money into cambridge and some of it will end up in property

[Deleted User]

GreatApe wrote: »

The second largest group are couples on decent incomes. 2 people on £50k each can get a mortgage of £450-500k plus the deposit they have saved. This gives access to a lot of 1-2 bed properties in inner London or 3 bed in outer. £50k pa is not rare in London

Average wage in the 'City of London' is £48k.

Where I live (St. Albans area) the average is £43.5k - and that's probably why you can't buy a 3-bed semi for under £450k anymore.

Masomnia

ringo_24601 wrote: »

Average wage in the 'City of London' is £48k.

Where I live (St. Albans area) the average is £43.5k - and that's probably why you can't buy a 3-bed semi for under £450k anymore.

The average house price in St Albans is higher than London now, isn't it?

Not hard to see why when it's a nice city and you can get into the City in ~30 mins.

My ex girlfriend lived in Harpenden so I used to get the train from NW London out to there quite regularly, and the other reason prices are so high becomes apparent, there's a lot of countryside! I'm not in favour of concreting over all our countryside, but there's plenty of room for house building round there but too many vested interests to allow it to happen.

[Deleted User]

Masomnia wrote: »

The average house price in St Albans is higher than London now, isn't it?

Not hard to see why when it's a nice city and you can get into the City in ~30 mins.

My ex girlfriend lived in Harpenden so I used to get the train from NW London out to there quite regularly, and the other reason prices are so high becomes apparent, there's a lot of countryside! I'm not in favour of concreting over all our countryside, but there's plenty of room for house building round there but too many vested interests to allow it to happen.

Dunno, I don't bother to look at house prices in London! I know that our little 'regular' 3 bed house has shot up over the 5 years we've lived here and our area is 'gentrifying' - more expensive cars are going on the drives on newly bought houses, lots of building work..

Our infrastructure is practically Roman.. the road capacity isn't supporting existing populations. I'm more in favour of well-designed garden towns expanding, rather than wrecking places that aren't coping already.

hildosaver

The whole London focus when discussing house prices is so incredibly boring when you do not live in London - which is actually the vast majority of people in the country.

Philuk

hildosaver wrote: »

The whole London focus when discussing house prices is so incredibly boring when you do not live in London - which is actually the vast majority of people in the country.

London drives the rest of the market not the other way around, it s hard to exclude it when trying to crystal ball the OP question, and that s why what is happening in prime central London is affecting more the 99% than it seems.

hildosaver

Philuk wrote: »

London drives the rest of the market not the other way around, it s hard to exclude it when trying to crystal ball the OP question, and that s why what is happening in prime central London is affecting more the 99% than it seems.

I understand it is important yes but it is not the 'be all and end all' of what is happening around the rest of the country - in fact, you could argue it is it's own 'bubble' that has little to do with the world most of us live in. That is why when we have to read about London time and time again when it is completely alien to the vast majority of people in this country it starts to get a tad annoying.


House prices in London are bonkers but to argue then that because of what is happening in London that house prices in general are unaffordable is just untrue because generally they are quite affordable (expensive yes but not out of reach) to the average couple in most areas of the country. I find it absolutely insane that anybody would consider spending 400k+ on a flat in London when they could spend half that and get a perfectly reasonable 2 or 3 bedroom house in many parts of the country. That's just me though but it does make it hard for me to understand why people complain about it when all they need to do is not buy that flat in London and move somewhere affordable to them.

Cakeguts

hildosaver wrote: »

The whole London focus when discussing house prices is so incredibly boring when you do not live in London - which is actually the vast majority of people in the country.

Thank you. I find that all the focus is on how much housing costs in London and the south east. London has never been affordable to first time buyers. Nothing has changed except the extent of media reporting on the subject and the vested interests of politicians in bringing it up to win votes. The population of London has increased because more people can rent now than when the rent acts were in force and rented housing was in short supply. First time buyers on the average salary have never been able to buy a property in London. First time buyers on the average salary in most of the rest of the UK have been able to buy a property. London is an exception not the norm.