Have I made a mistake purchasing a London new build?

london1990

sturgeon wrote: »

From some quick research I presume you're buying at Clissold Quarters? The prices there do look expensive (£525k is laughable for a one bed, looking at the area on Google Maps in the vicinity of the flashy new block it looks pretty horrible). I know you paid £460k. There are far better developments in London you could have bought a lovely new build at, i.e. around the Docklands (Royal Wharf for instance).

However, the London market is different and I generally have seen no evidence that new builds devalue. It comes down to making a very informed, careful, sensible purchase. If you're an idiot and you pay full price for a new build flat, and have no comparables in the area that have a remotely similar value, then yes you're likely going to see no value increase for a very long time.

If you buy close to when the sales suite opens, negotiate hard on the price and you're as sure as you can be that other recently built 1 bed flats in the area are selling for more than £460k already then you're making a better bet.

My last new build was in zone 4, bought in 2009 and it sold for almost 170% what I paid for it early last year. My latest new build, a 2 bed flat I bought off plan mid-2015 for just under £400k in zone 4 (completed late last year) and looking at countless comparables I could easily sell now for £45k-50k more, with £60-80k achievable next year/early 2019. And I actually could have bought it earlier in the developer sales process if I came across it sooner, and paid less.

To be fair, my comment above about the local vicinity is a bit hypocritical as some areas very near my flat are an absolute dive. Yet, there's an M&S opening downstairs in a few months, lots of other retail and it's in a £5bn London regeneration zone. Sometimes you need to 'invest' a few years before the area thrives. Same applies to where I was renting (and what I refer to above in the Docklands), early adopters bought 1 beds for £250k which are now selling for £100k more only 3 years later, 2 beds have inflated even further.

Oh and I know Help to Buy inflates the market, but who cares-you're not going to get anywhere sitting around renting so why not take the equity loan and hopefully enjoy the profit you'll make from selling the property on in 5 years before you need to pay a penny of interest on the loan?

Basically, as long as you are clearly sensibly looking at the purchase of your new home as an investment, and did all the due diligence at the time, I wouldn't worry too much. If you really, really think now that you've paid massively over the odds then consult your solicitor and see if you can 'flip' the property by selling your contract to someone else. Or create some extenuating circumstances, try your luck and pull out-as you say they'll gladly resell it for £60k more than you paid.

Very interesting post, thank you. I didn't think the immediate vicinity was that bad - I did walk from Finsbury Park tube station to the site initially which gave me chills as it was kind of a shady area but the site is opposite a gorgeous park and Stoke Newington itself is only a 5/10 minute walk away. You can walk to Shoreditch / Dalton in about 15 minutes too so the location wasn't really my issue, so I was slightly surprised to read your comment! Especially as the Docklands, as someone has pointed out already, is really pretty barren - there is literally nothing to do there and you really need a car to get around in that area. I had a friend who lived there and the area felt ... dystopian. Sure, you can likely get more for your money, but if it's my home, I wouldn't be happy there.

london1990

Crashy_Time wrote: »

It is just that your timing is a bit off, the posters saying they bought 7 years ago or whatever were buying into a totally different economic and political climate. From your comments about how the area could send someone "batty" my advice would be to put this flat back on the market and just get out of London for a while, until some sanity returns to the property market.

think it's time you went to bed sweetie...

Crashy_Time

london1990 wrote: »

think it's time you went to bed sweetie...

Ahhh...looks like all the "reassurance" has worked.......:j

london1990

Crashy_Time wrote: »

Ahhh...looks like all the "reassurance" has worked.......:j

Having grown up using online forums, one thing always gives a lot away about a poster with +3,000 posts - they have started no threads of their own

Crashy_Time

london1990 wrote: »

Having grown up using online forums, one thing always gives a lot away about a poster with +3,000 posts - they have started no threads of their own

Hey, that`s Dan`s line! What does this give away about a poster though?

sturgeon

london1990 wrote: »

Very interesting post, thank you. I didn't think the immediate vicinity was that bad - I did walk from Finsbury Park tube station to the site initially which gave me chills as it was kind of a shady area but the site is opposite a gorgeous park and Stoke Newington itself is only a 5/10 minute walk away. You can walk to Shoreditch / Dalton in about 15 minutes too so the location wasn't really my issue, so I was slightly surprised to read your comment! Especially as the Docklands, as someone has pointed out already, is really pretty barren - there is literally nothing to do there and you really need a car to get around in that area. I had a friend who lived there and the area felt ... dystopian. Sure, you can likely get more for your money, but if it's my home, I wouldn't be happy there.

Fair enough. I'm unsure if my area is dodgy or not when walking from the tube but as I'm here now it's my home and it's fine. Unfortunately for locals they'll be priced out soon.

Yes the docklands and royal Wharf is barren but with the developments are coming new high streets for example, and cross rail is coming plus Canary Wharf is very close with all its shops and restaurants. Buyers of newer builds tend to prefer buying in those types of developments or at least knowing they're in good company.

Shoreditch high st is a 58 min walk away from Clissold park so that's not going to help the property. I don't know stoke newington well but if it's genuinely a short walk and it's nice then great.

martinsurrey

Crashy_Time wrote: »

In all seriousness, if I had managed to exit the London bubble at peak mania, and then buy back in almost straight away! I would not be laughing, not even a little bit..................:rotfl:

so Crashy, 3 years ago when you were banging on about the crash being soon, was that the "peak mania" if so the peak seems to have risen fair bit, or is it one of those not so peaky peaks?

Crashy_Time wrote: »

It is just that your timing is a bit off, the posters saying they bought 7 years ago or whatever were buying into a totally different economic and political climate. From your comments about how the area could send someone "batty" my advice would be to put this flat back on the market and just get out of London for a while, until some sanity returns to the property market.

How long is a while? you would have suggested that 3 years ago as well, if the person had done that they would be looking at the London market now and wanting to cry.

£45k up in 3 years

£70k up in 3.5 years

£70k up in 3 years

All modest flats in Putney. A 20% correction now would only put us back to 2014, when you were spouting on about major crashes just around the corner.

jimbog

Crashy_Time wrote: »

my advice would be to put this flat back on the market and just get out of London for a while, until some sanity returns to the property market.

OP. Crashy sold up in the 1990's for this reason. He's still waiting.

Crashy_Time

martinsurrey wrote: »

so Crashy, 3 years ago when you were banging on about the crash being soon, was that the "peak mania" if so the peak seems to have risen fair bit, or is it one of those not so peaky peaks?



How long is a while? you would have suggested that 3 years ago as well, if the person had done that they would be looking at the London market now and wanting to cry.

£45k up in 3 years

£70k up in 3.5 years

£70k up in 3 years

All modest flats in Putney. A 20% correction now would only put us back to 2014, when you were spouting on about major crashes just around the corner.

A lot has changed in three years though as you know? The French election result will put more pressure on high paying banking jobs in London, and were there new-builds with 400k knocked off at auction and "free" cars as incentive to buy three years ago?


http://allsop-auctions.co.uk/1DAM-4X971-946Z6A1MEC/cr.aspx


They put "each" just in case anyone thought they had really grasped reality....:rotfl:

martinsurrey

Crashy_Time wrote: »

A lot has changed in three years though as you know? The French election result will put more pressure on high paying banking jobs in London, and were there new-builds with 400k knocked off at auction and "free" cars as incentive to buy three years ago?


http://allsop-auctions.co.uk/1DAM-4X971-946Z6A1MEC/cr.aspx


They put "each" just in case anyone thought they had really grasped reality....:rotfl:

and 3 years ago you no doubt said a lot has changed in the last 3 years... its a never ending circle.

3-4 flats in London still advertised at £1.4m by a single developer is all the proof YOU need that you're right.

and 3 years ago, these flats would have been under £1.4m...