Have I made a mistake purchasing a London new build?

hutman

People may view crashy's views as simple scaremongering but diving deeper into the finer economics of London's housing bubble reveals a lot and is fundamentally supported by data.

As a FTB im desperate as any of my peers, praying for a crash and this sense of 'tomorrow' you might say perennially undermines the views we have on the topic. However, the lingering feeling that all is not well and a correction is imminent nonetheless reflects a historically and sound sense of doubt. this guides human decision making or the lack of in the case of actually triggering the impulse to buy.

Back to the point about market fundamentals its clear - (see UBS/Halifax for insight) that we're seeing the tip of the iceberg. At ratios like 8x times earnings the london market is way out of whack. Added to that, you have basement rates, lack of supply and uncontrolled migration, the last of which will hopefully see its own correction.

So why does it keep going up? Well market fundamentals are wilfully ignored in the face of overriding capitalist stakeholders - who will abuse the dynamics to such an extent that only a 'crash' will yield a correction. Indeed, the governments for all its calls for affordability simply just sits and does f all - its meagre policies have perpetuated more price inflation such as htb and will do nothing on matters such as taxing foreign ownership (Canada) & something about stamp duty.

As long as these players - banks/pension funds/estate agents/investment banks are fully strapped onto to the housing bubble nothing but a crash will allow the cooling effect needed in evident abandonment of all fundamentals - tomorrow will eventually come but they will only allow the tomorrow we wanted three years ago - nothing like debt to fix every problem.

economic

hutman wrote: »

People may view crashy's views as simple scaremongering but diving deeper into the finer economics of London's housing bubble reveals a lot and is fundamentally supported by data.

As a FTB im desperate as any of my peers, praying for a crash and this sense of 'tomorrow' you might say perennially undermines the views we have on the topic. However, the lingering feeling that all is not well and a correction is imminent nonetheless reflects a historically and sound sense of doubt. this guides human decision making or the lack of in the case of actually triggering the impulse to buy.

Back to the point about market fundamentals its clear - (see UBS/Halifax for insight) that we're seeing the tip of the iceberg. At ratios like 8x times earnings the london market is way out of whack. Added to that, you have basement rates, lack of supply and uncontrolled migration, the last of which will hopefully see its own correction.

So why does it keep going up? Well market fundamentals are wilfully ignored in the face of overriding capitalist stakeholders - who will abuse the dynamics to such an extent that only a 'crash' will yield a correction. Indeed, the governments for all its calls for affordability simply just sits and does f all - its meagre policies have perpetuated more price inflation such as htb and will do nothing on matters such as taxing foreign ownership (Canada) & something about stamp duty.

As long as these players - banks/pension funds/estate agents/investment banks are fully strapped onto to the housing bubble nothing but a crash will allow the cooling effect needed in evident abandonment of all fundamentals - tomorrow will eventually come but they will only allow the tomorrow we wanted three years ago - nothing like debt to fix every problem.

one of the worst posts i ever read on here. just nonsense.

ModernSlave

Hi OP
You're committed now so there's not much point second guessing. I do think there will be an over abundance of new build flats coming onto the London market over the next few years.
But as long as you have locked in an affordable mortgage that allows overpayments I don't think you need to fret.
I suspect that 5 years will come and go quickly for you, you're young! Most Londoners only buy their first property in their late 30s so you're well ahead of the game.
Work hard, enjoy your convenient new flat (Stokie is fun), invest in your pension, and be nice to those less fortunate. You'll be OK.

Crashy_Time

martinsurrey wrote: »

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...

Two points;


1) If demand is so high in London, why have the flats not sold?


2) Three years ago I said it was a bubble (and it was) not that Brexit/Trump/French election etc. were definitely going to undermine the London/UK market (they are)


It is not a never ending circle, it is a classic (but unprecedented) debt/property bubble unwinding (Bursting sounds so much better) with crazy PTB interventions making things even worse.

Blakey74_2

New Build properties tend to be overpriced by 5-10%. As long as you haven't overstretched yourself or need to sell in in the next few years then you should be ok as even if prices fall then your repayments would hopefully cover this.

Timing a crash and when to buy at the bottom is near impossible so buy at time when you can afford it.

Crashy_Time

I think it`s safe to say that near a half million in debt for a London shoe box is not a great position to be in, most sensible people can agree on that surely?

Kalamazoo

Do you ever worry that you're wasting your life crashy?

hutman

economic wrote: »

one of the worst posts i ever read on here. just nonsense.

care to elaborate why?

Crashy_Time

Kalamazoo wrote: »

Do you ever worry that you're wasting your life crashy?

Do you think I need more debt? :rotfl:

tom9980

Crashy_Time wrote: »

Do you think I need more debt? :rotfl:

MORE debt? oh crashy i didn't know things were so bad for you! i thought you were investing in "other things" so had it all covered?