Trying to buy a house in this area is near impossible

[KidKruger]

I saw that place on Whateley a couple of weeks ago - surely it's just adventurously-priced in the hope of a high offer ?

There's better deals, even in ED.

ETA: And it's facing the old ED police station, which means a year and more of a building site coming once the developers move in, then being overlooked by a block of flats with constant comings/goings to the flats' car park (if they bother to build one). Nice.

[StraferJack]

when this housing crash comes it's going to be messy

The demand might be outsripping supply at the moment but that demand is leveraged beyond breaking point from the get go - when those interest rates go up again...

[LondonMix]

I just sold and bought in the area in the last 6 months and it is mental. I know very well what everyone is going through and we were fortunate enough to make enough money in our last place to afford to move up the ladder here-- also since we first moved to the area our incomes have gone up quite a bit.

My point was that people trying to figure out what's going on and suggesting that it will all come tumbling down are painting an overly simplistic picture of what's happening both in London and locally.

Out of curiosity Otta-- if you had 800k that you could only spend on a house, where would you spend it? Bigger place further out? Flat closer in?

[LondonMix]

This was my point-- prices in ED skyrocketed well before help to buy so trying to explain it that way doesn't make sense. Moreover, for purchases at these price levels banks require a hefty deposit (usually at least 15%). If you look at the trend, despite house price increases in London the ratio of earnings to house prices in the capital fell last year so the idea that people are pushing themselves more and more isn't necessarily the case. I'm not saying that the market won't crash, I'm just saying it's a lot more complicated than people make out and its difficult to know what will happen.

StraferJack Wrote:

-------------------------------------------------------

> when this housing crash comes it's going to be

> messy

>

> The demand might be outsripping supply at the

> moment but that demand is leveraged beyond

> breaking point from the get go - when those

> interest rates go up again...

[Otta]

Big house in Sydenham.

[Otta]

But as it is, we're going to have to scour the likes of Penge and Anerly for a shoe box for 250 or less.

[giggirl]

It is absolutely Mental and truly depressing for anyone trying to get a foot on the ladder.

Before moving to ED I lived in a 5 bedroom family house next to Hampstead Heath. Obviously absolutely no chance of buying there so I had to move far away. My only two options, i.e. places still affordable, were Stoke Newington and East Dulwich. My then boyfriend had just bought in Herne Hill, so I chose ED. Then we split up and I was left south of the river without a single friend and a mortgage in double figures that I could barely afford. I didn't have any furniture for the first year (not even a bed), didn't go on holiday for about 4 years, NEVER went out, and basically lived hand to mouth and only just managed to feed myself and get by. Those were the days when lots of people went into negative equity and were unable to keep up repayments. The personal sacrifices that I had to make to stay afloat are really depressing when I look back.

I really do get that the market today is a different market and that it is bonkers and it is almost impossible to get started, but what I'm trying to say is that it has NEVER been easy.

[Jeremy]

Or smaller house in Sydenham (or wherever), and keep the rest of the cash.

Maybe a good option to stretching yourself to the max and spending all your money on your house. Save 300-400K and retire earlier.

[LondonMix]

Fair enough Otta on big house in Sydenham. Most roads these days seem to lead to Beckenham if the family room is anything to go by. I'm sure all the locals Tthere moan about the ED unflux as voraciously as residents here complain about the influx from other parts of London :)

Edited for clarity

[giggirl]

Nothing wrong with Beckenham - it's not a bad place to raise kids.

[alice]

still got 2 years of low interest rates

why do i think that?

because mortgage lenders are still offering fixed 2 year deals

[LondonMix]

Agree that's the better option. I think that's what a lot of people are doing though... I know a few people who are buying at the moment (that stage of life) and no one is pushing themselves to the max. Your max and someone elses might be totally different. One of my friends is moving from ED to Forest Hill for the reason you said. However, I'm sure the locals of SE23 think she's mad to pay the current prices and she's breaking her back to afford to live there... It's all relative.

Jeremy Wrote:

-------------------------------------------------------

> Or smaller house in Sydenham (or wherever), and

> keep the rest of the cash.

>

> Maybe a good option to stretching yourself to the

> max and spending all your money on your house.

> Save 300-400K and retire earlier.

[StraferJack]

I don't think anyone is trying to say there was a golden age when it was easy giggirl

But there is a a difference between "hard but doable" to "not even remotely possible"

in your scenario, SE22 is the Hampstead Heath role, and somewhere else is the Stokey/ED role, so it all sounds plausible and doable

But if you aren't already on the ladder I don't see where you could go to reenact your story. I've seen all the places others have mentioned (Norwood etc) but even on a salary of say 40k you ain't going to be able to get a house anywhere even BEFORE you get to the cereal-with-water-3-times-a-day diet struggling with payments

[LondonMix]

I like it too-- I have friends there and its really nice and well connected for zone 5. If I were leaving ED, that's probably where I'd go as its also got good secondaries. Plus its only 15 min in the car from ED.

giggirl Wrote:

-------------------------------------------------------

> Nothing wrong with Beckenham - it's not a bad

> place to raise kids.

[Mick Mac]

StraferJack Wrote:

-------------------------------------------------------

> "It happended to be Hither Green near Lewisham, a

> considerable step down in terms of buzz and

> excitement but there you go, it was a 2 up 2 down

> and it was our first home."

>

> It's a well worn path Mick but as others have

> pointed out, moving up the ladders has become less

> do-able in the last couple of years

>

> I suspect most of the people saying "it is what it

> is, not really a problem " are well ensconsed in

> current homes and won't realise how things have

> changed unless they try and move

Although I wasn't talking about moving up the ladder was I. I do think first time buyers expecting to be be able to buy in the area they rented in is not always realistic.

[Loz]

StraferJack Wrote:

-------------------------------------------------------

> But if you aren't already on the ladder I don't see where you could go to reenact your story. I've

> seen all the places others have mentioned (Norwood etc) but even on a salary of say 40k you ain't

> going to be able to get a house anywhere even

> BEFORE you get to the cereal-with-water-3-times-a-day diet struggling with payments

That's because your ?40k salary is competing with two salary couples.

[Mick Mac]

This (667sq ft) seems to have gone under offer at 450k before even having time to be advertised on Rightmove.

http://www.rightmove.co.uk/property-for-sale/property-43632392.html

[Loz]

I'm struggling to see why that is worth over about ?300-?325k in this market. Seems very small.

[LondonMix]

Loz that's because you aren't buying a flat. If there was something better whoever bought it could get for 450k, they would buy it. Better of course being subjective regarding area etc...

[StraferJack]

"That's because your ?40k salary is competing with two salary couples."

not in the scenario outlined it wasn't

But let's take that two salary couple - what joint income do you want to give them? 80k?

3.5 times 50 k = 175k + second income of 30k = 205k

That's not buying much. Even in Norwood

But let's say they have savings of 50k and buy what - a 2 bed flat with that cash?

What is next step for them? If they are young they have career progression but unlikely many people would earn money faster than house prices rising? Plus maybe they start a family and earnings dip. Interest rates go up and their outgoings explode

I just can't see the progression that people used to be able to do

[Loz]

StraferJack Wrote:

-------------------------------------------------------

> But let's take that two salary couple - what joint

> income do you want to give them? 80k?

>

> 3.5 times 50 k = 175k + second income of 30k =

> 205k

>

> That's not buying much. Even in Norwood

Standard these days is 3.5x to 4x joint incomes.

In fact, I just plugged those figures into the HSBC "How much will you lend me" calculator and they will lend up to ?369k, and the Halifax one says ?344k. Of course, whether you'd want to take on that level of debt is another matter.

[KrackersMaracas]

We bought our 1st home a year ago, as a "two salary couple"... The calculation that was used to work out our mortgage limit was slightly different than yours, StraferJack. When we were buying (although it could have changed and will be dependent on lender) it was 3.5 times our joint income. As such, a couple with a ?80k joint income would be looking at a ?280k, rather than ?205k.

[aileking]

The market has gone mental in all the surrounding areas too, I've just seen one area after the next slip out of reach. Expectations are lowered on a monthly basis on what is affordable, which is pretty demoralizing. I spent years getting together what I thought was a decent deposit (well it could buy a flat outright in the North of the country) but when prices jump up ?50,000 within a month or two you realise how measly it really is. In retrospect should have bought earlier with a smaller deposit and done all the sacrifices of no holidays etc after I bought rather than before.

[Mick Mac]

There is no doubt it will end somewhere. But when and in what manner is difficult to predict.

The last genuine property crash in the early 90s saw a combination of recession and ERM related interest rates boom. Thats not going to happen again.

If we continue to come out of recession I can't see a crash for a fair few years. In fact its some peoples increased optimism that is adding to the property boom currently, not many would buy at current prices if they weren't optimistic about their future earnings potential being higher than it is currently.

As regards a lot currently being made of interest rate rises and the implied crash that will result..... the BOEngland is all too aware of the current position and housing will be a major factor in interest rate decisions and their focus on balancing both the interest of the economy and bringing house prices to a soft landing, hopefully.

[steveo]

There was a house for rent in Court Lane for ?5,000 a month recently.

My first house cost just over that

Still, where there's a will there's a relative