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Trying to buy a house in this area is near impossible

Grotty

By Grotty
in General ED Issues / Gossip

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Blackcurrant

Blackcurrant

Posted
Posted

LondonMix Wrote:

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

> House prices in London are now well above their

> previous peak. The people you know in that

> position are still in negative equity? Also,

> rents have risen in London to boot.


You don't need to be in negative equity to struggle with rising mortgage rates - just very indebted. Lenders don't have to take salary into account when assessing buy-to-let mortgages so people who became accidental landlords can easily be carrying 10x their salary in debt and would struggle with a rise in interest rates.


Rents have risen but falling at the moment.

JohnL

JohnL

Posted
Posted

I was in negative equity until recently (with a flat)


New builds in 2007 were priced above the peak.


LondonMix Wrote:

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

> House prices in London are now well above their

> previous peak. The people you know in that

> position are still in negative equity? Also,

> rents have risen in London to boot.

DaveR

DaveR

Posted
Posted

"I know quite a few people who couldn't sell during the financial crisis and were forced to rent out their first home to fund a move and now have 500K to a million in debt. Even a very small rise in mortgage rates would hurt people in that position."


I guess the question is how many people were in that position, and how many still are. Where prices have come back to 2007/8 levels, you would have expected them to sell up and get out of debt.


The general point is that although the BoE base rate has been 0.5% for a few years now, mortgage rates have only been very low for buyers considered to be very low risk (high equity and high income) or for the very few who were on base rate trackers in 2007.

LondonMix

LondonMix

Posted
Posted

Sorry, Blackcurrent, I mean why haven't your friends sold if that was always their intention? Why would they continue to be accidental landlords subject to interest increases in this situation.


JohnL-- sorry to hear that. New builds outside of central London at times appear to have lagged behind the market.

PN33

PN33

Posted
Posted

I'm one of the unfortunate first-time-buyers having my soul steadily eroded as the weeks pass! We cannot exceed the ?250k barrier because of the 3% stamp duty (although Boris mentioned this at the Tory conference so maybe they'll drop it for FTBuyers sometime soon) and we wouldn't really want to face repayments on mortgages much bigger than the ?200k we'd need in that scenario.


We've known since the beginning that ED was out of the question given our requirements (we need a garden, and if it's one-bed we need some other storage like a study or basement for my music studio). We naively thought that we could just jump over the Rye and buy in Nunhead, but this is not even the case any more. Further down on our list was Deptford, Crystal Palace.... but even they seem impossible with our budget. I went for a viewing in Catford for an absolutely perfect house but couldn't vibe with Catford... I wouldn't feel comfortable letting my girlfriend walk home at night to be honest.


The other madly depressing thing is that 12 of the 15 viewings we've been on already have been group viewings or 'open days', with people falling over each other to buy and asking prices being largely ignored!


I guess I'm after some advice if people wouldn't mind.


1) If you had to choose between the likes of Norwood, Hither Green, Anerley, Charlton, Woolwich... what would you choose? Am I missing any more potentially affordable areas which aren't too bad?


2) If we change our plans completely when our tenancy runs out in March (currently house-sharing with friends) and decide to rent a place of our own until this current scenario cools down, perhaps for a year or two, are we just going to find ourselves in an even more expensive, competitive market? Part of me thinks it's 'now or never'... in fact if I'm honest with myself, it's more like '2 years ago or never'.


PLEASE SOMEBODY SAY SOMETING POSITIVE!!!!



Thanks in advance

Otta

Otta

Posted
Posted

Woolwich good for transport links, and lots of new housing. But having worked there from 2002 - 2009, I'm not sure I'd want to live there. Charlton is a mixed bag basically. Think we'll be looking at Norwood and Anerley.


Feel your pain though, we're in the same boat exactly... Except I don't get a music studio unfortunately, that will be the kid's room.

Mick Mac

Mick Mac

Posted
Posted

JohnL Wrote:

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> I was in negative equity until recently (with a

> flat)

>

> New builds in 2007 were priced above the peak.

>


They often are JL. Thats why some mortgage companies stopped lending on new build flats, there is no market to establish the fair value, they are priced by the seller.

PN33

PN33

Posted
Posted
I'd live in Sydenham (now, wasn't considering it before!) but to be honest, my Rightmove search is now 'South East London added within the last 24 hours' as opposed to 'SE15 within 1/2 a mile added within the last month' as it was when we naively started this process! Demand is so low that I don't even feel in a position to choose, it's more a case of having a list of "Yes's" and a list of "No's" in terms of area and hoping for the best!
PN33

PN33

Posted
Posted

miga Wrote:

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> what do people think about catford? seems just

> about affordable.



Not a lot to be honest. Not wanting to sound like a snob at all and beggars obviously cannot be choosers, but I couldn't live there. I wouldn't feel safe walking home at night, and certainly wouldn't allow my girlfriend to do so, meaning it is straight off my list.

PN33

PN33

Posted
Posted

Righty Wrote:

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> Is Nunhead getting expensive then?



A friend of a friend just bought a one-bed flat in a period conversion for ?320k in Nunhead. And I was in Roy Brooks the other day and saw a 4 bed in Nunhead for sale for ?800k.... that's the same as the average 4 bed on my current street in East Dulwich, Rodwell Road

LondonMix

LondonMix

Posted
Posted
From your list I'd definitely choose Hither Green-- particularly the side closer to Lee. It's a bit dull but its walking distance to Blackheath. Also, there are transportation changes upcoming with Thameslink. Charlton is okay-- I've got friends who live there. As others have said, Beckhenham is very nice and not much further than Anerly.
Blackcurrant

Blackcurrant

Posted
Posted

LondonMix Wrote:

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

> Sorry, Blackcurrent, I mean why haven't your

> friends sold if that was always their intention?

> Why would they continue to be accidental landlords

> subject to interest increases in this situation.


Because mortgage rates are very low, so it's easy to cover the mortgage with rent, and because prices started rising again. As long as mortgage rates stay low and house prices keep rising, there's no need to sell.


If rates go up then people can of course sell the rental property, but that would obviously release new supply onto the market.

PN33

PN33

Posted
Posted

LondonMix Wrote:

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

> From your list I'd definitely choose Hither

> Green-- particularly the side closer to Lee. It's

> a bit dull but its walking distance to Blackheath.

> Also, there are transportation changes upcoming

> with Thameslink. Charlton is okay-- I've got

> friends who live there. As others have said,

> Beckhenham is very nice and not much further than

> Anerly.

A


Thanks, there is a theme appearing! I suppose my only reservation about Anerley, or even Cystal Palace, is that it's a horribly hilly and long cycle into the city. It's just that bit far out. My office is relocating from Westminster to Old Street in April and that would perhaps be a stretch too far! I wouldn't let it stop me if we found the right house though I guess

Blackcurrant

Blackcurrant

Posted
Posted

LondonMix Wrote:

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

> I wouldn't exactly call your example people who

> would be "hurt" by an increase in interest rates.

> Sounds like they would just make less money being

> landlords....


Being forced to sell because rental income no longer covers the mortgage would be the painful bit. Selling in a hurry during a glut also means taking a hit on the price.

????

????

Posted
Posted

Two random thoughts for tonight.


1) Even though the market is mad there are some explanations of how people can afford itpeople who bought before 2000 (and didn't remortgage to spend on crap....as a far few did), many of whom are probably just approaching their 40s have tons of equity so can trade up etc) even buyers in 2004 are prett


2)Related 2, the bank of mum and dad, people who bought homes in London (and the South east....(and haven't remortgaged to pay for crap) prior to say 1985 when normal salaries would buy you a place in areas now almost impossible except for the very rich are sitting on fortunes, there are probably 'millions' of these, they are clearly helping their kids/grandfkids to an enourmous degree, although doing bugger all for social mobility.


3) Demographics - the peak of the first post war baby boom was 1947 (Mick Jagger etc) but concentrated around 1945-48, yes guess what happened when the men came home from war!. These people are now hitting late 60s (there's a joke in there somewhere) hence the massive and incraesing pressure on the NHS/Pensions etc etc. They will start to die (some of them) and more will start to downsize and morefamily houses will come onto the market and this will accelerate...increasing supply etc etc


er, that's it, and it's three

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