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house: to buy or not to buy?

 
#1 house: to buy or not to buy?
10/06/2010 17:26

Frazer

Hello,

Not a consulting question but I thought a topic that the clever brains on this forum might have some thoughts on.

I'm thinking of buying a house/flat in London. I'm a first time buyer so a bit anxious about getting it right.

After a lot of saving and arm twisting, the budget's about £300k/£325k.

Thinking Highbury & Islington, for the simple reason that I've rented in the area for some years and know it well. Thinking a flat carved out of a victorian house, hopefully a box size garden or patio and at a stretch 2 rooms.

My question is, has the market bottomed out? I still think there's a lot of imbalances and it's going to fall further (just look at the ratio salaries:savings:average price). Then there are the upcoming CGT changes and a whole load of other reasons not to buy. But a lot of these issues might be like this for years to come and I'm just wasting money on rent...

Does anyone have any thoughts?

Thanks

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#2 RE: house: to buy or not to buy?
10/06/2010 22:48

Home Owner to Frazer (#1)

Frazer, this is the perfect time to buy.

In the current climate, you can easily negotiate the price down slightly. House prices are slowly creeping back up - so get in there quick. With that kind of budget, I suggest aim for a house rather than pay maintenance charges/ground rent and also avoid leasehold properties. Freehold is much better. I hope this helps. Good Luck.

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#3 RE: house: to buy or not to buy?
10/06/2010 23:27

Anon66 to Home Owner (#2)

Absolutely spot on. That isn't a consulting question.

As a consultant myself I can give you a piece of top quality advice: speak to someone who actually knows about the markets and don't make decisions based on the views of anonymous professionals who might not

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#4 RE: house: to buy or not to buy?
11/06/2010 00:11

highburyhill to Anon66 (#3)

I'm in exactly the same position as you. The trouble is, i'm looking at properties like this...

http://www.globrix.com/property-details/25247058-highbury_new_park-london-n5-2_bed-flat?from_results=1&hit=9

Not exactly an equivalent standard to the place I rent now and still needs 20K spending on it...maybe wait until people actually realise that the buy to rent market has finally burnt out.

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#5 RE: house: to buy or not to buy?
11/06/2010 08:26

Tramp to highburyhill (#4)

@highburyhill

Looks like all those years of hard work and education finally paid off then. Living in the same type of home as somebody on the dole gets for free from the council, whilst simultaneously putting in 60 hours a week at work.

This is a perfect example of why so many are choosing not to go into consultancy these days. What's the point, when all it gets you is a flat like that?

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#6 RE: house: to buy or not to buy?
11/06/2010 09:34

someguy to Tramp (#5)

LOL @Tramp.

Frazer - the right time to buy a flat is always ten years ago. In the immortal words of Buehler: If you have the means, I highly recomend picking one up.

That said, won't you need a bigger budget for a 2bed victorian on the uncouncilled side of islington?

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#7 RE: house: to buy or not to buy?
11/06/2010 10:13

fb to someguy (#6)

I am no expert, but in my humble view we are yet to see an adequate price correction in the UK housing market. Certainly if you compare it to the US - where, depending on what metric you look at, house prices fell almost consistently for 3 years.

My view is that first-time buyers are critical component of the housing mkt. Given they are where property chains begin - A buys B, so B has funds to buy C etc. The volume of first-time buyers able to borrow at pre-crunch income multiples is vastly reduced. As indeed is overall housing transaction volume if you look at the data.

The UK housing market is effectively stalled now. However, at some point volumes will need to revert to the long term avg. People still need to move - divorce / jobless / relocation etc. My sense is that prices will fall to accomodate this. People will simply have to accept less. Low interest rates have helped to delay this decision for many. The argument the Government can support the housing market indefintely is a nonsense - look at housing assets to the UK's budget.

On the flip side, the bears like me have predicted 5 out of the last 2 recessions :-) Cue all the homeowners now screaming the bears are wrong.

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#8 RE: house: to buy or not to buy?
11/06/2010 10:39

DCF to fb (#7)

Yes, great isn't it... those years of study and the graft at work to live in a 600 sq ft council flat - (and not even a nice one, one that needs refurbishment), and as the point has been made you've got no further than you could have done 10 years earlier after 2 minute insemination by Dwayne from the next estate, or from a surprise visit to Dover in the back of an HGV.

Face it. You are now one of the low-waged middle classes for whom there is no place in London.

But hey, why not enjoy the "edginess" and "vibrancy" of living there and paying £1200 a month while your neighbours either pay £300, or nothing and or you pay for them.

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#9 RE: house: to buy or not to buy?
13/06/2010 20:43

Scotty to DCF (#8)

Does beg a slightly off topic question but as a Scot living in London I'm wondering how possible it is to maintain the London salary and career progression whilst being based in Scotland and living in a nice big house? 80-100k a year affords a really nice lifestyle whereas in London it would be quickly eaten up.

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#10 RE: house: to buy or not to buy?
14/06/2010 09:31

DCF to Scotty (#9)

See if you can get a transfer to a regional office. I did.

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