Just wondering how people see the property market panning out for the next year or so?
After about 18-months of delaying selling due to the uncertainty of Brexit, I put my small 1-bed West London flat on the market in January in the hope that the market would take off a bit which it looked like it was going to do. I bought the flat back in 2015 for £355,000 and with a very stagnant market over that period, I was hoping to achieve £360,000 or at least break even but had an offer of £350,000 which I accepted because a similar flat in the block went for £340,000 the previous year.
Coronavirus had other ideas, and that fell through about a week before lockdown. I'd kind of resigned myself to staying put for the next 12 to 18 months but I left it on the market there has been quite a lot of activity recently and today had an offer of £340,000.
I'm now considering should I just sell up, maybe rent for a bit and buy my next property later this year as a cash buyer (with mortgage), or stay put in the flat for 18 months?
I guess it's always a gamble but I always seem to make the wrong decision!
What do people think...are we in bubble right now and would it be prudent to sell or should I just stay put and ride out virus uncertainty for 18-months?
I keep hearing that people are leaving the cities in droves and rural properties are booming.
If (and it’s a big if) that’s true then you’d be well advised to sell your flat in the city as demand should weaken. If you’re then going to buy out of the cities, buy now but if it’s another city pad you’re after, waiting would seem to be wise.
It’s all guesswork really though.
Thanks...would be buying into suburbs, so moving out by a couple of zones. I'm also trying to work out whether renting for, say, twelve months (which burns through cash rather than pays off a mortgage) is worthwhile.Originally Posted by Dave+63
Why pay someone else's mortgage than pay your own for the 12/18 months...also trying to time the sale/buy process for advantage is nigh on impossible.
Plus from the sounds of things you're moving out by a couple of zones rather than leaving the city for the country dream so I don't think there will be so much 'regional' variation in this instance.
Seriously doubt long term people will leave the lifestyle and buzz of London for the countryside if they weren't already going to do it. I doubt a young professional enjoying the London attractions suddenly thinks Milton Keynes is the place to be so I'd say once Covid has been forgotten about the market will return.
The mortgage advisers I work with are incredibly busy at the moment, busier than ever I’d say. Loads of first time buyer enquiries as well. Placing cases is a lot harder, particularly the big stuff which is what we do quite a bit of (we do loads of holiday let etc). Some lenders are saying yes and then changing their minds.
Were also seeing more people from away looking - personally I think that will be a bit short lived as when things return to normal, people will return to . . . Normal. A few may move from say London to the country but I doubt it will be the droves that are predicted.
The biggest issue right now is the one that know one can answer - unemployment. The furlough scheme is one long delay tactic, which is a good thing, as it provides hope and the chance for improvement. It will rise though. By how much is the unknown. That’s what will affect property but right now it’s ‘how longs a piece of string’.
Personally the only thing I wouldn’t do if I was you is to sell and rent, as you may never get back in the market, for whatever reason. As long as you can afford the payments, owning your home gives you stability. Otherwise you’re gambling. Just my thoughts on it.
I’ve just sold my house and moved into rented. Puts you in a strong buying position and able to make offers significantly below asking prices. Sometimes 7/8% off easily if you can say you’re able to purchase quickly.
IMHO, in general, there’s no way prices are going anywhere but down (in the short term), so if you have a buyer, it’s best to go for it and sit on the cash for a few months, while house hunting.
Trying to time the market with investments is one thing, doing so with your own home is another.
I’d stay on the ladder with your own home.
Investments is another thing.
That’s true and everyone has different circumstances but it’s also taking a risk unless you are a cash buyer. Lenders may change lending criteria, people may accidentally get credit issues, employment may change. Loads of potential things could happen. A lot of people can often afford to pay the mortgage amount, but on paper it doesn’t seem so therefore they can’t borrow.
Unlikely but who knows eh.
A bit of a myth.
An interest only mortgage is just renting from the bank.
Even for the first 10 years of a repayment mortgage you are mostly renting from the bank.
Yes but remember just two words - capital appreciation.
That's where he will make the money.
If you sell and buy at the same time, you are buying and selling in the same market, so just do it.
This has all changed as you can’t get an interest only mortgage anymore unless you have a substantial deposit.
With regards to payments you actually start paying off a lot straight away.
200k mortgage @2% over 25 years is £853 per month.
Interest element is £333 which leave £500 being paid off the capital straight away. That increases slightly every month going forward.
Yes, I’ve had a mortgage for the last 5 years and of the £1000 monthly payment, it’s been about 50:50 payment to interest.
I fully understand capital appreciation. Tell that to any homeowner from 1989 to 1995.
London has broadly been in very slow house price capital depreciation for the last few years.
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Take a stress test if Sunak’s printing press goes brrrrrr, and mortgage rates jump to 7%.
There is another Corona Property Prices thread.
I’m think prices will fall short term (higher deposits now required, banks are not lending as much / taking commission into account in the same way as before Corona) and higher unemployment and recession expected.
I personally have just sold my place to become a ‘chain free my buyer and am planning to buy something else straight away, with the view that prices will increase longer term.
I think there will be some bargains to be had, but they will be few and far between (repossessions etc).
Maybe, but you can also factor in the new ‘working from home’ element, if people can do that now and not need to have commutable to a office London postcode then buying a big pile in the country for the price of your 50% equity of your terraced semi has some appeal.
I posted this in a similar thread a few weeks ago:
"It's all still far too early for the real ramifications to be priced in the market. The people buying and selling now are the same people who would have been doing so pre covid, you may get a small discount for the uncertainty but they are not true motivated sellers.
The people who are really in trouble are on mortgage holidays now and are getting 80% pay on furlough. We'll only see that coming onto the market when mortgages can't be paid post holiday and when the furloughs turn into redundancies. It'll be the end of the year before that starts and I guess a number of months after that for repossessions to come to the market.
And that's not even thinking about no deal brexit."
I am certainly not rushing to buy anything now, those equating renting with paying someone else's mortgage are looking in the rear view mirror, not ahead.
It depends how far ahead you are talking. I’m confident that prices will struggle short term, but you would need a major correction in prices and rents for me to think renting is better option than buying!
Flats will struggle in the short and medium term. No one will wish to risk lockdown in a confined space without the ability to break out to the open air. Sell now if you have a vaguely acceptable offer.
We’re all different but I’m so pleased we moved from Kingston upon Thames to North Norfolk nearly 5 years ago now. The ‘hustle and bustle’ of London had lost its appeal over the years, as had the crazy house prices and tbh it wasn’t a place I wanted my kids to grow up in, with rising levels of crime - just not the London I grew up in. I’ve spent the lockdown in a large house and garden I couldn’t have dreamed of in London, working from home with peace and quiet, Amazon deliveries and a big empty beach nearby. Sure, I’m past nightclubbing age - but I really don’t know how I’d have coped with lockdown in London. It’s actually been quite nice up here, if I’m honest - my Dad is in West London and he’s finding it pretty tough. I think a lot of people may now decide that cities are not the only option .
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We sold in October and were hoping to buy again during either the Easter or the summer holidays as for the type of property we're looking at typically go with the school holidays.
We're choosing to stay out of the market until next Easter but will continue to monitor the market.
The market does seem to be busy. We get 1-3 emails daily from Rightmove with either new properties or reduced properties. Not sure how sustained this demand will be but do think new LTV requirements will take the wind out of the sails somewhat, particularly with first time buyers which may impact you.
I think it will hit the fan in October but there is a chance to make hay now as a seller.
If it's purely financial, then you need the property market to drop at least 10% to make it worthwhile. 1 year of rent and legals to sell and later buy is probably at least 5-7%, not to mention the hassle of moving, decorating etc.
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Good for you, love North Norfolk, I live in Cambridgeshire so NN is our go to coast for days out, my Grandparents lived in Great Bircham so fond memories.
A good friend of mine lives in North London, he works from home and has 2 small kids so nothing stopping him really, I keep trying to persuade him to move out to get a better lifestyle for his kids and more for his money, i know its subjective and there are pros and cons to it and Ive never lived there but I can't see the appeal when there is a more sedate and nicer lifestyle to be had.
Cheers..
Jase
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