Is it wise to buy a house now in London’s fast moving property market?
As the UK economy continues to make a gradual recovery from a severe recession, house prices in the capital continue to rise. London has experienced record house price growth during the last three years, and many property experts are predicting that this situation will continue for at least the next three years. The question many property buyers are now asking themselves is “should I buy a London property fast, before prices escalate any further?” In order to reach the right decision, it’s worth performing a little research of your own into the local housing market.
Are you a first-time buyer looking to buy a home in London?
If you are a first-time buyer, it’s important to keep in mind that a home bought fast today needs to deliver value for the future – particularly if you’re hoping to upsize at some stage. A recent article on the Telegraph website revealed that buying a house in London when house prices have risen so quickly in recent years may not be a great idea.
Interest rate rises are seemingly just around the corner, and this could mean property value growth cools considerably over the course of the next few years. And while some property experts are predicting house price growth of up to 25 percent over the course of the next four years, there can never be any degree of certainty where house prices in the UK are concerned.
If you are like many first-time buyers in the UK, you will be thinking about building up equity over the course of the next decade or so, and cashing it in eventually for a bigger property as your family grows. However, with house prices in London so high at the moment, there is a risk that you’ll be buying at the very top of the market. It may be prudent to either buy just outside London, or to wait a few years until the Bank of England raises interest rates to what will be their long-term position. Only then will house price growth stabilise.
Are you prepared to gamble on future house price growth?
Despite countless predictions of what is going to happen to London house prices over the course of the next few years, no one can say with any certainty exactly what the future holds. According to a recent report on the Thisismoney website, London house prices grew by almost 18 percent in the twelve months leading up to February 2014! This is around double the national average. However, the same report does suggest that this house price growth is spreading to other areas of the UK, and that may be a sign that people are now deciding that living in London is just too expensive.
According to the same report, the Office of National Statistics recently revealed that the annual rate of inflation is four times higher than the average wage increase. This situation is obviously unsustainable, and it might mean that house prices eventually reach their peak during the course of the next three or four years. Buying on the crest of this property value wave is something of a gamble, and you need to be aware of the financial repercussions if things don’t go your way.
Do you believe what experts are predicting?
It’s always a good idea to get financial advice from experts before buying property in such a booming market. A lot of people bought property at the height of the last bubble in 2007, and were left with property that depreciated by as much as 30 percent just two years later. However, this is easier said than done, as different experts and financial bodies are predicting very different futures for the London property market. The Royal Institute of Chartered Surveyors recently reported that the exceptional rates of house price growth recently experienced in most parts of central London have started to abate – no doubt because of the looming interest rates rises.
However, Savills believes that house prices growth will continue to remain strong until 2018, after predicting UK property values will grow by nearly 26 percent between now and then. The international estate agent also made the point that the annual rates of house price growth probably won’t stray beyond three to four percent during that period.
Instead of thinking ‘how fast can I buy a house in London’, show patience, get expert advice and bide your time until the effects of interest rate rises are obvious may be enough to ensure you get value for money and a property with future growth potential. If you’re sure you want to buy or sell property in the City or Greater London then check out our houses for sale in London – guide.
How important is living in London to you?
Some people become so used to living in London that they become blind to the possibilities of living elsewhere in the UK. Just moving a few miles outside the capital can often be the difference between a lifetime of renting and getting your foot on the first rung of the property ladder. Moving to a commuter town such as Reading could mean you get a lot more for your money.
A recent article on the Guardian website revealed that the careers of young Londoners are being jeopardised, just because of the rising cost of living there. Homes bought in London are selling for up to 105 percent of their initial asking price at the moment. If you are at the early stages of your career, and you insist on living in central London, the chances are you’ll need to share your home with others.
Unfortunately, the astonishing house price growth in London is expected to be far higher than in areas outside the South East of England for many years. Even if you can afford a property in the capital, upsizing as your life changes could become very difficult – especially given the fact that rich tycoons from American and Asia are snapping up investment properties all over London at the moment. If at all possible, moving a little farther afield could drastically improve your standard of living.
Can you afford to wait to buy a house in London?
The need to buy a house fast in London may take priority over everything else. If your job or private life requires that you live in the capital, waiting around to see what happens in the local housing market could mean you end up paying a higher price. A recent article on the Thisismoney website revealed that house prices in London rose by 2.7 percent in August 2014 alone. The average price of a home in the capital was £467,000 in August according to the same report, which meant homeowners saw the market value of their property rise by an eye-watering £12,279 in just one month. Gambling on the market cooling in the next few months may be the best idea, but it could mean you end up paying more for your home if it doesn’t go your way.
Whether you wait around for prices to cool or you act now to head off further house price growth depends on exactly where in London you are buying your home. For instance, there are some up-and-coming areas that are reasonably affordable yet are still showing strong house price growth – these areas include the likes of Shoreditch, Dalston and Brixton. The area around the newly developed Kings Cross is also in high demand; just a few years after it was considered one of the less desirable areas of the capital. And while prices in the likes of Peckham have increased by over 30 percent during the last three years, homes there are still a great deal more affordable than in most areas of central London. If you really have to buy a house in London, there are still areas that provide value for money and house price growth potential.
Are you prepared to look at alternatives to the traditional ways of buying a house?
Rather than scouring the highly competitive and inflationary open property market, you may be able to pick up a bargain if you have the funds in place and the freedom required to proceed with a house purchase in London quickly.
How do I sell a house fast London in today’s market, is a question hundreds of home owners throughout the City and the South East will wonder, for a number of reasons. They may be willing to sacrifice just a little value in exchange for the quick house sale they need. If you have a house to sell in London then a great place to get started is to perform a web search for local London estate agents or call us now and we’ll give you an instant online quote to buy your home.
House price growth in London has been phenomenal in recent years, and while that is fantastic news for homeowners looking to sell, it has been devastating for local people trying to get on the property ladder in the city. In truth, the rate of growth is already slowing, but there is always going to be a huge price differential between houses in London and houses elsewhere in the UK. As London house prices are expected to show an annual rise of at least three percent every year for the foreseeable future, now may be the time to buy property in the capital if you can. This article was brought to you by Flying Homes, the quick sale specialists, call us on 0800 68 99 420 or fill in the online form for a free quotation to sell your house.