House prices Feb 2014

[Mani77]

Hi all,

We are currently trying to buy in Sydenham (moving from West Norwood for ELL and better access to Crystal Palace) and having real trouble. Having seen recent posts, just to update those interested two/three bed flats are currently going for circa 10% above asking price (i.e. Recreation Road near Mayow Park, Lawrie Park Road etc etc) and 400k asking prices are on average being well over achieved... even down towards Lower Sydenham.

So we are now considering ex-local authority places, specifically in High Level Drive and around. Is this a safe area? We are not looking for property value appreciation any more (even with £500k to spend, it's pretty clear we are priced out of houses in Sydenham within 15 mins walk of the station unless there are major renovations to do which would really damage our deposit) - so that's not a worry - we just don't want to get mugged!

Any advice gratefully received... thanks.

[squashst]

Hi It might be worth trying Penge, its suppoed to be one of the cheaper areas in London. Its still got the Overground (Penge West) and there's the Penge East line to Victoria thrown in.

[leenewham]

The issue at the moment is that there is very little on the market, which is why properties are going for above market price. It may be worth leafleting roads you like asking for private sales. It must work because estate agents do it all the time.

3 bed terrace houses recently sold in Fairlawn Park (or under offer) for £370k and £390k according to the leaflets we got through the door. They have 40 to 50 feet back gardens (although it depends where in the road). ARound Lower Sydenham and just off perry Vale/Mayow park you would get a very nice house for less than £500k. It's still a huge amount of money though, but in London Terms amazing value. Down here we are very close to Beckenham and the cinema and a few minutes drive you are in Crystal Palace, Forest Hill or East Dulwich. It takes about 10 minutes to walk to Sydenham station.

Good luck. We moved here 6 years ago this coming Saturday.

[bensonby]

Nearly £400k for a terraced house? Are people insane?! Why are people paying so much?

[Eagle]

I agree quite amazing.

Although these terraced houses were usually well built they are mostly 100 years old , or even older.

Maintenance could be a nightmare which people are not considering in rush to buy.

[leenewham]

The houses sold almost as soon as they went on the market Eagle. They aren't any problem looking after to be honest. period victorian housing is the most desired in the UK in polls.

Property is stupidly expensive. As is the cost of flats, Semi Detached or especially detached houses. Even outside of London it's silly money and prices have jumped in the last year. We looked at house prices outside of Sydenham and London and it didn't seem any cheaper. Sydenham (especially lower Sydenham) is still one of the cheapest places in London for property and especially houses. South Norwood is a little cheaper.

[Eagle]

Thanks Lee

It beggar's belief where they get all the money from. They cannot all surely be tube drivers.

I appreciate your comments and know them , unfortunately , to be true. High prices help nobody. Profit is only realised on death when probate completed on the estate.

[squashst]

Go down to Honor Oak and 2 bed Edwardian terrace £500k, 3-bed £600k. I suspect prices will carry on rising for a while yet given the huge demand in London. There will be a bursting of the bubble ato some point (perhaps when interest rates start increasing?) but not for some time ahead yet.
The other point is whether there is an under-supply of property and if so, how to build more. A topic of some debate.....

[Rachael]

Profit is only realised on death when probate completed on the estate.

Or when older people downsize and pass the equity to their children. That's certainly our plan (although not for many years, nay decades to come).

[Poppy2011]

A 3 bed semi in Knighton Park Road recently sold for £660K, it was marketed at £475K but had overwhelming interest at an open day. Crazy prices!

[Eagle]

More money than sense , some people.

[stuart]

More money than sense , some people.

That's what my parents were told when they bought their first house in 1947.
Best investment they ever made. Meanwhile I'm sitting here while my house adds more to my wealth than actually working. Oh and tax free!

Its wrong, but as long as you can ride-out interest rate bubbles there have been few better sure long term bets. No government is going to deliberately undermine that when there are more home owners than house hunters. That's why Tim is a voice in the wilderness.

Stuart

[Eagle]

Are you calling Silverdale a Wilderness.

I understand your comments Stuart but there is no guarantee prices will not go down in future.

I am not sure comparing todays situation with 1947 is realistic .

[stuart]

Are you calling Silverdale a Wilderness.

I understand your comments Stuart but there is no guarantee prices will not go down in future.

I am not sure comparing todays situation with 1947 is realistic .

I never mentioned Silverdale. Long term is long term - as true in this millennium as the last. I gave the reason why no government is going to change it voluntarily.

Thus it is still a good bet though we are seeing a price bubble that will be followed by an interest rate bubble. Hence its currently not a good short term bet particularly if you are borrowing to the hilt with the danger of negative equity. But still a good long term bet Eagle.

Or would you recommend renting for how long to grow your wealth/have a pensionable asset?

Stuart

[Rachael]

I would hazard a guess that Eagle was making a joke there, Stuart, given that Tim lives on Silverdale and you said he was a voice in the wilderness...

[Eagle]

I mentioned Silverdale because you mentioned Tim. Sorry about that....


I do agree with most of what you write. I also agree interest rates should jump quickly to try and halt this bubble before it is too late.

I agree best if everyone owns their own home if possible. Rent OK when one is working , but how will one afford over 1000k a month on a pension.

But the price paid in Knighton Park. Surely over the top.

[simon]

A 3 bed semi in Knighton Park Road recently sold for £660K, it was marketed at £475K but had overwhelming interest at an open day. Crazy prices!

Has a very large garden for the street though, but agree; 660 is a bit toppy.

[Tim Lund]

That's what my parents were told when they bought their first house in 1947.
Best investment they ever made. Meanwhile I'm sitting here while my house adds more to my wealth than actually working. Oh and tax free!

Its wrong, but as long as you can ride-out interest rate bubbles there have been few better sure long term bets. No government is going to deliberately undermine that when there are more home owners than house hunters. That's why Tim is a voice in the wilderness.

The coincidence of your parents' first house purchase and the passing of the first Town and County Planning Act is slightly fortuitous, but still telling.

In a previous professional life, I used to watch markets drifting away from reality, and the game was to understand why, and so anticipate when the anomalies would reverse. It could be very frustrating, knowing something was wrong, but realising it wasn't going to correct any time soon. The housing market is such a case, and I admit that I can't see any triggers of change coming yet.

We can be sure that house prices are too high because it is possible to increase the supply, in locations where there is demand, at a cost much lower than the current selling price. You can blame government for this, but the restrictions on increasing supply are fairly popular, and not just because of the selfish interests of property owners - unregulated, unplanned development really would not be for the best.

One factor which will make it change is indeed a shift in the balance between groups differently affected, and the extent to which they influence government, although I don't think more home owners vs. house hunters is the main division - it's more home owners and those committed to home ownership vs. those who don't think in terms of owning their own house. But there other factors too, not least of which is that many people do now see the situation in the housing market, and the policies which have led up to it as wrong. Call me an idealist, but such views can have a long term effect. There's also the more hard-headed assessment of the financial markets - a country which misallocates its resources as we do, creating conditions where the young and dynamic look to emigrate where property prices are less crazy, is not such a good place to invest. Only a few weeks ago a friend in his 20s left for New York.

More important than these, I have a feeling, is a reduced capacity of government to enforce the planning restrictions which have led to this over-pricing. It's a bit like attempts in the US to stop immigration from Latin America, which are futile, and eventually lead to political pressure to grant amnesties. It would be nice if we didn't have to go that far, which translated into the context of the UK housing market would be equivalent to tolerating substandard housing which somehow or other has sneaked through planning, when well planned investment in an expansion of the supply of decent homes was possible all along. But one way or another, the supply is likely to expand to meet demand, an you can only bet for so long on Town and County Planning Acts.

[Hissing Syd]

Hallo Mani77,

Yes, prices have gone through the roof and will continue to rise, but for what it's worth, I'd stick to your guns. It sounds very much to me as if you should be looking in Lower Sydenham. I think people get strung up on the "Lower" thing - although nobody I know that lives down here refers to it as such. If you are prepared to scour estate agents/Rightmove daily and move fast when something comes up you can definitely get a more than decent Victorian terrace for less than 400k - just be absolutely clear with the max you want to spend and have all your finance in place ready to pounce. With spring on the way there should be more coming on the market.

The other reason I'd consider the bottom of Sydenham Road environs is because you mention security. I'm hyper-aware, as I don't drive and have frequently been a victim of crime in the past (before I lived here). From out of the station and straight down the main Road, walking back here even very late at night everything is well lit and there are usually people about. I'd steer clear of going too far off the beaten track, ie around Mayow Park where you mention. Those areas are still nice but I would think twice before walking there after dark.

Fingers crossed for you - and hope you find the right place soon. Frankly, London property will always hold it's value.

[Eagle]

Hissing Sid

How do you know London property will always hold it's value

Suppose the Finance Industry moves en masse from London. Will not occur tomorrow , but 10 years time who can say.

If that happens prices will DIVE.