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i read an article earlier this year which predicted one third of London boroughs to have an average house price of 1m by 2030-33.
can we really expect house prices to double by then?
In a word no
Sounds perfectly feasible, I bought my house for £245,000 in 1998 (just outside London post code), next door are selling their property (same style house) on the market for £1,250,000. Even at £1000,000 that would be 4 times the amount we both paid just under 20 years. So the doubling of prices over 15 years seems perfectly reasonable to me.
I read an article about the next recession soon to come will be worse than the wall Street crash. It's all just opinions.
Not a cat in hells chance
Learn Change and Adapt ?????
All comments are for casual information purposes only. If you wish to rely on any advice I have given please ensure you obtain independent specialist advice from a third party. No liability is accepted for comments made.
Doubling in 15 years is "only" an average annual growth of 5%.
About 7% per year means prices double in just 10 years.
Even 3% (ie roughly inflation at the moment) only takes 24 years for the price to double.
Of course inflation does mean that the value doesn't double in these time periods, it's just the number that's used to represent it that does!
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Its a good headline and enthuses me
SimonP expresses it well
The mind plays tricks on us and often doesn't like us to go there
I say let it go there
All my life when i have bought a house its really hard to envisage it doubling
But I know they do and history shows us that
So I overcome that negative - `Oh my god am i buying at the top ` sinking feeling
Its hard sometimes but I am vindicated by history - Because they do double so I invest
My old next door neighbour put me off
He paid 3K for his 3 bed semi in 1933 and when he heard I paid 52K in 1987 for an identical property to his, his eyes were wide in disbelief
You paid WHAT he said !!!! You must be mad !!!!
I had that sick feeling . But he was wrong to think I was mad
His mind just couldn't absorb the information and put it in a perfectly reasonable context
My 25K BTL flat I bought in 2000 doubled to 50K and doubled again to 100K
That`s in 18 years
Its entirely reasonable that in 15 years it will be worth 200K
My mind struggles with that of course now with all whats going on
But history is my comfort blanket
And the beauty of property is even if I am a massive 50% wrong I still gain another 50K
And thats before we talk about the additional 85K or so rental income on top in that time
And thats before we talk about inflation eroding my debt .
An 18K 75% LTV loan in 2000 on a 25K PP was a big chunk of cash to find
In 2018 that wouldn't be nearly as tough because of inflation
33 years on it will probably be just enough to buy a costa
Time is very kind to the property investor
Jonathan Clarke. http://www.buytoletmk.com
Very true Jonathan
I was able to buy a refurbished 4 bed semi in 2011 with a 25 % cash deposit of 80k, but now that same deposit can now barely buy me a 2 bed btl for 300-310k, and that is just in 7 years....
Pretty soon 80k won't even be enough for that....it's hard to envisage that inflation will continue to erode the value of money but history shows it to be true
Very unlikely to see London house prices going up in the medium term imho.
I think we have to agree that London property market is a very different breast all together compared to other parts of the UK. The reason is that the market is supported by foreign investors mainly from Russia, China and Malaysia. These countries with many individuals who are cash rich but unable to spend openly in their own market (money that is not easy to surface). Therefore money can only be parked outside the country. Hence, London is a very good bet to park money, great I hear you say for price increases.
However this would mean, average locals are unable to afford the average property as oppose to any other towns in the UK. The real danger of this is, if for whatever reason the foreign money is not flowing in any more, locals are not able to stand up to the plate to support the exorbitant prices. The prices will fall as it has been happening over the last few months. Money is not flowing in from abroad anymore and a huge "correction", ie, locally affordable prices will follow. For example, if an average London worker earns 50k, the average house price will be around £300k roughly speaking.
There is new/stringent regulation on anti money laundering on property purchase in UK since mid-2017, with Solicitor and estate agent binding to that. That is one of the reason offshore buyer you described have (partially) slowed down in buying in London, especially top end of the market.
Its very simple UK property prices in many places are overvalued and a correction is due to take place. How much will depend upon where you live.