The Guardian are today reporting that there is a 1 in 3 chance of a London house price crash https://www.theguardian.com/business/2018/aug/29/one-in-three-chance-of-london-house-price-crash-says-expert-poll
If you are currently looking around the Capital for a new property your jaw is going to hit the floor when you see some of the prices on offer.
A 2 bedroom flat for £900k, a 1 bed for £600k a studio for £450k… bargain?!
Not.
Properties are on the market for crazy sums of money, driven up by the lack of supply and the seemingly optimistic view from agents that prices will always just spiral… or that there will be some foreign buyer with an agent on the ground, on a high commission, to snap up the next best postcode at whatever cost (who gives a damn about locals?!).
Yet with BREXIT on the horizon and uncertainty rife, foreign investors aren’t willing to splash their cash because ‘ya know’ there’s no certainty of these prices continue to go up.
More importantly, buyers are looking at these prices and thinking ‘hell no am I paying that sort of cash for this…’. And by this, they are probably looking at some dingy 310sq ft 2 bed with no windows in a basement in Woolwich for £500k that didn’t pass building control standards.
No longer are there any great deals to be had in London if you’re simply looking to buy a new home. And who has the time to constantly worry about the amount of money you have to put into a property to actually make it what you want on top of the monstrous amount of money to buy the thing and then keeping up with mortgage payments.
Something has to give.
Wages aren’t rising and locals are tired of paying above and beyond just to get an OK standard of life.
So a housing crash will be just that… the market has to recalibrate and quickly.
I know that there will now be sellers out there running scared, panicking about losing money. However, if you want to help the situation, drop your asking price. I’m sure that you will have made A LOT of money on the property in the last few years, so a 5%-10% drop to keep the market moving will be fine AND you will still be able to pay off your mortgage.
Before you start saying ‘well Natasha, you wouldn’t do it’. I just have. My current flat was valued at £500,000, it’s being listed at £465,000 and still it’s made £90k. It just means I’ll get interest and be able to sell quickly. Rather than be stuck in the same boat as the couple opposite who are praying for a buyer, when they’ve only had 3 viewings in the last 10 weeks.
The more we work on doing this now, the less of the impact a crash will have, because it’s controlled! You leave it until everyone moves out and there’s no buyers, house prices will go into freefall.
For those of you in despair that you can’t afford to buy your perfect property in London. That’s OK. There are some beautiful places outside whereby you can have the same standard of living for a fraction of the cost and still get into London quickly. Reading… yes locals in Reading will say it’s not cheap, but I could easily get myself a 5 bed and it has the best shopping in the UK (I just love the Oracle, its quiet and has every shop I need). Also, if you are happy to take the meandering train to Waterloo is £16.30 return a day at peak time as opposed to £43 to Paddington. Bargain.
If something I’ve said resonated with you, please comment below. I want to know what you think of the crash.
Don’t forget to share this on your favourite social media channel so that everyone can get involved in this discussion.
Natasha
