Investors in London ! Will the prices double within 15 years?

[Jacob19]

Hi guys !

As I've been slightly studying the property market, I'm trying to imagine what it's going to be like in London after 15 years or so? I can hardly imagine the average house prices doubling. As from the investors point of view, the demand will always be there in order for it to build passive income. However, I can't see houses which are currently worth £300,000 being worth £500,000 or more. So for instance the rent is £1,700 that means after 15 years the rent should rise to at least £2,500 or so right? But I don't see any regular family paying such kind of money for the house. Either London is going to be full of HMO's or the minimum wage is going to rise to sky. 

Could anyone put out a scenario how could we possibly see house prices doubling in London within the coming 15 years?

Thank you so much !!!

[DezzaT]

Hi Jacob19

 

Interesting topic. I tend to think about this when I hear people mentioning that property prices doubling every 10 or so years.

 

I think you have to pick your areas within London. There was this article in the Evening Standard last week about Hackney's prices in the last 20 years. Up 568%, I'd be happy with that. 

 

Perhaps with areas impacted by transportation improvements like Crossrail, the proposed Crossrail 2, the proposed extension of the Bakerloo and DLR lines etc. If you can pick a spot along those lines and hope for some regeneration or gentrification, then there's definitely the opportunity of prices going from £300k to £500k+. You just need to find that next Hackney...

 

 

[Dino V]

Maybe, maybe not. Ask me again in 15 years and I'll tell you.

It does seem ridiculous, but then I live in Manchester and think the prices here are ridiculous and they're probably 1/3 the price of the equivalent property in London. It's difficult to predict off the back of probably the biggest crash in history, but look back at the numbers.

We bought our home in 2003 and the house next door has just sold after being advertised for pretty much double what we paid. Don't know what the sold price was, but suspect it was close to asking. So in that period we had huge growth, followed by a huge crash and, in this area, some growth. 15 years ago, I wouldn't have believed the price would have doubled. 

Over a longer period, my parents house went from £17.5k in 1983 to £115k this year. That's in an area where prices feel like they've always been low for no obvious reason, yet it's gone up about 5.5% each year, or doubled every 13 years.

So history says they should, or at least be close to doing it, as odd as it feels.

[TobyJR]

On 6/12/2018 at 9:58 PM, DerekT said:

Hi Jacob19

 

Interesting topic. I tend to think about this when I hear people mentioning that property prices doubling every 10 or so years.

 

I think you have to pick your areas within London. There was this article in the Evening Standard last week about Hackney's prices in the last 20 years. Up 568%, I'd be happy with that. 

 

Perhaps with areas impacted by transportation improvements like Crossrail, the proposed Crossrail 2, the proposed extension of the Bakerloo and DLR lines etc. If you can pick a spot along those lines and hope for some regeneration or gentrification, then there's definitely the opportunity of prices going from £300k to £500k+. You just need to find that next Hackney...

 

 

 

 

Strong advice IMO...  Many suggesting stay clear of LDN but I have seen strong result since buying my property in an up and coming area - SE28.

 

The area will divide opinions but I purchased in 2008 as a riverside REPO, steady growth and now valued at double that with Crossrail going live in the next 12 months 10 mins walk away in SE18.  I have had tenants in place since I left the occupation with a maximum of 6 weeks empty in the last 6 years.  I now have a great management company now after dealings with a couple of rogues. Currently achieving £1k PCM 12 month with 6 month break.

 

Prices in the neighbouring SE18 are £400k+, in SE28 one beds are c.£250-260; 2 beds, £300k with strong rent.  Crossrail is private funded and due to complete within the next 12 months, planned Jan 2019 (subject to slippage).

 

Demographics in the area have changed significantly and a flux of working professionals has been attracted of late.  I expect the apartment to break £300 with the realisation of the new station and the value significantly less (£100k) than 400 meters up the Thames cycle path...  Go on for a further 400 meters and you will find the Royal Arsenal development penthouses reaching in excess of £2M...

 

The introduction of the Crossrail link at Woolwich Arsenal will have a significant effect on journey times 

 

 

TO	CURRENT JOURNEY TIME	CROSSRAIL JOURNEY TIME
Canary Wharf	19	8
Liverpool Street	34	14
Bond Street	35	22

 

https://www.telegraph.co.uk/finance/newsbysector/constructionandproperty/11356408/House-prices-How-to-get-rich-quick-from-Crossrail.html

 

Furthermore, more is planned for the future... 

 

https://www.homesandproperty.co.uk/property-news/buying/new-homes/a-game-changer-for-southeast-london-new-1bn-town-centre-at-thamesmead-to-bring-20000-riverside-homes-a112441.html

 

Many scoffed at my decision to invest in West Thamesmead, Woolwich and Plumstead, it's not for everyone but it worked out well for me.  I sense after speaking to local agents and monitoring the situation for some time the biggest gain is yet to come.  People don't want the elongated commute now, but will happily pay for it when it's established I sense.  Happy to be shot down!

[connect_aiginvestment_co_uk]

I couldn't see prices going up significantly at any point in the last 20 years but they keep going up. We bought our most recent house in 2012 and it has increased 80% in value since then before a 10% drop over the past year.   I really can't see them going up any further in the next 5 years, but I am probably wrong, in the long term though I definitely can see them going up. The question you need to ask yourself is - Are house prices the most they will ever be? Unlikely.

 

It is likely that the prices will continue to keep increasing over the long term, the Government are devaluing the currency by printing it through QE like it's going out of fashion so its spending power is decreasing.

[Ivan J]

One scenario that would support higher prices in the capital is if banks start offering longer-term mortgages. If people are able to borrow for 50 years or 100 years, then prices could continue to rise. 

 

People would end up never paying off their mortgage unless they moved house and realised the capital gain (or died!). 

 

It't not an ideal situation for most people and would rely on interest rates remaining low for the very long-term. 

 

 

 

 

 

 

 

 

[OHANLON]

Certain Boroughs will.  Prime London will not.  Salaries do not match house prices

 

Areas on the outskirt like Lewisham, Bexley and Thamesmead will be the real winner.  Have my eye on that stretch of waterfront real estate in West Thamesmead, lots to play for there.  Prices are cheap and sat on the Thames.  London postcode SE28 and river facing for less than £300K  Behave!!!

 

Those areas dont have much infrastructure at present but its where the investment is going now to increase business links.  Watch this space.

 

Crossrail, DLR and Government backed regeneration - pure winner.  Crossrail next year, DLR and Regen now through to 2026.  3 or 4 capital growth triggers.  Watch out for the Ripple also in Plumstead and Lewisham but West Thamesmead is heating up.  The rental in the bit people are pout off with but I turned 35K in 18 months.  Thankyou very much