London propety projections

[z106]

How do people think London will perform over the next few years for property at the lower to lower-mid end i.e. up to £500k.

And in particular - how about the Olympic area?
I know a lot of price increases occurred the second it was announced - but it's still London !!

LIke - if you were to invest in London would you go to the olympic area or would you go elsewhere in London? Which offers better potential returns?

 

[JohnBoy]

As a London resident (and property owner) I would not be inclined to invest in London at present. Remember that you would be buying into a property market that has been on an uptrend for well over a decade and interest rates are rising. Expect another 25bps tomorrow and at least one more after that. The BoE have been caught on the hop by the strength of both the UK property market and domestic inflation so rates will continue to rise until there moderation in both.

As for the Olympics - any area that will benefit from imrpoved transport links ought to be a winner but I suspect that this has long been priced into property prices. As for the rest of east London - it is a fairly grim part of the city (and always has been). I cannot see how a one-off event can transform one of the poorest parts of the country. The Olympics will certainly provide lots of employment for construction workers but these jobs will all disappear once the project is complete.

Run the numbers on any place that you look at but bear in mind that rates could rise to over 6% by early 2008 and this will hit the heavily indebted UK consumer quite hard.

 

[canny]

I agree with JohnBoy.Rate rises will subdue buy-to-let market. Mortgages >7% are hard to cover with rents. The UK is however a well managed strong economy, with a perceived housing shortages in some areas. I would consider some other Cities close to London, where you might buy @ £200-£250 sq ft. The old terraced house, in a central location,refurbished, will in my opinion out-perform the new apartment market, in terms of running yield, at less entry price. Good luck!