When do I sell my London pad?

[sloverid]

Not wanting to sound smarmy but 'Ive been incredibly lucky to buy a zone 1 flat 2 years ago and have it valued recently at nearly double what I paid for it.

I dont think there's a housing bubble, but this madness cant last forever surely? I was just wondering If you lot had any thoughts on when would be a good time to sell up and live somewhere proper. I was gonna give it another year and see how it is then.

[Scrag Meister]

Where would you live instead, move out of the city I guess.

I know a nice house in Tottenham you could have for £750k. :-)

[Mulder]

Not wanting to sound smarmy but 'Ive been incredibly lucky to buy a zone 1 flat 2 years ago and have it valued recently at nearly double what I paid for it.

I dont think there's a housing bubble, but this madness cant last forever surely? I was just wondering If you lot had any thoughts on when would be a good time to sell up and live somewhere proper. I was gonna give it another year and see how it is then.

If you don't think there is a bubble then sell up when you no longer want to live in Zone 1 and when you have located a nice 'proper' place & house/flat for you to live in. Sounds that should be in around a year's time.

Given next year is an election year, although you don't think there is a bubble, I am sure the bubble/madness will survive into early 2015 should there in fact be a bubble/madness.

[KentPhilip]

Given next year is an election year, although you don't think there is a bubble, I am sure the bubble/madness will survive into early 2015 should there in fact be a bubble/madness.

+1
London was and is in a bubble caused by immigration and foreign tax-haven property investment (as in for them the UK is a tax haven), but it won't come tumbling down until after the election.

[OwlHoot]

Not wanting to sound smarmy but 'Ive been incredibly lucky to buy a zone 1 flat 2 years ago and have it valued recently at nearly double what I paid for it.

I dont think there's a housing bubble, but this madness cant last forever surely? I was just wondering If you lot had any thoughts on when would be a good time to sell up and live somewhere proper. I was gonna give it another year and see how it is then.

There's certainly a bubble in the central London property market now, but most of the cash buyers have already swooped for this year and after Easter you'll be left with more mortgage-laden wannabes.

Also, although it will probably last until the election, it's worth remembering that property bubbles spread. So, assuming you won't be living in a cardboard box or emigrating, what counts is the relative price difference between your sale and purchase.

It's hard to answer your question without knowing where you are aiming to go. If this is further out in London I'd say go for it now before the bubble equalises. But if you're content to move to another town or out in the suburbs maybe wait until the start of next year, and ensure that by then your gaff is in tip-top condition and all your property documents are ready for a quick sale.

[Unix]

Here is a simple algorithm to determin when to sell.

Check annual property change in your area every January...

If > 5% then don't sell
else sell.

[Martin@AS Financial]

Not wanting to sound smarmy but 'Ive been incredibly lucky to buy a zone 1 flat 2 years ago and have it valued recently at nearly double what I paid for it.

I dont think there's a housing bubble, but this madness cant last forever surely? I was just wondering If you lot had any thoughts on when would be a good time to sell up and live somewhere proper. I was gonna give it another year and see how it is then.

It's a really good question.

For me personally, even if you do leave London, and depending on your attitude to risk, I would look to refinance it as a BTL and keep it as my pension plan. While the rental income may not be great, the potential equity growth could offset this.

According to the home website - in 1995 the average flat was bought for £113,916. Today it is sold for £464,881 which is an increase of 308%.


Home.co.uk: House Prices Report for London - January 1995 to January 2014

[doodab]

Not wanting to sound smarmy but 'Ive been incredibly lucky to buy a zone 1 flat 2 years ago and have it valued recently at nearly double what I paid for it.

I dont think there's a housing bubble, but this madness cant last forever surely? I was just wondering If you lot had any thoughts on when would be a good time to sell up and live somewhere proper. I was gonna give it another year and see how it is then.

How can you not think there is a housing bubble when your flat has doubled in value in 2 years? If it's not due to a bubble then the only sensible thing to do is hang onto the asset for as long as possible. If it is a bubble, you need to hang on till you lose your nerve.

[BlasterBates]

One thing I have learnt in my years of investing is that what was good over the last few years will be bad over the next few years.

You can check on under/overvaluation by checking rents.

For a house to be correctly valued you calculate that rent minus all costs including the mortgage should give you a return higher than the bank interest, so 3 or 4%

Then you have to think what might happen, i.e. what happens if interest rates go up by say 2 or 3%, that changes the valuation.

Worth doing some sums to figure out what your over/undervaluation is. If you are overvalued now with interest rates at record lows then it's a good time to sell.

House prices will probably continue to rise, but when the drop comes it's always sudden, by the time you realise the fall is there, it's too late as all the buyers dry up.

[Unix]

One thing I have learnt in my years of investing is that what was good over the last few years will be bad over the next few years.

You can check on under/overvaluation by checking rents.

For a house to be correctly valued you calculate that rent minus all costs including the mortgage should give you a return higher than the bank interest, so 3 or 4%

Then you have to think what might happen, i.e. what happens if interest rates go up by say 2 or 3%, that changes the valuation.

Worth doing some sums to figure out what your over/undervaluation is. If you are overvalued now with interest rates at record lows then it's a good time to sell.

House prices will probably continue to rise, but when the drop comes it's always sudden, by the time you realise the fall is there, it's too late as all the buyers dry up.

I doubt this will happen in central London though, more likely they will stop going up or go up with inflation for a few years.