Worried about a 20% drop in property prices?

Worried about a 20% drop in property prices?

by Readers Question

Guest Author

11:51 AM, 26th January 2014, About 11 years ago 22

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Hello!

I am hoping to get some ideas from a dilemma that I have. I have just had an offer accepted on a London 2 bed flat (share of freehold I am pleased to say) I am buying to let out and in the last 4 or 5 months have seen prices rise rather crazily, easily 35 to 40K.

Now I know that most of you guys here are only probably thinking that property will go up, but I am wondering if my thinking is flawed if I was going to only put down 20% as a deposit on the flat and borrow the rest on interest only? The reason I say this is because I have the full amount in cash to buy the place but should prices get cut in half, say a 50% drop then I can use the cash to buy up more?

I was also thinking that as prices have run up so fast to maybe just wait a while and let the election happen as we may then see some ugliness come out of politics and perhaps a removal of help to buy which may bring prices down and then buy the flat.

Of course I could be wrong and it may not rise or just go up even further. This is quite a dilemma to be in. I have enough cash at present to buy about 1 further flat out right but I am a property bear , so don’t plan to use this further cash until we have a upset in the market like in 2007. I guess my thinking is like buying a rose not on Valentines day but 4 weeks before and stick it in the freezer to get a better price.

Any strategies/ thoughts would be greatly appreciated.

MarcusFrozen Rose


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Comments

Marcus Taylor

10:24 AM, 28th January 2014, About 11 years ago

Reply to the comment left by "Vanessa Warwick" at "28/01/2014 - 09:47":

Hi Vanessa,

Great site and a great idea cos for me it has to be all about yield! I will take yours and Richards advice and try to look elsewhere out of London.

Marcus Taylor

11:27 AM, 28th January 2014, About 11 years ago

Reply to the comment left by "Vanessa Warwick" at "28/01/2014 - 10:19":

The property I had my offer accepted on (then revoked) was a nice but basic maisonette at 249,995 (to avoid stamp duty) in Enfield near the station, that price got smashed and latest is 270K! So I do believe yours will easily reach that, Walthamstow is doing very well. My money is on that yours will reach 275!

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