Buying property in East London

[footman]

A young relative of mine is thinking of making an offer on a flat in the Whitechapel/Stepney area.
He is concerned about resale values in that neck of the woods,i.e. could it become the "new" Shoreditch or will it always be just East London.

I can't give him an unbiased answer as I come from that area originally and for me it's always been a place to get away from, not buy into.

Be grateful for any views.

 

[scorza]

Presumably the resale value is reflected in the asking price of the property at the moment? I don't think anyone can accurately predict where property prices will go, though with the Olympics and the East London line extension I would guess the area can only become more desirable.

Personally I think the main question here is does your relative think he'll like living there?

 

[muon]

You have to remember that people buying property are forward looking like your friend. So if there is a chance that the area becomes the next fashionable place for professionals, its already probably reflected in the price (reflecting both probability and the price increase).

In order to accurately predict prices you will have to know something others don't, I doubt even local estate agents could honestly tell you.

 

[Jonny69]

Stepney is a bit further out but that whole area is just getting more and more trendy. It wouldn't surprise me if Tower Hamlets is nice one day

 

[SeatIbiza]

East London is a ghetto (on the whole).

However, the Olympics arrive shortly. I believe there will be an increase due to this and the money invested in the area that is (or was) currently a drug addled waste land.

What is he buying and how much?

 

[muon]

Be careful that this promise of the Olympics don't just create a massive bubble for the area. The East London Line has already been opened and a vast amount of the budget has already been spent. Last time I checked, houses in Tower hamlets suffered as badly as the rest of London over the couple of years.

 

[Maccapacca]

Is what he's looking at cheap for the area? if he's worried about resale buy something run down or potential to extend.

If he buys at the top end for the area the risk is higher, what's the general area doing, is there investment from the HCA, what borough of London and what are they doing with their budget in the coming years?

 

[Scam]

Here's a thought. Why doesn't he just buy a place that he wants to, ya know, live in. Screw the resale value and making a quick buck, its that stupid attitude that has got us in the ridiculous mess we're in.

 

[DM]

My opinion for what its worth is that the whole olympic thing is going to cause a slight up swing then a flat period then a drop again all in a very short space of time.

If its cheap buy it, if its not choose somewhere he wants to live and forget the quick buck.

 

[footman]

Here's a thought. Why doesn't he just buy a place that he wants to, ya know, live in. Screw the resale value and making a quick buck, its that stupid attitude that has got us in the ridiculous mess we're in.

Who said anything about quick bucks.Thanks to the others for more constructive views. I'll send him the link for this thread.

 

[muon]

Here's a thought. Why doesn't he just buy a place that he wants to, ya know, live in. Screw the resale value and making a quick buck, its that stupid attitude that has got us in the ridiculous mess we're in.

Well if you do plan to move in the future, it is a consideration to make. People purchase houses as a savings asset as well as to potentially live in.

But yeh, thinking that you're going to be a professional real estate investor when purchasing is a stretch.

 

[toshj]

Presumably the resale value is reflected in the asking price of the property at the moment? I don't think anyone can accurately predict where property prices will go, though with the Olympics and the East London line extension I would guess the area can only become more desirable.

Personally I think the main question here is does your relative think he'll like living there?

You have to remember that people buying property are forward looking like your friend. So if there is a chance that the area becomes the next fashionable place for professionals, its already probably reflected in the price (reflecting both probability and the price increase).

In order to accurately predict prices you will have to know something others don't, I doubt even local estate agents could honestly tell you.

Thanks for the advice! (it's me that's looking to buy round that area btw)

In terms of liking living there, I think it's an area that makes sense. I can walk to work, my co-buyer can jump on the green line into the West End and the renter works night shifts near King's Cross - so in terms of actual location it's not a bad spot. We were told by the estate agent what the likely rental costs would be (that'sm if she's telling the truth) and the property could be used as a buy-to-let in the future, and also London Met is just down the road.

The only worry I have is whether the area will maintain it's current value. I'm not too bothered about making a profit on it (going 50:50 on a property like this is never going to yield much) I'd just rather not lose noney on it either - being my first property I think I'm just getting a bit nervy! Had the first offer rejected yesterday, but we know what they'll accept and it's within our budget!