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Why not? Am I missing something with that graph? Pretty much constant upward trajectory since 1995 and prices only fell between 2008 and 2009?
Fox-
whilst I own a house in London (with a small-ish mortgage) if I were a first time buyer looking to buy a modest flat/starter home - I wouldn't touch the London property market with yours at the moment.
its always going to be expensive to buy in London. however I would wait another 2 or 3 years to see how the tax changes unwind the lower end of the market and whether the government decide to do any further tax raids on the property market which will be particularly aimed at investors not owner occupiers.
property, even in London, is an illiquid investment with has enormous entrance and exit costs - its not a decision to be taken lightly. I appreciate that regrettably most people are intrinsically greedy and irrational when it comes to property (which has led to us getting into the lamentable state we are in at the moment) but I would hold fire for at least 2 years or so if I were a first timer. The upsides will be limited if you get in now but the downsides could vary from "a bit" to "oh fuck" on the sliding scale of misery. I think the upside is that rates will probably stay low for another 10 years or so - historically low. I suspect the tax grabs on the London market, aren't over by a long chalk..
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Must be just about to fall again as I'm looking at buying another place and I always seem to buy at the top of the market.
princeperch
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His emotional head should look at that graph and think 'Is this a good time to be getting involved in london property'?