Well, it is certainly a difficult thing to rationalize the property market of anywhere. Especially, places like London which are always on the radar of property buyers, local and global factors put a tremendous impact.
You talk to anybody in London (native or immigrant), and the discussion will ultimately come to the properties and property rates. Yes, it is a dream of every person to own a house, villa, or apartment or block in this wonderful city.
The charm of ‘getting on the ladder’ is so high that buyers start marching to the drums of estate agents and end up with owning properties that are not really worth.
Why should people be cautious about the decision of buying property in London?
Definitely, two factors are there that force people to think about buying a property in London; the increasing property rates and rents. Everyone wants to board the train as early as possible.
Hence, all investment decisions and savings are centered on buying a property. Some people take the undue risk of borrowing huge money from lenders if they do not have sufficient savings.
Thus, they are already under a risk. The situation worsens when the rates drop at astonishing rates.
Experts say that the desire for owning your own house is ok, but it should not be at the risk of your livelihood. Owning property in London (or anywhere for that matter) is a risky business. Hence, it has to be a well-thought decision and not an impulsive whim.
Ask a few awkward questions first!
If you are planning to own a decent property in London, then you need to do something important first. Sit back, relax and ask a few questions to yourself.
Do you really need a house, villa or apartment? If you feel the urge of buying a property, then look at a few data points first.
Statistics sys that the ratio of house price and the annual earning is 13 times today as compared to the baseline figure 7 of 2002.
As far as the increase in the salaries is concerned, it is from 5 times in 2002 to 8 times in 2016.
Therefore, if you are still determined to buy a property, then you must believe that the wages and rents both will show a phenomenal increase in the coming years.
Remember, your assumptions may or may not be true. Hence, you should be prepared for the adverse scenario.
Watch for interest rates as well
You ask any property investment expert, and he will underline the risks of jumping into the market at today’s valuation.
Having said it, there are so many people who made incredible money through investments of buy-to-let. Of course, their risk-taking ability played a major role in the profit-making. They may not be exceptional investors. They just reaped the opportunity at the right time; that’s it!
Hence, your gut feeling and intuition is more important than all other parameters. Get on the ladder by taking some risk, and you will definitely achieve success.