Hi there,
I was thinking of leaving london and mooving to Poole in Dorset. But I would want to return in about 5 years.

I'm always reading articles saying don't leave the london market cos you'll never afford to get back on.

But does this maxim really stand up to scrutiny?

The rate of London property increases can't continually outstrip the rest of the country. If it did the disparity in prices would simply get larger and larger. Shurely over the years the gap remains constant with fluctuations . . . . err dosen't it?

The gap may remain constant but your expectations may not. Many people leave London in search of a better standard of living and, importantly, a bigger property for their available spend. If several years down the line they are pining for the capital they would have to sell their provincial pile, incur costs and buy again in London. If the 'gap' had remained constant this would involve trading down in terms of the type of property they could buy and many people find this unacceptable.

I may be wrong here but I seem to remember reading an article stating that Poole was one of the most expensive areas for property in the whole country, including London.

Poole (Sandbanks) is more expensive than London.

Why would you want to move back?

Which part of London are you talking about, Knightsbridge or Peckham?

Susiecam is right. It depends what and where in London. If you're worried, why not rent out your London place and rent in Dorset? If you know you're coming back that is.

We have a few friends who orriginally owned in London, sold there places, put the money in the bank and pay the rent of their new places from just the interest they make of the money from selling their homes.

We have a few friends who originally owned in London, sold there places, put the money in the bank and then rent a new place, making the rent from just the interest they make of the money from selling their homes. That way you can live just about anywhere if you can put up with renting.

quote:

Originally posted by susiecam:
Which part of London are you talking about, Knightsbridge or Peckham?

Sandbanks is the 4th most expensive place in the world to buy. The very centre of London is more expensive, but if you were moving out of there, I wouldn't have thought you'd have to worry about the £££ when you move back.....

buyingagent you are being far too specific. In general terms Poole and environs is cheaper than London. I cannot imagine that Archi Tex was thinking of buying a £2m pad in Sandbanks but was probably looking at something a bit more humble. It is still the case that one can sell a two bedroom third floor flat in somewhere like Hackney (still a relatively cheap part of London) and buy a detached house in the Poole area (for 'Poole' read any number of south coast locations). The problem I was highlighting is when you come to sell your detached house and find that to return to London you will have to revert to that third floor two bed flat.

Hi,
I'd be moving from Islington (Highbury), to Poole (NOT Sandbanks)

Susie, I take your point about trading down in size on coming back to London. But do you think the price differencial would remain the same between the two locations? (Local area factors aside)

I think that the differential will remain the same for a number of reasons. Despite the increase in numbers of people working from home, despite improved transport links and despite the fact that everybody who lives here bemoans aspects of London living it is still the case that employment prospects are better here than in provincial towns, the demand for property is not just domestic but international and capital cities the world over always command a premium for just these reasons. Property prices may fluctuate, but I do not think you will see a time when wholesale prices in Poole are on a par with wholesale prices in London. I suspect buyingagent will disagree with me, but whipping out a property spec showing a house on the market in Sandbanks for £3.5m is as meaningless as me posting one for a property in London on the market for £10.5m and does not demonstrate lack of discrepancy in pricing on a general platform.

It's a difficult one.

I'd suggest that Islington will probably maintain value better than most parts of London in the event of a crash. Not only is it "desirable" but there's yet more local regeneration happening (Kings Cross etc).

I've seen many friends from London go through the scenario of moving out on the expectation of coming back. But they can rarely afford to .

It's not just that prices go up (though that's been the usual reason). If prices go down big time, it'll probably be because of a recession, and so no jobs. Or they've now got kids etc - so less spare cash and a need for a bigger place.

Hi vbland,

Just to confirm your view. You seem to be agreing with susie.Price differentials between both areas will problay remain constant. but the problem comes when moving back to london in accepting much less property for your money than one may have got used to out of town. . . is that right?

I believe that to find the better value London properties you have to look further and further out of the centre as the years go on. For example, Tooting and Balham grew in value after Clapham became too expensive. You may have to buy a house in Brighton if you leave the area for five years.
Just think of the stress relief of five years away. You cannot put a value on that.

quote:

Originally posted by Archi Tex:
Hi vbland,

Just to confirm your view. You seem to be agreing with susie.

To be honest, I'm not sure . I'm finding this hard to get my head round. I see what you are coming from if you do a genuine like-for-like trade.

It's obvious that the gap to be bridged will increase if prices doubled after you moved from a £100k house to a £50k one (ie. to £200k and £100k respectively). But an affordability constraint can kick in too. You may be able to afford to add (say) £50k to an existing £100k mortgage on the non London home - but not to a £200k London home as your mortgage is already maxed.

A less obvious factor is the average property in London is smaller than in most places (more flats and maisonettes etc). This tends to increase the desirability of larger ones - so the price jump to afford the higher end may well be bigger.

I also agree with the later post that points that it's people who lived in cheap parts of London that often lose out if their former area becomes more desirable.

And there's also often a timing lag. Prices often rise in London first.

So a 500k house in Poole is going to appreciate at the same rate as a £500k London house. The London property rise wont outstrip the Poole rise , unless the market begins to move rapidly, with london usually the starting point?

Archi – It’s much clearer if you look at the HBOS historical house price data, the regional series. It shows that from the bottom of the last crash prices in London rose constantly IIRC at 14% pa right up to (but slowing slightly) near the top last year, whereas a regional house languishes until someone notices that London prices have become the subject of newspaper reports and dinner party chat, then the regional house begins to zoom to catch up, sometimes even doing 30-40% pa step as people wake up. By the time it nearly catches up (i.e. gets back to its historic ratio wrto London), there are newspaper ‘crash’ headlines in the London press and the regional boom is cut off short. But some regional cities do overshoot the mark and fall back later.