When my most conservative of friends are rushing to buy their first home in Twickenham, before the area becomes even more expensive, you know the Greater London market is overheating.
Despite various signals that the capital's core and commuter zones, which have enjoyed rampant price growth over the last two years, is starting to cool, those in their late 20s and early 30s are still talking about buying.
New findings from Knight Frank and Markit Economics show us that 6.7% of householders polled intend to move within the next year.
Undeterred by looming interest rate rises, this group has grown from 6.2% in June, is higher than the 6.5% reported in May and 5.1% in April, according to an Ipsos Mori Poll.
While such "PR" suits estates agent talking up the market, now is not the time to buy your first home.
There has been a wave of panic across Greater London as first time buyers (FTB) stretch themselves to get on the property ladder in their area before price rises shut them out of the market altogether.
This, of course, has been self-perpetuating, driving values up further, with open house viewings and sealed bid competitions common practice.
But these price hikes - 20% over the last 12 months to May, are not sustainable and not supported by wage growth.
There has been a wave of panic across Greater London as first time buyers (FTB) stretch themselves to get on the property ladder in their area before price rises shut them out of the market altogether.
This, of course, has been self-perpetuating, driving values up further, with open house viewings and sealed bid competitions common practice.
But these price hikes - 20% over the last 12 months to May, are not sustainable and not supported by wage growth.
The mainstream London market is already showing signs of cooling - as property portal Rightmove tells us today. In fact, the rate of growth, month-on-month, has started to slow earlier this year and today we see our first drop of 0.4% in Greater London. We've hit an affordability ceiling until pay packets and the economic recovery catch up.
An expensive business
It's not just the extraordinarily high house prices that should make you wince but all the associated, long term costs.
Interest rate rises are looming and now is not the time to stretch yourself, with incremental increases expected from November onwards.
With the introduction of the Mortgage Market Review in April - stricter lending guidelines designed to curb the irresponsible practices seen prior to the 2008 housing market crash - the interest-only mortgage is becoming extinct.
First-time buyers now need enough monthly income available to make full repayments - which are far higher than an interest-only commitment. Sensible in the long run as you're effectively saving, but a hefty financial burden all the same in the early fragile stages of an economic recovery.
Buying a home is expensive - not to mention stressful - and analysts tell us that a FTB needs £70,000 cash just to make the move thanks to removal costs, estate agent fees and stamp duty.
The cost of the average first-time-buyer dwelling in London is £351,783, with a 3pc stamp duty fee attached to that. In Clapham, south west London, that gets you a two-bed flat in an ex-council tower block.
http://propertyportfolioinyorkshire.blogspot.com/2014/08/youd-be-crazy-to-buy-home-right-now.html