A top London broker has bailed out of the property market in favour of renting until the market stabilises.
James Rodea, director at Savills Private Finance, recently put his two-bedroom flat in the St John’s Wood area of London on the market and is renting a flat with his wife and son for at least a year.
He says the best time to get back into the property market will be a year or 18 months from now, when he believes better deals will be available.
Rodea says: “I don’t believe house prices will crash. They are sustainable in the longer term, but there will be a period during which prices and interest rates flatten out – this will be in about 12 to 18 months’ time. At that point, we will see a switch from a seller’s to a buyer’s market.”
“At the moment, many buyers are buying above asking prices because there is a lack of stock and lots of people are fighting for each property. But when the market stabilises and people get their confidence back, they will start selling again. He adds: “This will free up property stock and people will begin to buy below asking prices.”
Rodea says that taking this approach is the only way to beat the property market.
But James Cotton, mortgage specialist at London & Country, warns that selling to rent is risky.
He says: “This idea a gamble, and it would not be practical for most people – especially those with families.
“If a person takes this approach, they risk no longer being able to own a property as an asset.”