Housing Market

[Fidgits]

Hey all - apologies for the 'off topic' post, but as LOC is a wealth of knowledge and opinions, I was hoping you could help with my decsion making...

Following the 'boom' in the housing market, for the last couple of years, I have been 'running trying to catch up', never quite being able to afford the house I have needed...

So, in 03 I decided that bust follows boom - and being a first time buyer it would make more sense for me to wait for it to inevitably drop and buy...

However, my patience is being tried - and although the market here flattened off towards the second half of last year, all that has happened is the prices have 'dipped'.

Now, ive been looking into things, and if I morgaged myself to the hilt - I could just about afford the size house I need (not want though) - but I would hate to buy a house and next year it be worth 25% less...

So, I ask for advice, on what you think I should do...

[Gord]

its all in the area you live or want to live in, some areas have got to the peak, so they will then buy in other areas that are cheap, pushing the price up in that area, i dont think there will be a big crash like last time, just dipped prices to help the sale. 1st time buyers have got to get into the market for the rest to get moving. i took the gamble just over 3yrs ago, i moved into the house that im in now, kept the 1 i moved out of, and got 2 more cheap houses to rent out, and the area that i live in, is in a boom at the min, im selling a house at the min, and its gone up over 3x what i payed for it, so y wait anymore.

[lexi1]

I am not an expert mate, but the general impression given on the news, papers etc. is that it is more likely that house prices will steady, as they have, but a steep fall or bust is probably unlikely. I am sure they will be someone who works in this field and can advise you more. I was lucky, i reluctently mortgaged to the hilt, but it was 6 years ago and my house has more than doubled in that time. Its a shame hard working people cant buy a suitable house when the unemployed moan when there 4 bedders are too small.

[Matthew_McNally]

Now, ive been looking into things, and if I morgaged myself to the hilt - I could just about afford the size house I need (not want though) - but I would hate to buy a house and next year it be worth 25% less...

So, I ask for advice, on what you think I should do...

←

If I mortgaged myself to the hilt

I could just about afford

these two phrases mean you can't afford it - sorry mate :(

that close to the boundary of your budget, it would only take a slight change in interest rates for you to not be able to afford the mortgage.

My advice would either be to keep waiting, or change what / where you are looking at and find a different property, or one in a different area, that you can more comfortably afford.

[mikeyboy]

If i were in your shoes I'd hang on a while, certainly until the less favourable buying season ie autumn winter

Factors/Reasons why:

The economy is in the balance

Retail spending has flattened as debt has become slightly more expensive.

Everyones maxed out on credit cards

Oil price rises have reduced spending power

Govenment taxes have reduced spending power - may be more to come if, as expected, labour are returned and Gordon gets his way.

Talk of increased interest rates now on hold - watch out on thursday

More houses 'seem' to be coming onto the market.

As usual its all guess work

Industry is fairly bouyant at the moment although the oil price does seem to be worryingly high.

How high can house prices go up in the short term - not much I imagine.

Many are talking about a soft landing - but if it goes wrong then what.

hopefully all this cheery stuff points to a bit cheaper housing - maybe

[peter026]

This might help

http://www.uknetguide.co.uk/Homes_and_Gard...ossessed_Homes/

My son in law and daughter went down this route and got one about 10k below what the house originally sold for

[tdiplc]

I Think that if anyone knew the answer to that question with 100% certainty - they could be a multi billionaire within a few years.

If it helps, I have 2 friends within the top 50 of the Sunday Times Rich List, each of whom have in excess of £0.6bn (yes that's right, £600 million) worth of UK property assets. They are both expecting a minimum 20% downward correction.

Even if there is a 20% correction, a house bought today is still likely to at least double in value within 10 years.

Personally I would wait at least 6 months because there is a massive amount of persoanl debt in the UK, due to greedy banks and individuals borrowing far more than they can afford. The fall out is due to arrive shortly, resulting in reposessions and distress sales.

[Fidgits]

Thanks for all the replies...

Matt, I did actually move to a lower-cost area a few years ago (from Reading) in an attempt to out-manovere the market, and failed. As for a different location or house, well my job doesnt make that practical.

Peter, thanks for the link, and Mark for the advice coupled to it...

oh and Mark, if these friends are ever feeling charitable... ;)

[Stu]

i was in the same sceanrio not two months ago Ian, and had been waiting and waiting for months and months!

Eventually, me and mrs stu found a property that would suit us down to the ground, and it is only 4 doors down the road from us. It needs a bit of work doing to it, but that doesn't matter to me, as it's purely cosmetic, no structural needed.

I did however have an advantage over most that were looking at buying in the area, as it was my cousin that was selling the house, so i knew about it before most did. We got the house for £105,500, and it's a 3 bed mid terraced with garden and detached garage.

My advice to you would be as follows:

1. Wait a bit longer

2. Keep your eyes open for a property that needs a bit of cosmetic work

3. If you know someone that works for/owns an estate agents, talk with them about what you need etc (better if they are a friend or family member, as they won't bull**it you!)

4. Get yourself a decent deposit saved up if you can

5. If you can, get yourself a pre-approved mortgage, so you can complete quickly (this will appeal to sellers)

6. Set a budget that means you can comfortably afford the repayments each month, and don't go over it. Talk to an independant mortgage adviser, they are the best ones to see.

Hope that helps out a bit bud!

If you fancy a move into Norfolk, let me know, my cousin has got lots of property up for grabs at the mo! :winky: :D :P

Stu

[dhs]

The answer is that there is no answer,only doubt fear and sleepless nights. All advice is given with the best of intentions but it is your money and your life, and you will live with the decision. I have streched myself more than once when buying a house and it always went well. You cut your enjoyment budget to the bone , and within a few years you wonder what the fuss was. But my attitude has always been that I was not buying a house, but a home. Somewhere to bring up a family, love your chosen woman, entertain your friends and have lots of happy memories. I will not benefit from the financial investment, but my children and grandchildren will. Meantime I live in the happiest of circumstances within my home.

Sorry I cannot be of any help but wish you all the best with your decision. :duh:

[legendswraith]

i am the same in i now need to start looking to get on the property ladder and have been expecting the prices to drop off because it is incredibly difficult for first time buyers to get on the market now all i would say is to echo a few other feelings wait till the autumn/winter especially with a general election in the offing you never know whats on the cards and a change of goverment can easily affect the economy

[lexus boy]

have a look at repossessed houses, you'd be surprised how cheap some of them go for. and usually will need some work doing to them.

There are good deals to be had out there.

[ColinBarber]

Now, ive been looking into things, and if I morgaged myself to the hilt - I could just about afford the size house I need (not want though) - but I would hate to buy a house and next year it be worth 25% less...

So, I ask for advice, on what you think I should do...

←

If I mortgaged myself to the hilt

I could just about afford

these two phrases mean you can't afford it - sorry mate :(

that close to the boundary of your budget, it would only take a slight change in interest rates for you to not be able to afford the mortgage.

My advice would either be to keep waiting, or change what / where you are looking at and find a different property, or one in a different area, that you can more comfortably afford.

←

I would make sure you can still afford repayments with interest rates 1.5% higher than they are already.

Have you looked at 30 or 35 year terms?

[Claire G]

Get some advice from an IFA who can advise on the differing mortgages available (capital repayment, interest-only etc).

When we bought our first place, we had to overstretch ourselves to get a foot on the ladder. To ensure we had some respite if interest rose, we got a fixed rate mortgage for 3 years. We then knew exactly where we stood and knew we would (hopefully) have annual pay rises to help costs.

We did struggle at first and I wouldn't necessary say that was the best way of doing things, but it was the only way we could do it at the time, and we were both fed-up living at home!

[Bazza]

ian

if you look at house prices over a long time period, they have allways risen

other than in areas where huge industries were located and closed down overnight

i would suggest just going for it !

the longer you wait the less you are paying off

the first years or even ten you may well struggle to pay the repayments, but even if it means finding a part time /evening job it will be worth it

i brought my first house when i was 20, the repayments were £650 and i was only earning £500, the interest rates in the eighties were very high

but i worked weekends and even worked as a bouncer at brixton academy (actually that was cool, free concerts :D )with being married and babies appearing at the same time, was a big struggle but it paid off in the end, took a few years but then you realise the payments arnt that bad, as your earnings rise, and the payments remained the same

certainly dont regret it now

[Fidgits]

Thanks for the advice, as I expected there was quite a bit either way.

I got some morgage quotes today, and I am going to start looking at houses, but I will definaltley wait a while - as doing the math, I'm not losing anything by staying renting a bit longer..