ScooBStu

Who says prices are going to fall - Generally the people who have been holding off for years cos they are going to cash in on it. In the past when houses were allegedly more affordable interest rates were over 10% - I spoke to my parents recently and it was extremely tricky for them to afford to buy about 30 years ago as interest rates were so high even though prices were low - No difference in reality.

I agree prices are not going up like they used to but 2 years ago when I bought my first house the press were saying that they would drop 30% and have they? No - Our house, although much improved, has gone up over 30% if it sells for asking price and 29% if you compare it to the offer we had on it 2 weeks ago. I think the south is a different story though - We are in the North East.

speedking

TOP TIP Work out the difference between your rent and mortgage (presume mortgage will be higher) and start putting that aside now. If you can't then you won't be able to afford the mortgage Even £200/month will be £5k after two years, which represents a 10% deposit on a £50k share of a property.

If your rent is more than a mortgage then I'd say buy now.

@MikeCardiff (#10): I would place a large bet that nowhere is going to see a 20% drop in the next 6 months. PSL has been saying that for 3 years, and no matter how often he does it hasn't happened. Anyway let's have a look in July and see. Care to nominate the region where this will happen?

davegtt

Speedking, talking to a brick wall when it comes to PSL, he'll still tell you hes seen 15% drops already

As Stu said, interest rates play a part too, if we see a drop in house prices chances are we'll see a rise in Interest rate, or the other way round its all comparitive though, when we bought in 2001 (sorry said 200 earlier and I was wrong) the interest rate was 7% on a fixed rate deal. OK that was on 105% morgage and could have got a better offer but big deal. Still shows the interest rate levels.

OllyK

Not bad - hope you like gardening!

In comparison - http://www.rightmove.co.uk/viewdetai...a_n=2&tr_t=buy
or
http://www.rightmove.co.uk/viewdetai...a_n=4&tr_t=buy

davegtt

£67k for that first one Olly, bargain, needs a little work but looks OK that

borich

66k is a good price for the house. but how good is the area in which the house is found.. get mugged on the way 2 the car ?

Borich

davegtt

LOL... wouldnt say Ilkeston is any worse than anywhere in Manchester has been a while since I have been to Ilkeston though.

OllyK

Certainly way better than Hulme, Moss Side, Cheatham Hill and such (or as they were 15 years ago). I'm trying to think of a comparison. I've certainly had no bother in Ilkeston, although I haven't been there at night. I'd say it was better than Loughborough where I used to live.

OllyK

Indeed - as I said, plenty of bargains to be had in and around old mining towns. Especially if you don't mind holding on to it for a couple of years

MikeCardiff

iTrader: (2)

Speedking - I nominate Cardiff for at least a 20% drop !

Its always been an expensive place to live, and the prices here went ridiculous - 2up 2 downs going up from £40K to £150K over 4 years, and thats not even in particularly good areas - people with £250K houses now are having drop them 10% to even get a viewing, and 15 - 20% to get a sale.

I think the North was a bit slower than the South to get started on the rises, so the market up there probably hasnt stalled as much as round here - not much has been selling here for over 12months.

To illustrate this, the estate agents round the corner which I walk past most days has details of houses with 'SOLD' on them in the window that they sold nearly 6 months ago - I assume to try and get sellers to use them, but its pretty poor.

2000TLondon

Never look at your home as an investment. Be prepared to pay for it, don't count on it making you money.

Petem95

I would tend to agree with this. Interest rates look like they'll fall 0.25 or 0.5% before bottoming out and climbing.

The chances of prices "leveling out" are EXTREMELY unlikely. The housing market has a history of boom and bust, just take a look at this graph of UK house prices since the 1950's and have a guess as to where they are likely to go....

(scroll to bottom to see graph)

http://www.nationwide.co.uk/hpi/down..._inflation.xls

davegtt

Thanks for agreeing but remember, the key to my statement was I personally think Its all guess work at the end of the day.... although it does follow trends I cant deny that...

2000TLondon

It's also subjective to peoples opinions to a degree. If people fear a price reduction, no-one buys, prices come down to put it very simply. But there is never a bad time to buy really, (assuming you're job is as safe as it can be!) but there are optimal times to buy (late 90's!!!!!)

It's all relative too, just because your house has doubled in value, doesn't mean you are instantly wealthy, especially as all the other property has risen in line. It may mean you can borrow more money, however........

The best way to look at it, especially for a first time buyer, is to just find something you like and will enjoy........

CLSII

For god sakes just get on the housing ladder.

A friend of mine sold a flat a 4 1/2 years ago to rent and wait for the market to drop. There are always people predicting a crisis. He sold for just under 40K.

The same flat was sold recently for just over 140K.

I bought my first house just before the last slump about 14 years ago and sold it for about what I bought it after doing it up.

My current mortgage is about £200 more than then but my wage is more than double it and remarkably the house i am in now is valued at about 9 times that of my first house.

Even with a massive crash in house prices I would still be in the house that I want to live in.

Hope that helps

ChrisB

Loughborough was nice, but I was student bum when I lived there It was probably us lot who made the locals so unhappy

SimonGawthorpe

I am also in the North East (village near Hull). We have been renting for 2 years because of the state of the housing market. Prices (in this area at least) are on the way down as we speak. The local property guide is twice the thickness it used to be and is full of "new price" and "price reduced" markers. The boards outside houses are staying up for a lot longer.
Myself and my girlfriend have decent jobs (Police Officer and Bank worker) and we cant afford to buy a house that we would be happy to live in! We also have a fair sized deposit to put down.
I remain adament that prices are falling and will continue to fall. The true picture will be into the summer when we can see how the easter sales have turned out. As we all know Easter is the time to sell a house. I predict that estate agents have been satisfying worried sellers by saying
"dont worry, nobody buys at christmas wait till Easter and it will sell."
I have seen data that suggests that sellers are already taking on average 8% less than their asking prices.

The Land Registry info which is now available is a brilliant source of info as it shows what the houses are actually changing hands at. I use http://www.houseprices.co.uk/ The only prob is that the info is usually about a month over date.

My advice is DONT buy now. But that is only my advice and I am no expert. You will wish you were still "wasting money" on rent if you buy a 100k house now and its only worth 80k by the end of the year!! The graph like the one on the link above shows that these things go along like a rollercoaster. At the moment we are at the top and just about to go over the edge.

Simon

p.s. Dont get a 100% mortgage, the interest rates are horrendous! Its 100% / 105% / 110% mortgages with muppets like Northern Rock who are partly to blame for the reason you and I cant afford to buy a decent house!

davegtt

But isnt 8-10% the norm anyway for putting in an offer with things like buying a house and buying a car, its only been the "boom" that has gone through the stage when people where paying the asking price and more. Its levelled off and by seeing people accepting an 8% drop in the asking price is nothing....

again, IMO only.

f1sh4u

I have found myself in a very similar situation to Borich.

I live and work in Cambridge, and house prices here are not cheap. According to the Guardian (http://money.guardian.co.uk/pay/stor...415864,00.html) the average UK salary is currently just over 22k. Now, i have just done a quick search on HSBC website, and they would offer someone on 22k a 82k mortgage, that doesn't get much at all in Cambridge.

At the moment it is very very hard to get on the property ladder. If you earn 22k, and have to pay rent, bills etc, it would be hard to put much away for a deposit. Ideally if you could only get 82k mortgage you would want maybe 8-10k deposit to allow you to buy something thats not a shed although 90k stil wouldn't get much around Cambridge. And how long would it take to save 10k... on 22k it would take bloody ages?

Us first time buyers are in an almost impossible situation trying to get on the property ladder.

Al Coholic

You WERE in negative equity! You'd borrowed 5% more than the property was worth.


borich, the £100000 house MAY cost you £250000 at the end of the 25 years but in 300 months time you will OWN it. If you rent for 300 months you'll be anything between £150k-£220000 out of pocket.

davegtt

Roll your eyes all you want, you know what I mean, the market wasnt anywhere near dropping when I bought... And how do you know I was in negative equity eh? you dont know whether I bought the house for less than in was worth so :upyours:

Henrik

iTrader: (5)

Well, I say take out the biggest multiple mortgage you can. There has never been a better time to buy!

They wont, but even if the prices fell substantially, you have to live for today! Don't delay, buy today! Renting is just money down the drain. It's better to pay a mortgage (even interest only) as at least then you *OWN A HOUSE*!

Interest rates will not rise ("They" will not allow it), and over time the 15% per annum wage inflation we're seeing will soon erode the mortgage away. In a couple of years everyone will be making twice the money they are on now, and then the house prices will start rising at about 15% per year again and if you don't get on the ladder now, you will miss the boat again. The current soft landing is just that, a soft landing. Falling house prices LOL
Your mate will be sorry when house prices start rising at 15% pa again

I'm sorry, but young people in this country will just have to learn that not everyone gets what they want immediately. Stop buying so many iPods, stop going out on the **** every night and get a second or third job. When my parents were young, they had to work in the coal mines from age seven to buy a house. Us kids of today, we just think that someone will give us a house.

Start with a studio box somewhere in a council estate, and then after a couple of years HPI you will have enough equity to take out a much bigger mortgage, and by this time, interest rates will have fallen anyway (plus the wage inflation) so the cost of servicing the mortgage will essentially be the same as it is today.

Ever since 1996, we have had huge HPI, and I don't see why it should stop now. Gordon Brown's economic miracle has kept everyone employed and at the same time we have seen huge wealth creation in new industries (e.g. estate agents, house builders etc) and he has rationalised away the ineffective UK manufacturing industry.

Unemployment is at an all time low, interest rates are at an all time low, we have effective public services and hospitals! Thank you Gordon!

Ever owning your own home is not a human right, so stop whinging and get on the ladder and support my pension.

I find that the people who whinge about house prices are all no-hopers. The young of today are just lazy dossers.


Remember: House prices always rise, interest rates always go down. Gordon will save the day


In the past, I have been a bear on the property market, but I have now changed opinions (some bloke in the pub told me that now is the best time ever to buy a house, because house prices have stopped rising for a while). I'm now a property bull!

Interest rate mortgages have enabled a whole generation to own houses they would have never been able to afford on a repayment mortgage.


Honestly, some people


[please note, I'm also a **** taker...]

Al Coholic

I would wager that the mortgage broker and estate agent saw YOU coming at the time!

I expect you have credit up to the hilt even now.

A good mortgage valuer will ALWAYS flag up if he sees a property going through at under market value, unless he drank more than i do he'd have spotted it. You paid the going rate. If it was in a fast rising market on completion it may have been worth more than you paid but not on the day the surveyor went round.

And FYI, the market could drop like a stone at anytime.

Henrik

iTrader: (5)

Well, if house prices were achieving asking price (or even higher) a year back, and now sellers have to accept offers below, doesn't that tell you that the market is falling? (Arguably, they don't "have to accept" offers, but the longer they wait, the more likely it is the value of their asset will fall further)

Henrik

iTrader: (5)

Why would *anyone* sell a house below the market value, especially in a rising market?

Henrik

iTrader: (5)

Sorry for spamming, but this document from the *HALIFAX* (one of the biggest mortgage lenders in the country with a huge vested interest in keeping things looking "rosey") is very interesting: http://www.hbosplc.com/economy/includes/UKQ42005.doc

Ignore the first part and scroll down to "Table 1: Counties - Average house prices". Oh dear, seems that the south of England has just gone year on year negative

The link is courtesy of the house price crash forum (www.housepricecrash.co.uk)

SimonGawthorpe

Thats a very good site, but the info all seems a little out of date. Last time I looked all the PDF's were at least a year old.

They are definately coming down and as you said people accepting lower offers is a sign of this. The deciding factor for me is that young couples with decent jobs and wages (like myself and the mrs) cant afford to buy houses. We are the ones that start off the chains and bring in the new money to the market, without us everything else above is starting to grind to a hault.

I am looking on estate agents web sites now at £150,000 houses that I think will be in my price range (£130,000) by the end of the year.

Si

Henrik

iTrader: (5)

True, the PDF's are a bit outdated, but the real info is in the forums. A wealth of *very* knowledgeable posters frequent the site.

I think we're in the same boat as you. Although my wife is studying for an MSc at the moment, even when she finds a job after there's no way we'll be able to get anything in London (maybe a studio in stabbsville). At the moment we still have a decent combined income, but what use is that when house prices are something like 300k for a 1-bed flat... There is *no way* I'm getting into that amount of debt for anything but a mansion.

OllyK

There is something to be said for nubile 18 year old female PE students walking around town half naked, even in mid winter.

davegtt

I'll reply to your half bitten tripe tommorrow Alci. You'll find you have the same point as me if you read what we've both put. Maybe you should lay off the booze when trying to have a conversation or debate.