Terrible time to buy a house?

[FredClogs]

CoolHands said:

FredClogs said:

OP, I sold a house in Tadley (nr Basingstoke/Reading/Newbury) in 2006 because I was pretty sure that a small two bed house next to a bomb factory couldn't possibly be worth more than £200k... How wrong was I?

http://www.rightmove.co.uk/property-for-sale/prope...

what, you were 5k out? making 5k on 200k between 2006 and now is hardly a fortune.

Sorry, I wasn't clear, mine sold for £160k in 2006, I'd bought it for £120k 24 months earlier, the point being is that I'd thought I'd hit the top of the wave, but I hadn't, and that area which is commutable to several large employment areas and quite a few big towns is unlikely to suffer house price falls or even much in the way of a slowing.

That bungalow is actually a fair bit smaller than our house was. I should have rented it out, it would have been paid for by now... C'est la vie.

[okgo]

Who is affording 350k+ OP asks? Given average salaries in the SE its hardly a lot is it. What is balls deep with a lender classed as? They won't let you go that balls deep anymore anyway!

We bought two years ago in zone 6 suburbs in SW value has gone up quite considerably, about 30%, just wished I had spent more in the first place.

[Neil H]

jdw1234 said:

The population increased 6.7m between 1971-2011, but they made 8.8m homes???

It's the trend you need to look at. One trends up, one trends down.

[Neil H]

okgo said:

Who is affording 350k+ OP asks? Given average salaries in the SE its hardly a lot is it. What is balls deep with a lender classed as? They won't let you go that balls deep anymore anyway!

My colleague has just completed on a 2 bed flat this week. FTB, 350k near Denmark Hill - he went halves on it with his mate. I imagine we'll see a lot more of this in London. It wouldn't surprise me if we start seeing strangers buying flats together, in the same way people flatshare when renting.

People will find a way to afford it...

[KTF]

Best get building some more houses then. The locals will be pleased about that given the shortage of housing for their kids to live in, general increasing property prices, etc.

Oh.

http://www.dailyecho.co.uk/news/13503181.Fight_con...modern_ghettoHampshire_development/

http://www.dailyecho.co.uk/news/13502310.Green_lig...

[fido]

Neil H said:

I bought a property in mid-2007, arguably the worst possible time looking at that graph, but if I sold it right now I'd stand to make 50% profit...and the reason:

You didn't experience 2009 then. I bought and sold a property in 2009 - had to take 25% off the 2007 value to shift my property and there was only 1 buyer. This was a house just outside Zone 6 but a few minutes from a station. Yes it would be snapped up almost immediately today. Sold it chain-free but managed to find a property in Zone 4, which I then sold two years later for 20% more. Call it a crash, or dip, or a large drop - but I have no doubt in my mind that QE/ZIRP sorted us out for a few years at least.

Edited by fido on Tuesday 28th July 20:26

[DaveCWK]

Wacky Racer said:

I think the best thing to do, if you are desperate to get on the housing ladder, with limited cash is buy a run down property, (not too run down), and spend three or four years doing it up yourself.

If you are not too good at d-I-y LEARN....there's plenty of info on You tube etc.

If you want a nice shiny house to move into, you are going to have to pay for it one way or another.

A bonus will be you will feel a great sense of satisfaction when it is finally finished, but you may have to "rough" it for a year or so.

I'd love to do that. I already have a full suite of tools including a mig welder & compressor!
Sadly unless i'm looking in the wrong places, bargain fixer'uppers don't seem to exist around here. The 'potential' seems to be priced in.

My parents bought a house requiring modernisation & a small amount of structural work, & ISTR it was ~50% cheaper than a comparable place in need of no renovation.
The ones I've found have looked like right knackers & are only priced 10-15% less than a sorted place. Hardly seems worth it

I still intend on getting somewhere, after all like has been said whatever happens it's preferable to renting long term. Now i'm wondering whether i'd be a fool not to take the absolute max amount of affordable mortgage we can get & just buy the best place possible. I was leaning towards getting somewhere a little more modest & borrowing at a ~30% LTV on a 5-10yr fixed rather than at 20% or lower - possibly regret in the future?
Now I'm talking like I subscribe to the 'you can't lose with property!' ethos - damn you Pistonheads!

[daytona365]

He's looking at 'Hants' and wonders why it's expensive ?

[okgo]

daytona365 said:

He's looking at 'Hants' and wonders why it's expensive ?

Plenty of stholes in hants, its not all chocolate box villages.

[MarshPhantom]

Nick Grant said:

I remember when I bought my first house in 2001 all my friends told me it was too late and the prices could crash at any minute.

Our friends in the midlands thought we were nuts spending £65k on a 2 bed flat in Lewisham in the late 90s.
Sold four years later for £155k.

There's never really a terrible time to buy as everything evens out over time.

[Welshbeef]

We live in a tiny island and the vast majority of the population live in a small area with big green belts. Population is drastically increasing due to EU but also more families/divorces etc. so need more houses.

The growth of the need for houses outstrips supply and is forecast to continue to do so for decades - let alone the fact there is a glut of properties needed to be built now to catchup so to speak.



If we left the EU maybe that could have the impact that's needed to impact demand.

Like a previous poster flagged his mates told him not to buy in 2001 similar story to a friend of mine I told him to buy in 2001 he didn't kept saying the crash is coming he eventually bought in 2005/6 he could have afforded a 3 bed semi instead he could only buy a 2 bed terrace....

Long term it matters not - sure you might be able to make a quick buck if you can guess the market / that's pure chance. You and vast majority of people are not property investing experts so if you find a place you like can afford it (get a fixed term mortgage 10 years or longer for confidence of cashflow) and you'll be a content man.

[daytona365]

Just been drooling over the new Ferrari 488 spider as many others have. The price for one of these, would barely get you a one bed flat in say Peckham !!

[numtumfutunch]

Would it be OK if I closed this thread?

Take your pick:

a) houses cost stupid amounts of money for most people and the banks wont play ball so we're due a massive crash

b) we dont have enough houses in the UK and property only goes up in value

Cheers

[daytona365]

Are you one of those property gurus ?

[CoolHands]

Why do I get the feeling the powers that be (bank of england / politicians / the banks) like interest rates going up eventually? (the warning about rates going up in new year). ie they would like them to go up even if it was possible to have them very stable forever. I don't trust (the lot of) them. It seems it's almost like, ok.... they've been very stable.... and very low for ages...., the economy is fairly stable - "let's jack'em up!"

[Welshbeef]

CoolHands said:

Why do I get the feeling the powers that be (bank of england / politicians / the banks) like interest rates going up eventually? (the warning about rates going up in new year). ie they would like them to go up even if it was possible to have them very stable forever. I don't trust (the lot of) them. It seems it's almost like, ok.... they've been very stable.... and very low for ages...., the economy is fairly stable - "let's jack'em up!"

The banks directive is to make sure inflation stays around 2%

If inflation tracks up and is forecast to overshoot that medium to long term then we need higher interest rates to cool down the market
If inflation is low too low then we need lower interest rates and possible QE to devalue.

Odd though as currently inflation is 0% - though from Oct onwards the impact of low fuel cost will roll out IE had it for more than 12 months. If that is stripped out then we could be seeing notable increase in inflation as such we need to make the necessary changes.


Have you moved your mortgage to a long term fixed rate? If not you know it's coming at some point you can lock it in and therefore be immune to rate rise.

[Bedford Rascal]

fido said:

You didn't experience 2009 then. I bought and sold a property in 2009 - had to take 25% off the 2007 value to shift my property and there was only 1 buyer. This was a house just outside Zone 6 but a few minutes from a station. Yes it would be snapped up almost immediately today. Sold it chain-free but managed to find a property in Zone 4, which I then sold two years later for 20% more. Call it a crash, or dip, or a large drop - but I have no doubt in my mind that QE/ZIRP sorted us out for a few years at least.

Edited by fido on Tuesday 28th July 20:26

Scary graph that.

[Welshbeef]

http://www.getreading.co.uk/news/reading-berkshire...


14% growth in a Reading last 12 months and in all the areas OP is looking min 12% increase. Big numbers.

[p1stonhead]

How do people believe house prices will crash especially in popular commuter areas and all around the South East?

I have a LOT of friends saving to buy their first places which im sure is the story all around the place. This article (no idea on its truthfullness im sorry to say) says there are 11 buyers lining up for each property on average, 20 in London - http://www.ibtimes.co.uk/uk-housing-crisis-11-buye... . This one claims highest level of house hunters for 11 years - https://uk.finance.yahoo.com/news/number-people-hu...

Now if prices drop say 20%, demand will ROCKET to include all those who couldnt previously afford it. Hell a few people I know with cash ready to go would simply dive in and get them as BTL's (although this is less attractive now). What will all of this extra demand do? Keep prices low? Is that how supply and demand works?

Land is finite, planning is tough; we dont have enough houses to satisfy demand in popular areas. Crossrail, Readings new station (as referenced previously) are all going to drive prices up too.

Dropping prices will bring more buyers to the market, and demand will increase, raising prices again. It wont drop drastically in London or the surrounding areas.

Quote this post in 3 or 4 years when im proved totally wrong

Edited by p1stonhead on Wednesday 29th July 08:04

[Welshbeef]

Exactly.


However take certain areas of Wales South West and N England it's a very different kettle of fish.
Currently there is some demand from people in the SE simply wanting additional property in those lovely countryside areas - if things get choppy they will stop overnight and hold on tight as the nice to have is just that.

Take the home town I grew up in work frankly is working in shops hotels and bars - or you own a business are a teacher or policeman. The latter two are viewed as very high salaries..... Now oddly the prices for houses are £350-400k for 3 bed semis.... How?
Now do that again but say Reading let's say 3 bed semi £550k a teachers salary IMHO is very low in this area/at the bottom end of the curve. Joint income here heck single income here can comfortably afford that level of house price.

So one area has no logic to its valuation the other it's "affordable". Which do you think would crash?

Oh and the former area houses have been for sale for years already - I look pretty much every day on right move for my area only 1 has been hanging on for 6ish months the rest are 2weeks to a couple of months max.