House prices at an all time high.... Bad time to buy?

[Hoofy]

okgo said:

Hoofy said:

No, it's pretty much right as I see it. It's only great if you cash in and move into a smaller home or a cheaper area.

Which is easily done.

Also you can take cash out of the house if you please to do other things with - some things potentially more intelligent than others, i.e. a BTL or something, maybe not a bad idea, a new car or holiday (plenty do it) - probably less so.

True, I'm not willing to risk my main home even with something like a BTL in London.

[doogle83]

XMT said:

In my mind if I have a house which I bought for 200k and it is now valued at say 400k and I want to move house then the next house has likely to have went up by the same percentage give or take unless you make a huge geographical change....

Agreed. We're looking at the moment (pre Brexit vote) and I'd be more than happy with my current £350k house falling by 20% if the £550k one we're looking at does the same!

[DonkeyApple]

doogle83 said:

XMT said:

In my mind if I have a house which I bought for 200k and it is now valued at say 400k and I want to move house then the next house has likely to have went up by the same percentage give or take unless you make a huge geographical change....

Agreed. We're looking at the moment (pre Brexit vote) and I'd be more than happy with my current £350k house falling by 20% if the £550k one we're looking at does the same!

The more expensive one will fall by a larger % typically as there is less demand in a falling market. At the bottom end, even in a falling market there remains a latent demand that means in % terms the fall is less.

So, if you have not yet made your final move up the ladder then, assuming you can raise any additional funding, a soft or falling market tends to be hugely beneficial.

Or, you can just suck out each bit of new equity from your existing home and piss it away on consumables and then bh at the banks when they decide to hoof you out for not being able to maintain your debt obligation. The upside though is that you'll have lovely memories of what you bought to while away the decades in the caravan park.

[doogle83]

DonkeyApple said:

So, if you have not yet made your final move up the ladder then, assuming you can raise any additional funding, a soft or falling market tends to be hugely beneficial.

That's the current plan, fortunately no additional borrowing planned for the next step so ready to watch the market wobble for a little while.

[anonymous-user]

dom9 said:

mike74 said:

If you're a proper cash buyer, not requiring a mortgage and with no property to sell... you would be insane to even consider buying right now.

Joey Deacon said:

I have a 50% cash deposit and nothing to sell and I really want to buy. I was hoping for the brexit it in the hope it would shake up the market and cause prices to drop so I am going to give it a few months and see how it pans out.

We're a large deposit (savings held in USD), no house to sell buyers and we're still looking (Surrey).

I'd be interested in more thoughts on where the housing market may be going.

I feel like USD may strengthen over the next few months and I don't think houses are going to appreciate so I am fairly sure I am in a 'hold' position for now.

I am currently in Australia but originally from Surrey and I have been watching the market for the last 3 years. I actually tried to buy a place in November 2013 when the government introduced the help to buy scheme and the market was absolutely crazy. Estate agents were inundated with interest and every single house had an open house viewing and went to sealed bids. I remember going to one property and the estate agent told us he had had a full asking price offer from someone who had not even seen the property. There were 25 couples there that day and you could see the panic in everyone's eyes that if they did not get something soon they would be priced out forever. Small 2 bedroom house I was looking at for £230K had 3 full asking price offers on day one, I ended up offering £242K via sealed bids and won but the seller pulled out at the last minute. Saw it for sale again a year later for £290K.

Anyway, I have watched prices rise and rise over those 3 years to the point where I honestly believed it would never end. I wanted a Brexit as I could tell the market was holding it's breath to see what the result was going to be. My fear was that if it was a vote to remain, all those people would swamp the market again and prices would rise £50K overnight.

I honestly have no idea what will happen long term but I suspect that people are nervous now and will be wary about taking on massive levels of debt only to be in negative equity if prices fall. Add in the new BTL laws regarding Stamp duty and I cannot see the market will go anywhere but down in the coming months.

If the market stalls and looks like it may crash then the government will try and prop it up anyway they can. The two main tools they have to do this are to remove the changes to the BTL buying laws or to reduce interest rates. I honestly suspect there will be an interest rate cut in the coming months if the market cools and it looks like we are heading towards recession.

I have waited all this time, it would be stupid to buy now just as it looks like something drastic might happen. I suspect in three months it will become clear what is going to happen.

As for Surrey prices, prices of flats are looking very, very toppy right now so they will be first to fall.

[dom9]

I think you've echoed my thoughts succinctly there, Joey.

I don't think we'll be jumping in any time soon until we have some visibility of the 'plan' for the UK and how the world might respond.

I assume the foreign pound has (or will now) stall it's entry into the London property market and any price drop there usually knocks on to us as we're in a leafy suburb many of the London families like to move out to. If they can afford to stay in London and move to a bigger house, hopefully that frees things up for us.

[okgo]

Surrey will fall first because it looks expensive? If you're looking at that end of the market I think you'll be disappointed, personally.

[Femur]

Joey Deacon said:

As for Surrey prices, prices of flats are looking very, very toppy right now so they will be first to fall.

You could have made that observation in Surrey and London for the last 15 years and been wrong pretty much every year.

Just because they're high, doesn't make them 'toppy'. We'll only know that in the future.

[anonyrat39]

I'm not a financial whizz so don't have much to contribute to this thread. But we bought our first house in 2014, a new build in a cheap town up North. £225k with stamp duty paid for us, plus £10k of credit to spend on options.

House prices in our development have been going up since then. The same house type is currently selling for £250k and they're having no trouble at all shifting even the less desirable plots (although too soon to tell whether Brexit will slow them down).

I was worried in 2014 that prices had risen too high after the crash but apparently not!

[jdw1234]

anonyrat39 said:

I'm not a financial whizz so don't have much to contribute to this thread. But we bought our first house in 2014, a new build in a cheap town up North. £225k with stamp duty paid for us, plus £10k of credit to spend on options.

House prices in our development have been going up since then. The same house type is currently selling for £250k and they're having no trouble at all shifting even the less desirable plots (although too soon to tell whether Brexit will slow them down).

I was worried in 2014 that prices had risen too high after the crash but apparently not!

Have any resales gone through that haven't relied on "help to buy" or other house builder incentive scheme?

[anonyrat39]

jdw1234 said:

Have any resales gone through that haven't relied on "help to buy" or other house builder incentive scheme?

I have no idea. It's in Scotland though so if you need a mortgage and you're only buying one property I don't know why you would turn down a completely free (for life) loan. I imagine most have taken advantage of it.

[dom9]

Femur said:

You could have made that observation in Surrey and London for the last 15 years and been wrong pretty much every year.

Just because they're high, doesn't make them 'toppy'. We'll only know that in the future.

There was a definite correction during the financial crisis... I paid 66% of asking for my flat in London.

But yes, I also made about 40% on top when I sold it 3-4 years later. So, the 'recovery' was aggressive and sustained.

In the years I was abroad, things moved very, very quickly and went way beyond my expectations.

However, the 'affordability' of these places have changed. Other than my friends who are bankers and can buy with their bonuses; none of my buddies could afford the places they are in now, were they to look now, having bought 5+ years ago... and they're on 6-figure salaries (and weren't back then).

If foreign buying slows down, I don't see a way that the big rises won't slow down, at the very minimum. People just can't afford to move to something 'better' in the same areas (caveat - This is in my narrow experience of SW London and Surrey, which is where we live and are interested in).

As it is; I'm a saver not a spender so have grown my deposit at a rate as fast (if not faster) than houses have gone up so I am not in a terrible position. But I am not going to jump in now. Despite thinking I would, a couple of months ago.

It's difficult to call the 'top' but I don't think it's madness to observe that houses have become far less affordable and certain sections of the market aren't buying anymore. Will that cause a crash? I don't know. But I do think there will be a correction or a period of much, much slower growth.

[addey]

House opposite us has just gone on the market and I was gobsmacked at the price - £700k. Context is - it was purchased for £395k Aug '13 and they've spent a bit but its mostly cosmetic except for new driveway and bathrooms. Also, last house to sell on the road went for £500k in May '14. Likewise, next road up a house has just gone on for £795k, last sold for £432k in Aug '14 (to be fair they have done a full refurb and loft conversion).

This is prime Surrey and obviously I'm well aware that asking prices can be a long way from sale prices but even so it would appear that prices are still going up round here. Definitely supply/demand driven as there are a lack of houses in the £500k to £800k price bracket. The problems our neighbours face is that even if they do sell, they'll have to spend £1m+ to see a noticeable benefit of moving (assuming they stay in the area)

[Derek Chevalier]

addey said:

House opposite us has just gone on the market and I was gobsmacked at the price - £700k. Context is - it was purchased for £395k Aug '13 and they've spent a bit but its mostly cosmetic except for new driveway and bathrooms. Also, last house to sell on the road went for £500k in May '14. Likewise, next road up a house has just gone on for £795k, last sold for £432k in Aug '14 (to be fair they have done a full refurb and loft conversion).

This is prime Surrey and obviously I'm well aware that asking prices can be a long way from sale prices but even so it would appear that prices are still going up round here. Definitely supply/demand driven as there are a lack of houses in the £500k to £800k price bracket. The problems our neighbours face is that even if they do sell, they'll have to spend £1m+ to see a noticeable benefit of moving (assuming they stay in the area)

Interesting to see what type of house is available in prime (Weybridge, Cobham, Esher etc) for £700k

[okgo]

Derek Chevalier said:

Interesting to see what type of house is available in prime (Weybridge, Cobham, Esher etc) for £700k

He's either in the council bit of Cobham, or is classing Redhill as prime

[dom9]

Oi - we're looking in that bracket in Cobham (well, Oxshott)!

However, yes - inventory is low so houses tend to go quickly.

£750k gets you something nice in the area. £500k is do-able, £1M changes things a lot.

House opposite us is £1.3M and has beautiful grounds that back onto a lake (4 bed detached, detached garage, quiet road etc).

Seems to be the new builds on the Oxshott-Esher-Leatherhead road that go for crazy money.

[addey]

okgo said:

Derek Chevalier said:

Interesting to see what type of house is available in prime (Weybridge, Cobham, Esher etc) for £700k

He's either in the council bit of Cobham, or is classing Redhill as prime

Downside, Cobham. So yes my road is ex local authority but its a bit nicer than the bit between Portsmouth road and the A3

ETA both houses I mentioned are 4 bed semis with decent gardens off street parking so not too bad for £700k....

Edited by addey on Thursday 30th June 13:32