How far will house prices fall [volume 5]

[Jiebo]

princeperch said:

Just out of interest what are your expectations as to what will happen with any 1 bed flat you buy for 550? I'm not saying it's not market value ATM in those areas but are you comfortable that the value might fall in the next few years or are you of the view the capital value will increase ? Or aren't you bothered either way?

Here is my, probably twisted, logic.


The monthly costs of renting vs buying is the same in this situation. I'm in my early 30's and single, so would want to live in a part of London which is fun, otherwise what's the point.

I would assume zero capital appreciation during ownership. This is where the stamp duty holiday helps, as I'm not trying to recover £15k+ when I sell.

The mortgage would be about £1750 a month, i earn about £5.5k after tax, so easily affordable. During that time I will be repaying about £15k per year back, so that's effectively money back in my pocket when I sell.

Worst case scenario, prices fall over the next 3-5 years. In which case I would ride it out until they recover. Putney/Clapham are massively popular, so could rent it out in a second if needed. I'm saving(investing) £2k a month from my salary, so in 3-5 years, I would have saved enough to buy something else if needed.

Edited by Jiebo on Saturday 25th July 19:30

[Bullet-Proof_Biscuit]

Bullet-Proof_Biscuit said:

Another statistic; My broker just told me he is convinced I can borrow £280k if I put 10% down (62k basic paye).
Beans on toast until Autumn it is! Hopefully a probate/period project becomes available in the area where I'm shopping (Hampshire).
Just wondering how far they'll fall in the meantime!

Edit, I misunderstood somewhat and of course 280k borrowed PLUS deposit means I'll be shopping in the £310k ballpark! I was thinking £280 all in.. Such a noob. Decided to filter by semis & detached only (non terrace), and conceded to lower the 'good area' criteria and resolved to looking at relative 'sh*t holes' which means detached, garden, garage which is exciting.. I don't mind living in a sh*t hole, so long as it's MY sh*t hole.. Worth noting it's gutting RM doesn't have a 'must have garage' filter criteria Using the 'garden; filter to find those with scope for une garageee. How exiting! NB, this is the wine talking.

Edited by Bullet-Proof_Biscuit on Sunday 26th July 10:26

[red_slr]

Bullet-Proof_Biscuit said:

Worth noting it's gutting RM doesn't have a 'must have garage' filter criteria [/footnote]

+1

Something they really do need to add for us PHers.

[Venturist]

You can add a keyword to a search and it will prioritise listings with that word first. Bear in mind it treats each word individually no matter how clever you get with quote marks, so best stick to just “garage”. “Double garage” will get you results with a double bedroom and a single garage.

[red_slr]

Never knew that cheers!

[TriumphStag3.0V8]

dan98 said:

I'm afraid this is based on false assumptions.
In Germany, it's most likely that the rent will not increase at all - it depends on the original contract, and every one I've come across has been fixed like this.
Therefore after 20 years you'll be effectively paying far less due to inflation - easily topped up by a decent pension I would imagine, especially as rents are relatively cheap in the first place (outside of booming hotspots).

The bit you have quoted was in relation to the UK.

Interested (genuinely) in the German situation now that you have said the above... so you have been somewhere for 20 years plus, your fixed rent has remained the same so is now low in real terms, what happens if you want to move? Say you have retired and what to move to the country. Much reduced income and presumably you would have to take on a new rental agreement at current rates?

[dan98]

TriumphStag3.0V8 said:

The bit you have quoted was in relation to the UK.

Interested (genuinely) in the German situation now that you have said the above... so you have been somewhere for 20 years plus, your fixed rent has remained the same so is now low in real terms, what happens if you want to move? Say you have retired and what to move to the country. Much reduced income and presumably you would have to take on a new rental agreement at current rates?

I'm not an expert on the whole German rental market, but if you move you'll pay the market rate or you can swap apartment/contracts with another renter of a similar value. The more likely scenario after 20 years is moving to a more rural location in which case the rent is a lot cheaper anyway.
Retiring to the countryside..if renting the pension comes into play for topping up the rent (I believe there are also schemes for reduced rents on very low income/retirees).
Building a new bespoke home to get old and die in seems popular, as does moving East and buying a ridiculously cheap house.

[Bullet-Proof_Biscuit]

Venturist said:

You can add a keyword to a search and it will prioritise listings with that word first. Bear in mind it treats each word individually no matter how clever you get with quote marks, so best stick to just “garage”. “Double garage” will get you results with a double bedroom and a single garage.

Thanks but where would one type this keyword in a search? RM only let's me search an address/place name?!

[Vanden Saab]

Bullet-Proof_Biscuit said:

Venturist said:

You can add a keyword to a search and it will prioritise listings with that word first. Bear in mind it treats each word individually no matter how clever you get with quote marks, so best stick to just “garage”. “Double garage” will get you results with a double bedroom and a single garage.

Thanks but where would one type this keyword in a search? RM only let's me search an address/place name?!

when the results come up immediately under the number of properties there is a bar with prioritise properties with and then a box with add keyword...

[Bullet-Proof_Biscuit]

Vanden Saab said:

when the results come up immediately under the number of properties there is a bar with prioritise properties with and then a box with add keyword...

Life saver! Obvious now you point it out.. THanks agan

[AyBee]

Jiebo said:

I’m in the process of getting my flat in lewisham on the market. The agent who came round told me that the prices fell a lot after the brexit vote and have now recovered to back where they were. With the stamp duty change, I suspect things will stay at this level, maybe a slight increase over the next 9 months in London.

I’m looking at 1 bed flats in Putney and Clapham around the £550k mark, so that big house for £650k seems like great value. Isn’t it amazing how skewed our perspectives are in London.

Flat opposite where I used to rent in Putney sold for £491k last year - 2 bed in Putney with garage (in a block) on Carlton Drive (close to East Putney tube) - I'd at least want a 2 bed with your budget! I almost bought it - then moved north and buying a 4 bed with internal garage So right about the skewed perspective though, I used to think £500k for a 2 bed flat was good value!

[Overall D]

Venturist said:

You can add a keyword to a search and it will prioritise listings with that word first. Bear in mind it treats each word individually no matter how clever you get with quote marks, so best stick to just “garage”. “Double garage” will get you results with a double bedroom and a single garage.

Actually if you put "double garage" in double quotes it will look for the exact word combination

[p1stonhead]

Bullet-Proof_Biscuit said:

Vanden Saab said:

when the results come up immediately under the number of properties there is a bar with prioritise properties with and then a box with add keyword...

Life saver! Obvious now you point it out.. THanks agan

Can’t believe I have never fking figured this out!

[okgo]

Jiebo said:

Here is my, probably twisted, logic.


The monthly costs of renting vs buying is the same in this situation. I'm in my early 30's and single, so would want to live in a part of London which is fun, otherwise what's the point.

I would assume zero capital appreciation during ownership. This is where the stamp duty holiday helps, as I'm not trying to recover £15k+ when I sell.

The mortgage would be about £1750 a month, i earn about £5.5k after tax, so easily affordable. During that time I will be repaying about £15k per year back, so that's effectively money back in my pocket when I sell.

Worst case scenario, prices fall over the next 3-5 years. In which case I would ride it out until they recover. Putney/Clapham are massively popular, so could rent it out in a second if needed. I'm saving(investing) £2k a month from my salary, so in 3-5 years, I would have saved enough to buy something else if needed.

Edited by Jiebo on Saturday 25th July 19:30

They're very different areas. So its worth considering that, both have their appeals but Putney is a little more relaxed/worse links and Clapham (depending on what bit you are talking about) is very young in the main - I personally don't take much enjoyment from going out anywhere around Clapham.

I was in a pub the other day in Old Town and I kid you not, there was not a single person in there that looked over 30, I was with a mate who's 41 and he was by far the oldest in the place!

Edited by okgo on Monday 27th July 14:17

[Burwood]

okgo said:

Jiebo said:

Here is my, probably twisted, logic.


The monthly costs of renting vs buying is the same in this situation. I'm in my early 30's and single, so would want to live in a part of London which is fun, otherwise what's the point.

I would assume zero capital appreciation during ownership. This is where the stamp duty holiday helps, as I'm not trying to recover £15k+ when I sell.

The mortgage would be about £1750 a month, i earn about £5.5k after tax, so easily affordable. During that time I will be repaying about £15k per year back, so that's effectively money back in my pocket when I sell.

Worst case scenario, prices fall over the next 3-5 years. In which case I would ride it out until they recover. Putney/Clapham are massively popular, so could rent it out in a second if needed. I'm saving(investing) £2k a month from my salary, so in 3-5 years, I would have saved enough to buy something else if needed.

Edited by Jiebo on Saturday 25th July 19:30

They're very different areas. So its worth considering that, both have their appeals but Putney is a little more relaxed/worse links and Clapham (depending on what bit you are talking about) is very young in the main.

I was in a pub the other day in Old Town and I kid you not, there was not a single person in there that looked over 30, I was with a mate who's 41 and he was by far the oldest in the place!

That's because 35+ aren't daft enough to sit in pubs drinking beer through

[okgo]

Burwood said:

That's because 35+ aren't daft enough to sit in pubs drinking beer through

I went to a pub in Herne Hill the other day and can confirm that (it is more family age than most of Clapham, nappy valley aside) they certainly are

[HustleRussell]

Missed out on the house I wanted in Brighton suburbs. Everything else SSTC now too? Seems there was a real rush on property in the past couple of months.

[mondeoman]

HustleRussell said:

Missed out on the house I wanted in Brighton suburbs. Everything else SSTC now too? Seems there was a real rush on property in the past couple of months.

Getting in before they lose their jobs perhaps?

[p1stonhead]

mondeoman said:

HustleRussell said:

Missed out on the house I wanted in Brighton suburbs. Everything else SSTC now too? Seems there was a real rush on property in the past couple of months.

Getting in before they lose their jobs perhaps?

Need completion before March.

[HustleRussell]

mondeoman said:

HustleRussell said:

Missed out on the house I wanted in Brighton suburbs. Everything else SSTC now too? Seems there was a real rush on property in the past couple of months.

Getting in before they lose their jobs perhaps?

But that's what I was trying to do! it's not fair...

I don't know what to do now. If I had to guess I'd predict that it'll all cool off from the Autumn but the nagging doubt remains that I've missed a not to be repeated opportunity (it wasn't even my fault, the vendor arranged a private sale on the sly without telling me / the EA).