Times Newspaper Report Advises To Buy Property Now!

Lotus-eater

brit1234 wrote: »

You either buy when the market is right down or just starting to rise. If you can't afford to buy when the market has just started rising then you shouldn't be buying at all.:rolleyes:

Its nothing to do with affording it, its getting the best price.

Max_Headroom_3

Dithering_Dad wrote: »

Remember, the best time to buy is when the news is full of doom and gloom and the seller is worried. The worst time to buy is when the news is full of talk about green shoots and possible uplifts and the seller is feeling more optimistic.

Who is going to finance these "green shoots"? Mosst people need to borrow to buy, and the banks simply won't be lending in the same quantities that they once were.

Remember, if you loosen your lending criteria to allow (across the board) people to borrow twice as much as they could, they don't all get houses twice as good, they get the same houses, but pay twice as much. And then those houses go up even further still due to the "investment potential" since they doubled in short order.

Return to previous lending rules (halve the money available to borrow) and house prices have to shrink back to a level that that lending will support.

This isn't stock and shares, the housing market is underpinned purely on what Joe Public can afford to spend. (Even BTL has to ultimately be funded by those renting them). Shrink that (as has happened) and house prices shrink accordingly. They don't suddenly spring back to the artifical high and beyond unless there is some way of financing that.

So unless you believe banks will go back to lending anyone anything (which is in many cases what they were doing) then your whole theory, however plausable sounding, is flawed by the simple dint of affordibility.

Lotus-eater

I've just had a thought, if houses do drop to around 3.5 times earnings, aren't BTL landlords going to be a great deal of trouble, because people will be buying again, less will be renting and because their BTL has dropped so much in value some won't be able to sell without a big loss.
So lower rents all round, if you can find a tenant and lower house prices for a few years before you can sell.
But then more going bust, which moves the market even lower...........

What am I not thinking of?

Dithering_Dad

brit1234 wrote: »

Not necessarily especially when we have years of doom and gloom to come. Sorry but you argument is simplistic and does not take into count the turmoil in the banking industry with its fall out only just starting.

You either buy when the market is right down or just starting to rise. If you can't afford to buy when the market has just started rising then you shouldn't be buying at all.:rolleyes:

How do you know that we have years of doom and gloom? This is pure speculation on your part, unless you have a crystal ball.

I agree though the statement is simplistic on its own, but you have to couple it with the other statement I made that people aren;t investing in the whole property market but in just a single home. In this case, if they do their research and start targetting properties they like or areas they like they could pick up a real bargain now without having to wait for years and years.

I bought my house in the last crash, the old feller who owned it had died and his two nephews and one niece had inherited it. It was up for £50k and I offered £40k knowing that they didn't buy the property in the first place and so weren't 'losing' any of their money, they didn't have an emotional attachment to the property and as the £10k reduction was split between 3 of then, they didn't worry about the £3333k they were 'losing' but concentrated on the £13333 they were gaining. The papers at the time were full of doom and gloom, and so they probably thought they wouldn't get a better offer.

Even though the housing crash continued long after I bought that house, the prices in that area for that type of house never fell below the price I paid.

Sorry for such a long-winded post, but I really beleive that if people want to get a real bargain, they should start work right now while these 'green shoots' stories that have started to appear are still being dismissed.

Dithering_Dad

Lotus-eater wrote: »

I've just had a thought, if houses do drop to around 3.5 times earnings, aren't BTL landlords going to be a great deal of trouble, because people will be buying again, less will be renting and because their BTL has dropped so much in value some won't be able to sell without a big loss.
So lower rents all round, if you can find a tenant and lower house prices for a few years before you can sell.
But then more going bust, which moves the market even lower...........

What am I not thinking of?

People will always want to rent. The canny BTL is the one who has properties in the sorts of areas where there is always a demand, such as Cities, university and college towns or large industrial complexes.

I have to say that for someone who derides other people's writing, the piece you wrote here is not very well constructed. I almost passed out reading the first sentence. Please use full stops!

Dithering_Dad

Max_Headroom wrote: »

Who is going to finance these "green shoots"? Mosst people need to borrow to buy, and the banks simply won't be lending in the same quantities that they once were.

Remember, if you loosen your lending criteria to allow (across the board) people to borrow twice as much as they could, they don't all get houses twice as good, they get the same houses, but pay twice as much. And then those houses go up even further still due to the "investment potential" since they doubled in short order.

Return to previous lending rules (halve the money available to borrow) and house prices have to shrink back to a level that that lending will support.

This isn't stock and shares, the housing market is underpinned purely on what Joe Public can afford to spend. (Even BTL has to ultimately be funded by those renting them). Shrink that (as has happened) and house prices shrink accordingly. They don't suddenly spring back to the artifical high and beyond unless there is some way of financing that.

So unless you believe banks will go back to lending anyone anything (which is in many cases what they were doing) then your whole theory, however plausable sounding, is flawed by the simple dint of affordibility.

I could afford to buy a couple of houses right now, I have plenty of equity in my current house. Many of my peers have lots of ISA savings and such. Not everyone is a FTB struggling to scrape together a deposit from his/her meagre income.

There are plenty on this forum who have saved their deposits already and are waiting for the crash to bottom out. These are the people who should be looking now to pick up their homes.

Max_Headroom_3

Dithering_Dad wrote: »

I could afford to buy a couple of houses right now, I have plenty of equity in my current house. Many of my peers have lots of ISA savings and such. Not everyone is a FTB struggling to scrape together a deposit from his/her meagre income.

I really can't imagine many savvy people getting into BTL right now. Are you?

So back in the real world, who's going to buy?

Lotus-eater

Dithering_Dad wrote: »

People will always want to rent. The canny BTL is the one who has properties in the sorts of areas where there is always a demand, such as Cities, university and college towns or large industrial complexes.

I have to say that for someone who derides other people's writing, the piece you wrote here is not very well constructed. I almost passed out reading the first sentence. Please use full stops!

Yes, I think too quickly and have to get it down, I didn't think it was that bad though, you are allowed to pause at the commas you know

Where have I derided someones writing?

Dithering_Dad

Max_Headroom wrote: »

I really can't imagine many savvy people getting into BTL right now. Are you?

So back in the real world, who's going to buy?

One of my mates bought a lovely house a couple of months ago. It was a similar scenario as when I bought my first home. An old lady died and her next of kin wanted rid of the house. The home is on a huge plot and was an absolute bargain. The NofK saw the housing market falling and panicked. He got it for a song.

I was chatting to one of his neighbours at the housewarming and he was gutted. He had had his eye on the house for years and really wanted it but because of the credit crunch he couldn't get the bridging loan to enable him to buy that house before he sold his own.

While my mate could hav gambled and waited, trying to squeeze out that last few £k but he wuld have run the risk of losing a perfect family home.

Microstar_2

Dithering_Dad wrote: »

I could afford to buy a couple of houses right now, I have plenty of equity in my current house. Many of my peers have lots of ISA savings and such. Not everyone is a FTB struggling to scrape together a deposit from his/her meagre income.

There are plenty on this forum who have saved their deposits already and are waiting for the crash to bottom out. These are the people who should be looking now to pick up their homes.

I've read a some of your posts mate and I reckon you know as much about the property business as I know about ballet dancing (and that's not much, I can tell you!).
Just as a matter of interest, how many houses do you have at present? Are you a 'canny buy-to-letter' then, or is it all talk?