Buying a house

Claire827

Hello

Could i please give me some advice whether or not now is a bad time to get a mortgage and buy a house? I have seen the house i would like to buy and had an offer accepted but i am worried with the current state of the market.

Thanks

poppysarah

Give us some numbers. Income, outgoings, savings, mortgage, deposit etc etc
How secure is your job.

dag_2

I think it's hard to generalise about this sort of thing. It's never a good time to buy a house that's too expensive.

And I certainly think it wouldn't be a good idea to buy a house where the mortgage interest is going to be leaps and bounds more than the rent you'd pay for a similar house right now. House prices have been falling, but not half as fast as rents have been falling over the past few months.

brit1234

If you haven't seen the world is in economic turnmoil at the moment resulting back from over lending on well overvalued US properties. Now according to the IMF British house price are 10% more overvalued than the US. You would also have seen that our market has a massive subprime sector which is now collapsing (Bradford & Bingley - self cert and buy to let). Things are going to get worse as housing prices correct.

I would strongly recommend you wait or you will be in negative equity quickly, prices are going to fall over 50% from peak.

latecomer

brit1234 wrote: »

I would strongly recommend you wait or you will be in negative equity quickly, prices are going to fall over 50% from peak.

While there is no doubt that prices are falling, how do you know they are going to fall 50%? You dont so please stop scaremongering.


@claire827 : I personally wouldn't buy at the moment due to the falling prices and uncertainty in the economy but if this is your dream home that you are planning on staying in for a long time then maybe you should go for it. At the end of the day only you can decide.

Northants_Simon

brit1234 wrote: »

prices are going to fall over 50% from peak.

:rotfl:

I don't think so.

For a start prices will not fall by the same amount in all areas. And not all houses will fall by the same amount. It's easy to spot what is overpriced, for example here in Northants I can buy a 4 bed detached in a nice area for under £200k, but you can also buy an ex council house on a council estate for £175k. On a 25yr mortgage there is not much difference each month between the two. The ex council house is overpriced. I really can't see the 4 bed detached falling by 50% to under £100k.

I don't think it's a bad time to buy if you find a house you want to live in long term and are not dreaming of your home being an investment.

owner

If it's my house the answer is yes, anyone else's and it's no.

HTH.

Jorgan_2

poppysarah wrote: »

Give us some numbers. Income, outgoings, savings, mortgage, deposit etc etc
How secure is your job.

To that list I would also add how long do you want to stay in the property? Two years and it maybe a problem, ten years it (hopefully) shouldn't be.

angrypirate

Northants_Simon wrote: »

:rotfl:

I don't think so.

For a start prices will not fall by the same amount in all areas. And not all houses will fall by the same amount. It's easy to spot what is overpriced, for example here in Northants I can buy a 4 bed detached in a nice area for under £200k, but you can also buy an ex council house on a council estate for £175k. On a 25yr mortgage there is not much difference each month between the two. The ex council house is overpriced. I really can't see the 4 bed detached falling by 50% to under £100k.

I don't think it's a bad time to buy if you find a house you want to live in long term and are not dreaming of your home being an investment.

In todays current banking climate, whilst i think it might be an over estaimte, i certainly wouldnt mock the possibility of it - we are certainly heading for 30% falls

penguine

If you want to buy at the moment, you should have a substantial deposit to reduce your risk of negative equity. You should also be certain you can afford your repayments if interest rates rise substantially. House prices are at the moment still substantially inflated due to years of easy credit, which is not likely to return anytime in the near future. So your house may lose value over the next few years and be difficult for you to sell at the price you paid for it.

Without knowing anything about your personal circumstances (but guessing from your post that you're a first time buyer), I would advise waiting to see how far property prices drop as the financial crisis deepens. If you wait another year or two (while increasing your savings) you are likely to be able to buy a house you like better, at a lower price.

Austin_Allegro

Northants_Simon wrote: »

:rotfl:

I don't think so.

For a start prices will not fall by the same amount in all areas. And not all houses will fall by the same amount. It's easy to spot what is overpriced, for example here in Northants I can buy a 4 bed detached in a nice area for under £200k, but you can also buy an ex council house on a council estate for £175k. On a 25yr mortgage there is not much difference each month between the two. The ex council house is overpriced. I really can't see the 4 bed detached falling by 50% to under £100k.

I don't think it's a bad time to buy if you find a house you want to live in long term and are not dreaming of your home being an investment.

The oft quoted 50% fall is because that is what is required to bring back the ratio of average wages to average property price to more sensible (lower risk) levels for the banks.

For anyone who has been asleep for a while, a string of major banks in the US, UK and Europe have gone bust, and the Americans have just refused to bail out their banks; and in the UK, mortage approvals are down 98% from this time last year. This means the banks simply cannot provide the finance required to sustain 2007 house prices.

Of course not all properties will fall by 50% - some will be less, some will be more, but as a general rule it's perfectly possible.