first time buyer very confused

michldavis

I wouldnt buy at these prices. Sit and wait while your money earns interest. They are sure to come down as the average FTB hasn't got piles of cash.
Ive sold up and in rented at the moment. The market isnt good. If you are willing to gamble your cash then so be it.
I bought a house in 1995 (£44,000 Cardiff 2 bed) which had a crack in it which wasnt picked up by the surveyor. Dont touch anything with cracks believe me. I had to have major structural work done 3 years later. You are an FTB and young and vunerable. The estate agents can see you coming and are playing you off. I learnt from my mistakes the hard way...but I wasnt stupid enough to buy in 1989 the height of the boom which all ended in tears. It took 10 years to recoup loses that some of my friends made.

michldavis

I am surprised that any FTB is contemplating any house purchase when prices are on the way down, especialy a property with a potential problem. On average offers are being agreed at 93% of asking price, so either the house is very cheap, or you are at risk of overpaying.

I think this guy is nuts to buy now. Might as well give his hard earned savings to charity rather than chuck it at overpriced housing with a crack!. He will learn like I did.

deemy2004

Prices are not dropping everywhere! Its very regionalised and depends on local factors.

With a likely election in May, I would guess the bank of England will be encouraged to lower Interest Rates once or twice before then to give a feel good factor so prices could go up again.

I think purchasing a house as a long term investment it doesn't really matter what you pay.

The bank of england raises or lowers interest rates based on where it thinks inflation will be in 2 years time i.e above or below its target, and not elections.

deemy2004

hmm i am only just starting to

I am now Contemplating playing them at their own game and making them sweat.

I found another place and offered 10% below asking and the agent almost laughed it off, her tone changed to almost arrogance and said well you wouldnt sell it for that offer would you???

Well, at least theres one bright side to a housing market tumble, estate agents can laugh as loud as they like in the dole queue.

dougk_2

I disagree with your statement over the BoE the government have more power than tou think and they WILL put pressure on them to do what is best for the Labour Party!

Secondly with the exception of FTB's I would imagine the rest of the house owners are quite happy with current prices.

Thirdly the government does not want house prices to drop as they are doing very nicely from stamp duty and insuarnce taxes, so it is in their interests to keep prices high. If prices drop too much other taxes will need to increase to cover the shortfall.

littleangel

AVERAGE prices may be dropping across the country, but certain areas are still going up, and will continue to do so. As a FTB myself, if you've got the cash (well, the mortgage agreement) and want a place of your own, and you're in an area in which demand is unlikely to drop, then do it. Your home is supposed to be just that, not an investment. That's secondary.

When it comes to dealing with estate agents, remember that they get paid on a commission basis so they'll do whatever they can to get the price up. Inventing fictitious competitors is one of them. So play them at their own game. Smile sweetly and treat them like they're the only one you're dealing with so you get all the properties first. Then do the same to every estate agent in the area. Having other (fictitious?) places on your "book" never goes astray ("I really like it, but I've seen another place with a bigger garden who will take an offer only 1500 pounds more and they're keen to move straight away as the vendors are retiring to Spain, so I'd be grateful if I could get a definitive answer on my offer on this place by tomorrow lunchtime" - and watch them jump!)

deemy2004

I disagree with your statement over the BoE the government have more power than tou think and they WILL put pressure on them to do what is best for the Labour Party!

Secondly with the exception of FTB's I would imagine the rest of the house owners are quite happy with current prices.

Thirdly the government does not want house prices to drop as they are doing very nicely from stamp duty and insuarnce taxes, so it is in their interests to keep prices high. If prices drop too much other taxes will need to increase to cover the shortfall.

No, the power is with the markets, if the markets thought what you were saying was true then sterling would not be trading at over $1.93

The BOE has NOT done what would favour the labour party going into an election, i.e. in years past the bank would have been 'forced' to - lower interest rates going into an election to beef up consumer demand, house prices and the feel good factor, over the last 12 months the bank of england has been doing the exact opposite i.e. deflating the economy, all in a period of LOW inflation, i.e. were trundling along the bottom of the inflation band of 1 to 3%.

This is not the Ukraine .

The Government never wants house prices to drop period ! but they do drop ! so again they don't have anywhere near as much control as you think they do, and even less so since the BOE was given independance.

The only thing the government can do, is what Brown did today which is through a couple of billions at us, as any irresponsible spending (compared to other countries), would immediatly have an impact on the currency, and ripple right through the whole economy.

Britian compared to the USA is doubly effected by exchange rate movements, so unlike what the USa is doing it could not be ignored without more serious consquences.