my view!

dopester

mbga9pgf wrote: »

http://www.rightmove.co.uk/property-for-sale/property-21005093.html?

It is over 10 x my income. Many of you might be higher earners, but I think I do alright, and I hope you will be able to maintain your income, or have no issues about putting capital down.

Lyneham. Zooming closer on the satellite map, I see it is RAF Lyneham directly behind the back garden. Big employer for the area?

scheduled to close in 2012-2013, though no final decision has yet been made by the UK's Ministry of Defence. Redevelopment, regeneration and community strategies are already being formulated to deal with the loss of the RAF base to the local economy together with future land use issues, ie, regarding how the current air base area and large swathes of MOD housing can be managed.

ruggedtoast

dboy1985 wrote: »

Ive read MSE for about 4 years, never posted because plenty of people have the same view as me, but what the hell; ive got lots of free time now so let’s get stuck in

I believe that everyone has a jumping in point with regard to buying a house; I would imagine a lot of people looking at the property market in June last year would have been put off by the prices – (in my area at least) of about 270K for a 3 bedroom house, which I feel is the average family home.

If the figures are to be believed of a rough 15% drop from this `peak` will now leave these house’s worth around 230k. All my friends who are with a partner earn roughly 50-60k between them at 3.5x this leaves them with about 200 - 210k as a potential mortgage, so based on that another 10-15% drop over the course of 2009 would leave them in line to get a house at this price.

Bear in mind that each person will have what they feel to be their jumping in rate, just like some people would never consider buying a car more than £2000, some people will never consider spending less than £5000 and so on, when house prices get to the point that a lot of people are looking at them and thinking `ok, so its dropped 50k from 2007, im going to jump now` I think you will find them stabilize around mid to late 2010, some of the posts ive read about them dropping 50% I really cant see happening, of course that doesn’t mean it wont happen. Im sure there will be a number of properties that end up pretty close to that figure but I certainly don’t think the average house will get to that level, as that would pretty much ensure that the hundreds of thousands of people who bought a house in the last 6 years would end up in negative equity!

Thoughts?

I dont think history supports your view at all. If there was a "jumping in point" then prices would have stabilised long ago. They didnt and there isnt.

Supply and demand is informed partly by sentiment and partly by ability to pay. Everyone wanted in on the house price gravy train on the way up, and thanks to banks like Northern Rock offering 125% lie to buy mortgages on very low teaser rates, everyone who wanted in got in. Basically you could take out a very large loan for a very low monthly rate, and were quite likely to want to because in your head your "investment" was going up by thousands each week.

Sentiment has fallen over as most people now assume whatever they pay now, they could have got for cheaper by waiting a bit. Mortgage availability is much tighter too which means many people who think theyre good for a 200 grand mortgage are pften disappointed, as are the sellers who expect to sell to them.

I think we can be fairly sure that the same "experts" who were predicting the million pound semi in August 2007, will also completely fail to call the bottom when the market does turnaround.

For the timebeing though, with most sellers still insisting on pricing an average three bed at 7 to 10 times a local salary, and cheap mortgages hard to find, prices are only going one way.

MrDT

We could pay asking price on a decent 3 bed repo right now with a 1.2x joint income mortgage. Admittedly we have a fairly decent deposit saved up.

Having said this I have definitelty not reached my jumping point yet.

The plan is to keep saving throughout 2009. If we stick to the savings plan, and prices don't drop at all, we'd need a 0.9x joint multiple this time next year. Let's face it, prices will in all likelihood drop like a stone this year.

If we paid 85% of the current asking price in one years time (repo's are priced fairly keenly already, so I see this as realistic) and keep up the savings in the meantime, we'd need a 0.6x joint multiple. Maybe I'd jump at this point. But that's far from a certainty...

Why am I not jumping sooner? The current 1.2x joint multiple is wholly dependent on us both holding onto our income, no pay cuts, no redundancies. I am simply not confident that this will be the reality in 12 months time. Even if it's affordable to jump on now, circumstances change, and that 1.2x joint multiple might suddenly become 2.8x single income due to redundancy, manageable but not ideal. What if it suddenly became an infinite multiple of sweet FA?

My jumping point will probably be when I feel like I can afford to lose my job, be out of work for a few months, and still cover the mortgage with an eventual sh*tty 'needs must' job.

What worries me is that as unemployment rockets we'll have thousands of people clamouring for these sh*tty 'needs must' jobs as they're in similar situations. What happens if you can't even get a McJob to cover the mortgage?

Until the economy stabilises, I'd probably be very wary of taking on debt. Either things improve, I feel the risk is minimal, and jump in, oooor the whole world continues imploding, we keep on saving, and eventually make a cash purchase.

Edit - My point is that sentiment rules. Once we have 'Job Watch' etc on the news every night (we're pretty much there aren't we?) the fear of risk/debt will be widespread. Everyone's jumping point will be revised downwards, saving up thousands for a deposit to see it all disappear when you lose your job "like thousands of others you hear about on the news every day innit" will terrify people. I'm already there, I'm relatively risk averse and think things through a lot. A big part of me is all about assessing risk and looking for 'snags'. That mightn't apply to everyone out there, but they'll "get it" soon enough if the media keeps rubbing their noses in it

StevieJ

dboy1985 wrote: »

doesnt look right to me? I think lots of people are being duped into using data amalgamating websites to draw their conclusions and believing everything they say, but in this case its not a true representation...

http://www.zoomf.com/detail/spring-vale-north_da1_house_buy/NTUxMzkwNA../

Good point, they are not being duped, they see what they wish to see

Pobby

Just read a Mail ( so it must be true ) article claiming that house prices will return to peak in the south east in 2012, London 2013 and in last place N.I in 2018. As Kirstie said, if that`s the case I`ll eat my hat.

Sorry no link.

mbga9pgf

Pobby wrote: »

Just read a Mail ( so it must be true ) article claiming that house prices will return to peak in the south east in 2012, London 2013 and in last place N.I in 2018. As Kirstie said, if that`s the case I`ll eat my hat.

Sorry no link.

Only if wage inflation hits 100%. Which is never going to happen.