Questionably Bad Advice Given on here!!!!!! FTB Look HERE!

pandamonia

For the past months i have been studying a lot of forums and advice from many an expert of the property market from various sources such as Thisismoney.co.uk, my own personal IFA and my friends at HSBC.

i have noticed that on these forums there is a total lack of people who actually understand what’s currently going on.

Common question from a FTB is - Is now a good time to buy?

Commons answers given to these people are so far from accurate its scary! - a lot of people are answering this question as YES? !!!!!!! - Why would anyone advise on buying now? its the worst possible time to take any kind of plunge, markets are falling house prices are falling and mortgages for FTB are the worst for years!

House prices-

people think they got a good deal when they get an offer accepted 10k below the asking price of 180k, the market fell nearly 16% last year, so anyone with basic maths can work out that the 180k should be more like in the region of 150k! - its also worth noting that you will lose another possible 15% this year as experts expect further falls! - so why would you buy now knowing you will most likely have negative equity 12 months down the line and be stuck!.

House prices will continue to fall due to the affordability factor that houses should be at about 3.5x average salary and will most likely continue to fall from their peak of 5.8x in 2007.

Current house sales are equating at 1 per estate agent per month at the moment, if this doesn’t ring alarm bells i don’t know what will.

A good guide to follow is the bank LTV rates - Currently most will want more than 20% deposit for an OKish mortgage and some will let u have 10% but at high rates of interest because of the RISK. Banks aren’t stupid and they are factoring in the 15% decline into your mortgage from day 1, they know that it will be you who loses your deposit and not them who will retain the REAL value of the home.

New Build house prices - AVOID LIKE PLAGUE, no matter how good a deal you think you got you have probably still paid about 15% more than its worth, Banks such as HSBC, Britannia BS will tell you that you need 80% LTV even with gifted deposits from the vendor, because everyone knows that George Wimpey is ripping you off. Some city centre Birmingham apartments currently got auctioned at 90k when the list price was over 130k! 6 were sold while the other 24 were sold at full price to unsuspecting Muppets with to much deposit on their hands. They are now sitting on over 25k worth off losses in 1 month! - There is a very good reason why George Wimpey is sitting on £1.5bln worth of debt and a share price of 20p from £5.80 last year!

Mortgage affordability-

FTB it is not a good time to take out any mortgage, 5-6% Variable rates currently and 6-7% fixed from a base rate of 1.5% which is due to fall! if you take out one of these mortgages you could find that in a year or 2 you are paying over 10% as the base rate rises. Can you afford 10%? You could also find yourself in negative equity stopping anyone from being able to remortgage you to a better rate.

Second guessing the market -

One of the best investment sayings that i have ever been told has been to "never try to catch a falling knife"

People who think that a property recovery in 2009 is likely are probably wrong and anyone trying to buy just before the next boom will get their hands burnt badly. Just because 20k has fell off the 2007 asking price doesn’t mean that its a good buy. price are still massively overpriced and its not wise to buy until the knife hits the table and its safe to pick it back up. House prices will see a plateau effect of maybe 6 -12 months signalling that it is stabilising.

There is no rush to gamble away your deposit on a home that’s falling in value.

PART SHARE OWNERSHIP- anyone who thinks this currently is a good idea needs their head looking at, by creating an extra rung on a ladder that is currently getting shorter is of no use to anyone. a lot of these start off interest free and end up costing you interest or rent on top of your mortgage. This idea was created to try and keep the housing market booming for longer than it should of ever gone on for.

Rent is so cheap now that you can get huge place for about 300-400 a month and pocket the extra cash and save up for a bigger deposit. your asset isn’t growing anymore and its probably losing 1% value per month, if you’re losing 1% value of 100k per month that’s a loss of 1k per month!!! JUST RENT & SAVE,

The best advice for a FTB is to stay out of this market and its current conditions, people who are already in the market have to deal with its current problems and not the FTB, if you time your purchase and don’t feel rushed into buying then you will be the biggest winner of this entire mess. Don’t forget FTB that you have the power now! it’s a buyer’s market not a sellers! WAIT IT OUT!

An extra note on people buying on plan for builds completing in 2009! - What the hell are you doing? Houses aren’t selling so you go and PAY! Someone a fee for reserving a house that is currently overpriced and will be twice as overpriced 9 months from now???? From a company with a share price of 20p?
it’s like paying 50k for a Skoda on a 57 plate and asking them to run it in for you to the tune of 30,000 miles. - ~And if you believe any of the bull that the sales rep tells you then you only have yourself to blame.

I hope this brings a certain reality check to people on here looking at houses in general.

some of my predictions may not end up to be 100% true but i can tell you there is nothing to gain at the moment, we are currently falling down a hill and gathering speed, Job losses are getting worse and the financial year hasn’t even ended yet!

ioscorpio

pandamonia
"Rent is so cheap now that you can get huge place for about 300-400 a month"

Where do you live, that rent is that cheap?

DawnW

Not round here! Seriously though, it rather depends on someone's specific circumstances and requirements whether or not it is a good time for THEM to buy. Everybody's are different. Renting has its downside, (sometimes) bad LLs / LAs, no pets, no DSS, (sometimes) having to move every 6 months, so no security - no joke if you have little ones at school. However, if you are not SURE you can afford it, don't have a big deposit, might need to move to a different area, it is certainly not a good time to buy.

mikeandrach_2

i kind of agree, we live near york and have just agreed a let on a huge 3 bed detatched house, master with ensuite, very large rooms, parking for 5 cars, garden the size of a small country, all for £600 pcm. hopefully moving in on 1st march.

david29dpo

Whos to say your advice is better than anyone else's?

mbga9pgf

david29dpo wrote: »

Whos to say your advice is better than anyone else's?

Because the OPs opinion is the most likely by far to occur now we know shipping has fallen to 0, unemployment is heading towards over 3 million, industtry is reporting the biggest drop offs on record, the worst retail sales since the early 90s (this is the start) we have no real industry that can support the whole economy, GDP will fall around 5% and there is nothing, absolutely nothing to suggest a recovery in the next 24 months. Its a really, really big mess.

ALL of the governments schemes involve getting into more debt, which, if they work (the y wont as we have repeatedly seen) will solely prolong the crisis and increase the bubble for next time.

And then we hear someone on here time and time again (generally you find they bought at the top of the market) spouting - a house is a HOME and not an investment. Well, I am sorry, but if I can wait and afford a 3 bed semi instead of some crud thrown up by some cowboy newbuilders with a garden the size of a postage stamp and you have to pay for the priveledge of parking, I know what I would pick. And the fact their opinion is completely devoid of any minor economic analysis whatsoever, becuase they have been fed for 10 years on 'nothing safer than bricks and mortar' 'house prices wont crash' and other such now-blown-out-of-the-water mantras

kunekune

It is an individual assessment. That house that someone got 10K off, might have been originally priced much much higher, or might have been priced well below valuation to sell fast. There's no simple calculation about what a good selling to asking price ratio would be. People have all kinds of reasons for moving, and all sorts of financial arrangements. For us, for instance, the availability of a staff mortgage at BOE rate, means that for some time to come, buying will be significantly cheaper than renting (comparing interest payments with rental). For some FTBs, the right finances and the right house bought from a desperate or realistic vendor, and it can work. For others, yes, it will turn to custard. But to say it won't work for anyone at all is just as daft as saying 'jump in, prices can only go up'.

And mikeandrach have a good deal, but how long is the lease? I wouldn't move house, move schools, learn a new supermarket, etc, just for the sake of 6 months security.

pinkshoes

pandamonia wrote: »

Rent is so cheap now that you can get huge place for about 300-400 a month and pocket the extra cash and save up for a bigger deposit.

:rotfl:

for £400 a month, I could rent a small bedroom in a grotty house share in a grotty area.

Every individual postcode is different, so you can't generalise the market with one formula.

Some areas have had large price drops (usually areas where a 2 bed costs £200k and yet it's only £400 a month to rent one), and other areas have only seen slight drops or nothing at all (usually areas where a 2 bed costs £200k and yet it costs £900 a month to rent it).

Your post is just your personal opinion.

poppysarah

The local property paper is very telling. Very few EA listing in it and plenty of lets.

Premier_2

What name(s) do you normally post under on this forum???

jo1967

Rent is so cheap now that you can get huge place for about 300-400 a month and pocket the extra cash

What planet are you on? I work for managing agents and apart from 2 flats (above shops, busy streets, 1 bed - not my choice) at £395, there is nothing between £300-400. On average 2 bed starts at £450/475. We have a few at £700-1000. I dont live in a huge city but a small city woth reasonable amenities. However, people are unable to get mortgages at the moment so have no choice but to rent.