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

Dan_1976

I agree with some of what you say pandemonium, however you sound like a know it all who cant see beyond his nose!

FTB will not be that clued up, they are FTB! Says it in the title. I know nothing about the car industry, nor the aviation world, both are in trouble but i dont work or read up on why.

AS I say, some of what you say is right, buying is all about timing.

Nobody gives advice on this forum, its all about opinions. If you buy becasue of what goes on in here, then your asking for trouble!

Zandoni

The saying 'Property Ladder' really bugs me, it just doesn't apply at the moment. The term that's used now is 'Property Snake', if used more it might make people realise.

As others have said when the housing market bottoms that's the time to be a FTB, there is no way they will shoot up fast so there will be plenty of time before this roller coast starts it next down slope.

Sparkkee

pandamonia wrote: »

What you also have to consider when taking out a mortgage at times like these is your job can be here one day and gone the next. then your house is repossessed and you are evicted and no one will lend to you for years to come.

indeed it can, which is why (as a FTB chasing a property now) I'm making sure that I reserve enough of my deposit back to cover my mortgage and bills for 6 months. I'm also in a fairly secure industry - nothing is guaranteed but death and taxes and I make my living from both.

pandamonia wrote: »

if you think your job is safe and you are getting a decent deal on a house, ie 2004/2005 prices on the same property then maybe you can make it pay?

the house i'm chasing is on at about 2004 prices and it's looking like I'm going to be able to get a hefty discount off the top of that - at peak market the house next door was sold at £180,000, this is listed at £138,000 and it looks likely that the seller (who is in trouble) will go for £125,000 as I can complete in weeks.

pandamonia wrote: »

another thing to consider is 10-15% interest rates in the next 3 years due to hyperinflation making your mortgage unaffordable and causing you to default.

there will be FTBs who are talked into stretching to more than they can afford - a fair number of us can actually do the maths and see that 2 into 1 doesn't go. Although, you were complaining that we were looking at 5 year 6% fixeds a few pages ago. Don't your prophecies of hyperinflation cancel that out?

I've got an AIP for a 5 year fixed deal on which I can overpay (and can afford to by £200-£300 per month most months) I can afford to cope in a fairly rapidly rising market because of this cushion and also - when the fixed deal ends - will be looking to remortgage the property having overpayed by around 40% of the original mortgaged amount. The amount of interest I'd be paying on that on a 15% market is still well within my means.

pandamonia wrote: »

in days where banks are almost going under and they are being nationalised the last thing i would want to do is go into the biggest commitment of my life on ground that is falling away beneath you

Is the ground actually falling away from you? I'm more in control of my destiny by planning, researching, making damned sure that I have my figures right and then moving in on a deal than I am in the damp, nasty, over priced 2 bed terraced house that my landlord has recently MEWed on.

Not all FTBs are jumping in having seen 10% falls and asking for advice on 110% mortgages any more. Some of us know that it is likely that the market will fall further, interest rates will not stay under 2% for long and that we are taking a risk. But, for me, right here, right now, the short and long term risk is small enough that it's outweighed by the long term benefits.

Kev09

Pandamonia is right about it being a bad time to buy, however only if you are buying to invest! renting is dead money but it does allow a certain amount of freedom! im not buying any houses at the moment or investing in the stock market as it is way too unpredictable, however if you are buying a house to live in and not for an investment then I would not necessarily advise against it negative equity is only a real problem if you need to sell! and who knows what is going to happen, if you buying a house to live in, I wouldn't wait to call the bottom!

besonders1

I agree, if the price was a bargain and it was a desirable location then I would be buying anytime but sadly there is lack of these around to buy. I suppose renting permanently would definitely be dead money with no intention to buy (although I live next door to 2 sets of neighbours who are in their early 60s and would never even consider buying their council house even if you explained to them that they have paid for their homes 5 times in their lifetime and still own nothing!) I can't see a problem with renting for a couple of years until the prices become "sensible" i,e, a true reflection on people's wages and inline with inflation. For the cost of rent alone will only be a drop in the ocean compared to the reductions that we are heading for.

Running_Horse

pandamonia wrote: »

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!

You may be right or wrong (and incredibly bossy, I'm guessing female), but shouldn't this be in the house price forum?

ess0two

Running_Horse wrote: »

You may be right or wrong (and incredibly bossy, I'm guessing female), but shouldn't this be in the house price forum?

Check the other thread patron saint panda has posted,he drives a 35k bmw supposedly.

botchjob

He drives a 35k BMW yet thinks that £350 a month rents a palace? Does not compute. He still lives with his mum.