WTB: when will you start looking?

skap7309

wilksy007 wrote: »

I deffinatley won't be spend the savings on anything else, the reduction in interest rates hasn't change my view on saving either, if anything it has just made me determined to save more.

Ditto that.

mitchaa

Cleaver wrote: »

Two interesting points with this. Firstly, what if they just keep steadily falling, maybe 0.5% a month or so throughout 2010? Will people just keeping hanging on, even though they could comfortably afford a place? Will their plans change to maybe spending their savings on something else? Priorities may just change: is owning a property a dead duck that no one wants to do.

Martin was on Radio 1 earlier talking about the credit crunch and when the best time to buy a home would be.

If prices drop more than 7% per year, you are better off renting, if they fall less than 7% in a year you are better off buying.

12 x 0.5% falls would be 6% so in this case you would be better off buying.

Come from the horses mouth himself.

I suspect 0.5% falls per month would be less than your typical rents hence better off buying.

Thrugelmir

mitchaa wrote: »

Martin was on Radio 1 earlier talking about the credit crunch and when the best time to buy a home would be.

If prices drop more than 7% per year, you are better off renting, if they fall less than 7% in a year you are better off buying.

12 x 0.5% falls would be 6% so in this case you would be better off buying.

Come from the horses mouth himself.

I suspect 0.5% falls per month would be less than your typical rents hence better off buying.

Rents also will follow downwards to reflect the lower purchase cost of property.

mitchaa

Thrugelmir wrote: »

Rents also will follow downwards to reflect the lower purchase cost of property.

Will they

Mortgages and rent are miles apart at the moment.

Ask someone like NDG who rents a place probably worth in excess of £500k but for a small £1250pcm.

On paper and in comparison to how much this would cost to mortgage, rents are already low in comparison in their majorities.

I can see your point if there was an equilibrium, but there is not.

sympatex

Mitchaa, and in complete contrast to NDG, in my area South East England, Camberley, it's equal or more expensive to rent a like for like property if your mortgage rate is higher than 5%. (For FTB's they are mostly!)

IlonaRN

My bf and I wish to live together, so will be looking very soon. He has a house to sell first, though. For us, it's a lifestyle thing. We're not getting younger and would like to start a family soonish.

lethal0r

looking seriously in 2 months if either my current self-employed work improves or I find a good part-time job.

daveb975

Thrugelmir wrote: »

Rents also will follow downwards to reflect the lower purchase cost of property.

The rental prices do not change as much in my experience.

In 1999, 1 bed flats in my area cost about £90k and were rented at around £600 per month.

By 2007, the same flat would have cost £250k, and rented at around £800 per month.

The cost of the flat had gone up 175%, but the rental cost had only gone up by 33%.

Now prices have come down by about 20%, rental costs are down maybe 5%.

Thrugelmir

daveb975 wrote: »

The rental prices do not change as much in my experience.

In 1999, 1 bed flats in my area cost about £90k and were rented at around £600 per month.

By 2007, the same flat would have cost £250k, and rented at around £800 per month.

The cost of the flat had gone up 175%, but the rental cost had only gone up by 33%.

Now prices have come down by about 20%, rental costs are down maybe 5%.

Rents are primarily based on interest cost / yield on a property's value.

In 1999 average fixed mortgage rates were 8%. Normal practice was for commercial mortgages to be a 1% higher so 9% for BTL. (Variable rate 7.45%). As a side point I suspect most more recent BTL investors haven't factored in interest rates rising to these levels in the future.

So currently as long as interest rates remain low, rents will fall further. Or at least until the property market bottoms out. As FTB's will opt to purchase rather than rent creating yet more downward pressure on property prices.

Chris2685

I just looked back at some of the properties I was looking at last summer. They were all still for sale, and most of them had not dropped their prices much at all!

Pretty big stale mate it seems.