Property Price Drop

Phatmouse

If you want it buy it, it just money. Do what makes you happy, it' all just numbers when all is said and done.

Cleaver

Phatmouse wrote: »

If you want it buy it, it just money. Do what makes you happy, it' all just numbers when all is said and done.

Blimey, you're brave coming on here and saying that.

For what's worth I would normally agree. I'd say that life is for living and that that if you're in it for the the long term and can afford the repayments then do what you think is right.

However, a 18k deposit on a 155k flat is, once you take off £1k for fees, around an 11% deposit. I think most financial commentators feel that prices will drop around this amount over the next 12 months (some more, some less of course) so you'll be flirting with negative equity. What's the harm in waiting 12 months? Even if everyone on here is wrong and property doesn't drop anything in 2009 you could buy in early 2010 for the same price but with a bigger deposit.

If you had a good deposit (30 - 40%) I'd be with Phatmouse (the hip hop rodent), and say just go for it. But you haven't, so I wouldn't.

ModernSlave

Hi kier333

It sounds like you've made your mind up. If you still have doubts then I suggest you book an appointment with an IFA.

The most important thing is that you do your sums properly for all possible scenarios. What if interest rates go up? What if you become unemployed? What if you need to sell? What are all the costs associated with buying vs renting. Don't forget any service charges are probably included in the rent now. Finally, can you get a mortgage? A lot of banks have tightened their criteria dramatically.

As I said, I think you've already decided to buy. Good luck.

pandamonia

so your happy to pay 6%+ on a mortgage fixed for 2 years to then be dropped right into inflation with no equity.

good plan where do i sign up

macaque_2

kier333 wrote: »

"Property to keep dropping in value" this is all over this and other forums.
There has to be a point when it levels off and in time will rise again.
I think its a good time to buy in London as flats are 20-25% less that last year.
Any thoughts?

The house price boom of the late 90s to 2007 was arguably the biggest suckers rally in history. It convinced many people that wildly overpriced houses represented a new reality. The fact that many people were buying houses they could not afford did not matter. In a rising market, the lenders could always recover the outstanding loan when borrowers defaulted.

Houses will never return to 2007 prices (in real terms). They will fall until lenders feel safe again (3 to 4 times earnings). Thereafter, they will track inflation. I also suspect there will be a fair bit of overshoot on the way down.
Anyone who is hoping for another roller coaster is going to be out of luck. Lenders have come close to bancrupting the world (and we are still not out of the woods). Banks will never be given the freedom to lend again like this.

If you are trying to get a house at the best price, I should wait a few years. Renting is comparatively good value and getting cheaper. House prices are a one way bet for the next few years. If you are looking to make money, I think you are probably 15 years too late.

SouthCoast

Anybody interested in a 2 bed luxury apartment that you can rent for around £1000 a month?

History

dateevent15 February 2009

• Price changed: from '£364,950' to 'Offers in Excess of £349,950'

09 January 2009

• Price changed: from 'Offers in Excess of £370,000' to '£364,950'

04 November 2008

• Price changed: from 'Offers in Excess of £399,950' to 'Offers in Excess of £370,000'

07 September 2008

• Price changed: from '£399,950' to 'Offers in Excess of £399,950'

24 August 2008

• Price changed: from '£419,950' to '£399,950'

30 July 2008

• Initial entry found.

overlander

Your argument is flawed. If you buy with a typical 6% mortgage you will be paying approx £9300 in interest so thats dead money. Add on top of that say a conservative lose of £15,000 that works out about £2000 a MONTH lose. Sign me up for one of those please, and we wonder why the country is in the state it is.

ad9898_3

kier333 wrote: »

So you really think its best to keep renting at £8.4k pa. I think the flats good value

Yes, keep renting, is the flat good value ??, I don't know, but if I was a betting man I would say not. Losing 20k pa is grim and if you go for a 2 year fix now, I can pretty much gaurantee you will be paying more in 2 years time, whilst your 18k deposit will have gone the way of dodo and you will be NE. Not good.

However, as has already been said, it looks like you have made your mind up, in that case good luck, you're going to need it.

ukcarper

People keep mentioning property prices dropping to 4x salary + deposit but what type of property. It’s been a long time, if ever that a FTB has been able to afford the average house.

ad9898_3

macaque wrote: »

The house price boom of the late 90s to 2007 was arguably the biggest suckers rally in history. It convinced many people that wildly overpriced houses represented a new reality. The fact that many people were buying houses they could not afford did not matter. In a rising market, the lenders could always recover the outstanding loan when borrowers defaulted.

Houses will never return to 2007 prices (in real terms). They will fall until lenders feel safe again (3 to 4 times earnings). Thereafter, they will track inflation. I also suspect there will be a fair bit of overshoot on the way down.
Anyone who is hoping for another roller coaster is going to be out of luck. Lenders have come close to bancrupting the world (and we are still not out of the woods). Banks will never be given the freedom to lend again like this.

If you are trying to get a house at the best price, I should wait a few years. Renting is comparatively good value and getting cheaper. House prices are a one way bet for the next few years. If you are looking to make money, I think you are probably 15 years too late.

Spot on. QFT.