concerns about houseprices/mortgages

homer_j_3

I have read an article today in The Times (online) and they mentioned that the increased problems with inflation has meant that factories are now passing this cost onto the consumer which will indicate that the Bank Of England will be resistant to lowering interest rates.

I will now bet that there are at least 4 other articles that I can find that will contradict this and that is the whole issue that has been stated throughout this thread that nobody has a crystal ball to say what is going to happen.

Personally, if you were to ask me about future rates, I would say that I would expect slight variances of the rate going up and down but not massively to the extent of it dropping to 2% or raising to 7% but would expect somewhere between 4% and 5% for the next couple of years.

This of course could all change if there are major changes to the economy such as change of government, mass redundancies, stockmarket crashes etc..

The key consideration to all of this is that you take a sensible approach with your finances and do not overstretch yourself. When you get a mortgage offer now, it will tell you what a difference 1% increase will make to your payment. If you can comfortably afford this then I believe you are as best set up for the worst case scenario as you can at this stage.

If you are trying to buy at the right time to get the best deal, whether it be mortgage rates or house prices, I think that the only time you should wait is if you definitely know that there is something happening in the short term(o-12 months) that will have a major bearing on what you are doing. That is why a lot of people will wait before buying at budget time or election time.

If there is nothing on the horizon, as already suggested, I would work out what the savings are to be had in what you are looking to do. If it is financially beneficial to do it now, then the sooner the better to take advantage.

If you talk about this in a house price sense. If you can save £100 by having a mortgage rather than renting, why not save yourself the money. Choose the right product and ensure you look at it as a long term investment. You only have to ensure you sell when the cycle is on the up not the down (which if you buy right in terms of having a big enough house for family etc then you should be ok). You would have been paying that extra money out still so you are still saving regardless of what your house price is doing.

In respect of choosing what type of mortgage is correct then you really need to speak to a profesisonal but if like monkey you seem to be sitting on the fence wondering if a fixed rate would be beneficial when trying to forecast future rate changes then why not consider the capped rate option so you know your maximum liability but benefit on interest rate fluctuations whilst below the capped rate. This is just an example of good planning can take a lot of the unknown out of the equation.

Sorry about the essay but wanted to try and bring some sense to all of this..

Doozergirl

wibble68 wrote:

You'll find that there are 2 distinct camps on these future house price threads.

FTB'ers who are desperate for prices to come back to normal levels and those who stand to take a hit on their investments if prices fall.

Don't take any notice of the "Get in now or you'll miss the boat" argument or the "House prices are going to crash" argument.

These are the 2 extremes of the debate and entirely related to what people want / need to happen to the market.

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I'd disagree. From my time on this board, I'd say it was the "House prices are going to crash" camp (which has gotten much quieter of late) and the "Are They Really?" camp. The rare occassion on which someone assumes that they should be buying into investment property (in particular) are very quickly and sensibly informed. Buying a house as a home over 25 years as the majority asking for advice are doing is a completely different and in my view, necessary investment.

Those that gain income from property are particularly wary of the market and the evidence of that can be seen in the advice given on the majority of threads here. It's all about being a Money Saving Expert. I give my tuppence-worth as property is something I know about and it makes me feel like I'm giving something back to the great deal I have taken from this site.

tomstickland

Personally, looking at the properties I am, I don't think that prices will rise above inflation in the next year or so, nor do I think that they will fall much either. It's all about making a personal decision, and noone can predict the future.

nmiah786

Doozergirl wrote:

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I'd disagree. From my time on this board, I'd say it was the "House prices are going to crash" camp (which has gotten much quieter of late) and the "Are They Really?" camp.

Hi Doozergirl

I was wondering the same....where are they????

To the OP, I can only agree with what majority of the people on here are saying. If your buying to live in then whether prices go down or up is irrelavent, provided you can afford the repayments. Over time your mortgage will decrease and hopefully you will have a sizeable equity built up which will hopefully fund your move up the property rung.

I like other members on here do not think that prices will decrease drastically nor do I beleive that they will increase dratically in the short term. If you can afford to buy now and are holding off buying because you expect prices to drop then that is the wrong way of looking at it.

Obviously you need to look at what you can realistically afford and factor it in with what property prices are doing in your area. Also way up the scenario of interest rates rising a little and whether you can still manage the repayments comfortably.

Buying a house to live in and hopefully live rent free is different to buying a property with the sole purpose of making a huge profit.

How much risk you want to take and are comfortable with is upto you entirely but like one member above said with carefull planning & budgeting you can get rid of some of the uncertainties in buying a property to live in!

Good luck and all the best in your decision.