Are house prices set to take a tumble? February 2006

Alleycat

skaff wrote:

When me and my wife bought our first (yes first) house we were up to our eyeballs in debt. We had to go cap in hand to our family for the deposit and take a high mortgage rate as no-one else would touch us. Why did we take that risk? Because it was 1997 and i decided that prices could only go one way from there. What does that make me? Lucky? A genius? A b@stard? All of the above?

What it makes me is someone who made a decision that i thought was the best for my family. I'm happy it worked. I used the success of that to fund a couple more to gain some financial future. Do i feel guilty? Do i heck. When the dot com brigade made their fortune i didn't look on with envy nor did i rub my hands with glee when it all went wrong for them. These people have babies just like yours and want to see them playing in gardens just like you do. People make decisions. You chose not to get a house because you feel it would overstretch you. I don't look badly upon you for that. Don't think bad of me simply because i chose differently.

Finally, for those with the mindset of price correction being based on the inability of average workers to afford prices in the area I have one question. If that logic is valid then why is London not empty?

Marco

I am pleased that you were able to get on the property ladder when you did. In 1997 I was 18/19 years old, completing my final year of A-levels and about to take a gap year to save some money to go to Uni. By the time I had graduated, sort of sorted out student debts and had decent job it was 2003. When I put my and my OH's details into those mortgage calculators (even with a 5% deposit) they will not lend us enough to get a mortgage where we live. We simply do not earn enough money...and we both have good jobs.

Of course I am jealous. I would love to buy a house/flat. I am honest enough to say that. I have unfortunately through my job dealt with far too many people who have over-stretched themselves to get a mortgage and are coming into our office faced with homelessness. They have lost everything, sometimes including their relationships and families. I do not want to be staring down that barrel at some point in the future.

You are lucky that house prices took the turn they did. You are lucky that your family were able to fund a 5% deposit. There are plenty of people for whom that is not an option (yes, me being one of them). I am not financially savvy enough to even try and predict what house prices will do, but for now we will continue on our merry way. At least when we move to London if things go pear shaped in private rented, we can always move in with my parents for a while. They do not own, but are housing trust tenants so have some security.

Rant over!!

P.S. I could try and post rationally etc, but this is what I feel in my heart and it would be dishonest not to be open in how I really feel.

budhee

Just tappin in as a potential FTByer.

22% of countries wealth is owned by 1% of population. (kinda happened in the last 15 years)

This aint down to entreprenerial / innovative spirit. More prestigious fiscal shifting/ dealing that spins the money back into originator's pocket. So a 'fall' is possible, coz the money is on the 'top floor' We punters bicker, quibble, jabber down below. It seems that predictions are largely in the hands of those closer to the 1%

Any tips for me the FTB ? I aint that passive - just a monetary observation

Tojo_Ralph wrote:

No different from wishing all the teams good luck at the start of a competition.

tomstickland

Well, after years of waiting/hoping for a crash I've finally bought somewhere. I can weather a crash and/or interest rate rises, so the market can do whatever it wants now. I don't see a crash happening unless the economy goes down with it. Prices might stagnate or drop a few percent and wait for inflation to catch up. That's my feelings at the moment. I'd have loved a crash to happen, but in the end I decided that life was too short to wait any longer.

feelinggood_2

I honestly don't know

skaff

Nelly & Alley

Thanks for your comments. In answer to your question Nelly, the house cost £62k and is now worth £170K.

Alley Cat, i understand your frustrations and there is no shame in telling things as they really are. My comments were aimed at the people who look upon home owners as satan spawn, stealing food from the mouths of babies living in rented accomodation. I was just pointing out that there is always a way if you want to take a chance.

The 5% deposit i had was repaid 4 weeks later as i took out a cashback mortgage. The mortgage was also self-certificated which put the rate up still further. This was all a risk i openly admit that. Unfortunately, when it comes to any kind of investment there are times when you have to take a leap of faith. It could have gone wrong for me but, to be honest, with 30k of unsecured debt and twins on the way, the finances weren't going to get much worse!

To all those like yourself that missed the boat purely due to bad timing you have my sympathy. With your attitude towards finances however i have no doubt that someone such as yourself will work out just fine. Unfortunately, the housing ostriches who bury their heads in the sands of statistics will finally see a crash of 20% one day and claim victory not realising that prices tripled before that happened!

Best of luck in all that you do!

cupid_s

Alleycat wrote:

When I put my and my OH's details into those mortgage calculators (even with a 5% deposit) they will not lend us enough to get a mortgage where we live. We simply do not earn enough money...and we both have good jobs.

Experts are saying now that first time buyers need an average of 28k deposit to buy their house.

A 5% deposit nowadays is just not enough. Me and hubby are both students and bought our own house (for 100k). We bought it just under 2 years ago at virtually the height of the housing boom, and we had no help for a deposit from parents. Yet we had saved 30% deposit, and enough to cover fees and all expenses - without this no-one would have looked at us. If you both have good jobs there is no reason why you cannot save a lot more than 5% deposit and then you can get your own house.