Is it Time to buy and secure a long-term fixed rate mortgage?

lynzpower

scousethife wrote: »

Rightmove figures reveal than since January alone, 147,693 properties have had their asking price slashed; meaning that a total of 5.6bn has been cut from UK properties! To put this in to context, this equates to an average reduction of £28,377 on each UK price reduced property on the market.

http://www.uploadlibrary.com/rightmovenews/SeeMoreUK_newsletter/SeeMore_Mar09/UKPropPriceReduced.html?utm_source=uknewsletter&utm_medium=email&utm_campaign=Mar09


If I was thinking of buying today (I bought a year ago) I would wait another 6/12 months, because there are no forces, or presure on prices to go higher.

In fact with massive redundances, massive reposesions and banks unwillingness to lend. Government is desperate for prople to get spending so big interest rate rises are unlikely too. I personally cant see anything other then further price drops.

Maybe Clown and the rest of this shower will give FTB some sort of "bonus" f a few K to help "ge the market moving" nothing would suprrise me.

im holding on prices are getting lower, and I dont think the mortgages Ive seen are that cheap yet ( we have about 35% dep) no different to what I had in 06/07 when I sold.

feeta

As a second-time-buyer myself, now is the right time to buy. Of course, this is my personal circumstance.

With a minimal (20%) deposit, I would prefer to lock in to a 5 or 10 year fix so I have assured regular payments. I don't think anyone is doubting that interest rates will go up within the next 5 years, but the question is how soon.

Of course, I am buying a house for a home and not an investment. As house prices are relative, what I've lost on my current property should also have been lost from any property I buy. By that reasoning, I'm happy with my decision to purchase in the next 6 months.

ad9898_3

feeta wrote: »

As a second-time-buyer myself, now is the right time to buy. Of course, this is my personal circumstance.

With a minimal (20%) deposit, I would prefer to lock in to a 5 or 10 year fix so I have assured regular payments. I don't think anyone is doubting that interest rates will go up within the next 5 years, but the question is how soon.

Of course, I am buying a house for a home and not an investment. As house prices are relative, what I've lost on my current property should also have been lost from any property I buy. By that reasoning, I'm happy with my decision to purchase in the next 6 months.

I would broadly agree with this, if you already own and are staying in the same area, moving up/down the market only has a limited cost, and is far outweighed by wanting to get into 'the right house'. It's also a good opportunity to get a fixed rate mortgage, with the gilt failure and higher CPI, higher IR's are much closer than many people believe.

However if you don't own, it would be more prudent to stay put, the recession is set to last another year, house prices will undoubtedly be lower in 12-24 months time than they are now, and it gives the you the opportunity to save more.

Although I guess it does depend at how much you will need to borrow and do the sums, DD is right in some respects. If you aim to buy a house with less than a 50% LTV then it maybe best to wait, for me it's a no brainer, I'm down to a 50% LTV now from a 60% LTV late last year due to the drops in prices.

Dithering_Dad

scousethife wrote: »

Rightmove figures reveal than since January alone, 147,693 properties have had their asking price slashed; meaning that a total of 5.6bn has been cut from UK properties! To put this in to context, this equates to an average reduction of £28,377 on each UK price reduced property on the market.

http://www.uploadlibrary.com/rightmovenews/SeeMoreUK_newsletter/SeeMore_Mar09/UKPropPriceReduced.html?utm_source=uknewsletter&utm_medium=email&utm_campaign=Mar09


If I was thinking of buying today (I bought a year ago) I would wait another 6/12 months, because there are no forces, or presure on prices to go higher.

In fact with massive redundances, massive reposesions and banks unwillingness to lend. Government is desperate for prople to get spending so big interest rate rises are unlikely too. I personally cant see anything other then further price drops.

This is pretty much what I was saying, scouse. If you look at my early posts on this thread you see that I agreed with many of the bears on this site (and financial analysts elsewhere) who say that house prices will continue to drop, albeit much more slowly, perhaps by as much as they have fallen already (i.e. a further 15%).

I also pointed out that as houses are not as easy to purchase as cars or TV sets (my first home was vacant posession and I was a FTB, yet it took about 4 months to complete from start to finish), that if people start looking now with a view to buy then it could take anything between 4 to 12 months before they find the right property, at the right price and go through the arduous (and stressful) process of buying it.

My message is really that if people are thinking of buying in the next 12 months (and from what I have read on here, a lot of people are) then they should perhaps 'get their skates on' and secure a decent fixed rate mortgage.

A lot of people on here are single with no dependants, these people can afford to wait until the very end of the HPC. Other people have families or are just simply fed up with renting and are looking to buy - even if it means that they're not buying at the very bottom. My comments are obviously aimed at the latter set of people, not the former. People have different priorities and not everyone's priority is to squeeze every penny out of their house purchase, especially if the market falls do slow down significantly to the point where the next 15% drop takes (say) a further 4 years.

I'll state again the aim of this thread - if people are looking to buy within the next 6 to 12 months, it might be better to buy sooner rather than later so that you get acquire a cheap fixed rate mortgage. If the market drops do slow down as much as I think they will, it might be the case that anyone looking to buy in the next 18 to 24 months will save more money by securing a fixed rate than they will from buying a cheaper house.

Can I just say scouse, that it was a pleasure to reply to your post. I don't want to be condescending, but I thought your post was really consise and well considered, I just don't know why you needed to jump on me with all the 'Your stupid' comments, personal abuse and all that stuff about 'ramping'. This is usually done by people who are not very bright and can't form an argument, which you clearly can as your post above proves.

Cheers mate. :beer:

ad9898_3

Dithering_Dad wrote: »

Cheers mate. :beer:

Group hug, and all friends again:D. I have to say I don't really understand when people get abusive to other posters, whatever the reason. It will never end in the 'abuser' feeling better, much more likely he/she will be abused back, and the real reason for posting is lost.

There are two sides to every argument, and thats just how it is. Everyone who posts on MSE has some VI in the market one way or another, and although it's nice to feel 'cosy' with the people that are on 'your' side, you are much more likely to learn something from someone who isn't, this is my general reason for thanking people who I wouldn't say are on my side of the debate.

chucky

lynzpower wrote: »

im holding on prices are getting lower, and I dont think the mortgages Ive seen are that cheap yet ( we have about 35% dep) no different to what I had in 06/07 when I sold.

i don't disagree regarding prices but i'd be careful about mortgage rates getting any cheaper.

the Libor rates are starting to creep up on anything between 2 and 7 years

Dithering_Dad

the_ash_and_the_oak wrote: »

to be fair I don't think Dithering Dad is arguing there won't be continued price falls this year. I think his point is that in order to secure a long term cheap(ish?) fix there will come a time when it is worth buying even with the knowledge of further falls, and is that time now?

................


I'm yet to be convinced there is an urgency on entering this particular market

Thanks A&O, great post. I think sometimes people just see my username and jump on what I say without reading the content. Dunno why, because I have consistently stated that I think low house prices are a good thing and that HPI benefits very few people. I've argued for a return to the traditional 3.5 x annual salary for singles or 3 x main salary & 1 x second salary for couples since before I even joined MSE. I dunno where people get the impression from that I'm a property bull? / Though I suspect it's because it's easier to dismiss me as such that to actually read what I've put.

As you correctly state, I do think property will continue to fall, but I think it will be at a much slower rate. If people are happy to 'wait it out' then that's fine, but they should remember that not everyone's priority is to wait years in order to get the lowest price. Some people have seen a 15% drop in price and have decided that they now want to buy. Whether people agree with them or not, this is their choice and all I am saying is that if they want to buy in the next 6/12 months, then they should do it sooner rather than later and secure really cheap mortage debt.

A lot of people on this particular board find it very difficult to see the world from other people's perspective. Not everyone is happy renting, not everyone is single, not everyone want to wait years to buy (some have already been waiting years already), not everyone has a 60% or 70% or 100% deposit. You might feel that there is 'not an urgency to enter this particular market', but other people aren't interested in property speculation and don't see it as a 'market' or a commodity or an investment - they see it as their home. Sure, they want to get it at a decent price, but not if that means they're paying hundreds of £'s more for their mortgages each month.

It would be cold comfort indeed to know that you bought your house for £10k less than someone buying now, if you get it reposessed because you couldn't meet mortgage payments that have increased by over £1k per month.

chucky

scousethife wrote: »

Rightmove figures reveal than since January alone, 147,693 properties have had their asking price slashed; meaning that a total of 5.6bn has been cut from UK properties! To put this in to context, this equates to an average reduction of £28,377 on each UK price reduced property on the market.

Although you're looking at UK numbers people should be more interested in their local areas and what goes on there. Not every area has dropped 20% some are at around 10% and some 30%. Some of these areas will drop even more and some even less.

I'd also say that it's dangerous just taking these price drops at face value.
You have to look into them more and look at what type of property you're actually looking at. The majority of these price drops would be new builds - other property types like 3 beds may not have dropped as much.

For example if you want an inner city new build I would hold out because there will be a few more BTLers who have over-extended themselves looking to sell.

For 3-beds I can't see it being the same as unless redundancy kicks in you don't have to sell. Don't forget currently 93.5% of the UK is still employed - why would you sell?

scousethife wrote: »

If I was thinking of buying today (I bought a year ago) I would wait another 6/12 months, because there are no forces, or pressure on prices to go higher.

there is no pressure on prices to go higher.
the only factors to appreciate are if you want to take todays interest rates or sometime in the future. the most important factor to me are peoples personal circumstances which are usually the most important driver in buying property.

scousethife wrote: »

In fact with massive redundancies, massive reposesions and banks unwillingness to lend. Government is desperate for prople to get spending so big interest rate rises are unlikely too. I personally cant see anything other then further price drops.

Employment is currently 93.5% - predicted to hit 90% next year.
Will all of these people that are out of work need to sell - how many of these people rent?
Repossessions for this year and next years predictions are still less than they were in the last recession.
Banks are starting to lend slowly adding some liquidity to the market.

Heyman_2

Dithering_Dad wrote: »

Thanks A&O, great post. I think sometimes people just see my username and jump on what I say without reading the content.

:rotfl: Why, it's almost as if you have a reputation that precedes you or something!!! I have to admit, I opened this thread up expecting to see carnage given that you were the OP, that's not a dig at you or anything, just seems to go that way doesn't it? :rolleyes:

For some people there's never going to be a 'right' time to buy. For ages it was 'prices are too high', now it's 'prices will drop in 6-12 months' and in 6-12 months when interest rates have rocketed up it will be 'I'm waiting for interest rates to come down'. There will always be an excuse not to take the plunge.

Having said that I would be lying if I said I wasn't envious of people I know who bought in 1998-2000 who have now almost paid their mortgages off.

Pobby

You know, I wonder if it`s because we were financially not savvy when I and other friends bought in the 70`s. Can`t really remember talking much about mortgages or wether the market was going up or down. Or was it that there was very little choice in mortgage products?

The price was x, you paid y + interest every month for 25 years and job done. If you could afford it then, with a suitable deposit, you got the mortgage. Out of all the folk I knew, I only remember one getting repoed, and that was in the early 90`s.

I still think that the market got very out of kilter because of the way that lenders introduced some rather questionable deals. I also think that properties would have remained a good deal lower if the old ways had been adhered to.

Yes there have been other factors, immigration, btlers and others but again I feel that those factors never played that greater part in hpi.