Experts say wait 5 years to buy back into property

Dan:_4

Also, a FTBer buying with a partner are likely to afford at least a 2-bed

mp2

Dan: wrote: »

Below average will vary between individuals. Below average may be a 2 bed terrace for someone, and a 1 bed flat to someone else. Other factors include area - the chances of buying in the area you desire are slim for FTBers. Using myself as an example again - my first flat was in a crappy part of town, now im finaly in the area I wanted to be all those years ago.

What do you mean by "always get out during the boom years" I hope your not suggesting I should have uprooted my family into rented accomendation before my house value falls?

i always see things from a market perspective so individual circumstances are irrelevant. im not directing this at you personally.

youd be surprised about the amount of wise people that have sold to rent during this bubble.

take for example the zero sum game principle.

where does all the money go during this crash? the answer is nowhere.

person A buys a house in 2001 for 100k
person A sells it to person B in 2003 for 150k
person B sells it to person c in 2005 for 250k
person C sells it to perond D in 2007 for 300k

2009 the market collapses. house is now worth 100k again. where has person D's money gone? the answer is nowhere.

A made 50k, B made 100k , C made 50k, D has lost 200k.

the last person holding the house, or shares, or any asset, has basically paid off everyone before him in the chain. its the same in a stock market bubble. one persons loss is someone elses gain earlier in the chain..

its always a zero sum game. the last man holding the asset is the one that has lost out. the only difference determining if you make money or lose money in the chain is your timing. just dont be that last man.

lana22

mp2 wrote: »

i always see things from a market perspective so individual circumstances are irrelevant. im not directing this at you personally.

youd be surprised about the amount of wise people that have sold to rent during this bubble.

take for example the zero sum game principle.

where does all the money go during this crash? the answer is nowhere.

person A buys a house in 2001 for 100k
person A sells it to person B in 2003 for 150k
person B sells it to person c in 2005 for 250k
person C sells it to perond D in 2007 for 300k

2009 the market collapses. house is now worth 100k again. where has person D's money gone? the answer is nowhere.

A made 50k, B made 100k , C made 50k, D has lost 200k.

the last person holding the house, or shares, or any asset, has basically paid off everyone before him in the chain. its the same in a stock market bubble. one persons loss is someone elses gain earlier in the chain..

its always a zero sum game. the last man holding the asset is the one that has lost out. the only difference if you make money or lose money in the chain is your timing. just dont be that last man.

Alternatively, live in your house happily ever after.

ad9898_3

Dan: wrote: »

I agree, the recent HPI has been ridiculous. But with 20% - 30% down I think we're back to a point of affordability.

That is a fair point, the problem we have now though is, more or less everyone is worried about losing their job, and much less likely to want to take on debt at this time. If I wasn't planning on either buying outright in 2011, or moving abroad, the only thing that would stop me looking at the market at the moment is job security.

But for me, the goal is own outright, and I will pretty much put my hand to anything to acheive that in the next 3 years, prices could stop falling now and I would still be ok, I'm not relying on further falls to reach that goal.

Martinslovechild

What if person A then decided to purchase a larger/more expensive property using their £50K profit as a deposit?

Person B also purchases a larger property and uses his £100K profit as a deposit.

Person C also uses their £50K towards a new property.

Surely, the only potential 'winners' out of A, B or C are those who pocket their profit and do not use it to fund the purchase of another property, but instead either go into rented accommodation or long-term care.

ukcarper

You can get outright ownership by buying a house you like and letting the mortgage run it’s term I have.

mp2

Martinslovechild wrote: »

What if person A then decided to purchase a larger/more expensive property using their £50K profit as a deposit?

Person B also purchases a larger property and uses his £100K profit as a deposit.

Person C also uses their £50K towards a new property.

Surely, the only potential 'winners' out of A, B or C are those who pocket their profit and do not use it to fund the purchase of another property, but instead either go into rented accommodation or long-term care.

when taking the market as a whole, it will always balance.

so for example, imagine A buys back the house again for 100k. D loses 200k, or if he borrowed the money, he is effectively tied into paying A,B and C (via the bank) out of his future work/earnings. (bank gives A,B,C a total of 200k, D owes the bank 200k)

Martinslovechild

ad9898 wrote: »

The problem we have now though is, more or less everyone is worried about losing their job, and much less likely to want to take on debt at this time.

That's a fair enough point but let's just put it into context.

At the height of the Great Depression, one in four Americans were out of work. However, if we turn this on its head, this also means that three out of four people remained in their jobs.

Whilst I'm not particularly bullish about the short-term prospects for the jobs market, it's worth keeping in mind that the perceived threat of redundancy is probably much greater than the reality.

ad9898_3

ukcarper wrote: »

You can get outright ownership by buying a house you like and letting the mortgage run it’s term I have.

That's fine, but if you have the opportunity to buy outright in 3 years time by working your !!! off, not only do you have security if you become ill or lose your job, you will also save £100,000's of pounds in interest payments. That's what drives me.

ukcarper

ad9898 wrote: »

That's fine, but if you have the opportunity to buy outright in 3 years time by working your !!! off, not only do you have security if you become ill or lose your job, you will also save £100,000's of pounds in interest payments. That's what drives me.

I can see what and why you are trying to do and wouldn’t criticise you. But the majority of people haven’t got the drive or inclination to do it and in fact if they did no one would be able to do it like you said we can’t all take the profit.