To buy or not to buy that is the question

newbienewbison

Point taken but I would like to meet the guy that would not be upset if his house halved in value!

besonders1

well I suppose it depends on what area you live in as some places have fallen quicker than others. Remember that some houses may have also been over valued in the first place so obviously would need to fall by a lot higher %% than average in order to sell. I like to look at the land registry or houseprices.co.uk website and compare previous selling prices. I would try and look for houses which are priced at early 2003 levels for what in my opinion is an acceptable price whereas after that the "crazy" price era started. I suppose I don't mind overpaying by a few thousand but not being tens of thousands in NE. You do need to think in terms of the future as you may have no choice in moving house.

franklee

Odd no one had asked what your earnings are, are we that detached from the traditional safeguards? So what multiple of salary will you be borrowing?

Interest rates are going up sooner or later so budget for that.

charliee_3

franklee wrote: »

Odd no one had asked what your earnings are, are we that detached from the traditional safeguards? So what multiple of salary will you be borrowing

he said in the OP that he earns £35k so the multiple seems fine...

hethmar

franklee wrote: »

Odd no one had asked what your earnings are, are we that detached from the traditional safeguards? So what multiple of salary will you be borrowing?

Interest rates are going up sooner or later so budget for that.

OP's first post states:

So in summary 120k place. Savings(deposit) of 20k. Mortgage of 100000 (about £550pcm over 35 years. I am 23 and earn 35k per annum. Minimal outgoings no loans.

the_ash_and_the_oak

newbienewbison wrote: »

@ the ash and the oak

There is not much I can do if there is rapid inflation because if I had savings they would be worth less so the property is probably the right option. The fixed term is an issue.. but nobody can be sure so I will just have to hope for the best I suppose.

What is your opinion of what will happen to wages if there is rapid inflation? Also what do you think of what happened in Iceland where the currency pretty much collapsed sending inflation through the roof? Have you read much about what that meant for wages and asset prices there?

How long do you intend to live in this house and what is your ballpark figure compared to today that you think it will be worth at that time.

What is your contingency plan should your friend want to get married or lose their job and decide to go traveling in 3 years time?

QTPie

The more I read, the last few days, the more I THINK we are currently in a bounce (at least what I am looking at now - section of the market and area of the country).

I am looking at large family homes in the Bath area. This segment of the market had been priced VERY optimistically (i.e. "recession, what recession? surely prices have still been going up?") and not much at all selling because of it... Saw small price drops (i.e. less than 5%) on a few of them (so still actually priced at the peak of the market - "recession, what recession"). Still not a lot of interest, then suddenly anything half decent has gone "under offer" (in the past 2/3/4 weeks). Either those sellers have just all accepted extremely cheeky offers OR some buyers have run out of patience and are paying peak prices (Q4 2007) prices for those properties... Unfortunately am not likely to see for some months (until the properties are sold - assuming the sales don't fall through - and the Land Registry is updated...)

Originally I felt a moment of panic - oh no, what if we have missed the boat?! But now I am not so worried. Bath is NOT in a complete bubble and we do not want to pay "over the odds" for a property. Money WILL get tighter, prices will not shoot up again, BUT people will have to sell their homes at some point... (and with many people rushing to buy things during the bounce now, houses will have to be "priced to sell" in the future). With patience, I think that we will get a house at a more sensible price (probably in 6+ months time). At the moment a lot of vendors (at least around here) are still "trying it on".

Other areas of the country MAY see more sense to the property market sooner than Bath, though :rolleyes:.

Now I need LOTS of patience and preferably interest rates NOT to shoot up any time soon...

You have to understand YOUR local market and YOUR position (since things are very different for different people, in different areas, looking at different parts of the housing market). It is always going to be a gamble though - no-one knows what will happen.

QT