What is meant by 'missing the boat'

mitchaa

ad9898 wrote: »

If this is the bottom (no chance really), then prices are very likely to stay at this level, give or take the odd percentage point either way, for many years, so how is it possible to miss the bottom, if you have the funds, the credit rating and a job ?

The question is, when do you realise and take note?

Using the Nationwide scale, prices have remained fairly static the last 5-6mths or so give or take a % point either way.

You give it another 6 months, and the data shows roughly the same. You defiantly hang onto the belief that another 20% falls are on their way, so you wait another 6 months and again, no real change.

You are then already 18mths into stagnation and wondering where the time has gone. In the meantime, interest rates have shot through the roof, so you decide to hold on a little longer, and a little longer and a little longer waiting on IR's coming back down. You then find yourself 3yrs in and house prices are still hovering around that £150k mark but the difference being is that interest rates are high so you are paying a hell of a lot more than what you would today.

In this scenario, did you miss the boat in terms of purchase price, No. Did you miss the boat in terms of best time to buy? Yep almost definitely;)

In 3yrs time, you could have paid 3yrs off a 25yr mortgage, or in 3yrs time you could be starting a 25yr term. So 22yr mortgage vs 25yr mortgage. There are of course a lot of variables, you could jump in straight away with a 22yr mortgage and so on and on, im just talking hypothetically.

If it were me, i'd wait a couple of more months, and if Halifax replicate Nationwide data and then LR replicate and all 3 are showing 6mth + stagnation periods, i'd be looking to secure an interest rate then before its too late.

Im sure they will fall a little more, but its enough to get you thinking.

All in my opinion anyway, as i dont buy into all this buy a home on a credit card nonsense;)

(No doubt the above will be quoted in a years time when house prices have plummeted to below £100k:rotfl:)

System

If I was looking to buy right now I'd be getting a little twitchy, I'd be interested to see what will happen to prices when the winter comes but I'd be a bit worried about IR's.

Then again I'm the kind of person that would rather get it over and done with, for the sake of £50 odd quid a month.

I have 3 friends who are FTBing at the moment, and when I think about it it must be a bit of a sense of relief not to worry about it any more, similar to why I remortgaged recently. Sure I could have held on for some cheap SVR luvvin' but it was only £55 difference a month and I was tired of it being in the back of my mind.

Yakubu22

I personally dont believe any such boat has left. The mass unemployment factor has yet to hit the housing market and also when IRs increase (which they will in the next 12 months, surely?), that will have a huge impact too. Think of all the people who bought in 2006+ who now own a house worth a lot less than they bought it for. When they go for a remortage over the next year or so -its going to be tight. I think when the inevitable IR increase arrives, this alone may put some people (who where burnt this time) off from buying. IF higher IRs come and prices are still generally too expensive for FTBs. As many sellers are not looking to pass on much of a discount currently. Then i think the market may continue to suffer.
I'm NOT saying another crash or drop in 20% by x time/date. But just that there are some big obstacles that lie in wait in the near future. I certainly dont believe we are home and dry and things are getting better from now onwards.
So going back to the boat analogy. It hasnt left or even close too. There's still a significant risk attached to buying (unless you know you can easily afford and intend to keep the propery long term).

my 2p worth

lostinrates

Thing is, if its such a narrow window what about the next batch of FTBs? The very fact this window is being perceived as so narrow is part of the whole long term problem IMO.

mitchaa

Yakubu22 wrote: »

I personally dont believe any such boat has left. The mass unemployment factor has yet to hit the housing market and also when IRs increase (which they will in the next 12 months, surely?), that will have a huge impact too. Think of all the people who bought in 2006+ who now own a house worth a lot less than they bought it for. When they go for a remortage over the next year or so -its going to be tight. I think when the inevitable IR increase arrives, this alone may put some people (who where burnt this time) off from buying. IF higher IRs come and prices are still generally too expensive for FTBs. As many sellers are not looking to pass on much of a discount currently. Then i think the market may continue to suffer.
I'm NOT saying another crash or drop in 20% by x time/date. But just that there are some big obstacles that lie in wait in the near future. I certainly dont believe we are home and dry and things are getting better from now onwards.
So going back to the boat analogy. It hasnt left or even close too. There's still a significant risk attached to buying (unless you know you can easily afford and intend to keep the propery long term).

my 2p worth

A couple of points on that.

1) Will rising umemployment have an impact on the housing market?
2) Will interest rate rises really mean people can no longer afford to pay their mortgages?

My views..

1) I personally dont see the link, the numbers in my opinion are too insignificant to make that much of an impact. Considering the long term average of 1.5m in receipt of JSA before this recession raised its ugly head and considering the 3m the figure is expected to reach, that leaves a real 1.5m figure. Out of this 1.5m, how many are home owners and how many are council/social housing tenants? Impossible to say of course but even if a homeowner does lose his/her job, you cannot make the assumption that the mortgage will not be paid and the housing market will take the hit. ISMI is in place for anyone on IS/JSA benefits, and if its unemployment for 1 of a couple, then they still have that other income to help pay for the mortgage.

Of course, repossessions will increase, but i dont believe the numbers when whittling down on that real 1.5m above are going to make that much of an impact.

In my opinion anyway.

2) Those on SVR's and trackers have it lucky at the moment but there is no reason to suggest that they will suffer with coming interest rate rises. If employment is safe (Majority of people are) then why should interest rate rises affect them? Someone that was used to paying 6% and have done so for the last 3-5yrs on a fixed rate deal may well have recently finished and due to negative equity or just through choice revert to the lenders SVR rate, they will now be significantly better off. (What are they doing with the extra they now have? Saving it, overpaying?)

If for example we were to see a 2.5% overnight increase next time the BOE have their meeting, they will find themselves in the same position as before, used to paying 6%, reverted to SVR of 3.5%, 2.5% increase to base rates, back to 6%

Makes no impact.

Again a very simplistic example and i agree some people will have their fingers burnt, and lose their homes but i think some people are expecting total meltdown in the housing market as soon as interest rates start to rise again to which i cannot see.

Another point, a 90% mortgage now, compared to a 90% mortgage 2 yrs ago, really hasn't changed much at all. BOE base rates were 5.5% 2 yrs ago and 0.5% now but in both cases you would have expected to get a 90% mortgage for around 5.75-6.5%. Same on the way up or are 90% LTV's going to become 10-11%?

Hmmm;)

Conrad

A coupld of key differences to this crash

1) Ultra low unheard of interest rates - and a lot of pepes can port thier current uber low variable rate. They will rise slowly but a lot of folk will grasp the opportunity now and move come what may. Only the rigid pessimist will fret over what if's. Not an insult, just how it is.

2) Unprecidented interventions

3) People have lost trust in pensions, and most really see property as the only investment they want to bother with - this is a key point missed over and again

Pobby

This is my position. I am looking to move in the next 5 years. I want to sell my house as it is 3 stories and too many stairs. We are looking at a bungalow, if we can afford it or a 2 bed decent flat maybe or maybe not designed for retired people.

I personally don`t think that we are anywhere near the bottom yet. The place I am looking at is on the edge of a town in Wiltshire, bang on the M4. The info I have at the moment suggests that there is a huge over supply of new build there which is depressing the market and it looks like there are already some places that would very much suit my pocket and likely to give me some extra money, so in fact, a downsize.

I am intending to wait and see, based on the last crash, when prices have stabilised. I think it will be the same as last time, a period of stagnation.

Should I not be able to sell my existing home, I would ( the thought terrifies me ) rent it out at just below the going rate to avoid any voids. If that happens, I would be able to pay down a 50% + deposit on the new pad and the rent obtained on my existing place would more than cover any mortgage that I have now. When in four and a half years time my investment bonds mature the balance would be paid in full and the rent, if still not sold, perish the thought, would provide an additional pension.

Well that`s the game plan. Right now, blooming old bear that I am, I am looking at perhaps 3 years to see the bottom. Who knows? 300 to 400% increases in my area in the last 10 years suggests that there is still a lot of unravelling to be done yet.

chucky

chucky wrote: »

there will be and are areas with HPI when others willstill be decreasing.

mewbie wrote: »

How many times have you typed that now... and you still can't get it into a coherent form. This is more your level mate, a row of stupid smilies...

:rotfl::rotfl::rotfl::rotfl::rotfl::rotfl::rotfl:

here you go Mewbie enjoy, please come back and tell me that my facts are wrong.

chucky wrote: »

Just shows there are areas with 3% or 4% growth already... whilst others have the reverse. it's getting more and more regional.

• The region with the most significant annual price fall was the South West with a movement of -18 per cent.
• London experienced the greatest monthly rise with a movement of 1.4 per cent.
• The North East was the region with the most significant monthly price fall with a movement of -2.6 per cent.
• The highest monthly price increase was in Rochdale with a rise of 8.2 per cent.

http://www1.landregistry.gov.uk/assets/library/documents/hpi162009e.pdf

also Merthyr Tydfil is showing a 3.3% increase YOY (ISTL pointed it out to me)... imagining telling someone not to buy when they could have bought there and missed out, just shows taking advice from people on the internet that don't know what they're talking about can be dangerous...

so potentially you could miss the boat - not everyone will but there will be people that miss that boat and there may not be another one passing for quite a while.

Davesnave

Joeskeppi wrote: »

If I was looking to buy right now I'd be getting a little twitchy, I'd be interested to see what will happen to prices when the winter comes but I'd be a bit worried about IR's.

The only thing I was getting 'twitchy' about was keeping far too much of my wealth in ££££ rather than a mix. I suppose I'm relieved to be buying a doer-upper rather than blowing it all though. Interest rates are irrelevant in my case, as no one would give me a mortgage.

I expected to wait until the autumn/winter to get the best deal, but as something came up, I just went for it. I might have got something better by waiting, but I know from past painful experience how few properties suitable for my needs ever become available.

Bird, hand, bush. Simple. I still think there's no point rushing in most cases though.

Davesnave

chucky wrote: »

also Merthyr Tydfil is showing a 3.3% increase YOY (ISTL pointed it out to me)... imagining telling someone not to buy when they could have bought there and missed out, just shows taking advice from people on the internet that don't know what they're talking about can be dangerous...

Have you ever been to Merthyr Tydfil?

If I had to buy there, it would be incredibly dangerous......I'd be suicidal in a fortnight!;)