Inflation and it's impact on my ability to buy a house!!

kennyboy66_2

What would I do ?

1) Never buy a flat
2) Never buy a new build.
3) Try and save at least £500 a month.
4) Start looking at houses now, but would not be bothered if it took 12 months to find the right property at the right price.


I'm fairly convinced that prices will fall by another 10% at some stage in the next 18 months, and if interest rates jump then that will almost certainly put further downward pressure on prices.

StevieJ

Harry_Powell wrote: »

Argh!!! What are other people's views? What would you do??

I have been priced out of home ownership for years due to HPI, I don't want to run the risk of being priced out for years due to unaffordable mortgage payments!!

Class post :rotfl:

System

Well, I bought in 2007 and don't regret it one bit, I have a home for me and my Fiancee to live in, my mortgage payments are tiny and I've cleared £10k of the balance already.

Make of that what you will. If you want an investment then it might not be a great choice, but if you want a home, you can either spend the next 2 years fretting over house drops that might not even happen and watching mortgage rates go up or you can just get it over and done with and stop having to worry about it.

PasturesNew

Inflation, deflation, hyperinflation .... one word each covering many things.

Only you know what you need to focus on. But it's like the old chinese water torture as report, opinion, newspaper, news programme keep drip, drip, drip, dripping various viewpoints with VI spins and scaremongering one way, then the next.

Inflation - might be just the price of food
Hyperinflation - might be the price of transport
Deflation - might still be the price of houses

You'd need to watch and measure your own personal lifestyle, aspirations and finances against each of the scenarios and pick your moment.

On the other hand, you can do what I am doing, which is nothing. I have stuck my blinkers on and am refusing to get scaremongered into buying for another 2 years or more probably .... but then my situation is different to yours and to everybody else's. For starters, I'd need a permanent job that I liked, in an area I liked, before I could even think about buying.

Just don't get spooked, don't make any knee-jerk reactions.

I have no bl00dy clue what's going on .... so I have to take comfort in the fact that I've made my decision and I am sticking to it... no buying for 2 years minimum.

ruggedtoast

I will be buying somewhere at the end of the year regardless as thats when itll be right for me.

If you want to look at the fundamentals however; prices, of anything, are informed by a matrix incorporating buyers ability to pay, correlated with supply and demand.

First time buyers underpin the housing market and most of them need a mortgage. If rate increases lop £15k off an ftb's purchasing power then ftb houses fall by £15k and ripple up through the chain.

People who dont understand this (of which there are plenty on the internets) who start rabbiting on about "theres too much demand theyre not building any more land innit" - can safely be ignored.

They dont know what theyre talking about.

Ergo I wouldnt worry about it too much. The worst of both worlds however is getting a high rate fix before price falls have fed through. A double whammy.

JonnyBravo

ruggedtoast wrote: »

The worst of both worlds however is getting a high rate fix before price falls have fed through. A double whammy.

But rate fixes aren't high at the moment, so why would he be doing that?

Cannon_Fodder

It might be best to focus on whether you have found, or will find shortly, the right house.

If you aren't particularly picky, say anyone of a dozen houses on the market now, is in the right school catchment, right distance for work, right number of bedrooms, right sort of garden, reasonable re-sale features, (and whatever else influences you) etc; and its likely that a different dozen, also matching your needs, will be on the market in 6 months, 12 months, 18 months, then you can bide your time a bit longer, to find a bargain amongst them. Or one that has 98% instead of 95% of what you want/need for the same price...

However, if you have detailed needs and tastes, don't see houses you like/want very often, then whilst you don't exactly have to rush, you might want to start getting yourself geared up for a post-summer buy...and hope that one house comes along.

Sept/Oct could bring fresh doom and gloom, as the spring bounce stops being reflected in various lagged figures, resulting in more sensibly-priced properties, more often. (While still being ahead of major interest rate hikes, probably.)

Whether the right house is amongst them, only you will know.

bendix

Dan: wrote: »

everyone on this forum spouts nothing but rubbish .

Speak for yourself Dan.

My stuff is certified 100% brilliance.

:rolleyes:

SandC

I say if you have found a house you like now, you can get the mortgage, you can afford the payments, you have contingency (in case you don't decide to go for a long term fix, say) then I really wouldn't worry as you are planning on staying there for many years.

If it's worth anything, many people urged me not to buy back when I did in 1995, saying I would end up with negative equity. My response was that mortgage payments would be the same on the type of house I intended to buy (2 bed terrace) as the rent on a one bed flat, I had no intention of selling it any time soon so where was the problem?

I never did get into negative equity. True enough the value didn't rise in 5 years but I was able to afford the hike in interest rates after my fix came to an end (you used to be tied in for 2 years - they replaced that with the arrangement fees and penalties for leaving early) as I saw rent rise.

If it's right for you then go for it.

Most people who buy at the 'right' time only do so through chance.

mewbie_2

Unemployment going up.
House prices going down.

What's a poor boy to do?