House Prices - Which way are they headed?

ad9898_3

chucky wrote: »

will there be that much of a saving against the increased cost of a mortgage?

Unless you can fix low for 25 years, no one really has any idea where mortgage rates could go over that time period, they maybe relatively low over say the next 5 years, then be over 10% for 10 years or more, no one knows.

What you can know though is the actual price you pay for a house now, pay over the odds or have too larger a mortgage, and you are a hostage to fortune over that time period.

Smallest mortgage possible is where you want to be, not the lowest IR, unless like I say you can fix for under 6% for 25 years.

chucky

ad9898 wrote: »

Unless you can fix low for 25 years, no one really has any idea where mortgage rates could go over that time period, they maybe relatively low over say the next 5 years, then be over 10% for 10 years or more, no one knows.

this is exactly the same as buying when house prices are low or high - we don't know the future.
25 year fixes are unlikely to be around for at least 5/7 years.

fortunately you are in a good position where you could buy with savings - the very large majority of people are not in the luxurious position that you are in and have to get a mortgage to buy a house.

unless people were in the same minority as yourself it would never be a good time to buy with a mortgage.

ad9898 wrote: »

What you can know though is the actual price you pay for a house now, pay over the odds or have too larger a mortgage, and you are a hostage to fortune over that time period

this isn't like buying shares in BP, you can't just buy online or call a broker to buy 200 shares. it is a long process to buy a house and unlike shares most houses are very different and the same house that you really like may not be on the market for the next few years. from what we are seeing now the very low supply of property is a very good example of this. that same house may not come on the market again for years.

also, don't forget if you live in a house long term how many house price crashes/corrections will you go through in that time you are there - it's not like selling shares and then re-buying them when they're cheaper again. you have to think about the impact on your family? what about the furniture? the large amount of money on stamp duty and many other factors.

it's very easy to say these things but buying a house isn't just making a phone call to buy or to sell.

ad9898 wrote: »

Smallest mortgage possible is where you want to be, not the lowest IR, unless like I say you can fix for under 6% for 25 years.

with the low amount of mortgage funds on the market we won't be seeing these deals for a very long time, are there any on the market now. when base rate was around 5% these deals were in the region of 7.5% to 8%. so saying to wait for these deals is not logical, by the time they do come back the property market will have the momentum and base rates will have returned to "normal" behaviour and you'll have missed on a good price property.

it will be very difficult to get a good price property and a good mortgage rate. very few will get this opportunity.

wolfman

I think they'll stagnate too, and some areas drop a little more, where those areas need to catch up with the rest of the market.

But once interest rates start to go up, I think it'll drop a little again (-5% maybe). Mortgages will be more expensive, and harder to get. So purchases will probably drop.

People may get tired of waiting and reduce their price to sell up. Or people may struggle to make payments given the increase in interest rates. Either way if purchases continue to remain low, then the market is only going to stagnate or go downwards.

Purchases are only going to increase if a) prices drop to more affordable levels, or b) you can get an affordable mortgage easily. Given interest rates increasing, b) is less likely. Also if purchases do increase (maybe due to price drops) then mortgages will begin to become more competitive, so good deals will still be available.

I don't think it's the end of the world if you don't buy now. In fact I'd rather wait anyway. Just keep saving. As long as you're saving more than houses are increasing in price by, then you're ok. It's worth waiting a little longer, and buying comfortably, than buying now and being stretched prior to rates going up.

HAMISH_MCTAVISH

wolfman wrote: »

As long as you're saving more than houses are increasing in price by, then you're ok.

How many people do you know that saved more than £2300 last month?;)

Or more than £8000 since february?

Playing the waiting game was risk free last year. It's far from risk free now.

ess0two

I think the next 36mths will see marginal rises/falls.

robin_banks

In the short they'll go up slightly, historically more houses are purchased in the spring and summer months. We've also low interest rates and a relatively low supply i.e. not many houses on the market .

We'll get more distressed sellers through higher unemployment and couple this with the likelihood of increased interest rates then we'll see further falls.

Then stagnation, probably for a few years.

carolt

All the BTL landlords have been busy on this thread.

BUT Prices are going to fall further.

End of.

chucky

carolt wrote: »

All the BTL landlords have been busy on this thread.

BUT Prices are going to fall further.

End of.

yep - end of.
house prices have further to fall.
FACT.

bo_drinker

http://www.youtube.com/watch?v=bNPJuJSVmNA

carolt

chucky wrote: »

yep - end of.
house prices have further to fall.
FACT.

How nice to see we agree, chucky.