Are House Prices still Falling or Rising?

Cannon_Fodder

[IMG]http://www1.landregistry.gov.uk/houseprices/housepriceindex/report/default.asp?g=1&gt=1&a=Manchester&ac=North West&s=01 January 2008&e=01 August 2009&t=4[/IMG]
Is the Manchester "up-tick" going to continue, or dip down again like the North West...?

Even the most positive types over on the House Price forum expect a downturn in prices over the winter.

AliceBanned

Hi all

I tried posting this as a separate thread on "House Buying" but received no response. Thought it might be worth adding it here to try and see what people think.

For about two years now I have been planning to buy a housing association flat which I also live in. Every six months I have applied and either not been able to get a mortgage or because of work at the time the situation wasn't right. this means I've been given four offer notices after fresh valuations from an independent surveyor. The first price surprised me in being so low at £85k (one bed flat). It has now gone down to £72k which is good for me but even so I need 75% LTV so it might just be manageable. The reason for my post is my surprise that over the past six months the flat's valuation has lowered by £6k. I had expected it (according to recent new stories etc) to have risen a bit; either the trends being reported on in the media are exaggerated, or the housing association is happy to have the money and take a low valuation. It is a very good price for a flat in Hertfordshire and it is lower than average as it is on an estate, but that doesn't bother me as I live here and already know that it is pleasant enough. I have pondered waiting another three or four months to save myself a few more thousand, and of course no one knows which way things will go but this has made me suspect that anything could happen and no one knows when is the best time to buy. Any advice appreciated - I am keen to buy now but would really appreciate any input so that I can ponder on it a bit more before I decide for sure.. By the way I pay £320 pcm rent and a mortgage on this would cost me £400-£450. Thanks

Cannon_Fodder

[IMG]http://www1.landregistry.gov.uk/houseprices/housepriceindex/report/default.asp?g=1&gt=1&a=Hertfordshire&s=01 January 2008&e=01 August 2009&t=1[/IMG]
Alice, same as for Manchester really; Is the up-tick going to go on? No-one knows.

Low supply of decent houses seems to be propping up prices for now. Flats however are showing signs of being the worst hit of the different types of property - in part because of over-supply of new-builds. That was/is probably filtering down into second-hand flat prices.

If enough sellers think that "its all over", and a "safe" time to move without getting their asking price hammered down, then it could increase supply to help prices ease on their own.

Many people think winter will see further drops, due to reduced demand that often happens, as few people want boxes instead of a Xmas tree in the corner of the lounge...

AliceBanned

Hi

Thanks for this - it is strange that the offers I have had to buy the flat do not follow the general Hertfordshire trend. I do think there is chance of a further decrease but as you say it is so uncertain. I have found that councils tend to use conservative valuations, perhaps because unless they do the properties will be unmortgageable. I don't think they overinflate the prices in general so it is a fairly safe bet for me to go ahead soon...

JimmyTheWig

Alice, very few people think that prices are going to shoot up over the next year or two. So buy when you are ready.
If prices go up by 1% and you waited then your mortgage would go up by £4 a month. I presume that's not going to break the bank (if so, you shouldn't be buying!).

It sounds like a very good price, but then the rent sounds very good, too.
If you're thinking about buying, just ask yourself the usual questions - can you afford it and can you see yourself living there for, say, the next 5 years?

The only other thing I would say is to check what other bills you will be liable for that are currently covered by your rent or not currently applicable.
E.g. ground rent, service charge, council tax, water rates.

morg_monster

TrickyDicky wrote: »

In woking, some houses seem to be selling within a few days of going on the market, especially in the 3 bed range. Havnt seen any rise in asking prices yet, but they seem to have stopped going down.

same in nearby Walton and Hersham,where we want to buy, although there are quite a few houses which have been on for months and not moving, any that come new on the market get snapped up within a week. Its making house hunting tough, we are having to take hours off work here and there rather than going for several viewings at the weekends as there's no guarantee the houses will be around that long.

one in particular went on the market on weds, we saw it on sat and loved it, rang on monday first thing to arrange a 2nd viewing, then were called back a few hours later and told it was sold. Still trying to get the offer out of the EA - we don't want to gazump but interested to see as we thought it was quite overpriced...

michaels

You need to keep tabs on your local market - mine was down 20% from peak at the start of the year but has come back up to less than 5% below - every area is obviously different.

AliceBanned

JimmyTheWig wrote: »

Alice, very few people think that prices are going to shoot up over the next year or two. So buy when you are ready.
If prices go up by 1% and you waited then your mortgage would go up by £4 a month. I presume that's not going to break the bank (if so, you shouldn't be buying!).

It sounds like a very good price, but then the rent sounds very good, too.
If you're thinking about buying, just ask yourself the usual questions - can you afford it and can you see yourself living there for, say, the next 5 years?

The only other thing I would say is to check what other bills you will be liable for that are currently covered by your rent or not currently applicable.
E.g. ground rent, service charge, council tax, water rates.

Thanks for your advice. I have been waiting for several years, and renting for 20 years so the patience will run out soon! I have taken everything into account, yes water rates are £7 per week currently included in rent, but council tax is not included. There is a small service charge of £300 per year which I will have to pay but is included in the rent at present. There are also possible charges up to about £7k for any major repairs but I will get the solicitor to check this out to make sure I am not at risk of being asked for huge sums at short notice. I will stay in the property for three years perhaps and then see what my situation is but it will give me at least a bit of equity, all things going well, rather than the present zero!

JimmyTheWig

Sounds like you know what you are doing.
If it "feels" right then go for it. Don't worry too much about what house prices will do.

franklee

Hi AliceBanned, neat name

I take it you have set all the figures down to compare buying vs renting. At face value it doesn't look like buying would be worth it for just three years occupation.

Assuming inflation at zero renting is 7k + one off costs cheaper over the three years:

Rent is 150 pcm cheaper than mortgage, 150*12*3=5400
Water rates, 7*52*3=1092
Service charge 300*3=900

Total extra cost of buying just for the known costs over three years
5400+1092+900=7392

Then there is the change in the price of the flat, £85k to £72k over the last two years.

Obviously you will get a little bit of interest on your savings and if a repayment mortgage you will have paid off a bit of the loan. Interest rates are likely to go up over the next three years.

Then there are one off costs: Solicitors, EA etc. buying and selling fees. Any major repairs.

So in buying you would be exchanging known savings of £7k+ one off costs for unknown fluctuations in the price of the flat, all for three years