Should I Buy? BBC News sowing doubts

lightspeed

movieman wrote:

If you're borrowing 3.5x your _combined_ income, I hope you don't plan to be unemployed or have kids. There's a reason why banks usually used to only lend up to about 2.5x a couple's combined income, or 3.5x a single income.

Fair comment. However, knowone plans to become unemployed and if every decision that you made was done so with this attitude you would lead a very boring life. Everything has an element of risk attatched, you need to make sure that each one is calculated.

At those multiples affordability at current rates is no issue at all (and that is with the mrs having a horse that costs around 200 - 300 squid a month). If rates reached 8 - 9% things would be very tight but not impossible. 10+% and we would be struggling (and whether the mrs liked it or not the horse would have to go). Dont forget this is at our current incomes and assuming that we have paid no capital off the mortgage. Furthermore, if we had a mortgage within those multiples (2.75) and became unemployed we would probably struggle anyway albeit by a little less.

I class myself as a highly qualified and employable person and should have no trouble finding alternative employment even if it came down to working at a fast food restaurant just to cover the mortgage.

I agree that if you cant handle IR hikes of at least 3 -4%, you are stretching too far.

Multiples just dont apply as strictly these days as they dont provide enough borrowing capacity within todays market.

Angela_D_3

I must say I disagree about the North/South prices, you can buy the same house in Harpenden Herts for £200k as you can just outside Chester the huge difference being that most of the residence or main bread winners in Herts travel into Londn and command salaries almost double that of a solicitor or banker in the north west.
It's utter madness, most people near to us are self employed accountants, small business' or civil servants and when you ask them could you buy your own house now the answer is NO.

BobProperty

lightspeed wrote:

....(and that is with the mrs having a horse that costs around 200 - 300 squid a month)....

That's a cheap horse by my reckoning, good job she doesn't have an expensive one

lightspeed wrote:

....(and whether the mrs liked it or not the horse would have to go).....

Careful she doesn't choose to get rid of something else when you give her that ultimatum...;)

Can I do my Football Managers that go on to train racehorses joke?

summerday

You can never know what will happen. 2 years ago OH and I wanted to buy a house together, we had a good deposit but everyone told us we'd be crazy to buy, there would soon be a crash and we'd be in negative equity, and all the rest. Well, we decided to just go ahead with it as we don't ever want to move out of this area anyway, and we wanted somewhere we could really make our own, even if we did lose the money we'd put down as a deposit if prices fell...well, we'd have been paying rent anyway and effectively have 'lost' that money to a landlord anyway. So we bought thinking that prices would probably drop by a few thousand over the next couple of years or at best stay level. But 2 years on we have just had a surveyor come round for the re-mortgage and the house has risen by at least £10k. Our incomes have risen since we bought so we're better able to afford any increases in interest rate.

We wouldn't have risked it if we hadn't had a big deposit, bnor if tehre was any chance we would need to move in teh next few years.

nollag2006

Angela_D wrote: »

... you can buy the same house in Harpenden Herts for £200k ....

£200k for Harpenden ???

I think not !!

Most houses in Harpenden go for well over £1m, which is why I like the place

jackie_w

Am I right to assume that the house price crash will only affect people who are buying houses as an investment?

Reason I ask is because Hubbie and I have just bought a property (we're not FTB), and have taken on a bigger mortgage than we had before. We have decided to go for a 5 year fixed rate deal. Im thinking we're doing okay by taking a fixed rate for 5 years (5.49%).

We dont plan to move again until the kids are up an away, and we're unable to get up the stairs:rolleyes:

Jackie

Bargain_Rzl

jackie_w wrote: »

Am I right to assume that the house price crash will only affect people who are buying houses as an investment?

...

We dont plan to move again until the kids are up an away, and we're unable to get up the stairs:rolleyes:

No, it will also affect people who bought their house as a home, but then need to sell it (job relocation, needing to move closer to sick relatives, wanting to move in with a partner...)

hearts

LondonFTB wrote: »

Ha! there are plenty of people who tell me not to worry, that prices always go up in the long run. Didn't someone else say we're all dead in the long run though? What I would give for a crystal ball right now!:rolleyes:

This is a FACT. INDISPUTABLE. If the OP is intending to stay in the house for the long term then he has absolutely nothing to worry about.
Go ahead and buy and stop worrying.

irnbru_2

meanmachine wrote: »

Think Evan Davies is great, but Jaysus the 10 OClock News is really dumbed down these days.

The OP might want to listen to The Price Of Property

sanfrancisco

hearts wrote: »

If the OP is intending to stay in the house for the long term then he has absolutely nothing to worry about.
Go ahead and buy and stop worrying.

ONLY IF you don't borrow too much.

Interest rates do and will go up.

People get ill and are made redundant.

People have babies.

As long as you don't overborrow and prepare for a rainy day you SHOULD be OK.

Having said that will you feel stressed/depressed if you have a 200k mortgage and your in 100k negative equity. If this will not bother you, go ahead!