Not a good time to buy

Harry_Powell

carolt wrote: »

Of course Harry - that's absolutely true.

We're discussing someone in no particular hurry with no other factors influencing their decision.

In reality, things don't usually pan out like that. Other factors usually play at least as large a part as financial ones.

But given they're all unique and individual, they're impossible to generalise.

Financial factors however, apply equally to everyone.

Hence there is a point in discussing them in isolation.

As you say, it's impossible to generalise and everyone's financial position is unique and individual, so one wonders how anyone can state that 'now is not the right time to buy'?

It might not be the right time for the OP to buy for financial reasons, it's not the right time for you to buy due to personal reasons (schools, I believe) but it will be the right time to buy for other people.

Seems to be a bit of a pointless exercise in creating threads like this, unless the OP is requesting direct advice in regard to his own personal and financial situation, which I don't think he is.

chucky

carolt wrote: »

So do you expect the person buying now to take out a 25 year fixed rate? Or surely interest rates going higher will affect them both equally?

As you well know, long-term fixed rates are far from low at the moment - for rather obvious reasons.

If the person buying now takes a typical 2-3 year fix, at the end of that, they're in exactly the same position in 3 years time as the person who chooses to buy then.

It's prices you need to compare - interest rates are a red herring.

no that's not what i said at all - it's the first 3 years that he's not buying and the last 3 years that he's decided to postpone buying for. that's where he's exposed to interest rates the most as that's what he's gambling on.

carolt wrote: »

It's prices you need to compare - interest rates are a red herring.

i disagree - the ticket price of the house is one thing.
the actual price you will paying for the house including your mortgage increases or decreases your costs of buying a house.

Hamish, Realy and I bought at peak or just after peak with a 0.5% tracker or something - if you compared that to the average SVR or fixed rate at the time he's made a good decision. buying on the SVR or fixed rate of the time wouldn't have been a good idea. they've been able to clear between 10% and 15% of their mortgages in short periods of time reducing the term of the mortgage.

so interest rates are very important.

carolt

Agrree that interest rates are very important. But in the example we're considering:

He can't now buy 3 years ago - the chances of interest rates staying at the lows they are currently over the next 3 seem remote.

And if he had bought 3 years ago, there's only a small chance he would have bought a tracker. He could well have bought a fix and be worse off compared to renting.

carolt

Harry_Powell wrote: »

As you say, it's impossible to generalise and everyone's financial position is unique and individual, so one wonders how anyone can state that 'now is not the right time to buy'?

It might not be the right time for the OP to buy for financial reasons, it's not the right time for you to buy due to personal reasons (schools, I believe) but it will be the right time to buy for other people.

Seems to be a bit of a pointless exercise in creating threads like this, unless the OP is requesting direct advice in regard to his own personal and financial situation, which I don't think he is.

Well, by the same criteria, all threads discussing possible future direction of house prices are 'pointless'.

Me, I find them quite interesting food for thought.

Maybe you're on the wrong board, Harry?

Harry_Powell

carolt wrote: »

Well, by the same criteria, all threads discussing possible future direction of house prices are 'pointless'.

Me, I find them quite interesting food for thought.

Maybe you're on the wrong board, Harry?

Not at all, the OP is not discussing the 'possible' direction of house prices, he is stating that now is not a good time buy, which as we've already established is impossible to determine as generalised advice.

I think it's interesting to discuss the pros and cons of various financial strategies and the impact they may have on the wider economy or on house prices in general. I don't think it's possible to tell other people definitively to buy/not to buy a house based on one's own limited criteria and finances.

As someone who has repeatedly stated that her house purchase is based on her daughter's schooling and not on the movements of house prices, I'm surprised you're taking such a stance?

carolt

I don't really think that any of us are in a position to 'tell' other people 'definitively' what to do.

This is only an internet forum read by few.

Personally, I find reading others' opinions interesting.

If you don't, why are you reading this thread???

Just wondering.

N1AK

HAMISH_MCTAVISH wrote: »

That is pretty much certain.

In your opinion, which I don't hold in quite as high regard as you yourself I would not be shocked to see prices never reach that low again in real terms nor would I be to see prices drop perhaps 5-10% below the previous low in actual terms.

HAMISH_MCTAVISH wrote: »

But didn't you think the same thing at what proved to be the optimum point to buy?

I wasn't in the position to buy until the later half of 2009. I can't say for certain, but I do believe I would have tried to buy into the market in spring 2009 if I had been able (prices had dropped sufficiently that I thought the risk of a further severe drop wasn't too great).

With house prices having risen sizably by the time I was able to buy I feel the potential loss of value has already reached a point where it outweighs the risk of potential growth in value.

Harry_Powell

carolt wrote: »

I don't really think that any of us are in a position to 'tell' other people 'definitively' what to do.

This is only an internet forum read by few.

Personally, I find reading others' opinions interesting.

If you don't, why are you reading this thread???

Just wondering.

I completely agree with you, but that doesn't seem to stop certain people from trying.

I think you should re-read the exchanges we have had on this thread, we seem to be completely in accord in all that we have posted. I therefore don't understand why you wish me to stop reading this thread or contributing to this board?

silvercar

N1AK wrote: »

With house prices having risen sizably by the time I was able to buy I feel the potential loss of value has already reached a point where it outweighs the risk of potential growth in value.

In the short term or the long term?

You only realise the loss if you sell, if you hold on long term any dip in a property's value wouldn't effect you.

Procrastinator333

This thread discussed early on that I was really only talking in pure monetary terms and was in complete agreement that there may be other factors that render monetary value redundant.

Of course this thread is a comment on the direction of house prices. My first post list out various pit falls I see in front ot the UK and by association the UK housing market.

The point I was making, and it really went hand in hand with another thread I put up was that so long as prices are flat or falling, you lose nothing and everything to gain by renting. Imo the factors I discussed on the front page make me think house prices will at best stat flat for this coming year, or possibly fall.

Hence imo, in monetary terms, you have little to lose by waiting and everything to gain, so why buy?

Silvercar - I would disagree, you don't only crystalise a loss if you sell, you crystalise the loss every month you make your mortage payment if the person next door is paying 20% less for the identical house. Some don't see it that way and fair enough.

Harry, the title is a little blunt (but that seems to be the way on here), but my first post contains:

Procrastinator333 wrote: »

There are so many different ways the housing market can take a hit in the above that I am left as a very happy renter. With all this hanging over the UK, why not wait for 6-12 months and see how this plays out?

Can the UK avoid these scenarios? What alternative scenario do you see? Genuinely curious, does any one see a path out of this mess that doesn't end badly for the UK economy?

I leave open points and ask question in my opening post, imo that isn't saying definately don't buy, but hey we all read things differently.