Should i put my savings into bricks and mortar?

carpy

i still live at home and am happy to for a while yet but i'm constantly worried that i'm gradually being priced out of the property market (if not already!).

property prices are continuing to grow and reports this week suggest a surge in prices again over the next few years, and by 2010 or 12 the average price will be £300k!!! :-(

i have a very moderate income but due to being a scrooge have substantial savings.

i'm thinking now could be the time to get a foot on the property ladder.

my two options i'm considering are;

1) buy a share in my mum's house
2) buy my own property (but i wont be living there!)

i think if i invest in a property it's going to grow more than keeping it saved??......plus i've got a foot on the property ladder

any thoughts?

ollyshaw

carpy wrote:

i think if i invest in a property it's going to grow more than keeping it saved??......plus i've got a foot on the property ladder

any thoughts?

Can of worms opening up.....

Basil_Hume

There are plenty of people who will have strong views either way.

Ultimately, like the best investments, you have to buy low and sell high to reap the biggest reward. A good property in an undervalued area will grow your money more than the market average, even in a time of general stagnation. But buy unwisely - or even averagely in a falling market - and you'll suffer!

afro_2

Today's MoneyWeek email was a good one...
http://www.moneyweek.com/file/15603/can-uk-house-prices-really-jump-another-50-by-2011.html

F_T_Buyer

Search the posts i've made on this site. Now is not a good time to invest in property.

Although, buying a share of your mums house is a new one i've heard!

babitat

If you are being priced out then what happens when interest rates rise? Have you factored in a few % points rate rise to your calculations?

Remember that houses are in demand now because they are seen as money making investments - a slight chage in interest rates will have a huge impact in available housing from BTL investors not making any profit, and people selling their houses due to unaffordable mortgage and remortgage payments.
Once people start to realise they will only make their profits by selling their houses then the tide will turn very quickly and I believe the market will crash.

For these reasons I will be renting and saving towards a bigger deposit ready for the market to bottom out again. Boom and bust is still with us - this boom has lasted so long that people have started to trust it. You lose nothing by waiting a couple of years - remember that if you can't afford to buy a house then people can't sell a house.

Jim_B_3

I'd say no, and I have already put my money where my mouth is (or rather, I've ensured that none of it invested in residential property, to the extent of pulling it out of firms that I think are exposed to residential property).

Although I'm not sure where to put it; I'm nervous about inflation, so cash isn't as secure as it once was. Utilities? Krugerands hidden in the freezer?

lynzpower

Jim_B wrote:

I'd say no, and I have already put my money where my mouth is (or rather, I've ensured that none of it invested in residential property, to the extent of pulling it out of firms that I think are exposed to residential property).

Although I'm not sure where to put it; I'm nervous about inflation, so cash isn't as secure as it once was. Utilities? Krugerands hidden in the freezer?

russian oil companies? ?

Jim_B_3

Ha. The ruskies won't even pretend to do any accounting like Enron, they'll just take all the cash and go home. I like India for the long term, providing people don't start lobbing nukes around.

lush_walrus

Only you can decide what to do, there have been arguements about bubble bursting for the last 10 years. Whether it will or not is only speculation amongst 99% of the population, the only people who actually know are the B of E (if they raise interest rates higher than 1/4 percent the bubble will probably burst) and banks (who effect affordability through the amount they are happy to lend through multiples of wages, increasing the length of the loan to help affordability etc). While people are on paper able to afford repayments prices will rise.

stphnstevey

F_T_Buyer wrote:

Search the posts i've made on this site. Now is not a good time to invest in property.

Although, buying a share of your mums house is a new one i've heard!

Two cents worth:

I think deciding whether to buy your first house is like deciding whether you can afford to have kids. There is never really a good time and if you sit and wait for that 'good time to buy', then it might never happen.

A bland statment like 'Now is not a good time to invest in property' is ludicrous. Not a good time for who? Him? or you? or does he mean the 300 billion people out there who are all different. Everyone's circumstances are different and what might be a bad time for someone could be the ideal for someone else.

I presume you are looking for a 'home'. Again this is a different sort of investment than buying a BTL and money only plays a small part in that decision. What might be an ideal time in your life for buying a home might not be an ideal time to invest in a BTL.

Ok, so property prices might not be the lowest they have ever been, but there not the highest they have ever been either. If your in it for the long term and can ride out the peaks and troughs, then you have nothing to worry about.