Advice on when to buy as a 1st time buyer please!

phlash

VIGILANT22 wrote: »

Past Performance is No Guarantee of Future Results...I would have hoped that most people would have been aware of this by now...

Couldn't agree more.

phlash

Running_Horse wrote: »

And yet you failed to address it in any way whatsoever.

There is a house price forum for those wishing to predict house prices.

Here is an opinion of mine then....

"Some key reasons why I think house prices are not going to rush off anywhere:

Biased data - Recent house rice rises have been based on very low transaction volumes. If you look at how they have been bought, it is with a large deposit (i.e. spare cash has been soaked up). These types of purchases have, on the whole, been of larger/better quality houses - naturally more expensive. With a lower volume of sales, this trend distorts the average, hence you get monthly price rises. However, your basic bread and butter housing is still selling at depressed prices, if selling at all, because the likely purchasers are struggling to get credit, next point.

Lending - 'Normal' purchases have smaller deposits and rely heavily on bank lending. The banks still have no appetite for lending on property. They do need to 'repair' their balance sheets, and at the moment the banks are not sold on turning the credit taps on.

Debt levels - There is no need to over egg this point, we are all fully aware there is a lot of debt. But, it is MASSIVE, and it could get more expensive for the UK if their credit rating is lowered. Yes, that means more tax on us, in order to pay the interest on the money the UK government has borrowed. More tax = less spending power.

Public sector cuts - The UK economy is highly dependant on the public sector. Any cuts to the public sector greatly affect the UK economy. There is no need to prove the relationship between economic output and house prices, this is straightforward and well documented. Public sector cuts will be large after the election, they have to be because of the huge debt levels the UK has.

UK bubble - The UK housing boom, saw one of the biggest growths out of all the developed countries. Other countries, with much smaller bubbles (the US) have reacted downwards far more aggressively. Our leading indicators therefore put us standing on a pretty crumbly and rocky edge, certainly not built on solid foundations.

Interest rates & fiscal stimulation - A 0.5% base rate is incredibly low, lets not forget this. The government has printed billions of pounds in order to sure up the economy. This is not real money, it was simply printed (well pumped electronically). Even with such drastic action, the UK economy posted just a 0.1% growth in GDP, this was a tragic result for such unprecedented action. It is a sure sign that the 'recovery' is to be a long and sluggish affair. Post election, we may begin to see more of this unfold. To that effect, house prices are directly related to the economy and could perform very badly.

Wages - In order for house prices to rise, you need wage inflation. There is none. Lenders will not return to the lending criteria in the 'good years' and therefore house prices will be naturally depressed by a cap on lending multiples. If this is capped and earnings are not increasing, then prices cannot sustainably rise, as the market is heavily dependent on mortgage borrowing, and mr and mrs average do not have the cash to purchase without borrowing.

Enough for now, this is far longer than intended."

GSXRCarlos

firsttimebuyerz wrote: »

..........QUOTE]

Hiya mate, congrats on getting the mortgage offer.

All i can say is buy when the time is right for you, if you desperately want your own place and have to get out, now is the time for you.

Couple of questions, how much deposit have you got compared to the value of the properties you're looking at (i.e. Loan to Value ratio (LTV))

And have you worked out/been advised on the monthly repayments, can you afford these, even if one of you loses your job?

Check rightmove or upmystreet for an idea of sold prices in the areas you're looking at

and talk to 'local people' about their experiences of prices in the last couple of years.

spend a lot of time reading on the internet to get the right picture for yourself.

i bought a property 12 months ago, and while it's costing me money to fix up etc, it's the only way i could afford to do it - so was the right choice for ME :j

Fire_Fox

phlash wrote: »

Being able to take those indicators and formalise a balanced view is the key skill.

Did the people who invested in the internet in the early 1990's get lucky?
Did the people who sold their shares in 2006-07 get lucky?
Did people who invested in gold in the last 5 years get lucky?

Maybe some did, but many looked at the indicators and formalised a view. Simply shutting ones eyes and pretending that current conditions have no impact on future ones is quite ignorant, and unfortunately an understanding held by many.

I suspect the people who didn't get lucky did not do their research by straw polling a cross section of society on an internet forum! Few of us are qualified, knowledgeable or experienced enough to do more than guess - a guess clouded by how our lives have been affected by the recession.

phlash

Fire_Fox wrote: »

I suspect the people who didn't get lucky did not do their research by straw polling a cross section of society on an internet forum! Few of us are qualified, knowledgeable or experienced enough to do more than guess - a guess clouded by how our lives have been affected by the recession.

Even you're gonna tease me today!

Indeed, but many of the replies do come from people who have done a bit more than just straw poll cross sections of society on internet forums!

Unbelievable....never knew it could be so contentious. All* business decisions are made in the manner that I have stipulated, thought it wasn't too big a gap to bridge to the biggest financial decsion that most people make in their lives.

*Not all! Before I get hammereD!

firsttimebuyerz

Thanks all of you for your replies, I wasn't really expecting anyone to predict what was going to happen to the market! I guess I was just looking to gain an insight into different opinions as to whether to wait or go for it. Which you've given me, so thanks!

GSXRCarlos, we are fortunate enough to have put together a 40 per cent deposit for the sort of thing we wish to buy. Yes, we've been advised on our monthly repayments and have calculated that we should be fine to meet them (in fact, we ought to be better off than we are renting).

GSXRCarlos

That's great news, if you see enough information to put you off buying, then wait

but i suggest you consider buying now, especially if your circumstances allow.

If everyone waits, as you suggest, demand may outweigh supply after the election and therefore force prices up

there are two sides to every story, you just have to pick one, unfortunatley

Good luck mate:beer:

phlash

GSXRCarlos wrote: »

That's great news, if you see enough information to put you off buying, then wait

but i suggest you consider buying now, especially if your circumstances allow.

If everyone waits, as you suggest, demand may outweigh supply after the election and therefore force prices up

there are two sides to every story, you just have to pick one, unfortunatley

Good luck mate:beer:

That's a pretty one dimensional way to pick a side.

In the OP's circumstances, I would not be too bothered about buying at the moment, in fact I probably would if I found the house I wanted at the price I wanted to pay.

GSXRCarlos

phlash wrote: »

That's a pretty one dimensional way to pick a side.

In the OP's circumstances, I would not be too bothered about buying at the moment, in fact I probably would if I found the house I wanted at the price I wanted to pay.

so, like me, you're as much use as a chocolate tea pot :rotfl:

to the OP, you can see how difficult this is

"The choice is yours"

phlash

GSXRCarlos wrote: »

so, like me, you're as much use as a chocolate tea pot :rotfl:

to the OP, you can see how difficult this is

"The choice is yours"

It would be on the basis that I know I could ride out 20% falls without it effecting me getting another mortgage on reasonable terms.

I am a house is a home type person, but I will apply all the indicators to aid me in my decision. In my own circumstances, and without such a large deposit, I will not be buying.

It's not as simple as being bullish or bearish, of which btw, I am bearish on the housing market as you might tell. But given the right circumstances, I would still buy, in fact have (just not a home).