First-time Buyer fear - Will house prices crash??

F_T_Buyer

Bil2 wrote:

I think that some of you doom-mongers are missing the point of WHY people buy houses to live in.

People buy houses so that after 25 years of paying a mortgage, they will own the house outright (hopefully before they retire!). For those of you in rented acommodation sitting around waiting for a crash- whether the value of my home falls or not (presuming I can meet the repayments if the interest rate soars)! at least I will not have to make anymore payments on my home once I'm retired.

To me, this is the major reason why most people buy a home to live in.

Are you refering to all those buying on interest only? Clearly not.

lush_walrus wrote:

The thing with all of those people who state so clearly about the doom of the housing market is, if they are so sure why not just know that for yourself, rather than get so frustrated and so animated about those who dont agree. If those who think the housing market is not going to drop are so wrong, then why really would anyone worry, as with anything in life as long as you know what you know then that is good enough surely?

Why does Martin Lewis run this site? Why does he speak to the media mentioning how companies are ripping the public off, and offer ways to avoid extra charges.

We are not all that greedy, some of us here (like me) argue why property has risks, which people (bulls) seem to totally ignore. Could you imagine if all the so called "doom mongers" wasn't here? I'm sure many posters would go blindly into the property market thinking it is a one way investment.

Look how you talk about banks lending, I bet you have very little idea of how the markets work. They are not smart, they are greedy. The lax lending criteria they have is purely to increase profits, and satisfy their shareholders.

Infact, why do I bother? Most people here only want to believe that property rises, and get angry at any counter arguments that comes along. Well I'll say what any FTB should do:

If you want to buy, buy. If you are borrowing money to do so, make sure you can fullfill your obligation to your lender if the worst happens (interest rate rises, unemployment etc).

If you want to invest in property, make sure it is an investment, and you are getting a high enough return to cover any increased costs (IR rises, maintenance) and other downsides (tax, voids, hassle).

If you want to make money on property through speculation (like most threads here), go ahead - but don't say you weren't warned!

Bil2

If you were to buy a propery and pay off the mortgage before you retire you will have no further payments on the house to make. If you stay in rented accommodation, you will have to continue to pay rent afer you retire until your dying day/until you are shipped off to an old peoples home! This was my point.

manhattan wrote:

everyone is in a different situation.

i am in a situation of low rent/nice area (£260 a month) 2 bed semi.

we have saved a large house deposit.

i dont fancy buying towards the top of a housing market and see my hard earned savings be wiped out.im sorry i cant take that risk!

so in my position,i can sit and wait until things look realistic. and IMO any sensible person in a similar situation should do the same.

or course we want a house to own and live in! but we are not going to pay an arm and a leg for an overpriced starter home for me,the wife and two children!



"rant over" lol

Bil2

F_T_Buyer wrote:

Are you refering to all those buying on interest only? Clearly not.

Not everyone with an interest only mortgage is idiotic enough not to have a repayment vehicle in place you know! I make capital repayments btw.

meanmachine_2

This thread is officially pointless.

The same people who argue that "property always goes up in price" will be the same "experts" who'll advise you not to go near property when any correction does occur.

I'm off.

Bil2

RajaStyle wrote:

Hmmm lets hope your pension is in a position to cover the high council tax rates i'm sure will be making up the shortfall at the rate they're going .... hence being allowed to live in your home ... or forced to follow the many pensioners who move abroad to the likes of Spain every year as they can't afford to live here.

Erm... surely those in rented acommodation would have even more trouble paying their council tax if they had to pay rent money as well... what's your point?

RHemmings

meanmachine wrote:

This thread is officially pointless.

The same people who argue that "property always goes up in price" will be the same "experts" who'll advise you not to go near property when any correction does occur.

I'm off.

Trend-followers.

manhattan

Bil2 wrote:

If you were to buy a propery and pay off the mortgage before you retire you will have no further payments on the house to make. If you stay in rented accommodation, you will have to continue to pay rent afer you retire until your dying day/until you are shipped off to an old peoples home! This was my point.

yes i see what you mean,but i WONT be staying in rented accomodation thats my point!


and i will pay off my morgage before i retire,as i have such a large deposit!

and remember even "house owners" can be shipped off to an old peoples homes too!

thats after you have been forced to sell your house to pay the old peoples home fees!

lush_walrus

meanmachine wrote:

I agree with most of your points - how can I not, you've proven to be right over the past year!!

But regarding Japan, I think you're way off. The ingenerational mortgage came about at the tail end of their last boom. That was 15 years ago. Since then property prices have slumped.

I agree that banks will do anything to keep lending going. But as regards them "knowing what they're doing", they don't. They have profit targets to meet and will do anything in the shorter term to meet them.

It's this short term greed that will cause a correction, not stop it. But it's just a question of when. And the answer might still be a few years away.

Hi Meanmachine..

Nice to see your name still around. I wish I hadn't been right, it's a horrid situation out there. So hopefully going by Japan (I could well be very out of date on there!), the banks may well be bringing the end sooner rather than later.

lush_walrus

F_T_Buyer wrote:

Why does Martin Lewis run this site? Why does he speak to the media mentioning how companies are ripping the public off, and offer ways to avoid extra charges.

We are not all that greedy, some of us here (like me) argue why property has risks, which people (bulls) seem to totally ignore. Could you imagine if all the so called "doom mongers" wasn't here? I'm sure many posters would go blindly into the property market thinking it is a one way investment.

Look how you talk about banks lending, I bet you have very little idea of how the markets work. They are not smart, they are greedy. The lax lending criteria they have is purely to increase profits, and satisfy their shareholders.

Infact, why do I bother? Most people here only want to believe that property rises, and get angry at any counter arguments that comes along. Well I'll say what any FTB should do:

If you want to buy, buy. If you are borrowing money to do so, make sure you can fullfill your obligation to your lender if the worst happens (interest rate rises, unemployment etc).

If you want to invest in property, make sure it is an investment, and you are getting a high enough return to cover any increased costs (IR rises, maintenance) and other downsides (tax, voids, hassle).

If you want to make money on property through speculation (like most threads here), go ahead - but don't say you weren't warned!

Ok, Im not about to get into arguments about this, my only point was meant to be that despite what we all think...NO ONE KNOWS! Just as people need to be warned about prices can fall, they also need to be warned that prices may rise. Only with that balance can they decide, otherwise if everyone were forever in fear of prices dropping no one would ever buy!

If you want to use Martin as an example, then it only proves my point more! He sends out ways around situations, how to reduce costs etc, but why does Martin not warn all of his members to avoid buying property now, or to buy property now? Simple because he doesnt know and no matter how hard anyone stamps their feet, nor do they either.

RHemmings

SunnySusie wrote:

I wouldnt worry, protect yourself with a large deposit, if prices do crash then it just makes the next step up the ladder easier for you - thats not so bad is it?! I bought a house as a home, not as an investment. Of course there is some cross over between the two concepts, but the former means more to me. Also ensure you buy somewhere that you actually like, so that if you get stuck there, it wont be a problem.

But how does a "large deposit" protect you? Protect you from what? I have a "large deposit", and I don't want it to just vanish in a puff of market correction. I can use that money to do things for my family and myself. Could you be more specific about what you mean by "protect yourself"? There do seem to be some people who seem to assume that the only thing that can go wrong when you buy a house is negative equity. But timing a purchase wrong and wasting tens if not hundreds of thousands of pounds is something that I would want to do my best to avoid.