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

RHemmings

dougk wrote:

The inflation is mainly due to higher fuel costs - which have now dropped again in the last week or so. I look forward to lower inflation in this next months figures. Remember fuel prices effect everything as transport costs increase.

Have fuel costs dropped? Do you mean the 2p off petrol that Tesco, Asda, or whoever it was have instigaged a few weeks ago as a competitive measure? Costs for transport and heating fuel are way up on a year ago, and I don't think there's any doubt that they will rise again.

dougk_2

The news agencies have clearly shown that the price of oil has dropped in the last week.

Fuel prices in the last two weeks have dropped here from 99.5p per litre to 91.9p per litre now so much more than 2p (7.5p). The BP and shell garagess are with a couple of pence of this

Actually the price now is cheaper than last year when it was 93.9p per litre and if you remember the worries about a fuel protest in last september when in many places they were 99.9p a litre (as thats the maximum the pumps could cope with at many garages).

I can't comment on heating fuel as I don't use it. Yes I do know that gas prices are much higher but so are the gas companies profits and the fuel companies profits (as with banks too). In my view its time for the government to step in and stop this. certainly I think it should now be the case wher a company is not allowed to shed jobs whilst they are making a larger profit year in year out. But that is my personal opnion.

ravenfield

I still remember the time when my auntie is considering buying a second property during the property crash period. She couldn't get a morgage anywhere and only one bank allow her. She said she remember it well that the owner was begging for her to buy the house.

I just wonder what will happens if the property boom never ends? everyone will be happy no matter what happens, isn't? it doesn't matter if i buy now or I buy few years down the line cos the value will rise anway.

RHemmings

dougk wrote:

The news agencies have clearly shown that the price of oil has dropped in the last week.

Fuel prices in the last two weeks have dropped here from 99.5p per litre to 91.9p per litre now so much more than 2p (7.5p). The BP and shell garagess are with a couple of pence of this

Actually the price now is cheaper than last year when it was 93.9p per litre and if you remember the worries about a fuel protest in last september when in many places they were 99.9p a litre (as thats the maximum the pumps could cope with at many garages).

I can't comment on heating fuel as I don't use it. Yes I do know that gas prices are much higher but so are the gas companies profits and the fuel companies profits (as with banks too). In my view its time for the government to step in and stop this. certainly I think it should now be the case wher a company is not allowed to shed jobs whilst they are making a larger profit year in year out. But that is my personal opnion.

I hadn't noticed the fuel going down. But a certain imbecile is still planning to invade Iran, quite likely taking a certain lapdog with him. And peak oil will continue to bite. My prediction is that any descrease in fuel costs now is a blip.

lush_walrus

RHemmings wrote:

The reason why people were predicting a crash was because property was over-valued by most measures. The over-valuation and affordability problems of property have not gone away, but have gotten worse. So why should the prospect of a crash have receded?

The affordability is still there, the kind banks have offered lots of new options to aid affordability. For those speculating there are the BTL mortgages, for those on their own there are the lovely new buy with a friend options and for those wanting to up the years they are paying back then there is the option of increasing the term length to cover the next generation. All of these things stretch out that affordability to enable FTBs to continue to buy.

And if you really think that these will not keep the market going then don't buy and sit and wait for the crash, simple as that. The only point that I can really see at the moment slowing down the market is the introduction of HB packs, as the extra hassle may slow the 2nd plus time movers for a while. But as developers are getting new flats built by the dozen then the FTBs do not really need a chain to enable them to buy.

Personally, my money is on prices continuing to rise. Take a look at economies where these options have been in place for a longer term and see if they crashed or not.....It's a not Im afraid!

sm9ai

Fuel Prices don't go down, they only ever go up. Didn't you hear. lol


Anyway. If you are buying make sure you have a sizeable deposit(Ideally 10%). The last thing you want is negative equity. (Because then you will be on the lenders variable rates of 6.75%+, rather than their prefential rates of 5% fixed rate)

But as said looking at your debt free target date of march, then say december next year to save up a deposit. The housing market crash fears may well have sorted themselves out by then.

meanmachine_2

Surely the question is whether the OP should buy.

If they have debts, then no. If they have debts, why do they have debts? And do they have the discipline to shoulder a massive long term debt like a mortgage?

The other arguments are on a macro level which none of us can predict.

And it's true, oil prices have dipped. But the effects of very high prices are only now filtering through the economy, and will continue to to do so for the next few years.

A report today by the CBI is staggeringly bullish. Sales up, retail prices up. Absolutely no chance of us avoiding another IR hike before year end.

F_T_Buyer

dougk wrote:

The inflation is mainly due to higher fuel costs - which have now dropped again in the last week or so. I look forward to lower inflation in this next months figures. Remember fuel prices effect everything as transport costs increase.

How naive. Inflation is the devaluing of money, which has been caused by the lax monetary policy since the start of the decade. Fuel (oil/gas) has risen because it is finite, unlike fiat money which is unlimited.

What do you expect when the amount of money in circulation has risen 13% in the last 12 months. What do you think is keeping house prices from crashing! Only people do not understand this, and soon they will start rebelling as they realise they are becoming poorer and poorer - only it will be years too late!

Edit:
The inflation figures are currently feeling the oil price from two years ago, as it takes this long to feed through the economy.

desperadoV2

Dan29 wrote:

If things are as bad as some people on here say, you'll probably have your answer by March when you're debt-free (although won't you still have to save up a deposit?).

I already have got 5% deposit saved up (raised by selling valuables, overtime etc) but still deciding whether I should use to payoff all my creditcard debts or put it in saving account for 5.15% interest while my credit cards run on 0% interest (which it is not currently but will in the next few days). I will payoff a fixed amount on credit cards every month and I predict it to close by March 2007. The deposit on mortgage stays on savings account until I clear the debt. I'm also waiting for BOE reactions for inflation. By early sep we will know whether interest rate will stay @4.75% or raise to 5% which I think it is going to raise to 5%

Dan29 wrote:

No one can tell you whether or when a crash will happen, or how much your house will be worth afterwards, but bear in mind that if you put down a 5% deposit then obviously a 5% drop in prices will leave you in negative equity.

That is my big fear!!! I don't know my luck. I had a oppurtunity to jump on property market by early 2002 and again in 2004 but I didn't. I'm still in the same dilema!!

Dan29 wrote:

If you're planning to stay in the house for ten years this may not be a problem, but can you explain why you want to buy a house now? Are you not keen on renting?

One annoying thing about renting is I'm paying £500/- a month. I have been in this flat for the last 5 years (appx.) so I have paid £30,000/- in rent. The landlord bought this property back in 2000 for £70,000/- You do the math how much money I have lost. I should have a profit of atleast £40,000 - £60,000/- if I jumped the property market in early 2002.

Dan29 wrote:

Would your mortgage be less each month than renting? And how much could you afford rates to rise before you struggled to pay the mortgage each month?

I predict for £160K mortgage, the monthly fixed payment (5.10% interest) to be around £900/- a month and that's almost doubled my expenses.

I'm really confused!!! I hope there is this magic person who could predict the future and tell me whether I should jump into property ladder now or not.

ravenfield

if there is such magic person who can predict the future property market, our life will be very easy because everyone will buy when he said price will go up and everyone will sell when he said price will go down.