Shall I buy or pull out..

sonastin

I was warned off buying my first house because prices were too high and unrealistic and there was a crash coming just around the corner. That was in 2002 and the "crash" never really came. OK so somewhere around 2007/8 someone pulled the emergency brake but I don't think we ever fell off the cliff. We might still be teetering on the edge about to fall off but I think instead we're seeing a slow climb down towards something managable. (enough mixed metaphors for you?!)

There's just not enough sellers who are being forced to take a low price to bring about the downward pressure at the moment. Property might be massively overpriced at the moment, but there are some people out there willing to buy. And as long as sellers are in a position to wait it out until its their turn to get a price that they want, the downward pressure won't get enough momentum to constitute a full scale crash. Its only if this austerity budget forces a double-dip and enough people are forced to sell at any price that the crash will actually come about.

And even then it will depend on the area because some are more resilient than others, more desirable in these circumstances than others, more over-priced/under-priced/affordable than others...

SusieT

If you are looking at buying a home that could from what you have posted last you a long time then there is no reason not to buy now, at some point you will have your own home rather than putting money into the pocket of a landlord. Prices have already dropped (although the London area seems to hold the value better than the rest of the country) and I don't think London is going to lose a lot of value (sadly for me as I would have liked to live there again!!).

MobileSaver

brit1234 wrote: »

But maybe the best informed. As I said before research economics and your eyes will open.

So informed that in late 2008 you predicted:

brit1234 wrote: »

why property prices will crash 50% or more

As we all know prices went up in 2009 confirming your "informed" prediction of a 50% crash was completely wrong.

woody01

Can you cope if mortgage rates went up *heaven forbid they do*

There is no 'IF' about it.
3% is practically certain by Christmas. In 20 months time 5% will be a good deal.

sharkie

a few things: London prices tend to be more stable. The cheaper houses tend to loose less money in a down ward spiral compared to the upper end.

the basics are how much are you currently paying and how much will the new place cost? Can you afford the new place? How much would it cost to rent a property similar to the new place - big difference?

I would not get a two year mortgage. A five year mortgage, or even better a 10 year one - all fixed ones with few/low penalties

Squish_21

Go for it. Need to continue with your life.

Sounds like you are buying it to have a home for your family, rather than an investment.

Pete111

Op. There is some good advice on here.....but there is some very one eyed advice also!

The most important thing is to remember is not to listen to the extreme posters as they have only one point of view and in their mind they are 100% right. Even though they are often proven wrong in actuality this usually results in only a slight tweak to the message - Brit1234s ever changing sig is a case in point.

An example of a 'Bear' extreme is therefore Brit1234 (there are several Bull extremes also) He -like the rest of us - has no access to a crystal ball but is now so firmly wedded to the idea of a massive crash that even if the next big crash is in 15 years time he will likely claim it as 'his'

Personally I think housing is likely to stagnate in general (with parts of London and other 'desirable' areas increasing) this year and probably next. Do what you feel is right for you.

Entertainer

£187,000 sounds very reasonable for a 2 bedroom house in London.:T

Bullfighter

House prices aside, in an environment where your house is unlikely to appreciate massively in the short term (5yrs) , you need to consider your ability to service the considrable debt in a wide range of economic scenarios.


What if rates are 8% when your fix ends?

What if the government spending cuts impact your income?

What if your family expands?

In the boom years you could just sell and realise fabulous profits, those days are gone so your options to deal with the above scenarios combined with the fact that if nothing else we are in an unprecedented macro economic situation could male taking on a huge debt very risky

That said, I believe we will see a return to prices in 1999/2000

brit1234

Pete111 wrote: »

The most important thing is to remember is not to listen to the extreme posters as they have only one point of view and in their mind they are 100% right. Even though they are often proven wrong in actuality this usually results in only a slight tweak to the message - Brit1234s ever changing sig is a case in point.

Lets get a few things straight. I correctly called the first part of the crash despite bulls laughing and saying prices would only go up.

The rest of the crash was delayed when government bought the banks mortgage debt, crashed interest rates to 0.5% and funded developers. (not expected)

This was not the end of the crash it was just put on pause.Now I called the resumption of the crash last month, lets see you continue to mock and then find you were completly wrong.

• End of 2010-2012 UK banks have to start paying off Government loans and will have less money to loan.
• New government loans to banks aren't going to happen.
• Schemes such as homebuy and others are having funding withdrawn. The government has a huge black hole for housing funding and schemes are being scrapped despite widespread Housing Federation lobbying.
• Inflation figures are putting preasure for interest rate rises with BOE pannel members now starting to vote for interest rate rises.
• Unemployment in both public and private sector is expected to go up and push past 3 million.
• Taxes are going up, VAT 20% and others
• Public Sector wages are being frozen for 2 years.
• The US housing market is crashing again putting greater heat on US banks and government.
• European banks are now failing and EU countries are likely to go bankrupt.

Now if anyone wants to call me extreme so be it. However house prices are well overvalued and there is simply not the money or economic stability to hold these values.