Sellers drop prices as extra homes flood property market

Chris2685

ruggedtoast wrote: »

I think the question you have to ask is, are prices really going to fall each month by more than you are paying in rent?

And how much more to make it worth having to put up with being a tenant?

Currently I'm paying £900pcm in rent. Psychologically for me, I would have to see prices falling month on month by around £1500 to start feel like I had made a mistake.

And this would have to continue for a long time. -.06% in putative asking prices just isnt going to deter me from looking to buy somewhere, or anyone else I would think.

It's a hard one to call. I am still living happy in the knowledge that I saved myself around 40k or so on the final sale price of a house I was going to buy 2 years ago. Even with 6 years of renting I would not spend that amount, especially when you take into account the amount of that money that would have been interest payments on the mortgage!

But yea, I am wondering if it is just worth 'going for it' and having a place to call my own... Except it wouldn't be, it would be the banks.

ruggedtoast

Chris2685 wrote: »

It's a hard one to call. I am still living happy in the knowledge that I saved myself around 40k or so on the final sale price of a house I was going to buy 2 years ago. Even with 6 years of renting I would not spend that amount, especially when you take into account the amount of that money that would have been interest payments on the mortgage!

But yea, I am wondering if it is just worth 'going for it' and having a place to call my own... Except it wouldn't be, it would be the banks.

You also have to think about your circumstances. If you take out a mortgage then if you should lose your job there is all kinds of support, in the form of your own insurance and government schemes, to ensure you dont lose your house.

If the same thing happens when you rent you can kiss goodbye to your deposit as youll have to use that to pay your rent, until its almost all gone.

RenovationMan

Chris2685 wrote: »

It's a hard one to call. I am still living happy in the knowledge that I saved myself around 40k or so on the final sale price of a house I was going to buy 2 years ago. Even with 6 years of renting I would not spend that amount, especially when you take into account the amount of that money that would have been interest payments on the mortgage!

But yea, I am wondering if it is just worth 'going for it' and having a place to call my own... Except it wouldn't be, it would be the banks.

Yes, and you'll be like the rest of us, working for the bank.

If you really believe that we're in for some major falls, and a lot of people on this board seem to feel that way, then you should hold out until the crash plays itself out. There are so few ways that ordinary people can get on financially in life, so we have to make the best of the circumstances around us and go with our gut feelings.

I had a gut feeling about low interest rates where I thought they would be low for years. I therefore took a gamble and maxed out on my mortgage. It seems to be working out.

You, and others have a gut feeling about house prices falling, so you should go with that feeling and take a punt in the hope that prices fall. If you have saved £40k with the small correction we've seen since 2007 then you stand to double that if we see a reall House Price crash.

I hope you dont mind me commenting, I just feel people should go with their feelings and stick with it. It's so easy to start second guessing yourself and losing focus and confidence on what your aims are.

carolt

RenovationMan wrote: »

You, and others have a gut feeling about house prices falling, so you should go with that feeling and take a punt in the hope that prices fall. If you have saved £40k with the small correction we've seen since 2007 then you stand to double that if we see a reall House Price crash.

I hope you dont mind me commenting, I just feel people should go with their feelings and stick with it. It's so easy to start second guessing yourself and losing focus and confidence on what your aims are.

Excellent post. Ultimately, you decide - what someone on a forum says is irrelevant - they're not going to pay your mortgage/rent for you in future.

Graham_Devon

RenovationMan wrote: »

Yes, and you'll be like the rest of us, working for the bank.

If you really believe that we're in for some major falls, and a lot of people on this board seem to feel that way, then you should hold out until the crash plays itself out. There are so few ways that ordinary people can get on financially in life, so we have to make the best of the circumstances around us and go with our gut feelings.

I had a gut feeling about low interest rates where I thought they would be low for years. I therefore took a gamble and maxed out on my mortgage. It seems to be working out.

You, and others have a gut feeling about house prices falling, so you should go with that feeling and take a punt in the hope that prices fall. If you have saved £40k with the small correction we've seen since 2007 then you stand to double that if we see a reall House Price crash.

I hope you dont mind me commenting, I just feel people should go with their feelings and stick with it. It's so easy to start second guessing yourself and losing focus and confidence on what your aims are.

Excellent post.

Although I disagree with your maxing out based on low interest rates, I completely respect your following your thoughts, whatsmore, laying all your cards on the table.

Someone is going to come up trumps out of all this. It will either be those who held back, or those who went for it. No one really knows yet.

Procrastinator333

ruggedtoast wrote: »

I think the question you have to ask is, are prices really going to fall each month by more than you are paying in rent?

And how much more to make it worth having to put up with being a tenant?

Currently I'm paying £900pcm in rent. Psychologically for me, I would have to see prices falling month on month by around £1500 to start feel like I had made a mistake.

And this would have to continue for a long time. -.06% in putative asking prices just isnt going to deter me from looking to buy somewhere, or anyone else I would think.

That is not the question you should ask!!! I think I'm growing tired of making my point, but this just highlights why it is so important.

Have a look in the buying is better than renting thread if you want to see why your first line is wrong. Not saying buying was wrong, simply your logic that supported the buying decision.

ruggedtoast

Procrastinator333 wrote: »

That is not the question you should ask!!! I think I'm growing tired of making my point, but this just highlights why it is so important.

Have a look in the buying is better than renting thread if you want to see why your first line is wrong. Not saying buying was wrong, simply your logic that supported the buying decision.

Look dude, you can add up the facts and figures and the pie charts and the stats until youre blue in the face, most of us just want a place to live where we can plan more than 6 months ahead and dont have to ask permission to hang a picture.

carolt

ruggedtoast wrote: »

I think the question you have to ask is, are prices really going to fall each month by more than you are paying in rent?

And how much more to make it worth having to put up with being a tenant?

Currently I'm paying £900pcm in rent. Psychologically for me, I would have to see prices falling month on month by around £1500 to start feel like I had made a mistake.

And this would have to continue for a long time. -.06% in putative asking prices just isnt going to deter me from looking to buy somewhere, or anyone else I would think.

I agree with the basic point that personal factors should, all things being equal, take priority when making these decisions.

BUT 0.6% falls don't usually happen in isolation. If the falls appear to form part of a clear trend, then the advice to buy, whatever, seems less sensible. I'd then be comfortable waiting a bit longer till my ideal (or as near as) place came along at a comfortable price - not necessarily the best price, but a comfortable one.

Onviously, if the -0.6% was a complete outlier, that doesn't apply.

Procrastinator333

ruggedtoast wrote: »

Look dude, you can add up the facts and figures and the pie charts and the stats until youre blue in the face, most of us just want a place to live where we can plan more than 6 months ahead and dont have to ask permission to hang a picture.

Fair enough, there are plenty of reasons for wanting to buy or rent that override monetary value.

But go in to that with your eyes open, not claiming that it is only financially worth renting when house prices are falling by more than the cost of your rent as that is simply deluding yourself.

MissMoneypenny

silvercar wrote: »

Technically correct, but he had an offset mortgage where any overpayments are fed into some offset account and can be withdrawn at will by the borrower, so effectively he had the money to live on.

Did he tell the DWP about his extra income?

I read on the benefits board that those on contribution based JSA don't get their mortgage interest paid, so your friend must have been on income based JSA - which is means tested. All income must be reported to the DWP as it will affect the JSA payments he receives.

silvercar wrote: »

Hardly worth finding a job again.

It might be better for him if he did find a job again.