First time buyers - will you or won't you?

yak00

manhattan wrote:

just hold out,it takes time for the avalanche to get a grip!

.. well I got stung in the stock market crash, so was over caution and it's why I've waiting 4/5 years for a crash which didn't happen.. also if a crash was to happen I don't believe property prices would drop by the percentage they've increased at over the 4/5 years... so you could say those that have been waiting for a crash have already lost out (which includes me) also if the interests rate were to increase then the repayments would also increase so the drop in house value wouldn't benefit me (unless it was a considerable drop !).
I have played it save by ensuring the repayments are affordable and also at fixed rate (10 years) .. so I'm relatively please (providing I do get my first property ;-))

Pobby

The house price inflation cannot carry on for ever.If I was looking to buy right now I think I would look at what is going on in Australia and parts of the U.S.A.Property there is looking rather dodgy,the boom would appear to be over and prices starting to slide.When I was young houses were places to live not for btls to make money from.So with many folks worried about there pensions many are buying up places to let.This,imho,is a major cause in the prices being sky high.Houses are now not so much dwellings but commodities to trade.Imho I think that the whole thing has reached bubble proportions,just like we see from time to time in the stock market and at some time there will be a crash.

RHemmings

SmartGirl wrote:

It really depends on what price landlord bought the property at. My landlord paid £196k for the property where I live, so he is making a reasonable return on it, but at today's prices such investment would not make much sense.

But should he really be calculating his return on the original purchase price of the property? If someone bought a property for £3000 thirty years ago, and they're getting £500pcm, does this mean that they're getting a 200% return. If the landlord sold the house and put the money in a bank account, the interest he would be getting would be on the current value, not the original purchase price.

According to one of London evening papers the average asking price for properties in London have gone up by £8200 in last month! So here we go for a crash... Or is everybody rushing to buy before interest rates go up again?

It might interest you to read some academic papers on the potential of a house price crash. Several that I read (it would take some time to find the references) said that further price rises (published in 2004, 2005) would be the thing that made a crash more likely. The reasoning was that stretching affordability further was going to lead to events such as repossessions, big losses, and similar things which would have the biggest effect on buyer and seller sentiment.

Sarahpuggy

We were recommended this product via a broker. The deal you have found sounds good but it does depend on the lenders criteria for that particular product, for instance it may only be available if you have X amount as a deposit or some other requirement attached to that particular offer..thats where its good to have a broker.She does a pre-liminary credit check and takes everything down and then matches us to particular lenders, so you dont continually have to get credit checked by applying to the lenders direct (even for an AIP) as too many credit checks can damage your score. I must say our broker has been excellent and i dont know how we would have done it without her! Shes a regular on this site so i wont name her! hehe.

desperadoV2

Sarahpuggy wrote:

We were recommended this product via a broker. The deal you have found sounds good but it does depend on the lenders criteria for that particular product, for instance it may only be available if you have X amount as a deposit or some other requirement attached to that particular offer..thats where its good to have a broker.She does a pre-liminary credit check and takes everything down and then matches us to particular lenders, so you dont continually have to get credit checked by applying to the lenders direct (even for an AIP) as too many credit checks can damage your score. I must say our broker has been excellent and i dont know how we would have done it without her!

I found a broker via this website. I have been in touch with him, his contribution to this forum has been brilliant. I hope he could help me out as well.

Sarahpuggy wrote:

Shes a regular on this site so i wont name her! hehe.

Cool. Sounds like a perfect broker. Maybe I will have a chat with her regarding my plans as well, if i can find her

F_T_Buyer

desperadoV2 wrote:

Hi all,

I'm a First time buyer and the volatile house market makes me think over and over again whether I should buy a property now or wait for it. I'm just wondering what other first timer buyers are thinking, hence this simple survey.

Which group do you belong to?

Group 1: Waiting for a house price crash and won't buy until then.

Group 2: Will wait for the next three months and see how house market reacts to the next predicted interest rate hike and then decide.

Group 3: Looking for property now and will buy property regardless whether interest rates rise or not and property market crash or not.

I belong to Group 2. Which group do you belong to?

How about...

Group 4: Earn far more than the average, could buy a very nice house that with a deposit which would put most people to shame, but choose to rent as it's cheaper, and also allows me to invest in alternatives which way outperform the housing market.

SmartGirl_2

F_T_Buyer wrote:

How about...

Group 4: Earn far more than the average, could buy a very nice house that with a deposit which would put most people to shame, but choose to rent as it's cheaper, and also allows me to invest in alternatives which way outperform the housing market.

How sensible. It's all about being in the right place at the right time. Everybody still thinks that property is the best investment because everybody is doing it, but many investors are not making any profit from rent and are banking on property price growth.

Do you mind me asking what alternatives that outperform the housing market are you investing in?

greencat_2

OK I'm going for a bit of 1, 2 and 4.

I could definately afford something. I have more than a year's salary saved up. My rent is dirt cheap and I'm very frugal (which means I'm adding to savings by around 1/2 years gross salary a year).

I live in London and I see myself getting out in a few years. Might even start looking at the end of next year (savings should be around 2X salary by then).

But I'm fairly bearish on property and don't want to waste my hard earned/saved cash when property prices are the highest (according to most measures) that they've ever been. Sorry vendors I really don't see why I should pay double what something was 4 years ago. I wouldn't do it for a can of beans - I certainly won't do it for a scabby terrace.

Plan B is to save 3-4X salary and retire to South East Asia. I would be able to live comfortably off the interest even after buying or more likely building something much nicer than a skanky 1BR flat in London I could afford with the same amount of cash.

As I approach my mid-30s and given the British obsession with property is really starting to bore me, Plan B is looking more and more appealing.

GiveItBack

Scottish property is wierd. Everything had an 'offers over' price, so you have to bid on it, basically. ATM everything is going for 15% over the offer over price. population here is stagnant, but we have a housing shortage - don't get it

I still can't help but think that in the long term - 20 years etc, property might just be worth owning.

unlike in Japan where houses depreciate like cars.

confused.

Molanole

I'm in greater London (Zone 3 - west), a few parks, easy access to Motorway and good transport links. I currently rent at £950 per month but will never afford to buy anything in this area as one bed flats (no parking, no garden) easily go for £290,000 and upwards. A two bed flat on road has just come on the market for £340,000. That's 8 times my salary and 5.5 times our joint salaries. So at this rate, I am resigned to never having my own place until I leave London.

So, by default alone, I belong in group 1. Not that I believe there is one coming as I'm not sure it will.