House prices over the next 2 years

peakoil_2

diable wrote: »

You have 20% deposit, on what a £100k house or a £400k house?

Sorry, I dont understand what difference the price of the house is? It's not £400k thats for sure :-)

FTBFun

peakoil wrote: »

I'm now in the position to buy a house but dont want to jump in if we are going to see drastic falls. I also dont want to hang around and miss out on a cheap fix.

I have saved up and inherited some money that will amount to a 20% deposit on the sort of house I am interested in.

What is the view of the people in here on the direction of house prices?

Surely you could have posted this with one of your other logins, rather than starting yet again a new "persona"?

I reckon we'll be hearing about silver by the end of the week.

Graham_Devon

FTBFun wrote: »

Surely you could have posted this with one of your other logins, rather than starting yet again a new "persona"?

I reckon we'll be hearing about silver by the end of the week.

Don't be a meanie!!

abaxas

If you want a prediction.

North East down 10-15% over the next 2 years. No idea about other areas, but would assume stagnation on UK average.

peakoil_2

abaxas wrote: »

If you want a prediction.

North East down 10-15% over the next 2 years. No idea about other areas, but would assume stagnation on UK average.

Your views pretty much match what I was thinking. with a static market there is no real reason to hold back from buying. all I am doing is lining the pockets of my landlord. the next question is fixed or variable rate mortgage?

Jegersmart

To the OP:

There are a couple of things to bear in mind:

1. Unemployment is going to go up - especially in the public sector.
2. Banks are not lending a lot now, with potential new reserve levels and regulations will ths improve ? (My view is probably not).
3. Interest rates are going to go up for sure over the next 2-3 years.

Bearing in mind the above I see prices trending down but it will probably be a bumpy ride as we go through periods of low demand, low supply with prices fluctuating accordingly. If it was me I would hold off or monitor the situation for 2-3 years as long as you are not disadvantaged by doing so. Also, bear in mind interest rates - if you fix for 3 years you will *probably* have a shock when it expires - or fix for 5 years and hope this worst is over. No one knows of course, and if you *need* a house now you obviously need to purchase and take steps to minimise your risk where possible.

IMHO, DYOR.

steve237

I upsized a year ago and decided to fix for 7 years. my decision was based on a worst case senario of my house being worth the same as I bought it after 7 years.

Chances are, after 7 years it'll have risen in value. But in 2 years, I'd facter in a loss on todays prices, although only slight if anything at all.

peakoil_2

Jegersmart wrote: »

To the OP:

There are a couple of things to bear in mind:

1. Unemployment is going to go up - especially in the public sector.
2. Banks are not lending a lot now, with potential new reserve levels and regulations will ths improve ? (My view is probably not).
3. Interest rates are going to go up for sure over the next 2-3 years.

Bearing in mind the above I see prices trending down but it will probably be a bumpy ride as we go through periods of low demand, low supply with prices fluctuating accordingly. If it was me I would hold off or monitor the situation for 2-3 years as long as you are not disadvantaged by doing so. Also, bear in mind interest rates - if you fix for 3 years you will *probably* have a shock when it expires - or fix for 5 years and hope this worst is over. No one knows of course, and if you *need* a house now you obviously need to purchase and take steps to minimise your risk where possible.

IMHO, DYOR.

its a real catch 22 situation with interest rates. do you buy and get a decent 5 year fix but miss out on a crash if rates rise as fast as they fell. or do you hold out for a crash but then get hit by the same mortgage rates yourself.

I'm thinking that it could take anything upto 6 months ot buy a place and then with a 5 year fix that takes us to 5 years 6 months from now. hopefully this will be plenty of time for the country to sort itself out. if not then at least I had a stable mortgage thru the worst of it.

Does anyone have the maths skills to work out which cost us more a cheaper house but higher interest rates or a more expensive house and a cheaper mortgage? I suppose the variables are too great, but this is what is keeping me up at night. :-(

peakoil_2

steve237 wrote: »

I upsized a year ago and decided to fix for 7 years. my decision was based on a worst case senario of my house being worth the same as I bought it after 7 years.

Chances are, after 7 years it'll have risen in value. But in 2 years, I'd facter in a loss on todays prices, although only slight if anything at all.

I didn't realise you could fix for 7 years, can I ask who your lender is?

Jegersmart

peakoil wrote: »

iDoes anyone have the maths skills to work out which cost us more a cheaper house but higher interest rates or a more expensive house and a cheaper mortgage? I suppose the variables are too great, but this is what is keeping me up at night. :-(

The problem here is not mathematics related but rather a probability/forecasting one.

If you look at house prices historically, they have generally followed inflation with the exception of a few bubbles that have inflated and burst along the way. I would *not* treat property as an investment per se, unless you buy after a crash in certain areas and situations and so on. It is however an excellent saving vehicle - if only because you are legally obliged to repay your debt:)

The point I am making is that if you are needing a house to live in, in an area near where your family and friends and job are then forget trying to work out how to best "invest" in that way. I would personally then go ahead with the purchase you need to do and hedge your risks according to your own risk appetite. At least in that time you have a place where you want to live and you are paying down the mortgage. Please remember that risk management is not just fixing your rate in this - it could perhaps also be overpaying in the fixed period to leave more equity or less risk of negative equity if you like. Additionally there are 20 year + fixed mortgages availbale abroad in certain cirumstances although you would have to hedge your currency risk (if present). Might be overcomplicated.

Good luck!