House prices to fall 5% in 2013

ruggedtoast

Round my way houses are selling for high low prices and hanging around like hot cakes.

Niv

MacMickster wrote: »

I disagree.

A £108K mortgage over 25 years with 5% interest rates would costaround £630 per month. On top of this, you would be responsible for maintenance costs and buildings insurance which don't apply while you are renting. You also need some leeway in your budget in case interest rates should rise higher (I would always budget for at least 7%.

If you can't afford around £900 per month in total on housing costs then you can't afford that £108K mortgage at all.

Renting (not necessarily the nicest flat or area) for £450 per month whilst saving is certainly possible in most areas of the country outside of London, so if you can't then save £450 per month then you shouldn't be applying for the mortgage in any case.

If only they would go back to giving out those 100% mortgages then people could buy that £135K flat without a deposit (but pay £790 per month at 5% interest rates plus maintenance, insurance etc to do so).

How much do you think essential maintenance on a house is? In 7 years I have spent ~£2k (and 1k was doing up the bathroom and not essential - but was desirable - wouldnt have been done if I was renting I bet).

By your calculatation over a seven year period (using 7% interest rate on the mortgage) I 'should' have spent over £11k. Its just very wrong, you must be a renter or a very unlucky home owner is all i can say.

Generali

Niv wrote: »

How much do you think essential maintenance on a house is? In 7 years I have spent ~£2k (and 1k was doing up the bathroom and not essential - but was desirable - wouldnt have been done if I was renting I bet).

By your calculatation over a seven year period (using 7% interest rate on the mortgage) I 'should' have spent over £11k. Its just very wrong, you must be a renter or a very unlucky home owner is all i can say.

There are the big bills that come infrequently e.g. roof, boiler, new carpets etc.

Fella

Surely the vast majority large deposits for FTBers nowadays come from bank of Mum & Dad? I don't know very many people capable of saving a deposit on the scale currently required. I know plenty of 50+ parents with a few hundred thousand equity in their house though.

FWIW I'd be surprised if we saw 5% drops in real prices. Not much movement in real price & constant erosion by means of inflation still looks the most likely scenario to me.

somethingcorporate

Generali wrote: »

There are the big bills that come infrequently e.g. roof, boiler, new carpets etc.

Or all at once if you move into a house that needs them doing - like many do!

IveSeenTheLight

Generali wrote: »

There are the big bills that come infrequently e.g. roof, boiler, new carpets etc.

Boilers seem to last 15+ years nowadays.

Roofs, I've never had any major roof repairs in the 13 years I've owned. Closest came with a property I had that was over 100 years old that I sold but was starting to need a few tiles replaced.

Carpets, that depends how you "abuse" them.
In our properties, we put down wooden flooring downstairs but always take shoes off and use slippers. Upstairs is carpetted, but again, if you are only using slippers, it helps prolong their life. We even have spare slippers / bathrobes for guests.

I think the "big bills" in property ownership are possibly smaller than they used to be

IveSeenTheLight

somethingcorporate wrote: »

Or all at once if you move into a house that needs them doing - like many do!

Fair point, but generally you have saved on the purchase price as you take these costs into consideration.

I bought a BTL and replaced the kitchen, modernised the bathrooms etc, but I got at 13% less than a property I sold a few months later next door for.
The cost of modernising was about 1/6th the difference.

HAMISH_MCTAVISH

Graham_Devon wrote: »

FTB's will need to save £450 every single month for 5 years in order to gain a 20% deposit.

I don't care what anyone says, that's a lot of money to be saving while living.

It sure is.

Of course they'd only need to save a quarter of that amount if historically normal, prudent, and sensible 5% deposit mortgages were readily available to FTB-s again.

And as I recall, you're all in favour of these high deposit requirements preventing as many FTB-s from buying as possible in the vain hope prices might fall, so no more crocodile tears Graham.

It's obvious you don't care about FTB-s at all.

michaels

There do seem to be quite a few mortgages available with a 10 or 15% deposit.

The amount of saving suggeste dis not hard if that is a priority even for a single person in a traditional graduate job who is likely to start on 20+ and quickly get more, even easier if living as part of a couple with 2 incomes (or house sharing) so quite possible to buy by late 20s and tbh most people I know would not have wanted to buy before that as jobs, relationships etc might change.

Rinoa

Capital Economics have a history of grabbing headlines by predicting substantial house price falls.

Here's what they were saying in July 2010:

http://www.telegraph.co.uk/finance/economics/houseprices/7895551/House-prices-to-crash-20pc-by-2012-as-Budget-bites-says-Capital-Economics.html

Capital Economics, the consultancy led by Roger Bootle, expects house prices to fall 5pc this year, and 10pc in each of 2011 and 2012. In total, the group predicts a collapse in house prices of 23pc from the start of 2010 – a deeper drop than the 19.3pc crash during the recession.

Only the gullible believe Capital Economic predictions.