First Time Buyers - Enough is Enough!

meanmachine_2

Well, with house prices flat for April (Halifax figures), at least now we've finally seen the back of property as in "investment".

It's likely that the best case scenario is a 0% return on housing over the next five years.

Middling case scenario is a 10% fall, in real terms, over five years.

The worst case, and most likely now, is a fall of around 30%, even after inflation.

With the economy suddenly gone into reverse, I'd say the Tories were lucky to lose this election.

There are tough times ahead, and sites like this one can only grow, as people realise finally that the party's over, that their hosue is a place to live, not a cash machine and that the three holiday, 4WD lifestyle is unsustainable.

I think it could be another 10 years before we see a return to 20% year-on-year jumps in the property market, and even then it'll be way too soon.

Woby_Tide

let me guess, for March's figures you chose Nationwides house price report?

Woby_Tide

OK, quick high horse time, partially prompted by something I read on another forum, but I think it's valid in context here, it's also not aimed as personal attacks or anything of the sort if I do mention people in passing. Basically the owner of the website/forum was talking about how they felt the information being handed out by people on their forums was on the whole very unqualified and misguided, mostly personal opinion, based on very small bits of information. It was hard to distinguish any 'experts' from the 'man on the street' so people could be getting the wrong advice and spending their hard earned cash on unsuitable recommendations(rather than houses, it was TV/DVD equipment so we're talking £20 to £2k say, still could be sizeable amounts to many people).

Anyway to my point(yes there is actually one), I think a lot of the problem is the way the internet has changed the way we do things. Whereas before people would probably take advice from friends/work colleagues/family and maybe a bit from the media concerning something like a house purchase, now we've got a wealth of information to read at our fingertips. The difference though was before the majority of the advice would be based on peoples opinions and knowledge of that local market in most cases. Now though we've people in Lands End advising people in John O'Groats, people in Central London advising people in Rural Northern Ireland on whats happening to their local house prices. Similarly meanmachine just posted about a new report detailing about a monthly fall in house prices, a week ago a different bank produced their report saying that monthly prices were up. Last month they both reported the opposite(i.e. Halifax a rise, Nationwide a fall). The common factor though is thats a national figure. The regional data is much different, some areas are definitely slowing and falling, others are still showing year on year rises, who's right, everyone, who's wrong, everyone, it's all subjective.

Similarly(2nd mini rant), I can't abide by websites such as https://www.housepricecrash.co.uk, the dramatic overtones are just covering a lot of irrelevant opinion, why do people blindly agree with something with a name like that(yet a website called https://www.makeamillionpounds.co.uk we'd not believe at all). Whilst it's full of information, again it can also be highly misleading, one of their lead articles on the page is an report by an economist dated Nov 2002 called "The Great 2003-2005 House Price Crash in Britain's Housing Market ". According to figures on the same site though the average house price in Nov 2002 was £142k, now it's £182k, if a FTB say had read that in 2002 and decided not to buy they're now probably unable to afford a property and waiting for a fall in the region of what meanmachine says, the only difference being that when they then buy the property they've got a 25 year mortgage, if they'd bought in 2002 they'd be down to a 20 year mortgage for example. Whilst I'm not saying that people would have just taken that article alone and made a decision(which would have been foolish, its' just like taking an article now called "House prices to rise 2005-2007" as gospel would be) it's just an example of how too much information can work against people.

I just get the feeling that this board was originally created to share advice tips on real house buying selling etc. how to get better deals with estate agents, tips on packing, removals, checklists, what to look out for, for whatever reason I'm just not comfortable withe the house price issues. It's like the health board where there is a warning about not asking for specific advice. With no offence intended to any of the lovely people on the whole of MSE but I'd probably be as likely to take your(and mine) advice on whether or not I should make the biggest financial decision of my life as I would be to ask how you'd best perform DIY open heart surgery on myself at home. I don't think anyone, myself included should really be in any position to think we should be advising people to buy or not to buy, or similar such decisions. But thats all just my opinion.

(You can post the reply telling me not bother reading the house price topics now )

meanmachine_2

A FTBer who didn't buy in 2002, "now wouldn't be able to".

I think that's the most telling part of your long-winded post.

My advice has always been: if you need to buy a house to live in, do so, but NEVER borrow more than 4 times your salary (and that's pushing it), and if you can make other arrangements, then opt for that instead.

Woby, I'm sorry if the latest stats make for very uncomfortable reading, but that's all we have to go on. It also explains why so many people on here are having difficulty selling their properties.

And I'm no expert, unlike a lot of economists who are, quite frankly, extremely worried about the housing market, and our debt-ridden economy.

Oh, and if anyone needs some proper advice about buying property, then I advise they take a look at this month's Which, which gives advice to both buyers and sellers, and would make even the most hard-hearted of Estate Agents blush.

Woby_Tide

meanmachine wrote:

Woby, I'm sorry if the latest stats make for very uncomfortable reading, but that's all we have to go on. It also explains why so many people on here are having difficulty selling their properties.

And thats the most telling part of your shorter-winded post, you're doing exactly what I said.

meanmachine_2

Woby_Tide wrote:

And thats the most telling part of your shorter-winded post, you're doing exactly what I said.

What am I doing?

Pointing out that the market's stagnated, and that is why individuals in East London, for example, are having trouble selling their properties?

Surely you wouldn't disagree with any of that, or would you?

What I think is disgusting and outrageous is that anyone on this site would encourage other people to take out a mortgage (read: debt) that is well beyond their means, as has been the case, under the ruse that it's still "affordable".

Come back and give that advice when IR rates are over 6%. Or perhaps offer to help them pay that mortgage when it's way beyond their means.

Woby_Tide

AAAARRRRGGGGHHHHHHH read my second paragraph, go the Halifax website where your stats from above came from, have a look at the regional data, what does someone struggling in East London have anything to do with someone in Northern Ireland, in Scotland, in the North West, in the North East, whats the correlation, that they're buying and selling houses? Maybe but the markets are not all tied in as one big melting pot, whilst trends and fluctuations may filter through markets, hasn't london been 'stagnating' for quite a while yet still other regions go up, if other regions start faltering, conceivably London could be rebounding for example. If you don't want to read my points then fine.

meanmachine_2

Woby_Tide wrote:

AAAARRRRGGGGHHHHHHH read my second paragraph, go the Halifax website where your stats from above came from, have a look at the regional data, what does someone struggling in East London have anything to do with someone in Northern Ireland, in Scotland, in the North West, in the North East, whats the correlation, that they're buying and selling houses? Maybe but the markets are not all tied in as one big melting pot, whilst trends and fluctuations may filter through markets, hasn't london been 'stagnating' for quite a while yet still other regions go up, if other regions start faltering, conceivably London could be rebounding for example. If you don't want to read my points then fine.

No I understood your point. It all depends on what sort of time frame you're applying to the housing market. In East London, yes the market is pretty dead. In Northern Ireland, the market is still rising.

But the longer term trend is either flat, or downwards. If you're denying that, then all you're doing is blinding yourself to the current trends.

True, none of us can really know where the market is going. All we can do is look at affordability. And, as you rightly pointed out, a FTBer who didn't buy on 2002, is now probably unable to buy. My point being that this is a transitory phase and we're about to enter a more rational phase in the property market so that, in 1-2 years that same FTBer will be in a much better position to buy.

You must stop panicking FTBers into thinking they have to, at all costs, get on the property ladder "before it's too late". That is the surest way of costing them money, not saving it.

The fact is that housing has never been more expensive, and with the economy entering a recessonary cycle (it is claimed by some), there is no danger that property prices are going to keep shooting up. They're not. Sorry.

Spendless

Well I totally agree with what Woby-Tide is saying. I have made the same point on more than one occassion myself.

It is no use me saying that here bottom end of market are still doing ok, it's middle market that's sticking and giving that advice to someone else who doesn't live within my town.

I have posted before about how I was in neg equity with my first home. At exactly the same period of time Mr Spendless made a few £1000 out of his 2 bed flat in a neighbouring county.

Woby_Tide

meanmachine wrote:

No I understood your point.

In East London, yes the market is pretty dead. In Northern Ireland, the market is still rising.

But the longer term trend is either flat, or downwards.

True, none of us can really know where the market is going.

You must stop panicking FTBers into thinking they have to, at all costs, get on the property ladder "before it's too late".

Instead of a "Thanks" button, can we have one that delivers a virtual kick up the !!!!!!.

How can you say the market is rising in Northern Ireland is rising, then turn round and say the longer term trend is flat or downwards, wheres this information coming from? You're telling dougk to stop panicking FTB's into making decisions they may well regret yet making sweeping generalisations at the other end of the scale as though people should sell to keep any equity they have or be prepared for negative equity and a torrid time if they happen to have just bought somewhere as they needed to. Your best point is that none of us really know where the market is going. Because as I've said twice now, we're pretty much located in every single corner of this country, in completely different markets, in complete different stages of the cycles, with no knowledge of what could be round the corner, yet all still offering unqualified 'advice' on what is a huge decision for people.