will the house prices crash in your opinion?is it a bad time to buy

thewinkshow

hi there,

my situation is im living at home with my parents,im single male 22 years old.i earn £15,000 PA taking home roughly 950-1000 pm.my current outgoings are £80pm keep,obviously if i move out i wont be paying this,meaning my outgoing are zero.im looking at buying my own place,a blatchelor pad if you like.

im looking a buying a 100k house.my parents are going to give me 50k which i will use as my deposit,they will own half the house.so im looking at getting a 50k mortgage,im done a few searches and the best ones seems to be around £220 to £250pm over 30 to 35 years.i think it was woolich.

ive used this website to claculate most bills,using friends and relatives situations simular to mine to get my figures,where possible ive tried to overcompensate.

mortage £240pm
coucil tax-25% discount £61pm
water on a meter £13pm
gas and elec combined with n power £35pm
t.v license £10pm
building and contents insurance £14pm,with prestege
internet+phone £17.99pm with tiscali,no t.v package,just freeview box
food? not a clue any ideas?

when im at work or not in the house no one else will be using anything so i think this should keep costs down.after adding up the figures it seems i could afford it,it amount to roughly £500pm about half my wage.

is there anything ive missed or under estimated?

now my main concern is when to buy,as im very worried by peoples talk of a price crash,how likely is this to happen and will it be as harsh as some people predict.i intend to stay in the house for a number of years so im not after a quick buck,but at the same time i want to avoid negative equity,and getting into trouble with my parents money.
they say theres never a bad time to get on the market,but this cant be true.will the prices have dropped and settled if i say wait until this time next year?ive been told the crash will affect the higher priced houses the most,and wont really affect the cheapest low priced houses.

any advice or suggestion are very much appreciated

thank you

thesaint

If they crash it won't make any difference to you. I would simply look at if you could afford your repayments if the interest rates were to rise by 2% as a guide.

olly300

You need to include things in your budget like:
1. transport costs to work
2. telephone
3. clothes and shoes especially work clothes
4. rainy day savings i.e. boiler breaks down
5. going out/hobbies (you are young )
6. gifts

plus you need money for solicitors fees, survey, decorating and furnishing the house.

To find out food costs ask your mum

Personally I would go and talk to a independent financial advisor. Do a proper budget, check the repayment rates if mortgages went up 3% and your salary didn't and take it from there.

Jonbvn

You and your parents will already own 50% of the property. IMHO, there will be some house price correction and/or stagnation. However, it will likely be short-term and no where close to the scale necessary to cause you negative equity.

Once you have bought the house, the critical issue for you will be interest rates....

Garnet_Gem

If you're going to live in the house for a while any price crash won't affect you. Just make sure that you can afford the mortage reapayments even if interest rates go up a bit.

thewinkshow

thanks you all so much for the replies,they seem alot more positive than i attisipated,i thought most people would see my plan as unfeesable given my wage,age e.c.t

i am going to make an appointment with a FA and see what figures im truely looking at.im probley looking to get a 5 year fixed mortgage,this will hopefully keep me safe,as buy the time im looking for a new mortage the house market will hopefully have done its falling and be steady.

when do you correct the house price correction?is it happening as we speak or is it due to happen this year sometime?

thanks again.

Throbbe

£80/month rent and £50k towards a house! Don't forget to tell your parents how much you appreciate them.

JayScottGreenspan

Run a mile from anyone who tells you they know what's going to happen to house prices. I think prices will be down 5-10% in the next few years, but I'll probably be wrong one way or the other.

I would disagree with the suggestion that 1-bed flats are the least affected in a crash - if BTLs run away from a falling market I would expect the opposite.

If I were you I'd look at what will happen to your personal equity over three years in four different scenarios:
1) Buy the flat, prices up 5%
2) Buy the flat, prices down 5%
3) Stay at home, put what you would have spent on the mortgage into some sort of ISA
4) Stay at home, turns out you end up saving nothing (tempted by a new car, or some other frippery)

With these numbers in front of you, and with your feel for how positively/negatively each would affect you, and with your feel for the likelihood of each, you should be able to make a rational decision.

Good luck!

Gorgeous_George

Why not try paying your parents a reasonable amount, say £500 per month, to cover your board and lodgings. This will get you used to the idea of paying bills and they could put the money towards your £50K gift.

I have no idea whether house prices will fall or rise. However, I think that there is more scope for downward rather than upward movement.



GG

Phirefly

If you're young, earning £15k a year and have to get a 100% mortgage, its a bad time to buy

If you're young, earning £15k a year and your parents want to spend £50k to help you own a house, you should do a little dance of joy then find somewhere to buy asap before they change their minds.

Good luck

thewinkshow

thanks mate.i feel very positive from all your replies,i am doing a dance of joy and will hopefully soon be consuming plenty of jack daniels in my own place to celebrate,lol.