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

CB1979_2

pretty much agree with everyone else, personally would look at a 2 bed place though, in case you ever want/need to rent a room out and imo are slightly better buys than 1 bed.

you could rent that other room for probably the cost of your mortgage, therefore you'd only have to pay for living costs.

Just gives a lot more flexibility as well, what happens if prices do crash by 50%? you don't want to end up in a 1 bed place with a g/f & kid in 3 years time and you can't move.

if you were going in on it on your own, i would've said don't do it regardless of a crash or not! lol

thescouselander

I'd say you are right to be worried about a crash. Nobady can say for certain what will happen to property prices but consider the following.

1) House prices are currently at record levels when compared to avarage earnings.

2) Interest rates are rising and some predict they could go as high as 6%. A while back it was thought 5.5% would be the peak so whats to say they couldn't go even higher than 6% - there already reports of people starting to struggle with repayments at current levels

3) Buy to Let is quickly becoming a less and less atractive investment. Increases in interest rates are making it less profitable (or even making the BTL owners a loss) and there are reports of some BTL investors begining to sell up. A mass sell up in the BTL sector could trigger a correction.

4) The numbers of first time buyers are at record lows. If BTL investors stop buying and FTBs remain priced out there will be noone to support the bottom of the market and prices could fall.

In my view the increased interest rates will at very least put a stop to house price inflation so there would be be nothing to lose by waiting to see how things work out. At the end of the day its up to you.

garethhr

You have a right to be concerned, you are taking a big risk. A FA will likely try and get you to borrow, perhaps beyond your means.

Food should normally take up at least 10% of your income.

It very much sounds to me that you are overextended. Try and find somewhere to rent for a few years, and see where the future takes you.

garethhr

Regarding HPI, prices are currently going up, but the rate of increase is lowering.

This page should give you a good idea:

http://www.housereview.com/wiki/How_to_Value_a_House

nickmack

My opinion is that if you're taking out a mortgage for 30-35 years, you're probably stretching yourself. Any reason why you've chosen this repayment period?

As for house prices, crashes are regularly predicted by 'experts', but in reality it's incredibly difficult to accurately state what will happen. However, don't let this worry you in particular, if you listened to every doom merchant, you'd never purchase anything.

Kaz2904

House prices have been about to crash since I started looking for my first place- in 2001! It hasn't happened yet.
My advice would be to save up a little pot for fees and some deposit while you are looking around, get a flexible mortgage so that you can overpay even if it is only £10 per month it is still extra money off the mortgage. If you get a longer fixed rate then it could see you through quite well but could end up being a pain if you decided to move somewhere bigger in 3 years or so.
Not been much help really have I!

Nenen

Just wanted to say... please don't let my almost 22 year old son read any of your posts.... £80 per month keep!!!!!!!!!!!!!! :j :j :j FIFTY GRAND deposit for a house!!!!!!!!!!!!!!!!!!! :j :j :j He would think he's died and gone to heaven!... either that or he'd be round to your parents' house asking if they'd like to adopt him!... come to that... would thye like to adopt me?:D

Bargain_Rzl

JayScottGreenspan wrote: »

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.

The OP said "the cheapest low-priced houses" - not one-bed flats. I'd tend to think cheap houses would hold their value better than cheap flats.

thewinkshow

thanks all.

garethhr-why do you feel will i be overstretched?my total estimate came to half my wage,id say i can live o.k from whats leftover,i know alot of people who spend more than half their income on house/bills and they get by.is there any reason you say this that i may i not thought of,thanks.

nickmack-the reason ive chosen 30-35 years is to make my initial payments cheaper,so i can get my foot on the ladder,i aticipate my wage going up in the next few years,at which point i will remortgage over a shorter term which wont affect my pocket as ill be earning more.

kaz2904- i see what your saying,but i dont need to save a deposit or legal fees as i will be adding them to the mortgage,and have a 50k deposit,i could leave it and they may go up,and in a few years kick myself for not getting on the ladder,if you had ponders for a few years and not bought in 2001,u would be kicking yourself today wouldnt you,but saying that they are due to be going down so i hear so maybe its a bad time,i aint sure what to do really.i suppose if i get a 5 year fixed morgage then it wont affect me that much.

thanks you all for your advice

Bargain_Rzl

thewinkshow wrote: »

thanks all.

garethhr-why do you feel will i be overstretched?my total estimate came to half my wage,id say i can live o.k from whats leftover,i know alot of people who spend more than half their income on house/bills and they get by.is there any reason you say this that i may i not thought of,thanks.

I'm not going to disagree with you, but do bear in mind that a person's ability to live on half their salary really depends on what their salary is in the first place

For somebody whose take-home pay is £1,000 a month, if that person spends £500, 50% of their pay, on their housing they only have £500 left which isn't a huge amount. Somebody taking home £10,000 a month would have £5,000 left to live on after spending 50% on housing, and indeed would theoretically be able to "afford" to spend 95% of their money on their accommodation to be left with the same disposable income as the person bringing home £1,000

So, might those people you know whose mortgages/rent are more than 50% of take home pay be either (a) richer than you to start with, or (b) in debt?

Just a thought - didn't mean to put you off!