The housing market

[Deleted User]

My boyfriend and I live together but would like to eventually buy a house. We have a nice size deposit and personally I would like to start looking to buy as soon as possible, but he wants to wait. I am concerned if we wait too long we will end up paying a lot more for a house then we would do now. I have read news articles in the past few weeks that are saying house prices are already on the rise since the new help to buy scheme came into force.
Is there anyone who has good knowledge on the property market that could advise, or at least predict, on where things will be heading in the next few years?


Thanks

PartyPopper_2

I suppose no-one can really give a truthful answer on this. We had our house up for 3 years and have just sold. We moved in 2007 - oh dear me! House prices were at their highest. Although we have lost money, we haven't really although it does sting somewhat. House prices are currently (except for London) around 2005-6 prices. No sign of prices going up here, but many more buyers around which may signify an increase. Depends on whether a large amount of first time buyers can get mortgages as well as property owners now who can afford to upsize. Personally I would say buy now but don't overstretch yourselves as no-one can predict anything in this world!


At least you won't have 12% interest rate that was around when I first purchased!

Seabee42

I would say one of the key details is location. In general and average terms house prices rise in this country because we increase the population through immigration and do not similarly increase the supply of accomodation. This looks likely to continue.

So over all I think its not unreasonable to expect house prices to rise just because the "experts" are predicting another 5million immigrants in the forseable future which will put a demand on the limited supply.

That being said local supply and demand will have just as big an impact the current increase in house prices is a long way from being felt all over the country.

Look at your local area on rightmove zoopla etc and if you keep looking you will soon see whether good houses move fast. If they do then probably house prices will rise in your area.

ChopperST

Any market is subject to variation and corrections from time to time.

Current issues affecting the housing market are;

- Historically low interest rates meaning its more affordable than ever to borrow money at "cheap rates"
- Help to buy means people with a 5% deposit can get on the ladder with the help of governmental support
- A chronic problem of long term under building (if there is such an expression) meaning that demand is far outstripping supply.

The only certainty of the housing market is that the cost of obtaining credit i.e. a mortgage will go up (probably after the next general election), this increase in mortgage rates will probably stem house price rises in the medium term. There are many people who believe the house market will crash and prices will fall. History tells us however that over the long term (25 years) property always increases in value.

If I were you I would thoroughly research what I could afford and get the best mortgage deal you can (with a reasonable fix say 5 years). Also factor in the fact that rates will rise into the future and that you could afford things if the base rate is say 5% (currently 0.5%). As a first time buyer you have a major advantage in that you are chain free - use that to your advantage and chance your arm when offering on properties you like and never be afraid to walk away, there will always be another house.

Owning one's home make sense in so many ways over the long term and if I were you I'd take the plunge.

GL

Turnbull2000

Our property market is currently going though a price adjustment to take into account government support and ultra low interest rates. These two alone should ensure a 20% rise in values within 2-3 years.

Our ongoing property shortage, mass immigration and tight planning restrictions will have an effect too, but more so on rents rather than house prices.

dimbo61

In short if you are looking in London or parts of the south east prices will rise.
The rest of the country has not really seen a lot of movement either UP or Down in the last 5/6 years.
Certain places have seen steady increases if IN-DEMAND areas
By the seaside or trendy town/city etc

googler

Without knowing where you are ....

If Aberdeen goes up by 20%, and Barnsley down by 20%, the overall average indicates a static market - but it's not static if you're in one place or the other.

Nationwide statistics are pretty meaningless, largely due to the averaging.

dominoman

Prices will be lower in 3 years. Of that there is little doubt.

Probably much lower.

Interest rates and house prices are almost perfectly correlated, inversely of course. Interest rates fall, prices rise. Interest rates rise, prices fall.

Interest rates can only go one way from here.

Don't believe the people that say London is immune. When even highly qualified accountants and lawyers are struggling to buy a 2 bed house in zone 3 you know something is just waiting to pop...

Turnbull2000

dominoman wrote: »

Prices will be lower in 3 years. Of that there is little doubt.

Probably much lower.

Interest rates and house prices are almost perfectly correlated, inversely of course. Interest rates fall, prices rise. Interest rates rise, prices fall.

Interest rates can only go one way from here.

Don't believe the people that say London is immune. When even highly qualified accountants and lawyers are struggling to buy a 2 bed house in zone 3 you know something is just waiting to pop...

Deary me! I would take an economic catastrophe or major natural disaster for prices to be lower in 3 years time.

BigAunty

There is a dedicated Debate House prices forum on MSE.

I've always loved the Private Eye's take on this. They had an article quite a few years ago when the market was very hot that said

'Experts have indicated that property prices will fall/remain static/increase in value.'

How is it possible to tell if we are in a bubble or if a bust is due around the corner? It's usually only known 'retrospectively'....Certainly the one predicted to burst a few years back didn't wipe the prices down to the extent that many expected.

Like an earlier poster on this thread, another poster there thinks the inevitable rise in interest rates will be catastrophic as people have become complacent about the historically very low mortgage expenses and that when interest rates have risen before in the past, repossession rates shoot up and depress the whole of the market.

I always remember a well known author saying he detested mortgages and saved for many years to buy his first property outright. I know that rent swallows up disposable income so I understand why most people save for just the minimum deposit on their first place. But I kind of admired that stance against debt.

Mobeer

Prices are rising quickly and mortgages are relatively cheap, so buying now seems sensible to me. If a 200k flat rises 25% over the next 5 years (from Savills Research) then you would need to save about 10k a year to make no progress at all.

Longer term, numbers of households are growing faster than the number of homes, which would suggest prices will continue to rise.

But if those predictions of a housing bubble are true then you might be better renting. Still, prices have risen almost every year since 1996 (from Halifax).

Another risk for you two is whether you will be together in 5 years time. I'd also suggest you get something formal regarding ownership sorted out when buying together, just in case.