'Financial crisis'

Ruby_Hepburn

I have little knowledge about the stock market, but can anyone tell me if any off this 'financial crisis' news the papers are telling us would effect the housing market, or employment situations? I have an offer of interest (mortgage and survey pending) on a property, and though we plan for it to be our 'forever home' and not move again, I am slightly worried we are heading towards a 2008 downturn. I am a first time buyer, and also worried how it would effect jobs as we couldn't afford the house should either myself or my partner lose our jobs.

The offer we had accepted was a good price, but I don't want to find ourselves in negative equity as we only have a 5% deposit

david29dpo

Do you consider your new house as a home or a cash cow?

Davesnave

The majority of people with mortgages would not be able to afford their repayments if they lost their jobs, so why should you behave differently from them?

Yes there was a Crash in 2008 and some people lost money. A friend of mine lost his business and the bank took his house, but he's happier now than he was before then, because life is not just about how much one has in the bank. He could be poor and unhappy as well, of course, but it's his attitude to adversity which has made the difference, and no one can buy one of those!

If you feel very risk averse, hold off for a while and see which way the wind blows, but don't be bitter if that turns out later to be a bad choice. No one here can absolve you from the responsibility of making it, nor will their crystal balls all show the same future.

moneyistooshorttomention

I always took the view that landlords aren't going to be keen on unemployed tenants - and there is a lot more "public sympathy" for anyone at risk of losing their own home if its due to no fault of their own.

Hence, I tend to take the view that "buy regardless" makes sense. Having said that, it makes sense to buy a place that is capable of taking in a lodger if push comes to shove (even if its down to the extreme situation of having to turn the sitting room into one bedsit and the bedroom into another one for the time being). Hence one of my reasons for disliking the type of through lounge with a staircase coming down into it or door to kitchen coming off it.

worried_jim

Article in the times yesterday saying UK houses prices set to rise 30% in the next five years. Buy now and buy two!

http://www.thetimes.co.uk/tto/business/industries/construction-property/article4536028.ece

House prices are expected to rise by nearly a third over the next four years, with almost every English region overtaking the capital, but the devaluation of the Chinese yuan is hitting demand for prime London homes.

Davesnave

worried_jim wrote: »

Article in the times yesterday saying UK houses prices set to rise 30% in the next five years. Buy now and buy two!

http://www.thetimes.co.uk/tto/business/industries/construction-property/article4536028.ece

House prices are expected to rise by nearly a third over the next four years, with almost every English region overtaking the capital, but the devaluation of the Chinese yuan is hitting demand for prime London homes.

Here come the crystal balls!

Unless one is a subscriber, this one fades tantalisingly , just at the point where it says my property's value is going to rise by almost 40%......

Hmmm...must be right, then.

moneyistooshorttomention

Thinks...:think::whistle: - that's just reminded me I do actually have a crystal ball.

Only got as far as seeing grey swirling clouds in it last time I tried it out - now if it could turn out those Lottery numbers for me...:)

dodger1

Ruby_Hepburn wrote: »

I have little knowledge about the stock market, but can anyone tell me if any off this 'financial crisis' news the papers are telling us would effect the housing market, or employment situations? I have an offer of interest (mortgage and survey pending) on a property, and though we plan for it to be our 'forever home' and not move again, I am slightly worried we are heading towards a 2008 downturn. I am a first time buyer, and also worried how it would effect jobs as we couldn't afford the house should either myself or my partner lose our jobs.

The offer we had accepted was a good price, but I don't want to find ourselves in negative equity as we only have a 5% deposit

If you are worried about job losses then get mortgage protection, it's not that expensive,

http://www.moneysavingexpert.com/mortgages/payment-protection-insurance

With regard to negative equity, not really much too worry about unless you intend to sell or don't have mortgage insurance.

Pixie5740

You're buying somewhere to be your home. Some days your home will be worth more, others less. It doesn't really matter because it's your home...not an investment like a BTL or stocks & shares.

I bought somewhere in Aberdeen very recently despite the slump in oil price. I bought it to be my home. I have income protection insurance so if I should get made redundant that will keep my going for a while until I find another job. I'm currently building up a buffer of 3 x my current salary and I'm overpaying my mortgage so that when interest rates rise (I don't have a crystal ball but I think it is unlikely the BoE base rate will fall any lower than the current 0.5%).

You don't know what is going to happen in the future so you just protect yourself the best you can which in my mind is to have as little debt as possible and something stashed away for a rainy day.

worried_jim

Davesnave wrote: »

Here come the crystal balls!

Unless one is a subscriber, this one fades tantalisingly , just at the point where it says my property's value is going to rise by almost 40%......

Hmmm...must be right, then.

Sorry, I subscribe-

House prices are expected to rise by nearly a third over the next four years, with almost every English region overtaking the capital, but the devaluation of the Chinese yuan is hitting demand for prime London homes.
BNP Paribas Real Estate is forecasting that house prices will jump by 30.4 per cent across Britain between next year and the end of 2019 to reach £260,000, buoyed by robust economic growth and the chronic undersupply of new homes.
Growth will be strongest in the southwest at 39.7 per cent, followed by the West Midlands and the southeast at 34.9 per cent and 32.5 per cent respectively, the analysts said. At 19 per cent, the north will be the only English region to experience a lower rise than London.
Simon Durkin, head of research, said: “Many forecasts show benign, low-value growth, but history tells us that isn’t how the market behaves in reality, and expectations are far from uniform across the country.
“Many of England’s regions will see a stronger pace of growth over the next four years, partly due to their low base, but also as the benefits of economic growth extend across the country.”
In contrast, house prices in London, which rose by 7.3 per cent during the 12 months to June, are predicted to experience lower growth of 24.8 per cent over the whole of the forecast period. In particular, values of homes worth £5 million or more are expected to decline in value because of slower demand amid higher stamp duty rates.
However, although house price growth in the capital moderates from the double-digit expansion experienced last year, by 2020 average values are expected to be about 80 per cent higher than at their peak before the financial crisis as more high-income employees chase housing stock.
The real estate advisor’s analysts also found that the recent devaluation of the yuan was set to change the dynamics of the London housing market, which will inevitably have implications for certain development and regeneration schemes coming to the market.
They believe that the trend for selling homes before they have been built, a so-called off-plan market that is dominated by investors from home and abroad, is likely to give way to a growing proportion of owner-occupier buyers drawn from the London workforce.
The worst-case scenario, which the real estate advisor said was highly unlikely, is that off-plan units are returned to the market by financially challenged investors, which could have potential implications for development risk and for the funding of future schemes.
Adrian Owen, head of residential at BNP Paribas Real Estate, said: “In the short term we anticipate a tempering in the ferocity of overseas investor demand in the capital. Certainly, the slowdown in the Chinese economy and the sharp devaluation of the yuan has marked implications for potential investors, and more so for those committed off-plan.”
A separate report from Countrywide, the estate agency chain, found that, on average, landlords trade properties only every 17 years, compared with 14 years for the average homeowner, and that annual rental price growth increased to 4.6 per cent last month from 3.8 per cent in June, pushing the average rent to £937 a month.

G_M

Buy a cardboard box as a fall back just in case....