**Don't Buy A House** House Prices Set To Crash!!!

dougk_2

I beg to differ but there are quite a few people buying houses (and selling there own) to move to larger ones so 9 out of 10 are not property developers or landlords.

Also the past few years have seen parents buying houses in university towns for their children to live in whilst studying. They fit to to no particular category.

The whole culture of the country is changing so its not possible to concentrate on past trends and events to work out what is happening or going to happen. The world is changing daily.

People can afford to spend more on houses in relation to their salary income as in real terms the prices of other commodoties have fallen (food for instance).

Sensible young FTB's will have saved for a few years instead of drinking their money away needlessly- sorry but life is hard and a series of choices and noone has the right to anything - you have to work for it.

Finally are prices dropping? Not according to this:

"UK house prices rose by 0.7% in October, figures from the Office of the Deputy Prime Minister (ODPM) show"

Chop

Sensible young  FTB's will have saved for a few years instead of drinking their money away needlessly- sorry but life is hard and a series of choices and noone has the right to anything - you have to work for it.

That's an outrageous assumption. Not all young FTBs have 'drunk their money away'.

As a young FTB, I find that a highly insensitive, unnecessary and stupid thing to say.

>:( >:( >:(

dougk_2

Chop, then you are one of the sensible FTB's!

I am now in my early 30's and only bought about 4 years ago but realised early on it was a choice of going out night after night or stay at home and save for a house. For the average person YOU CANNOT HAVE BOTH. Speaking to older people / relatives it seems that this is nothing new.

I didn't mean to be offensive - but after seeing statistics on the web and programs like Booze Britain , then it shows there is a growing culture of spending excessive amounts on drinking, smoking, holidays etc. Last night watching Booze Britain they said the average student spends £2k a year on drink - well £2k x 3 years = 5% deposit on a flat or 1 bed maisonette.

Maybe it is wrong these people are not FTB's they are NTB's (No Time Buyers) as they won't be able to afford a house and basically thats thier own doing not mine, not yours , not the housing market.

Loaded_Bachelor

A pint of Tenants.
A glass of house red/white.
Lemon porch.
Tequila front door slammer.
Not enough Guineas for the deposit.
Bacardi breeze blocks.
A.L.E. ....Annual Lending Extremes.
Buy to let profit marGin.
The property bubble Schnapps.

diggingdaddy

Maybe we better get what meagre savings we have out of the building societies and banks and get it in national savings before the lot goes belly up then ??? ???

lilaliboo1

"I'm always surprised that people who need somewhere to live choose to rent rather than buy"

I agree. Whether to buy or not depends on:

• the alternatives to buying, ie renting: how much will you 'waste' while waiting for prices to perhaps drop? This could be more than the amount they drop by...

• what type of house you can afford - will it last you as a long term investment? For single FTBs, does it have rentable rooms so you can supplement your income if you get in difficulty?

• is it in an up and coming or good area?

• can you afford to add value to the house over time?

The people I know who were in negative equity last time round (or lost out financially when they sold) had to move quickly, either because of something you can't control like a divorce, or because of not enough space for a growing family, etc.

I would suggest that FTBs do not buy a one bed place right now that they are likely to grow out of quickly. A long term buy is the best bet.

I would also suggest that they consider this as 10 year investment. Historically houses are said to double in value every ten years (on average). I realise you cannot predict the future but people will always need somewhere to live.

deemy2004

House prices cannot double in the next 10 years peak to peak, if the inflation rate is only 1.5% !

Now if inflation started taking off then house prices may double or more.

raeble

Walked pasted a street filled with estate agents, looked in the window of one to see how much a house was going for in my street. It had been reduced it was on at 104k now gone down to 99k, been on the market a month or so. 50% of the houses in the window had been reduced, at least 25% of the others in-store had also been reduced. It seems that people are either unable or unwilling to pay what homeowners are asking. At least in my neck of the woods.

HeadOverHeart

In a stagnant or declining market, ALWAYS RENT IF YOU CAN

For example I have just pulled out of a brand new flat purchase in Manchester priced at £120K because when I sat down and worked it out I realised the following;

Interest costs on my 84K mortgage over the next year will = £4,488.

Although my rent of £700/ month (£8,400 a year) looks more expensive by £3,912/ year, in actual fact if I factor in the £40K which I have borrowed from parents (paying them back at Bank of England Base Rate, currently 4.75%) then this advantage is reduced to £2,012. Include stamp duty, legal fees, mortgage fees and this becomes a £500 loss over 12 months.

If you add into this equation a modest fall in property values - say 10% (and this is happening now the same appartments have been bought on the Wimpey development in question for 140K in May 2004) then renting my larger place in manchester for £700 / month looks 12,500 cheaper over the 12 month period.

Be Wise - Wait for the fall - if you miss the bottom buy on the way up but never buy at the at the top!!!

From all I have read - the only common ground seems to be that prices aint going up!!

HeadOverHeart

Yep, lets see what happens after the election.

Things at the moment are quite rosy, even 4.75% rates are not particularly high, but the housing market is drifting lower.

No ones mentioning the 'R' word YET !,
But I am afraid we are long over due for a recession, which is the direction we are drifting in.

Slowing demand, slowing momentumn, increasing deficit on trade and public sector borrowing requirement.

And don't think that cuttign rates will be possible, as coupled with a recession will follow higher rates !

Okay enuf doom and gloom enjoy your parties and the coming year. Me thinks the election will be a lot earlier than May.

The R word is being mentioned in the Indepentdent (7/12/4)

Manufacturing on the brink of recession
By Philip Thornton, Economics Correspondent

07 December 2004

Britain's production industries suffered an unexpected fall in October, according to official figures yesterday that left the sector on the brink of recession after five successive monthly falls.