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

glennw

bridiej wrote:

No problem, not really sure why it was sticky in the first place to be honest...

This was sticky because I asked the previous Mod to make it sticky. I wanted to see a serious debate about timing entry into the UK housing market.

I think it certainly provoked one!

I believed, and still believe, that this is a serious money saving topic. Possibly one of the biggest savings that people can make.

Buy low. Don't buy yet!!!

As Abraxus said on RPoints:
http://www.rpoints.com/bb/viewtopic.php?t=92231&postdays=0&postorder=asc&start=0&sid=058577291d8bcf0372404b8ae7f7a916

The market was talked up by crappy TV programs and low interest rates. Why cant be be talked down with sense?


Bring on the crash, lets get it over with!

Could this be sticky again please ;o)

Woby_Tide

you've just cost loads of people another 6 months rent with this topic....;)

deefadog

Please correct me if i am wrong, but a big crash will only apply to first time buyers, I mean if you sold your current house (100k) and bought a larger one (200k), then 3 months down the line the market crashed by around 20k, so old house is now (80k) and new house is now (180k) there would be no difference! still 100k to move!

Is this correct or have i got it wrong?

Cheers

dougk_2

I agree with you- prices don't uniformly fall or rise anywhere - % terms are meaningless really .....

FTB's would suffer anyway as a crash in house prices may mean people moving need to downgrade because of negative equity so need to buy the smaller houses FTB's would normally buy. Well thats my feeling anyway.

You cannot use only historical data and theories because the housing market is a very different beast to 10 or even 5 years ago.

IF BTL investors come out of the market then I guess rental prices will increase to?

Personally I think a crash is unlikely and people have being saying a crash is due any minute for the past two years from what I remember!

Woby_Tide

if (note if) the market were to crash it's more likely to go in percentages rather than in set amounts of cash(also the percentages could be different depending on level of house prices i.e. top end of market may crash further than lower priced properties). In your example rather than say £20k you should do it on a 20% fall in prices say

so if market crashed(if....) then original house was £100k is now £80k, new house was £200k, is now £160k, if you'd stayed put you lost £20k equity, by moving you've lost £40k equity(this is a very rough example but the theory is the same), also depends on how much you mortgage for, if you took a 95% mortgage on the second property you now have £30k negative equity on the first house you only have £15k negative equity

Woby_Tide

dougk wrote:

Personally I think a crash is unlikely and people have being saying a crash is due any minute for the past two years from what I remember!

the first house price crash story appeared in 1998 in this present cycle apparently

dougk_2

So had I rented from 1999 when I bought my first house I would have spent around £30k in rent (compared to £15k in mortgage) and would have lost the £80k my house has incresed by - so I would have been abouth £95k worse off!

So as long as I we dont get a 70% crash I'm still better off regardless of what happens.........

But... on the other hand as I have just remortgaged to rent my house I wish everybody in Norwich now sells and moves to rent so I can get a higher monthly rental as demand increses. A crash for me would be as good as it is bad, but somehow I think its unlikely to happen!

deefadog

Ah yes, i should have used percentages

This thread got me a bit worried, as I am about to sell my home and upgrade to a larger property! But i think I am one of the luck ones where as I don't have nothing really to lose!

I am a bit thick when it comes to all of this So here are my figures:

My house - 160k, new house 200k - 40k difference - New mortgage will be 64k


If this time next year the market dropped 20%, where or what have I lost?

Thanks

Woby_Tide

if you stay where you are and it drops by 20% your house is worth £128k, if you move and it's dropped by 20% your house will be worth £160k so you'd still have equity of £96k(plus a bit more as you pay some of the mortgage of)

the point is that if you're aiming to sell your house in a year then yes it's potentially bad and you could lose money, if you're buying it to stay for a while i.e. as a home, then whilst a crash would damage your equity, it shouldn't affect you that much as you aren't moving (and you have a reasonable amount of equity). It's most risky for those moving and strecthing budgets to obtain a mortgage.

deefadog

Cheers Woby_Tide.

Well this move will be for at least the next 10 years if more! So not bad 30% equates to £8k negitive equity difference then if i move now or after the (imaginery) crash!

Thanks again