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

nelly_2

How can modern ftb ers not be worse off when the price of houses has far outstriped wages???

There was a post grad earlier in this thread saying he cant afford to buy.

And hollidays arnt material goodies they are an investment in our happiness

dougk_2

FTB's are no worse off as:

Interest rates are lower
Other commodities (furniture, food etc) are lower in real terms. Esp. if not buying NEW (which as an FTB I couldn't and really there is no need to)
Average salary in early 70's was £1.5k it's now something like £26k.
There are starter homes and more small flats which simply were not there in 70's and these are aimed at FTB's.
Like for like (i.e if not doing all the modern things like multiple holidays, Sat Tv, new cars etc you have much more disposable income).

A house is in some ways like a bank and the deposit you put in is there and (unless prices drop) that money is always available to you.... if you have a holiday, you spend that money - its gone , never to return (and memories fade fast!).

Personally I think if you need holidays to keep you happy you have to look and see what makes you unhappy and change things!

Woby_Tide

nelly wrote:

No actually I wont become tight or obsessed with the price of my house, tight !!!!!! are the scum of society imo.

!!!!!!? how the hell is knowing what your house is worth being tight or the scum of society? Seeing as you're evidently not capable of owing a house yet you won't yet appreciate the finer points of small print where you'll need to know the price of your house to a) get a mortgage and b) insure it, only little things but it may help you. Mind reading your other comments maybe you are better off 'having fun' because you don't get holidays or anything when you own a house do you....:rolleyes: ...course not....

vishpatel

dougk wrote:

FTB's are no worse off

A house is in some ways like a bank and the deposit you put in is there and (unless prices drop) that money is always available to you....

a good way to measure this is to see what kind of properties FTB's we're buying (and hence could afford) in the past.

I think you'll find they weren't all going for 1/2 bed flats like they are now!!! And thats if they can actually afford anything at all!!

I've long since come to the opinion that most homeowners (who haven't bought recently) are completely out of touch with what FTB's have to face these days. The only ones that understand at all are those with children who are 18-30+ & haven't bought yet. Many of these parents are stuck with their children because home ownership is not within their reach.

I work in the city in London earning 33K gross. That would get me a mortgage of about 110K. I have 10K savings but half of that would go towards stamp duty (maybe thats about to change) and other initial costs like solicitors etc... BTW I save £1200 a month - sold my car a couple of months ago... cut back on holidays.

Now, I guess my budget is £120K = there is absolutely nothing available for that kind of price which is within a decent commute to my work place (Canary Wharf) and reasonably close to at least 1 member of my family (or a friend).

Don't worry too much you wannabe FTB'ers out there. The market has already turned... these things take time. The last crash took 6 years (from peak to trough). You'd be stupid to buy into a falling market. The best revenge is to 'rent well'. Currently rent is cheap, and you can live in a much better property than the cost of buying.

And with regards to your house being like a deposit account - yes if house prices keep in line with inflation or rise, but once they start to fall, LIKE NOW, it's like your piggy bank has got a hole in it. The money you put in is just falling out of the bottom!!

Don't expect any sympathy from the likes of DougK - He probably has a comfortable life on the back of his house price inflation. He may have even MEW'ed a bit. But just wait for the new dawn... debt has to be repayed - the bank wont take no for an answer. FTB, don't take on an insane mortgage and fund DougK's comfortable life. Wait.... and be patient.

dougk_2

vishpatel -

Wrong house prices here in Reading have not fallen and are increasing at the moment.

NO, I don't live a comfortable life and certainly not on the back of any increases in my property value. I work hard and don't waste my money.

You DO NOT have to buy in London to work in London.... You could easily get a flat in the surburbs for £130k ..... How about somewhere like Slough? You can be in central London by train in 45 mins!

House prices in London have always been high, hence the quantity of rental properties. London is the Capital City! Compare it to other capital cities in Eurpope and I don't think you will find properties are any higher... for example a quick search reveals that 2 bed apartments in Paris are circa 500,000 Euros and the same in Barcelona is 450,000 Euros...

Anyhow a search of Rightmove and there are numerous 2 bed places for sale within 5 mile of Canary Wharf for under £120k.

If house prices drop they go up again. If they drop then other factors come into play (normally higher interest rates, high unemployment etc - you may not have a job so then you can't buy!).

vishpatel

dougk wrote:

vishpatel -

Wrong house prices here in Reading have not fallen and are increasing at the moment.

You DO NOT have to buy in London to work in London.... You could easily get a flat in the surburbs for £130k ..... How about somewhere like Slough? You can be in central London by train in 45 mins!

House prices in London have always been high, hence the quantity of rental properties. London is the Capital City!

If house prices drop they go up again. If they drop then other factors come into play (normally higher interest rates, high unemployment etc - you may not have a job so then you can't buy!).

I notice you've already added 10K to my budget. This was probably a sub-conscious thing, because you know 120K doesnt get very far in the London property...

Without going into house prices in specific regions, I think we can all agree the general trend is downwards. Some parts of the country are always quicker/slower to follow the general trend, but they all do eventually.

Your right I don't have to buy in London, but in the long term that is where I will be living. In a downward market it would be stupid for me to buy somewhere I don't really want to live because when my equity starts to evaporate I will be stuck in good ol Slough!

House prices in London haven't always been high. An example: A couple bought on the same street as me 8 years ago. They are currently paying £400 a month mortgage. For me to buy a property on the same street now I would have to pay at least £1100!!! So things we're easier 8 years ago.

You're right, if house prices drop, they will go back up again. But the last slowdown/crash lasted 6 years... As I'm pretty sure we are now on a downward trend, you've just re-enforced my point about not buying now, because we are in for higher unemployment, higher interest rates etc....

vishpatel

dougk wrote:

Anyhow a search of Rightmove and there are numerous 2 bed places for sale within 5 mile of Canary Wharf for under £120k

How many of these are ex-local authority?? How many are above/connected to commercial properties??

Let's get real please...

dougk_2

vishpatel wrote:

House prices in London haven't always been high. An example: A couple bought on the same street as me 8 years ago. They are currently paying £400 a month mortgage. For me to buy a property on the same street now I would have to pay at least £1100!!! So things we're easier 8 years ago.

It's always been higher than other parts of the country.
8 years ago the average salary was much lower also (in my case I was earning £9k! - about a 1/3rd of what I am now).

I get your point, I wouldn't want to live in Slough .... I worked there and that was enough!

It depends if you are looking short or long term I suppose - if you are looking to buy now and stay for 15 years , the risk is minimal as by your viewpoint the dip (Crash?) will have been and gone.... interest rates can be secured with a 10 or 15 year fixed rate , so its only the unemployment issue....suppose it depends on the job you do

nelly_2

I said dougie, that people who are obsessed with the price of their house and not simply knowing it at purches time, and I went on to say "tight !!!!!!" are the scum of the earth,,, and you jumped in defending what was'nt accused, it seems you feel you need to for some reason. Maybe you are a tight !!!!!! I dont care.

And another thing I never said home owners dont go on holliday. But I'll bet 1000 quid you cant find another average wage earner (I'm a plasterer) who owns a house who, went away for 9 weeks on 3 different continents in just over a year.

Woby_Tide

probably because not a lot of people get 9 weeks holiday a year in the first place to be able to use for holidays, maybe this explains why you can never find a plasterer