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

filigree_2

I'm not convinced that falling prices will lead automatically to lower interest rates. The trauma of the early 90's crash was compounded by mortgage interest rates approaching 16%, not to mention the introduction of crippling Poll Tax charges.

I had my flat valued and the estate agent said bluntly "It will be bought by an investor, no private individual can afford these prices any more. Don't bother tarting the place up because landlords really don't care about the decor". BTL has contributed to the currently astronomical house prices, IMO. Prices aren't led by the aspirations of real people trying to buy a home, they are inflated by businesses who see the property as an investment.

alicardinal

Lisyloo - bought the house last November - so not that long ago. But, thinking about it, I do live in the heart of the Surrey stockbroker belt, so I think that probably distorts the rental market a bit.

A

Loaded_Bachelor

Presumably you stumped up a fair chunk of the cost of your house with a deposit as I wouldn't think a £630 per month mortgage buys you much in Surrey. Perhaps you have an interest only mortgage..... or a shed

The differences between buying and renting (even if they both cost the same) are that your mortgage payments are usually more volatile than rental payments and if you are unlucky and house prices drop then it is difficult to move without downsizing. If you do move them moving related costs are far higher if you own rather than rent.

I think the burning question is not whether one should own rather than rent (most would agree that owning is better in the long term) but whether a renter should buy a property at this particular time, which goes back to the original title of the thread.

I will be renting for the time being.

alicardinal

LB - more or less a shed yes , but you're right I did stump up a substantial amount as a deposit.

It does come down to personal judgement and individual circumstance. Faced with a choice now, I'd probably have to move back home

chubbybrown4real

House prices were fueled by a stockmarket crash,property seemed the tonic to keep private investments up.
what could happen is when all speculators sell the prices will dip.
a house as a home is worthless as you have to live somewhere unless you die.
A house as an Investment ,well yeah,someone mentioned maggie and the Im alright jack attitude well fine,the only thing to watch is the increase of fixed prices in your area,it just means the rats are leaving the ship.
it just makes me wonder who is buying all these houses ?
fly with the crows you get shot with them.
I do feel sorry for the kids trying to get on the ladder,my place was over 3x my income then in 1992,I suppose its always been hard but now you dont have the choice of a council house do you...
I have enough trouble finding my council tax let alone having two houses to play with.

chubbz ::)

Loaded_Bachelor

I strongly feel that a major reason (along with low base rates) for recent house price growth is down to buy to letters and buy to developers of whom I believe 90% of them never thought of doing a buy to let or to develop until it became heavily publicised and almost glamourised by television programmes in recent years.

As prices have gone higher and higher it has priced more and more people out of purchasing their own property (to live in) and therefore they are forced to rent. This has therefore created more demand for the buy to letters to absorb making it easier for them to rent out their properties. The steady rise in property prices has also made the buy to letters confident that they are on to a great long term strategy.

The obvious risk for buy to letters now is that if prices begin to fall then the complete opposite effect may happen. More renters will be able to now buy their own properties and rental demand will consequently reduce leaving many buy to letters with empty properties. This scenario would trigger a mini panic as buy to letters desperately scramble to sell their now loss making properties. The real nightmare for a buy to letter would be if they have tenants on a long term assured tenancy contract and during this time house prices plummet therefore prohibiting them from selling up until the tenancy period is over.

aidsy

in my local area (where i keep a close eye on property prices) there seems no sign of a crash or even a slow down of house prices, the demand for houses is great in my area i was in my local EA last week , they are selling propertys faster than ever they said . house prices will continue to rise , a friend of mine bought a 3 bed semi for 85k 8 months ago , now two houses close to him have sold for 95k. He told me that if he didnt buy when he did that he couldnt afford to now..
i say bring on the 40 and 50 year mortgages. it has to be the way foward

Loaded_Bachelor

A three bed semi for £95K! This price is way below the national average for a similar property so I can see why there might be scope for some further rises even if other areas house prices stagnate. Where are you? I'm guessing it might be Moss Side or Beirut or somewhere like that

(I live in a run down depressing part of urban Kent and a grotty 2 bed terraced house costs £110K, a three bed semi is around £160K)

As for 40 and 50 year mortgages; firstly they are not quite as attractive as they might first seem as the compounded interest to pay on them is so huge that monthly repayments would not be as much lower than say a 30 year mortgage as you might think. Secondly, these kind of mortgages would surely not be granted to anyone over the age of 28!.................. which rules me out

aidsy

hi loaded
the area that i live in is a popular seaside town in northern ireland called bangor ,not Moss Side or Beirut. House prices are still going up there has been no slow down, i still say bring on the 40 and 50 year mortgages.

Loaded_Bachelor

aidsy,

I haven't visited any part of Ireland yet but I'd certainly like to take my girlfriend on holiday to Bangor :P
(Sorry, old joke)

I think its fair to say that your region of the U.K.,although bound by U.K. interest rates, essentially has an economy of its own which in recent years has attracted a lot of inward investment beyond that which the rest of the U.K. is experiencing.

I am guessing that property prices in general in your region must have been held back over the years due to a lack of property speculators, buy to letters, migrants coming in etc but obviously all of these things happily are more likely to now happen.

Northern Ireland gets little or no exposure or publicity (on English T.V.) as far as its economy and property prices go and I think you have uncovered a potential hotspot for property price growth.

We see all of these T.V. programmes about people selling up and buying far cheaper properties in France/Spain/Australia/Italy etc........... well why not Northern Ireland? It would certainly be a lot easier from a paperwork and job point of view for people to move there.