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

aidsy

ive just got a letter tho the door 2day about the Bank Of Ireland are now doing 35year mortgages and not only that but they r doing a (first start approach) this means that they will take the parents income as well as the applicant's income even if the parent are 58years old i can see the 40/50 year mortgages comming soon...

Pal

Who the heck wants to get in debt for 35 years just to buy an overpriced house? If you can't afford a house within 25 years then don't buy. There will be lots of other people in the same position and eventually the market will cool down so that you can afford to buy. It might take a few years to happen but surely it has to be worth waiting a few years?

Woby_Tide

there's someone still sat there with a warehouse full of betamax videos because someone told them it might take a few years to catch on, I think they're getting worried now

what happens if it takes 10 years to cool down then you take a 25 year mortgage out, is that economically better than say a 35 year mortgage now when you take into account rent, too many variables for me to evaluate, which is the better option(it also ignores the risk factor of price drops in those 10 years, or rises for that matter I guess)

loopyloo_4

With the interest i make each year on the profit made on the flat i have just sold it covers the extra i pay rent on top of what i paid on my mortgage.

although i am not making any money, I am not losing any if the prices do fall a bit. and in the meantime i get to live in a nice house which I wouldnt necessarily afford a mortgage on without my profit from the flat being swallowed into it.

For now I am happy. If the prices fall, great i have a nice big deposit, if they dont I'll just have to find a man with a house to marry ;D ;D

Woby_Tide

and if prices rise albeit at a slower rate than last few years?

Pal

If house prices continue to rise Loopyloo is still in a much better position than most first time buyers as she has a large deposit to put down.

35 year mortgages are a daft idea designed to benefit the lender and help sustain ridiculously high house prices.

Let's be honest here though, house prices are not going to rise by an substantial amount for the next few years unless everyone starts getting massive payrises to pay for it. The problem is that prices are very high compared to people's earnings but we have allegedly full employment meaning that there is still reasonable demand.

This suggests to me that prices will neither fall nor rise significantly in the next few years. They might bounce up and down a bit for a while (a bit like the stock market), but prices will generally stay the same.

Personally I think prices will fall by about 10% over the next few months then stay almost static until an economic shock occurs that causes a major crash. That could take anything up to 10 years.

The other alternative banded about is that prices stay entirely static for up to 10 years while everyone's earnings catch up, then start increasing again. I don't believe this. For earnings to catch up with house prices they are going to have to rise substantially. If they do so, it will cause inflation to rise sharply and so cause interest rates to rise as well, which will cause a housing market crash by itself as mortgage rates increase.

I do not believe that a major crash will come in the next year, but a crash will happen at some point, the only question is when. I also do not believe that we are currently at the top of the interest rate cycle as many commentators try to make out. Interest rates might have peaked for a while, but I believe that they will stay about the same until either there is a recession, in which case they will fall, or alternatively economic conditions improve and inflation starts to build up again, in which case they will rise.

loopyloo_4

and if prices rise albeit at a slower rate than last few years?

Then I stay in rented accomodation and my money stays in the bank. I am not too bothered about actually owning a property at the moment.

Enviomon2

Well done loopyloo. imo you've definately done the right thing. Just think, if you wanted too you could even shop around for a better place to rent maybe even a cheaper place to rent and you could rent this place out anywhere in the country so it could even allow you to aply for a new job altogether and go into a higher pay bracket.

Also if you were ever thinking of getting a job abroad it might be good to look at the house prices elsewhere.

My mother owns a hosue in Portugal, nice little place in a village about 10 mins from a big town which only cost her 26k in euros and 3k in euros to do up abit.

Bamf100

It seems to me that the only people who foresee (are hoping for) a property crash are those who want to cash in on the poor souls who went for it and bought over the last couple of years, and who will have there homes taken away for whatever reason allowing the vultures to come in and snap them up dirt cheap.

Personally I hope the prices level off and hold for a year or two then start to increase again, which is also what I believe will happen. This will teach the vultures a lesson. If you want to buy a house then buy it don't try and predict the future. So there has been a crash before? So what?

aidsy

if every1 thought like loopyloo the demand on rental propertys would increase and so would the rent per month ...