Inflation, Inflation, Inflation...

cells

mwpt wrote: »

How old are you? Do you currently house-share? Best bit of advice I can give any new prospective buyer is that if you are currently, or are willing to house-share, think of the income you can get by owning the place and being picky about your lodgers. It almost becomes a no brainer to buy a place in an area where you can easily get a lodger or two. Not only are you paying off capital on your property but the lodger fees probably cover the interest and then some. It's like living somewhere for free.

Of course, prices may come down next month, or next year, who knows, but if you're sensible you can ride it out or even use it as an opportunity to trade upward.

If interest only self cert 100% LTV mortgages existed then all share homes could do this. Instead of going to a landlord and asking him to buy that £500k house to rent to 4 friends one or two in the group could buy and rent rooms out to the others

of course with a standard mortgage on a £500k property asking for £100k income and £50k deposit that means sharers have no option but to ask a landlord to put up the capital and to rent it to them and take a slice for the time/admin/risk.

westernpromise

economic wrote: »

im in my early 30s. living with my parents at the moment rent free whilst i look for somethign to buy.

i actually did have a lodger for 6 months. i wasnt very picky and managed to earn a decent amount from my spare room (£850 a month).

i will be doing the same only my lodger will be my bro who i get along with very well.

i want to buy soon just wondering if its worth waiting a bit longer(few months) for it to be a buyers market and so can get something good for cheaper.

There are people who've been waiting 10 years for that to happen and who now need prices to fall by more than 100% (i.e. to be free) for their speculation against property to look like a smart bet.

If you want to know how that feels, have a read of housepricecrash.co.uk. Then ask yourself if you'd want to be any of those people

If you take out a mortgage at 3% fixed fro 5 years, you'll have paid off 15% of it by the time the fix ends. Add that to any deposit you're able to put down, and the risk of negative equity leaving you unable to move looks quite slim, even if there is no price recovery at any point in those five years.

Very few people who make money from property do so by timing their entry and exit around peaks and troughs. Most people with equity have amassed it by sitting on property for a long time, rather than by speculating in short term price.

economic

yes i dont want to be like one of them.

makes sense just to buy now - i agree. i bought in 2013 and made a decent return on my purchase and learnt a lot too. i want to now buy where i want to live for the long term. i know what to look out for now having gained the experience.

MiserlyMartin

Oh dear oh dear. Posts here of desperation, can't afford anything so will stretch to borrow a lot of over inflated London pad, getting lodgers in so can afford it. Fears the market will go down and all this at 0.5% base rates. Government using tax payers money to underwrite the market - they call it 'Help' to buy. If this isn't a reciepe for a big future Spain/Ireland/US style crash I don't know what is.

CLAPTON

MiserlyMartin wrote: »

Oh dear oh dear. Posts here of desperation, can't afford anything so will stretch to borrow a lot of over inflated London pad, getting lodgers in so can afford it. Fears the market will go down and all this at 0.5% base rates. Government using tax payers money to underwrite the market - they call it 'Help' to buy. If this isn't a reciepe for a big future Spain/Ireland/US style crash I don't know what is.

what would you estimate the surplus of supply over demand was in London

MiserlyMartin

The "sale and demand" theory eh? Not relevant really. Every other bubble including UK 2007 had the same characteristics. Once it goes down, so does demand. Jobs go, the whole thing collapses, working immigrants go home. All thats missing is the economic downturn and trigger.

westernpromise

MiserlyMartin wrote: »

The "sale and demand" theory eh? Not relevant really. Every other bubble including UK 2007 had the same characteristics. Once it goes down, so does demand. Jobs go, the whole thing collapses, working immigrants go home. All thats missing is the economic downturn and trigger.

Are you a time traveller from 1996? Because that's when I first heard this.

I don't think you got the memo. A property crash is a completely benign event with no adverse consequences for anybody except greedy boomers and BTL landlords, whom everybody hates, so that's OK.

Nobody will lose their job, nobody will lose their home, nobody will be stranded in negative equity. People on housing benefit will be able to buy, and nobody's rent will go up. Everything will be lovely.

Thrugelmir

westernpromise wrote: »

Are you a time traveller from 1996? Because that's when I first heard this.

I don't think you got the memo. A property crash is a completely benign event with no adverse consequences for anybody except greedy boomers and BTL landlords, whom everybody hates, so that's OK.

Nobody will lose their job, nobody will lose their home, nobody will be stranded in negative equity. People on housing benefit will be able to buy, and nobody's rent will go up. Everything will be lovely.

That's what real recessions are actually like. You are too young to know anything else than boom times.

mwpt

MiserlyMartin wrote: »

Oh dear oh dear. Posts here of desperation, can't afford anything so will stretch to borrow a lot of over inflated London pad, getting lodgers in so can afford it. Fears the market will go down and all this at 0.5% base rates. Government using tax payers money to underwrite the market - they call it 'Help' to buy. If this isn't a reciepe for a big future Spain/Ireland/US style crash I don't know what is.

Sure, I agree with some of that, but the question is when? If you could 100% guarantee a crash in the next two years, then it is worth waiting. But otherwise, it isn't, a person might as well buy, enjoy the home and start paying off the capital. Every year that goes by without a crash makes it less and less of an issue for people paying off mortgages.

Also, what is the problem with a young person taking lodgers to afford a mortgage? You're on moneysavingexpert. If a person is going to house share anyway, far far better to own the place and be the one receiving the lodger income.

padington

economic wrote: »

im wondering whether i should buy now or wait for a correction/slowdown. i recently sold my flat (wanted to sell for a number of reasons mainly the location). i want to buy for myself to keep into retirement however prices are expensive in the nice locations.

should i wait or not?

I would consider buying in the south, outside of London now if you wanted to play the market. The ripple finally looks like it's happening with the south east booming more than London now.