is it the right time?????

Nenen

Thanks for the thought-provoking questions... they are really useful and just the sort of thing I'm looking for. :beer: As far as I'm able to answer.....

olly300 wrote: »

A few questions:
1. How do you plan to pay your mortgage of when you retire? Most people's pensions are a good deal less than their salarly even if they have a final salarly pension. In addition lots of people have to work in retirement and it's harder for older people to get work at the same level particularly when they are forced to retire.
At the moment we have three children living at home and need a reasonable amount of space (3-4 beds). We are also living in a very expensive area. When we retire we could (hopefully) downsize to a smaller property in a cheaper area to pay off remianing mortgage. We are still putting 2 children though university... hopefully within the next 5 years (well before we retire) thinkgs will be a bit easier financially (they'll all either have left home or be contributing to bills) and so we'd hope to overpay. I would also hope that my final salary pension will be help as in 15 years time I guess inflation would mean that mortgage repayments that seem horrendous now would not be so bad in compariosn as wages should have risen by about 30% (assuming 2% per year without compounding).
2. How do you plan to pay maintenance on the property let alone decorate it or fit new kitchen/bathroom/carpets if you can just afford to pay the mortgage? While you may be able to move the furniture around it's no good if you can't afford to buy the furniture. If we bought now we would budget for furniture and some alterations if needed by using some of our savings (equity from the house we sold in March). We are not used to living in a palace and are quite good at making do with 2nd hand furniture etc.
3. What happens if interest rate rise 2% will you still be able to pay the mortgage? That would be our biggest worry at the moment so we're looking at long-term fixed rate (at least 7 years).
4. What happens if one of you loses your job will you still be able to pay the mortgage considering you won't be able to save any money for emergencies?
My dh has insurance for that... I am a teacher so not very likely, but if it did happen then I would turn my hand to whatever necessary... supply teaching, tutoring, barmaid etc! I've done all of this and more before. I suppose I'm a cautious optomist where that sort of thing is concerned as I'm very hardworking, fairly flexible and I've always managed to find work somehow in the past. My biggest worry would be if we went into negative equity and I was ill for longer than a few months as I can't get permenant health insurance like my dh (due to previous health history)

Having said all that, it still frightens the hell out of me to take the gamble. On the other hand, if we don't we might never own our own house again and I really can't stand the thought of having to keep moving every few months for the rest of my life.... every time a LL decides to sell up! If I had the kind of secure tenure etc of council tenants I think I'd rather rent!

Nenen

Well... from my very financially unsavvy position now doesn't look like a good time to be taking on a massive mortage.... but I don't know if I can hold my nerve!!! Common sense tells me to find somewhere else to rent for at least 6 months until we see a clearer picture for house prices but my emotions are saying....
'Quick get back on the housing ladder.... what happens if you're wrong and prices shoot up in this area? You'll be stuck in rented houses, moving every six months for the rest of your life!!! Buy! Buy! Buy!'

Problem is that in the late 80s (just prior to the last HPC) we had a sale agreed on our house at 75K. Unfortunately, at the time, we couldn't find anywhere to buy in the village we wanted and so we considered renting for a while but were too scared because at that time prices were rising each month. Consequently, our buyers got fed up waiting for us and withdrew. Fast forward a few months into the HPC and we eventually sold our house for 52K (around 30% drop). Of course the house we then bought had dropped too but I've kicked myself for years thinking 'If only we'd sold our house at 75K and rented for a while we'd be soooooo much better off now.'

Of course hindsight is a wonderful thing... but having made that mistake once I don't want to do it again. Conversely, s*d's law being what it is, no doubt if we take the gamble on continuing to rent this time in order to be in a more comfortable position when/if prices go down, then house prices will suddenly increase and gallop away from us!

I never seem to be able to make the right calls on money related stuff! Crystal ball anyone?????

Zammo

Personally I think stagnation will be the order of the day for the next 6 months or so. At the moment there aren't many distressed sellers and employment is still high so there is little incentive to drop prices - home owners will sit it out rather than reduce their price.

I think it would be a safe bet to rent for 6 months just to see how it all pans out.

Nenen

We are leaning towards that view ourselves Zammo... nice to know it's a shared opinion!:beer:

PINGLEIST

Nobody has ever witnessed a fall in house prices where there are so many small-time investors after easy money. The novice BTL brigade will be the first to sell when they don,t see a return for their money in increased rents coupled with increased mortgage payments as the one-way movement in house prices has ended. This would have enabled them to ride out the storm.

The real tests are yet to come in my opinion;

The natural slowdown in winter
Previous rate increases starting to bite
Difficulty getting high borrowing to earnings mortgages
Change in sentiment

This could initially trigger a slight fall but more seriously a massive correction if there are more casualties like NR. With their high fees they are being charged from the B of E they have to increase their mortgage rates, other banks in similar positions will probably follow the hike signalling an end to cheap lending.

All guess work on my part but as a whole it is preventing me from jumping into the housing market for at least a year.

HenryWeston

Zammo wrote: »

Personally I think stagnation will be the order of the

markets dont stagnate, they go up or down, all the signs are that the housing market is now going down.

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p1an0player wrote: »

It's a matter of opinion. I think you should wait if you are renting cheaply. House prices in Nottingham seem to be heading downwards. Interest rates are unlikely to plummet for a while.

Interest rates won't be coming down Merv has said as much. Has anyone else noticed the price of food in the last few weeks? The only thing going down is Northern Rock and along with it the pyramid scam we call the UK housing market.

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Zammo wrote: »

Personally I think stagnation will be the order of the day for the next 6 months or so. At the moment there aren't many distressed sellers and employment is still high so there is little incentive to drop prices - home owners will sit it out rather than reduce their price.

I think it would be a safe bet to rent for 6 months just to see how it all pans out.

Competition is fierce for jobs at the moment. I actually feel lucky to have a job. The reality is very different to how the government paint it.

izzybusy23

SCREAMIN_BABIES wrote: »

please someone is this the right time to be buying a house or are house prices and intrest rates about to plumit ????

I really DON'T think you needed to post this on here if you watch the news...

So erm, NO is my question. You would be stark raving mad to consider it IMHO.

Editing to respond to somebody's question about noticing how much food has gone up. I was shocked to see the price of hovis medium wholemeal bread at £1.09 at my local asda. Thats a hike of 30p in a matter of weeks!!

Apparently you can judge how far inflation has risen by how much loaves of bread have risen.

derek.gtalk

the rise of bread is due to bad weather in canada and other countries which export wheat. do not think it's a proper reflection of the inflation.