House price crash-don't make me laugh

Guy_Montag

Good point - there are always runs on banks in stable economies - aren't there?

fimonkey

I'm with Carolt and I'm a FTB. There are other FTB's who I know who agree with me, we think house prices are going to stagnate (not crash or drop significantly however) and it's ultimately cheaper to rent (when taking into account maintenance etc). Hence for the moment we're going to continue to save a better deposit to be able to afford the place we really do want to buy.

So if the number of FTB's dry up, what will happen?

Vampgirl

Another (potential) first time buyer here. We were seriously looking to buy earlier this year but have finally taken the decision that there are just too many unknowns at the moment: no-one can ever say for sure what the future is going to bring, but when the economy isn't in a particularly great shape then it makes it even more difficult to predict.

I feel much more secure renting at the moment: we have a great landlord who is happy for us to stay here as long as we want to, our rent is half what we would pay on a mortgage if we had bought this place recently and if the landlord ever found himself in the position of having to sell then we're in a pretty good position to make him an offer. So for the next year or so we'll save up a good deposit and by then hopefully the market will have stabilised somewhat and we'll re-assess then.

Turnbull2000

carpetbelly wrote: »

Too many FTBs seem to want at the top of the ladder when they dont have the salaries/deposits to go with it.

Either you've got a lot of financially naive friends or you're just making silly generalisations.

FACT - First-time buyers costs have tripled in 10 years. First-time buyer salaries have not.

FACT - First-time buyer numbers are incredibly low by historic standards. FTB homes (1/2 bedroom flats) can cost in excess of 200K.

FACT - Salary inflation is low and debt will not be eroded. Student loans also consume nearly 10% of any earnings above 15K.

FACT - Inflationary pressures are high and the cost of living is rising.

So despite all the above, are you really implying that lack of affordably is due to unrealistic expectations? Personally, I think you're just as deluded if you really believe this is the issue.

The very flat I'm living in costs £500pm to rent, yet would require £900pm to buy - with insurance and maintenance costs on top. That tells me something has gone seriously wrong with the market and I'm better off renting.

adr0ck

Turnbull2000 wrote: »

Either you've got a lot of financially naive friends or you're just making silly generalisations.

FACT - First-time buyers costs have tripled in 10 years. First-time buyer salaries have not.

thats a silly generalisation - what does it mean?

Turnbull2000 wrote: »

FACT - First-time buyer numbers are incredibly low by historic standards. FTB homes (1/2 bedroom flats) can cost in excess of 200K.

True and they can also be bought for £75K

Turnbull2000 wrote: »

FACT - Salary inflation is low and debt will not be eroded. Student loans also consume nearly 10% of any earnings above 15K.

We have a labour government to thank for that - good old gordon

Turnbull2000 wrote: »

FACT - Inflationary pressures are high and the cost of living is rising.

So despite all the above, are you really implying that lack of affordably is due to unrealistic expectations? Personally, I think you're just as deluded if you really believe this is the issue.

i don't htink its the whole issue...just part of it

Turnbull2000 wrote: »

The very flat I'm living in costs £500pm to rent, yet would require £900pm to buy - with insurance and maintenance costs on top. That tells me something has gone seriously wrong with the market and I'm better off renting.

aye but you would own it (well your mortgage co would but you know what i mean)

Ms_Piggy_2

carolt wrote: »

The ONLY reason to BUY (as opposed to staying put) in the current market is because you are convinced the price of your house, if not all houses, is going to continue rising, thus making the extra monthly capital sensible expenditure in the long term.

Surely that depends entirely on whether you are looking for a *home* or an *investment*

Woby_Tide

wibble68 wrote: »

So house prices have increased by £653 in the last 3 months.

That's what I call an investment.

thats what I call trying to make a point badly

izzybusy23

porridge wrote: »

To be honest I'm not bothered either, I just get fed up reading post after after post gleefully announcing that prices are going to fall 50%, Personally I would never want to rent !, I would rather have the security of knowing it is my home and I can do as I please, I am not at the mercy of LL.

Well, then its simple. Don't read the threads... unless you are worried and overstretched and talking the market up

House prices are falling, and 0.7% is nothing compared to this time last year. Lets see what the next 12 months bring huh?

Oh and I rent, and its far less per month than a mortgage on the same property, with the added luxury of hassle free problems of having the boiler fixed when its broken etc etc.

Badger_Lady

carpetbelly wrote:

Too many FTBs seem to want at the top of the ladder when they dont have the salaries/deposits to go with it.

Turnball2000 wrote:

Either you've got a lot of financially naive friends or you're just making silly generalisations.

Yes, FTB costs are very high and very difficult. I can only draw from my personal experience...

At age 21, I decided I wanted to buy my first home. I could only possibly stretch to a 1-bed leasehold flat in my area, so that's what I bought.

My sister, friends and colleagues of a similar agegroup could have done the same, but chose not to because a 1-bedroom flat wasn't good enough. They prefered the luxury of larger (rented) accommodation.

My sister, in particular, stated that she would never buy anything less than a 3-bedroom semi-detatched house with a garage on a nice estate near work. Bear in mind that, when she said this, she was a 22-yr-old single girl with no plans to marry or have children.

So, some potential FTBs' expectations are too high, although this is also combined with the affordability issues above.

My 1-bedroom flat helped me get into a position where now, 2 years later, I have the dream 3-bed house... whereas my friends are still renting their comfortable houses with money they'll never see again.

Turnball2000 wrote:

The very flat I'm living in costs £500pm to rent, yet would require £900pm to buy - with insurance and maintenance costs on top

TurnBall, I don't know where you live, but I'm surprised by those figures - my flat would have been £600pcm to rent, but I paid £670pcm towards my 100% repayment mortgage.

carpetbelly

Turnbull2000 wrote: »

Either you've got a lot of financially naive friends or you're just making silly generalisations.

Well, I wouldnt call them financially naive, I'd say they're not being realistic as to what would constitute a first house for most people not realistic about the areas they want to buy into for a first house.

Turnbull2000 wrote: »

FACT - First-time buyers costs have tripled in 10 years. First-time buyer salaries have not.

I won't disagree with that.

Turnbull2000 wrote: »

FACT - First-time buyer numbers are incredibly low by historic standards. FTB homes (1/2 bedroom flats) can cost in excess of 200K.

As someone else quite rightly pointed out, they can also cost a heck of a lot less as well. I bought a large 2bed as my first property. Very commutable from London. In good condition and no where near the 200k mark you're talking about. And I also had a lot of choice. Places are out there if you're willing to look and be flexible on where you want to live.

Turnbull2000 wrote: »

FACT - Salary inflation is low and debt will not be eroded. Student loans also consume nearly 10% of any earnings above 15K.

I have a student loan, earn a fair bit over 15k and have nothing like 10% of my earnings taken by that.

Turnbull2000 wrote: »

So despite all the above, are you really implying that lack of affordably is due to unrealistic expectations? Personally, I think you're just as deluded if you really believe this is the issue.

You don't think that's at least part of the reason? Do you personally know many FTBs trying to buy at the moment? I know I do and I'm going from my experiences.

Turnbull2000 wrote: »

The very flat I'm living in costs £500pm to rent, yet would require £900pm to buy - with insurance and maintenance costs on top. That tells me something has gone seriously wrong with the market and I'm better off renting.

The last flat I was renting would have cost 20k more to buy than the one I'm in. Was in a nicer area and had a garage, and that's about it. Cost £600 a month to rent. My mortgage, well thats only £200 a month more on a repayment. And for that I get a house that's got a much bigger floor space and it's easier for me to get to work as it's not in such a suburban area and lacking the public transport links.

I value the ability to decorate, the security of not being chucked out in 6months time and the fact this property is mine. I think that's worth the extra money.

Too many of my friends have watched too many of these do up shows and want either something flash in a new build which are overpriced. Or they want something a professional developer would have either got to first or they're to naive and that a professional developer wouldnt have touched but they've been sold to by an EA thinking they can do it up.