Is now the time to buy?

MrsCrafty

I have sold, lowered mine by 35k to get a buyer and to be honest I have put in offers over the last 3 months which I have then withdrawn. The higher end market is stiffed by stamp duty and this can only have a knock on effect. The house I am currently offering on was 495 last October, reduced to 475 in Jan and reduced to 450 last week. My offer is 430. They are considering it.

All of the expensive houses here in Essex are simply not selling. Too high. I don't think there will be a crash but I think it's beginning to be more sensible.

I have also noticed houses sold stc but back on market within 2 months. I suspect people cannot get the credit or surveyors are being cautious. It couldn't just go on and on going up. People's wages simply haven't risen.

Just my opinion. I am an ex agent & mortgage broker.

strawberries1

Conrad wrote: »

Brexit is about opportunity and us tailoring our own destiny. This tailored autonomy WILL enable us to prosper even better than now.


Think about it - you have the old tired lumbering slow EU full of rules and enterprise killing intrusiveness on one side of the Chanel. On the other you have a pro enterprise, nimble, confident global nation, a haven for investors with it's own full seat at all the global rule setting tables that hand down rules to the EU


I assure you Brexit will be a huge success. Quote me on it - stick this on your fridge.

Conrad for PM!!:T

Crashy_Time

Davesnave wrote: »

Well, they were right; it happened in 2008, but it wasn't as huge as they expected.

If they'd sold up in, say, 2006 and re-purchased in mid-2009, or if they'd just purchased as FTBs at the latter time, they'd have done OK.

But most didn't, because they were expecting more than was reasonable.

We sold our house in 2008 at 16% below the previous year's valuation, and I know they fell further in our (desirable) area, so maybe a 20% discount was possible. Not bad. However, by then, there weren't many people selling!

It was also possible to make a good profit on renting in 2008. Our rent was £10k/pa less than the interest we were accruing once we'd sold.

So, conditions were good for the sell-to-renters, but it didn't last long. They were simply too far up their own fundamentals to recognise a good situation when it happened.

They also said that a banking crisis would morph into a sovereign debt crisis, which in turn would become a political crisis, and we got to Trump/Brexit partly because bankers and debt holders were bailed out too obviously in 2008 IMO. The predictions were thrown by the amount of financial firepower central banks were prepared to throw at the "problem" in attempts to keep the bubble inflated. I really wouldn`t want to be owing large amounts of mortgage debt at the moment the way things have started to play out.

ThinkingOutLoud_2

Some relatively basic thinking can help here and some has been suggested.

High value homes are often more volatile - so they are not an issue for the OP. There are not enough homes at the entry end of the market...so any crash may be better insulated at that end.

When you buy anything more than a chocolate bar - it is worth doing your research and making sure the price for the item is appropriate. In the case of house that can be more difficult if uniqueness (what it is where it is and when you buy) - unless it is next to many house just like it. But, the point is do not be tempted to overbid just to get a property - but you may have to pay more than 6 months ago...and more again in 6 months.

Don't buy a high value item like a house if there is the possibility the prices may fluctuate will HAVE to sell. Everyone obsessed about negative equity in the last century and it did really affect those forced to sell / who could not keep paying the mortgage. The rest of the population of homeowners who owned throughout simply saw no impact (aside worry and something to discuss at the pub / while watching the kids play football) - because it ONLY hurts if you need to sell before the market recovers.

Of course, someone will say but it may never or will take 50 years to recover- but history does not suggest they are right. Hence, if you can commit to your house being your home for a good few years - you will be unlucky to come unstuck.

Given rents are some way above the comparative costs of home ownership (landlords are making money, right?) - you will be better off as "your own landlord"! Plus, the fact you can decorate, modify, enhance and enjoy calling it your home is nice side benefit.

If you are ready financially - do you homework on the local market and don't delay too long in case prices do go up and up - but don't rush into an over-priced property out of desperation. Buy a house you like too!

It sounds like where you are at - but if this helps endorse that sense :-)

cloo

Depends what you want to do with it. If you can just afford a small place you know you'll grow out of within 5 years, maybe not. If it's a keeper for the longer term, I'd say go ahead and buy whatever the rest of the world is doing as long as it's a property and area you like.

Davesnave

Crashy_Time wrote: »

The predictions were thrown by the amount of financial firepower central banks were prepared to throw at the "problem" in attempts to keep the bubble inflated.

That's one way to spin it.

The other way is to imagine how many ordinary people would have been severely affected, had been a total financial melt-down.This would have included many of those poised to capitalise on the crash in prices.

It's reasonable to assume that if the government and the banks found creative ways to avert a financial disaster last time, they'll do it again, should conditions dictate.

Crashy_Time

Davesnave wrote: »

That's one way to spin it.

The other way is to imagine how many ordinary people would have been severely affected, had been a total financial melt-down.This would have included many of those poised to capitalise on the crash in prices.

It's reasonable to assume that if the government and the banks found creative ways to avert a financial disaster last time, they'll do it again, should conditions dictate.

Well the biggest gun they had was dropping interest rates, can`t see that working too well this time? It will be ironic if the people saved last time around by the CB actions to bail out the banks now lose their jobs because of a Brexit voted for off the back of those decisions?

ukcarper

Crashy_Time wrote: »

Well the biggest gun they had was dropping interest rates, can`t see that working too well this time? It will be ironic if the people saved last time around by the CB actions to bail out the banks now lose their jobs because of a Brexit voted for off the back of those decisions?

Let's be honest you have no idea what is going to happen to house prices just like everybody else. You have been predicting a crash 15 years so why should people take any notice of what you say. If someone bought 15 years ago not only would there house be worth a lot more, they would have paid off a substantial amount of thier mortgage and be paying less in mortgage payments that rent.

ThinkingOutLoud_2

If you had bought in 2002 and seen average UK house price change - then your average £100k home would be worth an average of £180k in 2017 give or take.

That is pretty massive difference £80k vs. rent paid out and no equity at all (ignoring the reduced mortgage debt). But Crashy will argue that he must be right because it might have happened and the average renter is smugly wiser not simply 80k poorer?

In fact, there is NO point of purchase since 1952 I can see where either of the two dips lasted longer than the 5 years everyone is citing you need to figure holding on. Meaning if you bought at the worst possible time - you had not long to wait till you were positive vs the price you paid.

Tomorrow of 5 years - no-one knows.

Filo25

Crashy_Time wrote: »

Well the biggest gun they had was dropping interest rates, can`t see that working too well this time? It will be ironic if the people saved last time around by the CB actions to bail out the banks now lose their jobs because of a Brexit voted for off the back of those decisions?

Still perfectly capable of pumping further QE into the banking system.

In terms of housing there's nothing to stop them looking at a variety of measures which might support prices in a variety of ways if required (inheritence tax, stamp duty, some of the recent changes to the treatment of BTLs)

It would be political suicide for a Conservative government in particular to allow a full blown house price crash to develop.

I certainly wouldn't rule out a modest correction to house prices or a significant period of relative stagnation, but It remains hard to see the driver for a massive crash at present, albeit the market is currently facing more headwinds than it has in a while.