Impact of Negative Equity

Crashy_Time

bouicca21 wrote: »

Gosh, fascinating stuff. Rents are falling? Not in my part of London. Prices are falling? Well the market in my bit of London is stagnating a bit and its clear that people can once again offer under asking price without being laughed at.

But I think the answer to OP's question is that it all depends on how long you want to stay in a property. The market has seen mega rises followed by stabilisation at lower levels before, but the stabilisation (at least in areas that I am familiar with) has always been at a higher level than before the bubble. If you are looking long term, then you will ride out a temporary blip. You will almost certainly be paying less than it costs to rent.

More important are factors like interest rates and job security. I can't be the only person on this forum who once paid 15% and is astounded at rates that are actually lower than my parents paid in 1950. I have no idea what OP's job security is like, but jobs are easier to get in London than in many other parts of the country, so if needs must... Of course if there are spare rooms, there's always the possibility of a lodger, and maybe OP can expect career progression with attendant salary improvement.

If OP can afford a place he/she thinks is going to be OK for 7-10 years, preferably with a substantial deposit, then I'd go for it. There is never going to be a right time, but a roof over your head that you own (albeit with a mortgage) is always going to be better than being at the mercy of a landlord in a private rental.

Lot of assumptions in there, what if he buys now and interest rates shoot up for example?

bouicca21

what if interest rates shoot up for example?

Did you not notice

More important are factors like interest rates and job security

Crashy_Time

You can`t "almost certainly be paying less than it costs to rent" if you are not certain where interest rates will go and you know rents are falling?

Crashy_Time

bouicca21 wrote: »

Gosh, fascinating stuff. Rents are falling? Not in my part of London. Prices are falling? Well the market in my bit of London is stagnating a bit and its clear that people can once again offer under asking price without being laughed at.

But I think the answer to OP's question is that it all depends on how long you want to stay in a property. The market has seen mega rises followed by stabilisation at lower levels before, but the stabilisation (at least in areas that I am familiar with) has always been at a higher level than before the bubble. If you are looking long term, then you will ride out a temporary blip. You will almost certainly be paying less than it costs to rent.

More important are factors like interest rates and job security. I can't be the only person on this forum who once paid 15% and is astounded at rates that are actually lower than my parents paid in 1950. I have no idea what OP's job security is like, but jobs are easier to get in London than in many other parts of the country, so if needs must... Of course if there are spare rooms, there's always the possibility of a lodger, and maybe OP can expect career progression with attendant salary improvement.

If OP can afford a place he/she thinks is going to be OK for 7-10 years, preferably with a substantial deposit, then I'd go for it. There is never going to be a right time, but a roof over your head that you own (albeit with a mortgage) is always going to be better than being at the mercy of a landlord in a private rental.

Again, too general a statement for me - Do you mean in all situations, at all times? Do you really believe that? To take one example - I would far rather be in a cheap private rental (outside London) than attached to say 500k`s worth of debt for a London shoe-box when interest rates rise and the London bubble implodes.