House prices

chucknorris

Curls2208 wrote: »

So after reading the discussion in here. Here's one for you..

Im a first time buyer....I have about £14000 saved up, I am looking to spend between £100-150K on a house.

Now....should I buy sooner rather than later? If I bought in the next two months I'd have around 10% deposit right?

But I'm going away with work for four months in January to May where I should be able to HOARD all cash. This will probably mean I'll have about 30-35K for a deposit next summer.

What are the chances of the market flunctuating so much, that it would be better for me to buy early?

Obviously if a house costs £120K now and it'll cost £150K next summer, then all my savings will be for nothing?

You may be able to tell but I am very new to this., and am just picking brains.

PS...that person posting further up has too many houses ;-)

Timing the market is very difficult, everyone is only guessing (the market can make fools of us all), and also the markets vary regionally too, it is more important to buy what you really want, at about the time you can buy (i.e. for you next year, rather than in 2-3 years time). Where are you intending to buy (just out of curiosity)? But I can't see any markets moving from £120k to £150k (that's 25%!) in the short term, but it does sound like you will be a much better position in May, and it'll take about 3 months to reach completion from making an offer, so May becomes February for putting an offer in, so not that long to wait. When you do buy, the following year the property may move in value from say -5% to +5%, but that doesn't really matter, what matters (from a 'should I wait perspective') is what the value will be in the long term (say 15 years time), and that will almost certainly be higher.

GreatApe

Low mortgage rates makes it very risky to wait

5 year fixes can be had for under 2% while rents are typically closer to 6% so over a five year term prices need to crash 20% just to break even in renting.

The chances of a 20% nominal crash over 5 years (which would be closer to 30% in real terms) is close to zero. So waiting for a crash is almost certain to fail the arbitrage between rents and mortgage rates will kill the crash cheerleaders

Filo25

GreatApe wrote: »

Low mortgage rates makes it very risky to wait

5 year fixes can be had for under 2% while rents are typically closer to 6% so over a five year term prices need to crash 20% just to break even in renting.

The chances of a 20% nominal crash over 5 years (which would be closer to 30% in real terms) is close to zero. So waiting for a crash is almost certain to fail the arbitrage between rents and mortgage rates will kill the crash cheerleaders

There are always risks but I don't think they are too severe in this instance, rapid rate increases don't look particularly likely.

On the other hand just improving the deposit and LTV position on a mortgage is likely to improve the rate on offer significantly.in this example.

Curls2208

Yes I'm looking to buy in Lincoln....one of the cheapest places in the country...Hoorah!

Baring in mind whilst I'm away I also won't be paying any rent, and my Lifetime ISA will have been valid a year come next summer. Move my maxed out H2B ISA to my LISA in March, and max out the LISA too and it'll be another 2-3 K

So yeah waiting is probably best, but the market going up worries me.

Jack_Johnson_the_acorn

Curls2208 wrote: »

Yes I'm looking to buy in Lincoln....one of the cheapest places in the country...Hoorah!

Baring in mind whilst I'm away I also won't be paying any rent, and my Lifetime ISA will have been valid a year come next summer. Move my maxed out H2B ISA to my LISA in March, and max out the LISA too and it'll be another 2-3 K

So yeah waiting is probably best, but the market going up worries me.

If it were me I'd save. The rates are great when you have more than a 10% deposit. I bought with a 10% deposit and with overpayments we now have roughly 30% equity its easy with rates so low.

buglawton

GreatApe wrote: »

Nonsense

Actual data is available from the census figures

What they show is that women have always worked. As I keep saying my mother worked my grand mother's worked my great grand mother's worked. Its just a silly myth that most women stayed at home.

Likewise actual data is available for home ownership.
1971 was 49.99% home owner and of course 1961 was even lower and 1951 even lower still

The most recent figures for the UK have it at about 63.5% ownership and if you exclude recent migrants (who overwhelmingly rent) the native population figures for ownership is even higher u believe about 68%

The figures are also distorted by students. A student renting a flat age 18-22 is counted as a renter. While his grand father age 18-22 would gave been working and likely living with his mother still and thus he was counted as in a homeowner home. Even though in both cases the 18-22 wasn't a homeowner.

There is nothing wrong with the UK housing market.
It functions logically and it functions well.

Homeownership is high for the locals and very affordable. Most locals get free housing via gifts and inheritences and are thus not even net house buyers

?
I'm not disputing that women have always worked (whether true or false)
But I firmly believe that the demographic of the 1st time buyer has totally changed compared to the time I was growing up. To buy one of the semis I grew up in would today require 2 highly professional workers pooling their resources, not to mention a cash injection from the bank of mum and dad. I'm beginning to wonder if the media isn't colluding with current governments to wipe out the memory of when there was simply more living space.

ukcarper

buglawton wrote: »

?
I'm not disputing that women have always worked (whether true or false)
But I firmly believe that the demographic of the 1st time buyer has totally changed compared to the time I was growing up. To buy one of the semis I grew up in would today require 2 highly professional workers pooling their resources, not to mention a cash injection from the bank of mum and dad. I'm beginning to wonder if the media isn't colluding with current governments to wipe out the memory of when there was simply more living space.

I suppose it all depends on where you are and when you bought. As I've said before i was FTB in the early 70s, I was earning the equivalent of £35k and wife was earning equiv of £15k to buy the same house now would require a joint income of £65k so not that much higher.

GreatApe

buglawton wrote: »

?
I'm not disputing that women have always worked (whether true or false)
But I firmly believe that the demographic of the 1st time buyer has totally changed compared to the time I was growing up. To buy one of the semis I grew up in would today require 2 highly professional workers pooling their resources, not to mention a cash injection from the bank of mum and dad. I'm beginning to wonder if the media isn't colluding with current governments to wipe out the memory of when there was simply more living space.

You are simply wrong there was not more living space there was LESS. You have been lead by the left to believe the UK is not a great country and they provide you with false information to feed your biases

The truth is there has never been a better time to be alive and the best time to be born in today. With regards to housing specifically you are definitely wrong. Here is the data

1971 = 55.9 million people & 19.26 million homes = ~25.8 sqm/capita
2011 = 63.3 million people & 27.61 million homes = ~32.7 sqm/capita

So people today have about 27% more residential housing than people did in 1971


Also with regards to affordability it is just FALSE to say 1971 was more affordable.
You are not only suggesting that but you are going further and almost suggesting it was dam easy. It was not!
In 2011 ownership was 64.85% while in 1971 ownership was just under 50%

Ownership was not easy in 1971 the actual data shows this. Please drop your biases and use actual data. We live in a good country with lots of opportunity the primary problem is the media types and the politicians are too dim or embarrassed or it suits their prospects to always paint a negative picture when they are not.

ukcarper

GreatApe wrote: »

You are simply wrong there was not more living space there was LESS. You have been lead by the left to believe the UK is not a great country and they provide you with false information to feed your biases

The truth is there has never been a better time to be alive and the best time to be born in today. With regards to housing specifically you are definitely wrong. Here is the data

1971 = 55.9 million people & 19.26 million homes = ~25.8 sqm/capita
2011 = 63.3 million people & 27.61 million homes = ~32.7 sqm/capita

So people today have about 27% more residential housing than people did in 1971


Also with regards to affordability it is just FALSE to say 1971 was more affordable.
You are not only suggesting that but you are going further and almost suggesting it was dam easy. It was not!
In 2011 ownership was 64.85% while in 1971 ownership was just under 50%

Ownership was not easy in 1971 the actual data shows this. Please drop your biases and use actual data. We live in a good country with lots of opportunity the primary problem is the media types and the politicians are too dim or embarrassed or it suits their prospects to always paint a negative picture when they are not.

I believe it is more difficult buy now than in the 70s but not by the amount some people seem to think, it certainly wasn't easy otherwise I would be living much closer to London than I do.

GreatApe

ukcarper wrote: »

I believe it is more difficult buy now than in the 70s but not by the amount some people seem to think, it certainly wasn't easy otherwise I would be living much closer to London than I do.

The majority of native born brits will inherit property or the sums to buy property it doesn't get any easier than that.

Some people find that a depressing though because they themselves wont (or think they wont) get any inherited/gifted wealth. But people should not think like that, the only alternative is developing countries which are yet to build out their infrastructure and hence much lessor amounts of wealth are passed down the generations simply as much less wealth exists.

Things are not bad for most the people of the UK they are good.
Wages savings housing is all in a fairly good state the biggest problems we face in this country are dysfunctional individuals and families not housing not 'austerity' etc.