Who are buying now?

pandhandj

We were looking at the start of the year to move to a bigger house with garden. But have stepped back for a while to see how things pan out. We live in the west of Scotland, a small, pretty grim town, which according to a survey (cant remember the name) recently was suppossed to have the 2nd highest price increase in Scotland in the past year. However, i bought our flat in '99 and acording to local EA's is now worth about double what i paid for it 8 years ago.

We are about half an hour from Glasgow. Where the average wage is currently circa £22k, with the median at approximatley around the £18K mark. This town is almost certainley less affluent than Glasgow IMO, but the new build 3/4 bed detached houses are being marketed at £180K - £220K plus.

IMO this is just too expenseive for this area. Granted commuters from Glasgow may buy some of these properties, but why buy a house down here when you can get one at a similar price, a lot closer to Glasgow?

We are keen to move on, but will definatley wait to see what happens in the spring. We are lucky in the fact that we would "like" a new place rahter than "need" one.

Generali

kissingthepink wrote: »

The demand for flats does not seem to be diminishing in this area, and selling prices as well as rents continue to rise. Part of the demand is artificial in that lots of investors are trying to buy in the area prior to the East London tube line extension in expecatation that the additional transport link will boost prices even further as they have done in other parts of the city. And of course this area has a very big and growing immigrant community that require rented accommodation.

I'm financing it with a fixed interest buy to let mortgage, and have paid a 23% deposit. Rental cover is 126% of the interest which will allow me to cover interest and costs.

I hope to keep the property for at least 10 years, and I expect that the price may fluctuate within that time given the cyclical nature of any market.

Interesting, thanks. A couple more (I'm nosy!):

Do you have any sort of 'stop loss' in place (that is would you sell if you lost more than x% of the value of the place) or do you plan to hang on in the hope/expectation that the price will rise again?

Why property rather than shares, bonds, cash etc? Are you already 'fully invested' in those areas? What I'm trying to get at is are all your investment eggs in the property basket or is it a part of a diversified portfolio of investments?

dmg24

My brother and his fiancee are looking to buy at the moment, they are in no hurry, but are in it for the long term, so they are not concerned if they buy now or in six/ twelve months time.

I know of three other people who are looking to buy, each due to relationship breakdowns (not with each other, and not caused by me!). I suppose the housing market does not wait for people to settle their marital differences?! x

kissingthepink

Generali wrote: »

Interesting, thanks. A couple more (I'm nosy!):

Do you have any sort of 'stop loss' in place (that is would you sell if you lost more than x% of the value of the place) or do you plan to hang on in the hope/expectation that the price will rise again?

Why property rather than shares, bonds, cash etc? Are you already 'fully invested' in those areas? What I'm trying to get at is are all your investment eggs in the property basket or is it a part of a diversified portfolio of investments?

I do not have a stop loss in place as I believe that over a 10 year period the property will gain in value overall, i.e. if there is a price slump say next year, that prices would have caught up by year 5 or 6.

Why property? It is easy to finance and I feel confident about this purchase. I certainly wouldn't sleep at night if I had invested my deposit money directly into shares. It would be too risky. I do not own any shares directly and my cash savings are minimal (never more than a grand on average). Also the rental income will cover my costs. I have a stakeholder pension which I have been paying into for the last nine years, and see this as giving balance to the property investment.

Generali

kissingthepink wrote: »

I do not have a stop loss in place as I believe that over a 10 year period the property will gain in value overall, i.e. if there is a price slump say next year, that prices would have caught up by year 5 or 6.

Why property? It is easy to finance and I feel confident about this purchase. I certainly wouldn't sleep at night if I had invested my deposit money directly into shares. It would be too risky. I do not own any shares directly and my cash savings are minimal (never more than a grand on average). Also the rental income will cover my costs. I have a stakeholder pension which I have been paying into for the last nine years, and see this as giving balance to the property investment.

Interesting that you see an illiquid leveraged investment as less risky than a liquid cash investment.

I disagree and think that yours is the riskier investment. Selling it is expensive and slow and a drop in value of 10% wipes out about 40% of your investment. Of course the flip side of that is that a rise of 10% increases your investment by 40%.

Good luck. I hope you make money.

mystic_trev

The Tenants in one of my 2 BTL's has just served notice to my Agents and are moving out the begining of December. I've decided to sell it and invest the money elsewhere. It's been a nice little earner and the values more than trebled in the last 10 years, however the nett yield is just over two and a half percent and I can get much better sticking the cash in the Bank.

It's great to be able to look back and see how much Properties gone up in value, more difficult to look forward. My opinion is that we've reached the top of the cycle, if for no other reason - affordability. I think any growth in the next ten years will be very much restricted, and in real terms, there might be none at all. As I've said before, I now think there will be far better Investment oppurtunities then of Property for the forseeble future.

PS I'm going to make sure I don't Exchange contracts on it until next April!

dolce_vita

rambo1987 wrote: »

my prediction is property prices will stall for next 2 years, not fall or rise but start rising again in the future. the level of immigration coming in is still a problem, BTLers and FTBers will go up over time and the amount of houses being built still does not live up against demand. generations are getting older, more people are living longer lives. some factors. at the moment demand is still higher than supply, until that changes there wont be a fall in my opinion.

:rotfl:

How many cliches can you get into one post?

MrShed

movilogo wrote: »

If we read the bearish stories here, everyone should now realize that it is not a good time to buy, prices are soon going downward and we already reached the peak of the market.

The same stories have been going around(and I do mean the same, not differing!) for at least the last 5 years. The longer prices rise, the more people will fear they will fall or crash, without potentially the economic arguments behind it.

That does not mean to say that prices wont crash, but only to say that prices have been predicted to crash for years with no such crash occurring. I think people are starting to ignore the naysayers.

nelly_2

MrShed wrote: »

The same stories have been going around(and I do mean the same, not differing!) for at least the last 5 years. The longer prices rise, the more people will fear they will fall or crash, without potentially the economic arguments behind it.

That does not mean to say that prices wont crash, but only to say that prices have been predicted to crash for years with no such crash occurring. I think people are starting to ignore the naysayers.

'
on the contrary I keep hearing people say 'the crash' as if its inevitable who only a short time ago laughed off any such possibility.

The reason being for theri change is its not just a few people saying it but rather newspapers tv etc etc

PasturesNew

Fact: No matter HOW much prices are stagnating or dropping ... there are some people who will ALWAYS sell/buy.

Some people don't know
Some people don't care
Some people have to sell

You can't have an entire nation not buying/not selling.
And it's early days yet.

Even if there were a full on crash that everybody knew about.... there would STILL be people buying/selling. Fact.