Buy now or wait till BREXIT

Crashy_Time

lisyloo wrote: »

A lot of measures have been put in place since the last financial crisis e.g. capital requirements for banks.

Can you show your source for the property market “giving” (we shouldn’t have to ask you to back up your claims all the time).
Loads of us would be really interested in this.

Not everyone can rent cheaply or live with their parents e.g. if your job isn’t close to your parents or your career e.g. fashion has to be in central London.

Those measures put downward pressure on prices/transactions. Look up mortgage approvals over the last 15 years, or recent sales transactions to see evidence of the market weakening. The media is full of evidence for why high house prices are not sustainable, or even desirable to the majority of people anymore. If you think the present situation is sustainable or desirable then I think you should be backing that up with links and more reasoned argument. Someone wanting to start a family or "having" to be in London because they work in fashion isn`t a strong argument for property prices being sustainable.

PhilE

lisyloo wrote: »

Why will rent go up?
I rent in central London and I’d say the major factor here is supply and demand.
We’re about to renew for 12/15 months so not personally concerned but I can’t see why rents would go up, in fact the opposite could be true.

BTW - we own our country pile outright (yay) just in case anyone was worried.

Yes, the country is independent and has been since 1066. Only the ignorant would think it was occupied.

However, it WAS good to know that we had someone to keep Teresa May in check, when she wished to violate out human rights with her snoopers charter. It's also been very pleasant not to have a major war with Europe, for the first time in centuries.

Not to worry, I'm sure that the modern chav would be happy to give up his smartphone, cable TV and Mc Donalds in order to fight for his/her country.

davidmcn

PhilE wrote: »

Yes, the country is independent and has been since 1066.

Well, it was from 1066 until 1707

mick1111

flatulantyounggoat wrote: »

Simple question really, I'm holding off house hunting until BREXIT has occurred. I think there will be a massive house price crash?

Or, maybe there won't be. First time buyer either way. Any thoughts? Should I just get a move on with it.

We're FTBs and were waiting because of Brexit. Prices seem to be coming down where we are but we saw a house that we really liked at a price we can afford, so we thought "sod it", and took the plunge. Offer was accepted a week or so before Christmas, and things seem to be progressing, We're not planning on moving within the next 5 to 10 years, so we're assuming Brexit shouldn't be too much of an issue (with the house, that is, it'll be awful in all other respects...!)

jamesyork

We decided to buy this month as we'd be finally paying off capital instead of just throwing wasted money towards rent payments (our rent is £850 a month but the interest element of our new mortgage starts at £450 each month and declines after each payment).

Because of Brexit, you can actually get some good discounts as it's a bit of a buyers' market out there. We managed to secure a £10k discount in an area where houses usually sell within a week of being on the market.

There are some fantastic deals out there at the moment for FTBs. We managed to get a 90% LTV with Virgin Mortgages for 5 years fixed at 2.35%. That gives us a real opportunity to pay a good chunk of capital off over the next five years with minimal interest payments. There are also plenty of 5% deposit mortgage offers out there too.

Inflation is currently averaging at 2.7% each year and appears to be on the rise towards 3%. With everyday prices certainly set to rise further, the value of a home purchased today will actually be cheaper in real terms each year (e.g. a £250k mortgage now would actually be £175k in 2029 monetary terms based on inflation of 3% each year). Obviously it's all dependent on wages keeping up with inflation but they would have to in order for people to afford to put food on the table.

The value of the pound is terrible and will really fall if we have a hard Brexit. That could prompt the bank to have to increase interest rates (albeit hopefully not to historic norms). The UK will always protect the banks! This would make mortgages even more expensive in the future.

Above all, if we have a crash then it'll be a lot more difficult to get a mortgage as lending always tightens in a recession. I always regret not getting a mortgage back in 2007 when lending was easier before the crash. Yes, prices dropped in 2008 briefly but you needed 20% deposits as a minimum in order to get a loan. Those on the ladder were secure in terms of paying off their very own home and ultimately did well when prices increased again.

Crashy_Time

jamesyork wrote: »

We decided to buy this month as we'd be finally paying off capital instead of just throwing wasted money towards rent payments (our rent is £850 a month but the interest element of our new mortgage starts at £450 each month and declines after each payment).

Because of Brexit, you can actually get some good discounts as it's a bit of a buyers' market out there. We managed to secure a £10k discount in an area where houses usually sell within a week of being on the market.

There are some fantastic deals out there at the moment for FTBs. We managed to get a 90% LTV with Virgin Mortgages for 5 years fixed at 2.35%. That gives us a real opportunity to pay a good chunk of capital off over the next five years with minimal interest payments. There are also plenty of 5% deposit mortgage offers out there too.

Inflation is currently averaging at 2.7% each year and appears to be on the rise towards 3%. With everyday prices certainly set to rise further, the value of a home purchased today will actually be cheaper in real terms each year (e.g. a £250k mortgage now would actually be £175k in 2029 monetary terms based on inflation of 3% each year). Obviously it's all dependent on wages keeping up with inflation but they would have to in order for people to afford to put food on the table.

The value of the pound is terrible and will really fall if we have a hard Brexit. That could prompt the bank to have to increase interest rates (albeit hopefully not to historic norms). The UK will always protect the banks! This would make mortgages even more expensive in the future.

Above all, if we have a crash then it'll be a lot more difficult to get a mortgage as lending always tightens in a recession. I always regret not getting a mortgage back in 2007 when lending was easier before the crash. Yes, prices dropped in 2008 briefly but you needed 20% deposits as a minimum in order to get a loan. Those on the ladder were secure in terms of paying off their very own home and ultimately did well when prices increased again.

Prices in 2008 didn`t increase because of normal market forces though, it happened because of the biggest central bank bailout program in history (now being wound down) and the EZ for example still has lacklustre growth! As the banks have been saved the chances of a bailout for the property market alone, especially since voters have turned against high house prices, is next to zero IMO. All factors to take into account, as well as the chances of rates soaring because of a run on the pound, when looking to take on large mortgage debt.

Gwendo40

lisyloo wrote: »

A lot of measures have been put in place since the last financial crisis e.g. capital requirements for banks.
.

Given how naively unaware (or possibly complicit?) the Central Banks were in the run up to the 2008 crisis... do you really believe that their latest stress tests and capital requirements are worth the paper they're written on?

Gwendo40

jamesyork wrote: »

We decided to buy this month as we'd be finally paying off capital instead of just throwing wasted money towards rent payments (our rent is £850 a month but the interest element of our new mortgage starts at £450 each month and declines after each payment).

Because of Brexit, you can actually get some good discounts as it's a bit of a buyers' market out there. We managed to secure a £10k discount in an area where houses usually sell within a week of being on the market.

There are some fantastic deals out there at the moment for FTBs. We managed to get a 90% LTV with Virgin Mortgages for 5 years fixed at 2.35%. That gives us a real opportunity to pay a good chunk of capital off over the next five years with minimal interest payments. There are also plenty of 5% deposit mortgage offers out there too.

Inflation is currently averaging at 2.7% each year and appears to be on the rise towards 3%. With everyday prices certainly set to rise further, the value of a home purchased today will actually be cheaper in real terms each year (e.g. a £250k mortgage now would actually be £175k in 2029 monetary terms based on inflation of 3% each year). Obviously it's all dependent on wages keeping up with inflation but they would have to in order for people to afford to put food on the table.

The value of the pound is terrible and will really fall if we have a hard Brexit. That could prompt the bank to have to increase interest rates (albeit hopefully not to historic norms). The UK will always protect the banks! This would make mortgages even more expensive in the future.

Above all, if we have a crash then it'll be a lot more difficult to get a mortgage as lending always tightens in a recession. I always regret not getting a mortgage back in 2007 when lending was easier before the crash. Yes, prices dropped in 2008 briefly but you needed 20% deposits as a minimum in order to get a loan. Those on the ladder were secure in terms of paying off their very own home and ultimately did well when prices increased again.

Why do you hope that interest rates won't return to historic norms?

letsbetfair

I'm buying a house in Scotland, planning a date of entry in early March. This is in Dundee, though, where prices are still comparatively affordable and where there hasn't been the kind of rises seen elsewhere (the place I'm buying has gone done in price in real terms since it last sold a few years back). The timing suits me for personal reasons, I found a house I really like, and I can comfortably afford the place even if rates shoot up.

There's also the question of what I'd do with my deposit if I didn't buy. If the £ is devalued, so are cash savings...and who knows what will happen with stocks and shares if things go badly. Gold would be a lousy investment if things don't go pear shaped with the economy! I've made some very nice returns matched betting, but it's hardly worth the time nowadays. Rents seem to be rising, too, and my landlord hasn't been maintaining my flat well - so either I'd have moving costs (and likely higher rent) or would be living in a not-great flat.

I'm not optimistic about Brexit, but I think buying now can still make sense....

Crashy_Time

letsbetfair wrote: »

I'm buying a house in Scotland, planning a date of entry in early March. This is in Dundee, though, where prices are still comparatively affordable and where there hasn't been the kind of rises seen elsewhere (the place I'm buying has gone done in price in real terms since it last sold a few years back). The timing suits me for personal reasons, I found a house I really like, and I can comfortably afford the place even if rates shoot up.

There's also the question of what I'd do with my deposit if I didn't buy. If the £ is devalued, so are cash savings...and who knows what will happen with stocks and shares if things go badly. Gold would be a lousy investment if things don't go pear shaped with the economy! I've made some very nice returns matched betting, but it's hardly worth the time nowadays. Rents seem to be rising, too, and my landlord hasn't been maintaining my flat well - so either I'd have moving costs (and likely higher rent) or would be living in a not-great flat.

I'm not optimistic about Brexit, but I think buying now can still make sense....

What is driving rising rents in Dundee?