Should I be wary buying a house in the current climate?

Thrugelmir

GDB2222 said:

The OP asked a perfectly sensible question, whether house prices are going to drop this year, so he will be able to buy a similar property for less money if he waits? It’s a shame that people here have not tried to answer that. There are clearly serious consequences from being in negative equity, which have largely been brushed aside.

Early nineties saw people work there way through negative equity. Twenty odd years later they were laughing. The foundations for many a BTL empire. 

Arklight

Even now, renters are being stretched on the rack. Left without income, evictions are abounding. Meanwhile, mortgaged homeowners sit back with a sigh of satisfaction and enjoy generous mortgage holidays. 

England is not a friend to the renter, or the poor. 

Crashy_Time

MobileSaver said:

Crashy_Time said:

High or low rent renters can bail out of the cities much quicker than those tied to mortgage debt if this gets bad,

You really are clutching at straws Crashy in a desperate attempt to convince yourself you made the right decision all those years ago!

Where exactly can all these renters bail out to? Is there a glut of rental properties somewhere? With all the uncertainty do you think landlords are going to be more or less cautious with deposits/credit-checks for new renters? Do you think it will be harder or easier for someone to rent a new place?

Anecdotally a friend whose long term renter just moved back to London had a waiting list of people to take his place. I've just checked Rightmove for the nearest big town (rural mid-Wales) to me; there is literally just ONE rental property available and it was added to Rightmove just a few days ago...

In my village, Edinburgh, there are about 15 flats to rent in the two or three  blocks near me, that is looking at signs not Rightmove, don`t know if they are even on Rightmove. I think you are clutching at straws TBH if you think that even without this medical emergency rent demand would stay strong, Brexit is going to have a big impact, and a serious recession will have more impact, many young people will just stay at home. Someone who wants to give up their flat say in London because of medical fears, or not being able to pay the rent as their job has closed, or they can`t get gigs any more, will find it much easier to flee back to the parents in Leeds or wherever than someone who just signed up to 500k mortgage debt for a flat in Brixton.

MobileSaver

Crashy_Time said:

In my village, Edinburgh, there are about 15 flats to rent in the two or three  blocks near me,

In much better times you gloated that there were loads of empty flats in your area so, let's be honest, your bit of Edinburgh is not very desireable even in the best of times!

Crashy_Time

Herzlos said:

Crashy_Time said:

High or low rent renters can bail out of the cities much quicker than those tied to mortgage debt if this gets bad, that alone is a very very good insurance premium included in the rent.

To where?

If things get bad you're better off mortgaging than rent - if you need to flee, you're not going to care if you default on the mortgage and lose the house - you'd be in about the same situation as renting. However with a mortgage and you do stay, then it'd be harder to get kicked out and you're not dependent on any 3rd party (like that paramedic who was kicked out of his rental because his landlady feared contamination), I believe it's also harder to repossess a mortgaged house than evict a tenant.

You're really getting desperate to try and justify your poor decision. Get over it and move on with your life!

There are benefits to renting - if you're a contractor for instance and move between cities and countries on a regular basis, but for almost everyone else the stability is a big deal.

I`m not convinced you fully understand or have thought  through the situation, even in Italy and other badly affected areas the main impact for most people is economic not medical, we are not talking about millions of people fleeing London and other cities like in a movie about the apocalypse. My point is simply that many young people now finding themselves out of regular work may decide to wait this out at their parents and give notice on their rented flat/room meaning that the landlord will take the hit and the person who just bought a 500k flat in Brixton is looking at a weakening market as landlords start selling up. If you pay your last months rent and leave you are free and clear, if you have a 500k debt to the bank and flee the house you will be pursued for the debt unless it really is the end of times, and the renter is also more flexible if say they find another job at the other end of the country. I believe the paramedic was actually a lodger, so if that is true it is really a non-story let`s be honest?
It is strange, and slightly bizarre, to see some posters (it is a seriously diminished number it must be said) still trying to argue that the best way to go is mortgage debt every time, even as the limits of the debt based system are tested to the max! In a medical/financial emergency flexibility beats "stability " every time.......

Crashy_Time

MobileSaver said:

GDB2222 said:

The OP asked a perfectly sensible question, whether house prices are going to drop this year, so he will be able to buy a similar property for less money if he waits

Let's be honest, no-one can answer that question. What we do know from past experience is that when prices drop so do transactions either because of reduced supply or more stringent lending criteria so prices may drop but there's no guarantee that means you can buy the same or a similar property for less.

GDB2222 said:

Personally, I’d hang on a bit before buying, to see what happens.

That may be fine for some people but fundamentally the OP has to live somewhere in the meantime so it depends on where they are living now on whether waiting would work for them. Just look at Crashy, ten or fifteen years on, still living in a bedsit in an undesireable part of town waiting for prices to crash. How long should the OP hang on for and at what point do they know prices won't fall any further?

At the end of the day, trying to time the market is a mug's game and a complete gamble; there are much more important issues to consider than just the headline price you will be paying for your new home.

How do you explain rising prices and transactions at half the 2007/8 peak then in that case? (I know how I explain it, I just want to hear you explain it....)  And can you name the part of town I live in....?

50Twuncle

My first house cost £30k and interest rates went through the roof - virtually the day after I moved in - they reached almost 20% (late 80's)  - I was paying almost £400 pm at one point - over half my salary - but I stuck it out and sold the house - some 11 years later and still made a gain (though I do regret using an endowment mortgage) - so yes things might look a littl;e rough at the moment - but things WILL improve and theres nothing like owning your own home !

MobileSaver

Crashy_Time said:

How do you explain rising prices and transactions at half the 2007/8 peak then in that case? (I know how I explain it, I just want to hear you explain it....)

I have no idea what you are talking about?
What I do know is that after the last financial crisis you were the one that kept going on and on about prices might be rising again after the fall but transactions had fallen off a cliff! What a short memory you have!

Crashy_Time said:

And can you name the part of town I live in....?

I have no idea what part of town you live in, I just know that you used to gloat there were loads of empty flats in your area and this was in much better times.

MobileSaver

Crashy_Time said:

see some posters  still trying to argue that the best way to go is mortgage debt every time,

Which posters have said buying is best "every time?" I, for one, have said it depends on what the alternative is as everyone has to live somewhere.

Crashy_Time

MobileSaver said:

Crashy_Time said:

How do you explain rising prices and transactions at half the 2007/8 peak then in that case? (I know how I explain it, I just want to hear you explain it....)

I have no idea what you are talking about?
What I do know is that after the last financial crisis you were the one that kept going on and on about prices might be rising again after the fall but transactions had fallen off a cliff! What a short memory you have!

Crashy_Time said:

And can you name the part of town I live in....?

I have no idea what part of town you live in, I just know that you used to gloat there were loads of empty flats in your area and this was in much better times.

You said - " What we do know from past experience is that when prices drop so do transactions ", I asked why in that case are transactions at half their peak levels while posters on here have recently been gloating over ever increasing prices (statistical noise from numbers produced by property VI`s IMO  - i.e their business is selling mortgage debt and their numbers don`t represent the reality that most sellers won`t achieve the headline price)