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

Herzlos

GDB2222 said:

50Twuncle said:

stehouk said:

Iv'e been looking at the property market in my area for a while now and prior to the pandemic hitting the country there were only 2-3 houses per week/fortnight all of a sudden there are between 3-5 houses per day being listed, are people trying to off load their houses before the crash........ i think they are.

There will NOT be a crash - there are still too many potential buyers - there may be a slight correction of around 10%

I'm not predicting a crash, either. But I think that a 10% price correction is more than 'slight', and if I were buying I'd certainly wait a few months in order to get that sort of reduction.  

What's the risk of falling foul of tighter mortgage criteria?

Plus if prices fall much then most people will just stay put unless they don't have a choice.

MobileSaver

Crashy_Time said:

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

You seem to have taken something that I said (the simple verifiable fact that when prices last significantly dropped, so did transactions), then come up with your own flawed assumption that the opposite must also happen and then asked me to explain why it doesn't?!?!

If you think about it, it is pretty easy to explain why falling prices lead (admittedly counter-intuitively) to fewer transactions and yet, despite having it explained time and time again, you and the HPC crowd repeatedly bang on about lower prices being a good thing that will make it easier for people to buy a property. That is simply and demonstrably not true.

50Twuncle

Prices will only drop when there's a housing surplus - Which is not the case

GDB2222

50Twuncle said:

Prices will only drop when there's a housing surplus - Which is not the case

You also said “there may be a slight correction of around 10%”.  That was yesterday.

It’s good that you are hedging your bets. Regardless of the outcome, you’ll be able to point to a post where you predicted it.

50Twuncle

GDB2222 said:

50Twuncle said:

Prices will only drop when there's a housing surplus - Which is not the case

You also said “there may be a slight correction of around 10%”.  That was yesterday.

It’s good that you are hedging your bets. Regardless of the outcome, you’ll be able to point to a post where you predicted it.

Ok I meant '' DROP' as opposed to."fluctuate"
There is still an incredible shortage of housing stock in UK

Crashy_Time

MobileSaver said:

Crashy_Time said:

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

You seem to have taken something that I said (the simple verifiable fact that when prices last significantly dropped, so did transactions), then come up with your own flawed assumption that the opposite must also happen and then asked me to explain why it doesn't?!?!

If you think about it, it is pretty easy to explain why falling prices lead (admittedly counter-intuitively) to fewer transactions and yet, despite having it explained time and time again, you and the HPC crowd repeatedly bang on about lower prices being a good thing that will make it easier for people to buy a property. That is simply and demonstrably not true.

Are you denying (or trying to) that transactions are about half their peak number, and that prices have risen since that peak?

Crashy_Time

Windofchange said:

GDB2222 said:

50Twuncle said:

stehouk said:

Iv'e been looking at the property market in my area for a while now and prior to the pandemic hitting the country there were only 2-3 houses per week/fortnight all of a sudden there are between 3-5 houses per day being listed, are people trying to off load their houses before the crash........ i think they are.

There will NOT be a crash - there are still too many potential buyers - there may be a slight correction of around 10%

I'm not predicting a crash, either. But I think that a 10% price correction is more than 'slight', and if I were buying I'd certainly wait a few months in order to get that sort of reduction.  

But there is no guarantee you are going to get that reduction. Drops in prices can be very region specific, and very situation specific. Forced and desperate sellers may have a bit more pressure, and there may be some bargains to be had, but given how strong the property markets were at the start of the year before corona virus, it really wouldn't surprise me if certain parts of the market just carried on as they were. There are so many nuances to buying a property that are specific to each situation that you cannot just chuck a blanket over it all and say sit it out.

In my n=1 case, we are building towards hopefully exchanging contracts in the next few weeks once the country is allowed to move again, and I am not going to be pulling out or trying to re-negotiate. In my part of SE London, demand was through the roof, and we had to fight off multiple offers to get what we have. That demand won't have gone away overnight regardless of the wider economy - not everybody is on a zero hours contract, and certainly in the price range we are buying in, people have resources. We are both NHS workers, and our jobs could not be more secure, particularly in this time. We are planning to start a family in this house, stay for at least 10 years, if not longer, and any short to mid term drops just aren't a factor to my thinking. 

The issue with trying to guess the property market is that it is not driven by economics. Of course economics affect it, but there is a lot of heart and emotion that goes into something. I love our potential new home, and if it takes a hit for the next few years then it's not something I will cheer about, but at the same time, it's not something I will lose sleep over. If you find somewhere you love, and you can see yourself there for the long term, then look at the positives - never seen before low interest rates, the security of owning somewhere whilst you sit any recession out, building equity in the long term even if you are going to take a slight bath immediately. Circumstantially, I cannot wait much longer to do this as I won't get a mainstream lender 25 year term, and for us it is a case of fortune favours the brave!

It is driven by sentiment and cheap credit/mortgage availability, both about to be severely tested IMO.

Crashy_Time

50Twuncle said:

There will always be  a shortageof property - especial with the virus causing no new builds
This will  ensure that prices remain as they are now

Many new builds would have remained unsold anyway, why do you think they introduced Help To Borrow? With this crisis on top the developers are really in deep trouble and maybe some will go bust, meanwhile most people who want a roof will have one and the world will still turn.....

50Twuncle

Crashy_Time said:

50Twuncle said:

There will always be  a shortageof property - especial with the virus causing no new builds
This will  ensure that prices remain as they are now

Many new builds would have remained unsold anyway, why do you think they introduced Help To Borrow? With this crisis on top the developers are really in deep trouble and maybe some will go bust, meanwhile most people who want a roof will have one and the world will still turn.....

That's because most new builds are poorly constructed and nobody wants them !!
Who wants to spend several hundred hundred thousand on a millstone ?

triathlon

Crashy_Time said:

Windofchange said:

GDB2222 said:

50Twuncle said:

stehouk said:

Iv'e been looking at the property market in my area for a while now and prior to the pandemic hitting the country there were only 2-3 houses per week/fortnight all of a sudden there are between 3-5 houses per day being listed, are people trying to off load their houses before the crash........ i think they are.

There will NOT be a crash - there are still too many potential buyers - there may be a slight correction of around 10%

I'm not predicting a crash, either. But I think that a 10% price correction is more than 'slight', and if I were buying I'd certainly wait a few months in order to get that sort of reduction.  

But there is no guarantee you are going to get that reduction. Drops in prices can be very region specific, and very situation specific. Forced and desperate sellers may have a bit more pressure, and there may be some bargains to be had, but given how strong the property markets were at the start of the year before corona virus, it really wouldn't surprise me if certain parts of the market just carried on as they were. There are so many nuances to buying a property that are specific to each situation that you cannot just chuck a blanket over it all and say sit it out.

In my n=1 case, we are building towards hopefully exchanging contracts in the next few weeks once the country is allowed to move again, and I am not going to be pulling out or trying to re-negotiate. In my part of SE London, demand was through the roof, and we had to fight off multiple offers to get what we have. That demand won't have gone away overnight regardless of the wider economy - not everybody is on a zero hours contract, and certainly in the price range we are buying in, people have resources. We are both NHS workers, and our jobs could not be more secure, particularly in this time. We are planning to start a family in this house, stay for at least 10 years, if not longer, and any short to mid term drops just aren't a factor to my thinking. 

The issue with trying to guess the property market is that it is not driven by economics. Of course economics affect it, but there is a lot of heart and emotion that goes into something. I love our potential new home, and if it takes a hit for the next few years then it's not something I will cheer about, but at the same time, it's not something I will lose sleep over. If you find somewhere you love, and you can see yourself there for the long term, then look at the positives - never seen before low interest rates, the security of owning somewhere whilst you sit any recession out, building equity in the long term even if you are going to take a slight bath immediately. Circumstantially, I cannot wait much longer to do this as I won't get a mainstream lender 25 year term, and for us it is a case of fortune favours the brave!

It is driven by sentiment and cheap credit/mortgage availability, both about to be severely tested IMO.

Its always your opinion and has been for years/decades. If the next doors cat is run over it will "severely test the markets"