Bad time to buy a house?

[Deleted User]

captaindough said:

Lover_of_Lycra said:

captaindough said:

So, is it a bad time to buy a house?

It's as good as time as any.  The point is that buying a house you only intend to have for 2-3 years is not sensible at any time.  Really you need to buy with a view to owning for 5+ years.

I agree...if the cost of moving is 20K as previously stated by someone. 

In this case it’s costing next to nothing...solicitor fees £1000 +  surveyor £400 + a few minor bits and bobs.

Cost of rent p/m is £1000
cost of mortgage p/m is half of that. 
To say buying for a short period ie 2-3 years is “never a good idea” is a ridiculous thing to say when you have no idea of that persons circumstances.

i appreciate your opinion but I would have to disagree with your opinion on “its as good a time as any” to purchase.  

It's not ridiculous, it's very sensible. 

What are you counting as the cost of the mortgage? The interest which you'll never see back? Arrangement fees? 

You have the FTB SDLT Relief and you're about to spunk it on somewhere you'll only live in for 2-3 years. How much will the SDLT be on the next purchase because that's going to be your largest expense. 

[Deleted User]

Crashy_Time said:

RelievedSheff said:

Crashy_Time said:

captaindough said:

need_an_answer said:

Property prices rise and fall...if you've purchased a property you should ideally expect to be thinking of it as not a short term investment....so what if its worth £5k less in a few months time,you should be looking at it as somewhere to live in the early stages.
If your mindset is to track the value of it monthly then don't buy its the wrong type of purchase if you continually want to keep tabs on its value.

What sort of timeframe do you hope to keep the property for?

Thanks for your reply. I would be looking to sell within 2 to 3 years. My fear would be, as I said, purchasing for 200K, market crash, value of said property plummets due to current crisis, fast forward to 2022 when I want to sell and the property is worth considerably less...not 5k less.

Certainly wait until the virus stabilises/disappears, the economic damage is already done though so no need to worry about house prices going anywhere from here, choice between a nice discount soon and a big loss in a couple of years if you buy now is what you are looking at I think.

Given your exceptionally poor form at predicting the property market in the past the OP is probably best doing the exact opposite of what you advise!!

My prediction has always been that the property market is a debt fuelled bubble that is not built to withstand economic/credit market type shocks. What are your predictions and how should the OP navigate the economic/medical emergency that we have now? I would imagine that many potential house purchasers are shelving their plans right about now but you obviously disagree.

Ive been watching your threads for many many years Crashy. In that time my house has increased in value by over £300,000 
Im so glad I did not follow your advice 

Mickygg

Densol said:

Crashy_Time said:

RelievedSheff said:

Crashy_Time said:

captaindough said:

need_an_answer said:

Property prices rise and fall...if you've purchased a property you should ideally expect to be thinking of it as not a short term investment....so what if its worth £5k less in a few months time,you should be looking at it as somewhere to live in the early stages.
If your mindset is to track the value of it monthly then don't buy its the wrong type of purchase if you continually want to keep tabs on its value.

What sort of timeframe do you hope to keep the property for?

Thanks for your reply. I would be looking to sell within 2 to 3 years. My fear would be, as I said, purchasing for 200K, market crash, value of said property plummets due to current crisis, fast forward to 2022 when I want to sell and the property is worth considerably less...not 5k less.

Certainly wait until the virus stabilises/disappears, the economic damage is already done though so no need to worry about house prices going anywhere from here, choice between a nice discount soon and a big loss in a couple of years if you buy now is what you are looking at I think.

Given your exceptionally poor form at predicting the property market in the past the OP is probably best doing the exact opposite of what you advise!!

My prediction has always been that the property market is a debt fuelled bubble that is not built to withstand economic/credit market type shocks. What are your predictions and how should the OP navigate the economic/medical emergency that we have now? I would imagine that many potential house purchasers are shelving their plans right about now but you obviously disagree.

Ive been watching your threads for many many years Crashy. In that time my house has increased in value by over £300,000 
Im so glad I did not follow your advice 

Yes Crashys comments over the years have been so wrong everyone should ignore or at least be very wary of what he says. 

As soon as there is a thread on buying and selling it’s just a countdown to when crashy replies with a comment or link to anything promoting house prices reducing. 

And when there is a house price crash he will be all over it saying ‘I told you so’ albeit he has been shouting from the rooftops it would be happening for the last 10 years!!!

 OP you are buying a house for the future and I would look at how affordable is it to you now. If you have a house you love now then I would not be put off buying now. If house prices go down then what’s to say there will be a house you like or want to buy then? I was buying right when brexit voted to leave, all stories were stock market could crash and house market more than likely will. The stock market increased as did the house prices. So many people pulled out after the vote thinking house prices would reduce significantly, I didn’t and got the house I wanted as it was affordable and it was the house I wanted.

I was trying to sell in 2007 and then the crash happened and I pulled it. I then sold when things calmed down 3 years later, which is what a lot of people did, and that’s when house prices had already in my area started increasing significantly. 

If house prices go down, there is no guarantee you will snap up a price at a low level that you love. If you are buying when house prices are increasing strongly that presents a whole lot of other problems.

captaindough

Lover_of_Lycra said:

captaindough said:

Lover_of_Lycra said:

captaindough said:

So, is it a bad time to buy a house?

It's as good as time as any.  The point is that buying a house you only intend to have for 2-3 years is not sensible at any time.  Really you need to buy with a view to owning for 5+ years.

I agree...if the cost of moving is 20K as previously stated by someone. 

In this case it’s costing next to nothing...solicitor fees £1000 +  surveyor £400 + a few minor bits and bobs.

Cost of rent p/m is £1000
cost of mortgage p/m is half of that. 
To say buying for a short period ie 2-3 years is “never a good idea” is a ridiculous thing to say when you have no idea of that persons circumstances.

i appreciate your opinion but I would have to disagree with your opinion on “its as good a time as any” to purchase.  

It's not ridiculous, it's very sensible. 

What are you counting as the cost of the mortgage? The interest which you'll never see back? Arrangement fees? 

You have the FTB SDLT Relief and you're about to spunk it on somewhere you'll only live in for 2-3 years. How much will the SDLT be on the next purchase because that's going to be your largest expense. 

There is no stamp duty...it’s 140k and in wales. So no stamp duty.

captaindough

Mickygg said:

Densol said:

Crashy_Time said:

RelievedSheff said:

Crashy_Time said:

captaindough said:

need_an_answer said:

Property prices rise and fall...if you've purchased a property you should ideally expect to be thinking of it as not a short term investment....so what if its worth £5k less in a few months time,you should be looking at it as somewhere to live in the early stages.
If your mindset is to track the value of it monthly then don't buy its the wrong type of purchase if you continually want to keep tabs on its value.

What sort of timeframe do you hope to keep the property for?

Thanks for your reply. I would be looking to sell within 2 to 3 years. My fear would be, as I said, purchasing for 200K, market crash, value of said property plummets due to current crisis, fast forward to 2022 when I want to sell and the property is worth considerably less...not 5k less.

Certainly wait until the virus stabilises/disappears, the economic damage is already done though so no need to worry about house prices going anywhere from here, choice between a nice discount soon and a big loss in a couple of years if you buy now is what you are looking at I think.

Given your exceptionally poor form at predicting the property market in the past the OP is probably best doing the exact opposite of what you advise!!

My prediction has always been that the property market is a debt fuelled bubble that is not built to withstand economic/credit market type shocks. What are your predictions and how should the OP navigate the economic/medical emergency that we have now? I would imagine that many potential house purchasers are shelving their plans right about now but you obviously disagree.

Ive been watching your threads for many many years Crashy. In that time my house has increased in value by over £300,000 
Im so glad I did not follow your advice 

Yes Crashys comments over the years have been so wrong everyone should ignore or at least be very wary of what he says. 

As soon as there is a thread on buying and selling it’s just a countdown to when crashy replies with a comment or link to anything promoting house prices reducing. 

And when there is a house price crash he will be all over it saying ‘I told you so’ albeit he has been shouting from the rooftops it would be happening for the last 10 years!!!

 OP you are buying a house for the future and I would look at how affordable is it to you now. If you have a house you love now then I would not be put off buying now. If house prices go down then what’s to say there will be a house you like or want to buy then? I was buying right when brexit voted to leave, all stories were stock market could crash and house market more than likely will. The stock market increased as did the house prices. So many people pulled out after the vote thinking house prices would reduce significantly, I didn’t and got the house I wanted as it was affordable and it was the house I wanted.

I was trying to sell in 2007 and then the crash happened and I pulled it. I then sold when things calmed down 3 years later, which is what a lot of people did, and that’s when house prices had already in my area started increasing significantly. 

If house prices go down, there is no guarantee you will snap up a price at a low level that you love. If you are buying when house prices are increasing strongly that presents a whole lot of other problems.

Thanks for the post, interesting points.

MobileSaver

captaindough said:

this property is more short term, 2 to 3 years. ... I wouldn’t be in a position to sell....because I’d take a huge hit.

Unless I missed it, you haven't said where you plan to live after selling in two years?

It makes a difference because if you plan to buy a different/bigger/nicer house then, if prices do fall generally, your next purchase will also be cheaper than today's price, so swings and roundabouts.

However, as touched upon by others, one of the other big problems with prices falling is that supply also falls; in two years time you may find cheaper houses but none may be suitable if all the decent properties have been taken off the market.

akorn77

I'm in the process of buying. Exchange date is about 6-7 weeks away - if the economy totally crashes by that point, then I will probably pull out. 

Remember this virus is causing chaos across the globe and once the dust has settled it's going to leave a gaping large black hole in government and company budgets - the recovery will take a long time. During that time, there will be job losses and company closures. Price of properties wont increase under this type of scenario. People will drastically lower their asking prices to get a sale done. 

numbercruncher8

Seems certain that there will be job losses, an outside chance of really bad job losses if it is prolonged. I don't feel the government have enough to prop up everyone. 
Thing is, a share price can rise and rise if a company earnings do - something like Greggs has seen terrific gains, those are the fundamentals.
What are the fundamentals for the housing market? People's salaries, bank lending variables, government props, macro factors like interest rates.
On most of these factors there doesn't appear to be room for much good news in future. Interest rates can hardly fall any further now. A modern 2-bed flat in a suburban area I look at has jumped from £250k in 2010 to £350k in 2020, but the mortgage terms are way different now - 25 years was standard, now 30-35 and other schemes like BOMAD. Other catalysts of demand (BTL/foreign buyers) are taxed more highly now.
Does there seem to be sufficient ammo to take the price of this flat to £450k-500k in 2030?
I would say it is more likely that the price will be still £350k - flat in nominal terms but a large drop in real terms, and of course still expensive even if the prevailing local wage is 25% higher. The government would like that as the house price indices are all nominal and people won't be angry.

davidmcn

captaindough said:

Lover_of_Lycra said:

captaindough said:

Lover_of_Lycra said:

captaindough said:

So, is it a bad time to buy a house?

It's as good as time as any.  The point is that buying a house you only intend to have for 2-3 years is not sensible at any time.  Really you need to buy with a view to owning for 5+ years.

I agree...if the cost of moving is 20K as previously stated by someone. 

In this case it’s costing next to nothing...solicitor fees £1000 +  surveyor £400 + a few minor bits and bobs.

Cost of rent p/m is £1000
cost of mortgage p/m is half of that. 
To say buying for a short period ie 2-3 years is “never a good idea” is a ridiculous thing to say when you have no idea of that persons circumstances.

i appreciate your opinion but I would have to disagree with your opinion on “its as good a time as any” to purchase.  

It's not ridiculous, it's very sensible. 

What are you counting as the cost of the mortgage? The interest which you'll never see back? Arrangement fees? 

You have the FTB SDLT Relief and you're about to spunk it on somewhere you'll only live in for 2-3 years. How much will the SDLT be on the next purchase because that's going to be your largest expense. 

There is no stamp duty...it’s 140k and in wales. So no stamp duty.

Ok - and there is no first time buyer relief for Land Transaction Tax purposes in Wales anyway, but you might want to bear in mind that you're using up your first time buyer "virginity" with this purchase, which might be valuable for whatever FTB perks are available for a later, more expensive purchase (e.g. if you want to use FTB relief on SDLT for a purchase in England).

Crashy_Time

captaindough said:

So, is it a bad time to buy a house?

Bad time to overpay/over borrow for a house IMO, but if you find one at price you are comfortable with go for it. 2008 was a banking problem, a big one admittedly, but this is worse because as far as I know pumping liquidity into the system doesn`t cure the virus. if this goes on for a while BTL get`s hit, Air B`nB gets hit, people will lose their jobs and we have Brexit looming as well (how insignificant that problem seems now?) all putting downwards pressure on house prices.