Bad time to buy a house?

Crashy_Time

Davesnave said:

Lover_of_Lycra said:

captaindough said:

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

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.

This is the point I was trying to make. Our purchasers in the  2008 recession did very well, because the property in our area fell until mid 2009, then started to recover, reaching previous high levels  5 years later. After that, prices just kept on climbing. However, had they sold within, say, 3 years, they'd have seen little if any benefit from buying low. Remember, that was a very buoyant area; elsewhere the recovery was more delayed.

We rented and bought right at the bottom in mid 2009, but of course we didn't know it was the bottom. No one does. Like the poster above, we were focused on finding the right place as a long term home, and as in all recessions, the supply had dried to a trickle, so we were lucky finding somewhere. I expected to be renting for much longer.

One difference between then and now is that interest rates were much higher: around 6% was easily achievable, so with our house money banked, we were making a good profit on renting a house in a 'better' street than the one where we'd owned. That won't be possible this time.

The difference between then and now is that after 2008 the biggest central bank bailout in history took place, and it is still ongoing, being stepped up as we speak, and back then people were no where near as indebted on all sorts of levels as they are now, plus houses were generally much cheaper. The worst thing to have in an economic/medical emergency is a system that relies on massive debts being serviced to just tick over, IMO the damage  already done, even if this all stops next week, is going to cause a recession. Just imagine if more people had been able to buy houses outright or pay down mortgages quicker how much easier the coming school/work etc. shutdowns would have been? As it stands the government is going to have to QE some magic money to pay people to quarantine themselves and still pay their debts? Total farce of an economy if we are being honest.

captaindough

davidmcn said:

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).

I am purchasing my first property, yet I am not a FTB. I inherited a property a few years back which ruled me out of FTB perks.

Crashy_Time

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 

Do you have a link, not your house, just general postcode will do so we can follow the price changes?

Crashy_Time

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 

Any chance of linking to one of my threads that you followed?