Is now really a bad time to buy?

Scotbot

eidand said:

Ozzuk said:

I've been reading this thread with interest, and what has become clear is Crashy's modus operandi.  Any bad event over the last 5-7 years will see an increase in their posting level, promoting the absolute worst case as fact.  Other posters will then provide rational responses which Crashy will then ignore 90% of, picking up one statement that they think they can challenge in an attempt to divert the point with an ever meandering response.  This will be interpersed with an article with a shock headline that often they haven't actually read.  This will be followed by new accounts supporting his position.
Everyone is entitled to their opinion but this really is just agenda driven scaremongering.  I actually agree with some aspects - this is a time to be careful about over leveraging to buy property - but being chicken little everytime something bad happens is getting old and detracts from your points.
I think what is clear at the moment is everyone's situation is different and each person should consider their own attitude to risk, and likelyhood of certain scenarios happening (redundancy, house price drop/increase etc).  The current disaster could be a wake up call for many people who live a life based on credit, and you'd hope we'll see more shoring up of assets.  And there will be winners and losers - sadly a lot of people are losing their jobs/homes, relationships breaking, there are also a lot of people for whom the opposite is true - a lot of money is being made on the stock markets right now with clever (if risky) investment.



 

Tbh I don't see the point to all this.
Whatever is talked about on this board won't have any effect outside of it, so I am wondering if it's simply attention seeking. The guy is either bored or clearly has nothing better to do with his life. It's a shame really because people come here to get some helpful advice and they get this chap with his waffle.

Who knows what Crashytime's motivation is, how many properties he owns or indeed if he is a he. It's an internet forum after all. I  think new forum users work out pretty quickly that his advice is best taken with a large portion of condiments. I did. 

Norman_Castle

Crashy_Time said:

Parking_Eyerate said:

Crashy_Time said:

Parking_Eyerate said:

Crashy_Time said:

RelievedSheff said:

Crashy_Time said:

MobileSaver said:

Crashy_Time said:

RelievedSheff said:

Where do you get yours from because it is at complete odds with what everyone else is seeing?

BBC, where else?

It's strange you didn't want to comment on this BBC news article, is that because it undermines your BTL end of the world euphoria?

Boris Johnson - right to live in UK for over two and a half million Hong Kong citizens

Do you honestly think 2.5 - 3 million are going to come here from HK? Many of the people wishing to leave will have foreign passports anyway for various countries and will have their plan B drawn up long ago, and if they did leave the dispersion is going to include UK but also Australia, Taiwan, U.S, Canada etc.etc. Don`t you understand that if HK is basically evacuated we are going to see major disruption to global credit markets and hence lending including mortgage and BTL lending? This along with Brexit and the inevitable recession more than neutralises any "benefit" from an influx of people who you hope are desperate for accommodation! (did it ever cross your mind that many choosing to come back to the U.K already own a property here anyway and don`t need to buy or rent?)

so where are all of these empty properties that these people already own?

If they are not empty and are rented out then surely the current tenants will have to find another property once the property owner returns to the UK?

If the tenant finds another property back home in Poland for example (or goes there to live with family or already owns there) where does that leave your "fixed demand" theory?

Yeah but, if this, if that, if, if, if, if...
Your 'points' are essentially just far-reaching conjecture. Up until last year the Polish economy grew steadily for 28 years, a better record than France or Germany, yet overall there was nevertheless still quite significant emigration. To me this suggests that trends are difficult to predict and so please do tell how you know what the pattern of migration will look like for multiple populations as a consequence of coronavirus. I don't have any idea what proportion of what nationalities own versus rent, for example, or what proportion of overseas nationals may choose to stay or what the extent and length of coronavirus impact on different countries' economies will be, and so I wouldn't be tempted to make the assertions that you dream up. Strangely, however, the little question of evidence seems to be quite irrelevant to you.

Crashy_Time said:

TonyMMM said:

Nationwide are raising minimum deposit to 15% for FTB ....says something about where they think house prices are headed.
https://www.theguardian.com/business/2020/jun/17/nationwide-triples-minimum-deposit-for-uk-first-time-buyers

Think I posted something about that a couple of days ago, should be 20-30% IMO.

The harder it is for people to buy and sell houses the more the existing rental market will benefit. So I can't help but think that if you get your wish of 20-30% deposit requirements then you won't get your wish of a flood of buy to let properties coming to the market. You might have to decide which would bring you greater pleasure and focus all your efforts accordingly.

So it is "far reaching conjecture" that if someone from another country loses their job here they could give up their BTL tenancy and go home to their own country? 

"Could", no, that's a reasonable theory. "Would", yes, because there's no indication of how settled they are. They might have kids at school, might have extended family here, might be confident of getting another job etc. etc.
However that's just yet another attempt at a misdirection because, unless I have underestimated your comprehension skills, you should have been able to realise that that's not the point I was making. To reiterate for you, what is pure and far-reaching conjecture is the concept that there will definitely be such a trend that is so extensive that it is able to overpower all counter-pressures to cause your 'guaranteed' and long-desired market "flooding" of buy to let and Airbnb properties.

IME people who can`t make a clear point in a couple of sentences don`t really know what they are talking about, and if you add in a sarcastic patronising tone then it is a dead cert that they don`t!

Well you've been waffling on for 25 pages with constantly changing points and I suspect many on here don't know what you are on about, doesn't that suggests you don't know what you're talking about.

Crashy_Time

Wkmg said:

Crashy_Time said:

Ozzuk said:

I've been reading this thread with interest, and what has become clear is Crashy's modus operandi.  Any bad event over the last 5-7 years will see an increase in their posting level, promoting the absolute worst case as fact.  Other posters will then provide rational responses which Crashy will then ignore 90% of, picking up one statement that they think they can challenge in an attempt to divert the point with an ever meandering response.  This will be interpersed with an article with a shock headline that often they haven't actually read.  This will be followed by new accounts supporting his position.
Everyone is entitled to their opinion but this really is just agenda driven scaremongering.  I actually agree with some aspects - this is a time to be careful about over leveraging to buy property - but being chicken little everytime something bad happens is getting old and detracts from your points.
I think what is clear at the moment is everyone's situation is different and each person should consider their own attitude to risk, and likelyhood of certain scenarios happening (redundancy, house price drop/increase etc).  The current disaster could be a wake up call for many people who live a life based on credit, and you'd hope we'll see more shoring up of assets.  And there will be winners and losers - sadly a lot of people are losing their jobs/homes, relationships breaking, there are also a lot of people for whom the opposite is true - a lot of money is being made on the stock markets right now with clever (if risky) investment.



 

I think it is pretty clear to most sensible people who are not blinded by their need/desire for ever rising property prices that my call that the present property/credit bubble is not built to withstand much volatility is accurate. One account is all I have ever had though, but it is quite tragic to see obvious personalities from the debate forum etc. popping up with new accounts and still trying to tell people to dive in, thankfully it seems that the banks are now worried enough to start putting a stop to the over-borrowing nonsense. To bring things back on topic, IMO it is a very bad time to take on large debt -  for anything.

It depends on the individual circumstances though. If you have a secure income (for example you work for the NHS) then it’s a good time to borrow as interest rates are low.

Prices for the one thing most people borrow most for are super high though, and the interest rates are likely to rise over the term of the loan, probably about 30 years for many people now. Prices have to correct, there is no other way out of this.

MobileSaver

Crashy_Time said:

Prices for the one thing most people borrow most for are super high though, ... Prices have to correct, there is no other way out of this.

Prices have to correct to what? What is the "correct" price?

You are clearly educated and intelligent and yet fundamentally you don't seem to get that we live in a market economy; the price is what it is based on supply and demand. There is no right or wrong price, house prices are neither good or bad, they just are what they are.

Parking_Eyerate

Crashy_Time said:

Wkmg said:

Crashy_Time said:

Ozzuk said:

I've been reading this thread with interest, and what has become clear is Crashy's modus operandi.  Any bad event over the last 5-7 years will see an increase in their posting level, promoting the absolute worst case as fact.  Other posters will then provide rational responses which Crashy will then ignore 90% of, picking up one statement that they think they can challenge in an attempt to divert the point with an ever meandering response.  This will be interpersed with an article with a shock headline that often they haven't actually read.  This will be followed by new accounts supporting his position.
Everyone is entitled to their opinion but this really is just agenda driven scaremongering.  I actually agree with some aspects - this is a time to be careful about over leveraging to buy property - but being chicken little everytime something bad happens is getting old and detracts from your points.
I think what is clear at the moment is everyone's situation is different and each person should consider their own attitude to risk, and likelyhood of certain scenarios happening (redundancy, house price drop/increase etc).  The current disaster could be a wake up call for many people who live a life based on credit, and you'd hope we'll see more shoring up of assets.  And there will be winners and losers - sadly a lot of people are losing their jobs/homes, relationships breaking, there are also a lot of people for whom the opposite is true - a lot of money is being made on the stock markets right now with clever (if risky) investment.



 

I think it is pretty clear to most sensible people who are not blinded by their need/desire for ever rising property prices that my call that the present property/credit bubble is not built to withstand much volatility is accurate. One account is all I have ever had though, but it is quite tragic to see obvious personalities from the debate forum etc. popping up with new accounts and still trying to tell people to dive in, thankfully it seems that the banks are now worried enough to start putting a stop to the over-borrowing nonsense. To bring things back on topic, IMO it is a very bad time to take on large debt -  for anything.

It depends on the individual circumstances though. If you have a secure income (for example you work for the NHS) then it’s a good time to borrow as interest rates are low.

Prices for the one thing most people borrow most for are super high though, and the interest rates are likely to rise over the term of the loan, probably about 30 years for many people now. Prices have to correct, there is no other way out of this.

Prices don’t ‘have’ to do anything, at any given time they are influenced by multiple varying factors, some very specific to areas etc. They might ‘correct’, they might stagnate, they might rise, or any mixture of these things, that’s the nature of such a market and nothing said by you, me or anyone else is going to change what happens. It’s interesting though that it’s only ever property that provokes such calls, as a proportion of household income weekly food spending is about half what it was 60 years ago but nobody ever calls for a food price correction.
So I think the most appropriate strategy is for people just to look at their own personal situation, consider various factors such as those that have been mentioned and decide what they think is best for them. That may sound obvious and a bit pointless and it probably is, but I can’t see that there is ever going to be a ‘one size fits all’ answer to the house buying question.

onetimeatponycamp

Miranda25 said:

onetimeatponycamp said:

Miranda25 said:

onetimeatponycamp said:

Miranda25 said:

TonyMMM said:

Nationwide are raising minimum deposit to 15% for FTB ....says something about where they think house prices are headed.
https://www.theguardian.com/business/2020/jun/17/nationwide-triples-minimum-deposit-for-uk-first-time-buyers

How about help-to-buy scheme? It is clearly said 5% deposit, 20-40% equity loan and 55-75% mortgage. So for somebody who wants to buy it is still 5% deposit.
https://www.helptobuy.gov.uk/

HTB relies on HTB specific mortgages. I would have thought that lenders will continue to offer them due to the government security (as surely from the lender's point of view it is 75% or 55% LTV), but it would be interesting to get the input of the brokers here, or others more knowledgeable. 

On the other hand though, HTB prices are inflated, so I guess in that sense higher risk? I was going to buy HTB, when I felt reasonably confident that prices could at least remain the same, if not go higher - I accepted that I was over-paying at the start, but felt that the loan would still allow me to build enough equity to make it all worthwhile. However now I feel it's too much of a risk.

Why do you think HTB prices are inflated? You pay for NEW properties.
Also read this threat: 

Using Help to Buy Equity Loan to hedge the potential price crash?

It might be helpful to you?

I have been looking at HTB properties for 2-3 years. Yes they are new (or in some cases a new conversion), but as soon as you move in they are no longer new. It's like driving a brand new car off the forecourt - the moment you move in it's not worth what you paid. You wouldn't be able to sell it on the open market for what you bought it for at that time. The whole point of the scheme is the reliance on property values going up. 

Anyway, I have done a LOT of research and thinking about the scheme, am confident I am aware of the pros and cons, and have made a decision that is personal to me. From reading your posts it doesn't seem like you know that much about the scheme so I was trying to help, but if that doesn't fit with what you want the answer to be then no problem, I wish you well.

Honestly, I did not decide yet what would be nice for me. 
I cannot afford to buy in London without help-to-buy scheme. But I can rent 1-2 years more and save more money for deposit. I only know that I don't want a flat in awful condition as I want to live there straight away without spending a huge amount of money on refurbishment. So ideally it would be properties which are 2-3 years old (slightly cheaper than new ones). But these properties will be on HTB shared ownership not on HTB equity loan and I still have to pay an element of rent, correct?
Not sure what would be better: these properties on resale or new ones? 
But you are right, everybody's situation is different and everybody decides what is better for him.

Yes, London prices are so high! I live in London right now, and will be moving out, although I do want to get further out anyway. Does it have to be London? Depending on how far out you are willing to go the prices do go down quite a bit. 

I also don't want a property in bad condition - once I buy I won't have tonnes of money to then do up the flat, like you. But if you look at non-new, there are lots that are in really good condition. Even a lot older properties, it depends on what work has been done on them before. 

Yes, I think right now if you want to use a government scheme then your options are the HTB equity loan or shared ownership. And yes, on shared ownership you pay an element of rent. They can also be much harder to sell on in future, so worth understanding potential downsides if you are considering. I would personally definitely choose the equity loan if I had to go for one or the other. 

Before corona happened I was happy to use the HTB loan. Whilst I knew that prices were quite high due to being brand new, I thought that given prices in general were going upwards, that by the time I wanted to sell the price would have gone up enough to make it worth it. However, now corona has happened, my worry would be to buy now, then prices to drop further, and to fine that I'd paid potentially 20-30% more than the property was now worth. That would take years for then the prices to go up enough (if at all) to get back to what I'd paid for it. I think if the HTB property were my "forever home" then I'd consider it, but the properties I was looking at I'd want to be in about 5 or so years, and for that it would be too much of a risk. Also, as you know, you can't rent the property out until you pay off the HTB loan - less of a worry if I could sell if the property no longer suited my needs, but if the value went down then I might not be able to afford to sell so I would be stuck.

FrugalCat

MobileSaver said:

Crashy_Time said:

Prices for the one thing most people borrow most for are super high though, ... Prices have to correct, there is no other way out of this.

Prices have to correct to what? What is the "correct" price?

You are clearly educated and intelligent and yet fundamentally you don't seem to get that we live in a market economy; the price is what it is based on supply and demand. There is no right or wrong price, house prices are neither good or bad, they just are what they are.

Questionable terminology, thought the sentiment is probably correct. Prices are relatively high by any historical measure.
Correction of prices would be regression to the mean.

And house prices are not just based on supply and demand. They're based on affordability (key demand factor), which is incredibly high due to low interest rates and high pressure to lend. The Bank of England published something to that effect, link below:
https://www.bankofengland.co.uk/working-paper/2019/uk-house-prices-and-three-decades-of-decline-in-the-risk-free-real-interest-rate

The question that housing bulls can't convincingly answer is: What could drive affordability higher?
Interest rates are as low as it gets, lending is already at 95% and high earning multiples, with various government schemes supporting.
Meanwhile earnings are under downward pressure due to recession and de-globalisation (short term) and technological advancement (long term).

The best answer to the question is invariably inflation - but that would 
A) Not mean a real increase in value (it's just currency devaluation)
and Would come with higher interest, which would affect affordability negatively

Filo25

I'm surprised COVID doesn't seem to have had more of an impact where I live locally (NE London), looking on Rightmove quite a few houses listed in the last month are already showing as SSTC, and from chatting to a mortgage broker today he isn't seeing any weakness in prices coming through so far.

Maybe things will change when furlough ends and we may have the possibility for some forced sales, but for now it seems to be holding up better than I would have expected

Miranda25

onetimeatponycamp said:

Miranda25 said:

onetimeatponycamp said:

Miranda25 said:

onetimeatponycamp said:

Miranda25 said:

TonyMMM said:

Nationwide are raising minimum deposit to 15% for FTB ....says something about where they think house prices are headed.
https://www.theguardian.com/business/2020/jun/17/nationwide-triples-minimum-deposit-for-uk-first-time-buyers

How about help-to-buy scheme? It is clearly said 5% deposit, 20-40% equity loan and 55-75% mortgage. So for somebody who wants to buy it is still 5% deposit.
https://www.helptobuy.gov.uk/

HTB relies on HTB specific mortgages. I would have thought that lenders will continue to offer them due to the government security (as surely from the lender's point of view it is 75% or 55% LTV), but it would be interesting to get the input of the brokers here, or others more knowledgeable. 

On the other hand though, HTB prices are inflated, so I guess in that sense higher risk? I was going to buy HTB, when I felt reasonably confident that prices could at least remain the same, if not go higher - I accepted that I was over-paying at the start, but felt that the loan would still allow me to build enough equity to make it all worthwhile. However now I feel it's too much of a risk.

Why do you think HTB prices are inflated? You pay for NEW properties.
Also read this threat: 

Using Help to Buy Equity Loan to hedge the potential price crash?

It might be helpful to you?

I have been looking at HTB properties for 2-3 years. Yes they are new (or in some cases a new conversion), but as soon as you move in they are no longer new. It's like driving a brand new car off the forecourt - the moment you move in it's not worth what you paid. You wouldn't be able to sell it on the open market for what you bought it for at that time. The whole point of the scheme is the reliance on property values going up. 

Anyway, I have done a LOT of research and thinking about the scheme, am confident I am aware of the pros and cons, and have made a decision that is personal to me. From reading your posts it doesn't seem like you know that much about the scheme so I was trying to help, but if that doesn't fit with what you want the answer to be then no problem, I wish you well.

Honestly, I did not decide yet what would be nice for me. 
I cannot afford to buy in London without help-to-buy scheme. But I can rent 1-2 years more and save more money for deposit. I only know that I don't want a flat in awful condition as I want to live there straight away without spending a huge amount of money on refurbishment. So ideally it would be properties which are 2-3 years old (slightly cheaper than new ones). But these properties will be on HTB shared ownership not on HTB equity loan and I still have to pay an element of rent, correct?
Not sure what would be better: these properties on resale or new ones? 
But you are right, everybody's situation is different and everybody decides what is better for him.

Yes, London prices are so high! I live in London right now, and will be moving out, although I do want to get further out anyway. Does it have to be London? Depending on how far out you are willing to go the prices do go down quite a bit. 

I also don't want a property in bad condition - once I buy I won't have tonnes of money to then do up the flat, like you. But if you look at non-new, there are lots that are in really good condition. Even a lot older properties, it depends on what work has been done on them before. 

Yes, I think right now if you want to use a government scheme then your options are the HTB equity loan or shared ownership. And yes, on shared ownership you pay an element of rent. They can also be much harder to sell on in future, so worth understanding potential downsides if you are considering. I would personally definitely choose the equity loan if I had to go for one or the other. 

Before corona happened I was happy to use the HTB loan. Whilst I knew that prices were quite high due to being brand new, I thought that given prices in general were going upwards, that by the time I wanted to sell the price would have gone up enough to make it worth it. However, now corona has happened, my worry would be to buy now, then prices to drop further, and to fine that I'd paid potentially 20-30% more than the property was now worth. That would take years for then the prices to go up enough (if at all) to get back to what I'd paid for it. I think if the HTB property were my "forever home" then I'd consider it, but the properties I was looking at I'd want to be in about 5 or so years, and for that it would be too much of a risk. Also, as you know, you can't rent the property out until you pay off the HTB loan - less of a worry if I could sell if the property no longer suited my needs, but if the value went down then I might not be able to afford to sell so I would be stuck.

Hi :-))
1. I considered to live outside London and travel for work into Central London but I would like nice area outside London too. They have 20% HTB outside London and not 40%, that's why again I cannot afford it. It is easier within Greater London with 40% HTB.
2. Can you clarify please: which one would be more difficult to sell in the future-any HTB flat or the flat bought via shared ownership? How do you know? Through your research?
3. Can you wait until the end of the year to see if price drop happens? 
https://www.moneywise.co.uk/property/everything-you-need-know-about-post-pandemic-property-prices
4. If property price goes down then you can still sell it at lower price. At the same time if the flat on equity loan HTB then you pay less amount of equity loan (you pay % of selling price not purchase price). I see kind of balance here? Am I missing something?

MobileSaver

FrugalCat said:

 house prices are not just based on supply and demand. They're based on affordability (key demand factor),

What a strange thing to say when you then immediately contradict yourself. House prices are based on supply and demand and as you say affordability is an aspect of demand. Everyone on this thread might like the idea of owning their own private island complete with electricity, fresh water and high speed internet; however, as no-one here can afford one, all our collective wishes have absolutely zero impact on the price of such an island.

FrugalCat said:

The question that housing bulls can't convincingly answer is: What could drive affordability higher?

Who are these "housing bulls" you speak of and why do they need to answer a particular question of your choosing?

FrugalCat said:

A) Not mean a real increase in value (it's just currency devaluation)

HPCers always give themselves away when they start talking about prices in "real" terms.