Is it stupid to buy a house right now?

Crashy_Time

blue_max_3 said:

The thing to appreciate, is that house prices also dictate rents. Often landlords would want to cover the mortgage plus a profit. Accommodation costs escalate for all unless you live with your parents. The only hedge against rising costs, is to purchase. 
There may be buying opportunities presenting themselves in the coming months, but If you were out of the property market for years or decades, you're probably unlikely to be able to benefit from it. 

Wages and housing benefit dictate rents, can`t see either rising any time soon. in fact as the Government gets into even more debt (or gets us into it) I can see caps on tax payer bungs to landlords.

Crashy_Time

Scotbot said:

JeffMason said:

Hi All,
Really interesting discussion here. I've noticed a few 'as long as you're going to stay in the house for a decent amount of time' type comments, and wondered what people thought a decent amount of time is?

I'm looking at buying now in London, but don't think this will be a forever home as the size I can afford right now isn't huge and my workplace might change and affect where it is smart for me to live. My estimate is 4-5 years in the property I'd buy now, and I wonder that is thought of as a decent amount of time..?
 

I am on my 4th house, I owned the previous 3 for between 3 and 15 years and made a profit on all of them.  Where I now live houses have gone up 30% in the last 5 years so even with a 20% price drop you would have made a profit. I bought 3 years ago and if I sell next year might make a loss on the price of the house but not if I add in the cost of renting for that period.
Sharp movements can happen very quickly. I was going to sell the second property when I took an overseas posting, prices had been flat for several years and I thought it would be a hassle to rent it. In the end I couldn't  sell in time do decided to rent it out and sold 3 years  later during which time the price had nearly doubled. If I  had sold when I originally intended I would not have been able to get back in at the same level.
In your situation , if prices go down you will benefit by being able to trade up to a property which is more affordable as it will have dropped in value more than yours.  Whilst you only plan to be in your next property for 4 to 5 years it sounds like you plan to be owning property for much longer.  This is what posters are thinking about when they talk about staying in a house for a decent time, it doesn't have to be the same house.
Track the market, I doubt prices will rise in the next year so you can take your time but when you find a house you like that you can afford make the move

The past is not necessarily a guide to the future though, you participated in the biggest property bubble in history, that won`t apply to someone buying now, and being caught in a sharp downward movement at London price levels with the economy in the state it is could be very financially painful indeed.

tom9980

Crashy_Time said:

blue_max_3 said:

The thing to appreciate, is that house prices also dictate rents. Often landlords would want to cover the mortgage plus a profit. Accommodation costs escalate for all unless you live with your parents. The only hedge against rising costs, is to purchase. 
There may be buying opportunities presenting themselves in the coming months, but If you were out of the property market for years or decades, you're probably unlikely to be able to benefit from it. 

Wages and housing benefit dictate rents, can`t see either rising any time soon. in fact as the Government gets into even more debt (or gets us into it) I can see caps on tax payer bungs to landlords.

LHA rate just went from £665 to £750 here after years of not going up, Despite that rents on 3 beds were still at the £750 level.

Crashy_Time

tom9980 said:

Crashy_Time said:

blue_max_3 said:

The thing to appreciate, is that house prices also dictate rents. Often landlords would want to cover the mortgage plus a profit. Accommodation costs escalate for all unless you live with your parents. The only hedge against rising costs, is to purchase. 
There may be buying opportunities presenting themselves in the coming months, but If you were out of the property market for years or decades, you're probably unlikely to be able to benefit from it. 

Wages and housing benefit dictate rents, can`t see either rising any time soon. in fact as the Government gets into even more debt (or gets us into it) I can see caps on tax payer bungs to landlords.

LHA rate just went from £665 to £750 here after years of not going up, Despite that rents on 3 beds were still at the £750 level.

What general area is that?

tom9980

Crashy_Time said:

tom9980 said:

Crashy_Time said:

blue_max_3 said:

The thing to appreciate, is that house prices also dictate rents. Often landlords would want to cover the mortgage plus a profit. Accommodation costs escalate for all unless you live with your parents. The only hedge against rising costs, is to purchase. 
There may be buying opportunities presenting themselves in the coming months, but If you were out of the property market for years or decades, you're probably unlikely to be able to benefit from it. 

Wages and housing benefit dictate rents, can`t see either rising any time soon. in fact as the Government gets into even more debt (or gets us into it) I can see caps on tax payer bungs to landlords.

LHA rate just went from £665 to £750 here after years of not going up, Despite that rents on 3 beds were still at the £750 level.

What general area is that?

West Midlands

Crashy_Time

tom9980 said:

Crashy_Time said:

tom9980 said:

Crashy_Time said:

blue_max_3 said:

The thing to appreciate, is that house prices also dictate rents. Often landlords would want to cover the mortgage plus a profit. Accommodation costs escalate for all unless you live with your parents. The only hedge against rising costs, is to purchase. 
There may be buying opportunities presenting themselves in the coming months, but If you were out of the property market for years or decades, you're probably unlikely to be able to benefit from it. 

Wages and housing benefit dictate rents, can`t see either rising any time soon. in fact as the Government gets into even more debt (or gets us into it) I can see caps on tax payer bungs to landlords.

LHA rate just went from £665 to £750 here after years of not going up, Despite that rents on 3 beds were still at the £750 level.

What general area is that?

West Midlands

I would suggest that landlords will have more difficulty going forward finding working people to pay higher rents, and that will be part of the reason for the bung from the government, they like the idea of the public thinking they are being tough on landlords and property hoarders, but in reality they don`t want the BTL/HMO sector to actually collapse. The problem for the government though is that everyone needs a bailout now!
https://www.landlordzone.co.uk/news/retail-rents-could-drop-by-50-after-coronavirus/

tom9980

Crashy_Time said:

tom9980 said:

Crashy_Time said:

tom9980 said:

Crashy_Time said:

blue_max_3 said:

The thing to appreciate, is that house prices also dictate rents. Often landlords would want to cover the mortgage plus a profit. Accommodation costs escalate for all unless you live with your parents. The only hedge against rising costs, is to purchase. 
There may be buying opportunities presenting themselves in the coming months, but If you were out of the property market for years or decades, you're probably unlikely to be able to benefit from it. 

Wages and housing benefit dictate rents, can`t see either rising any time soon. in fact as the Government gets into even more debt (or gets us into it) I can see caps on tax payer bungs to landlords.

LHA rate just went from £665 to £750 here after years of not going up, Despite that rents on 3 beds were still at the £750 level.

What general area is that?

West Midlands

I would suggest that landlords will have more difficulty going forward finding working people to pay higher rents, and that will be part of the reason for the bung from the government, they like the idea of the public thinking they are being tough on landlords and property hoarders, but in reality they don`t want the BTL/HMO sector to actually collapse. The problem for the government though is that everyone needs a bailout now!
https://www.landlordzone.co.uk/news/retail-rents-could-drop-by-50-after-coronavirus/

Your article is about commercial rents not private.

JeffMason

Crashy_Time said:

Scotbot said:

JeffMason said:

Hi All,
Really interesting discussion here. I've noticed a few 'as long as you're going to stay in the house for a decent amount of time' type comments, and wondered what people thought a decent amount of time is?

I'm looking at buying now in London, but don't think this will be a forever home as the size I can afford right now isn't huge and my workplace might change and affect where it is smart for me to live. My estimate is 4-5 years in the property I'd buy now, and I wonder that is thought of as a decent amount of time..?
 

I am on my 4th house, I owned the previous 3 for between 3 and 15 years and made a profit on all of them.  Where I now live houses have gone up 30% in the last 5 years so even with a 20% price drop you would have made a profit. I bought 3 years ago and if I sell next year might make a loss on the price of the house but not if I add in the cost of renting for that period.
Sharp movements can happen very quickly. I was going to sell the second property when I took an overseas posting, prices had been flat for several years and I thought it would be a hassle to rent it. In the end I couldn't  sell in time do decided to rent it out and sold 3 years  later during which time the price had nearly doubled. If I  had sold when I originally intended I would not have been able to get back in at the same level.
In your situation , if prices go down you will benefit by being able to trade up to a property which is more affordable as it will have dropped in value more than yours.  Whilst you only plan to be in your next property for 4 to 5 years it sounds like you plan to be owning property for much longer.  This is what posters are thinking about when they talk about staying in a house for a decent time, it doesn't have to be the same house.
Track the market, I doubt prices will rise in the next year so you can take your time but when you find a house you like that you can afford make the move

The past is not necessarily a guide to the future though, you participated in the biggest property bubble in history, that won`t apply to someone buying now, and being caught in a sharp downward movement at London price levels with the economy in the state it is could be very financially painful indeed.

What is the alternative though? 

Crashy_Time

tom9980 said:

Crashy_Time said:

tom9980 said:

Crashy_Time said:

tom9980 said:

Crashy_Time said:

blue_max_3 said:

The thing to appreciate, is that house prices also dictate rents. Often landlords would want to cover the mortgage plus a profit. Accommodation costs escalate for all unless you live with your parents. The only hedge against rising costs, is to purchase. 
There may be buying opportunities presenting themselves in the coming months, but If you were out of the property market for years or decades, you're probably unlikely to be able to benefit from it. 

Wages and housing benefit dictate rents, can`t see either rising any time soon. in fact as the Government gets into even more debt (or gets us into it) I can see caps on tax payer bungs to landlords.

LHA rate just went from £665 to £750 here after years of not going up, Despite that rents on 3 beds were still at the £750 level.

What general area is that?

West Midlands

I would suggest that landlords will have more difficulty going forward finding working people to pay higher rents, and that will be part of the reason for the bung from the government, they like the idea of the public thinking they are being tough on landlords and property hoarders, but in reality they don`t want the BTL/HMO sector to actually collapse. The problem for the government though is that everyone needs a bailout now!
https://www.landlordzone.co.uk/news/retail-rents-could-drop-by-50-after-coronavirus/

Your article is about commercial rents not private.

Yes I know, that is why I said - "Everyone needs a bailout now". It isn`t difficult though to see a connection between struggling commercial sites and private rents? 

Crashy_Time

JeffMason said:

Crashy_Time said:

Scotbot said:

JeffMason said:

Hi All,
Really interesting discussion here. I've noticed a few 'as long as you're going to stay in the house for a decent amount of time' type comments, and wondered what people thought a decent amount of time is?

I'm looking at buying now in London, but don't think this will be a forever home as the size I can afford right now isn't huge and my workplace might change and affect where it is smart for me to live. My estimate is 4-5 years in the property I'd buy now, and I wonder that is thought of as a decent amount of time..?
 

I am on my 4th house, I owned the previous 3 for between 3 and 15 years and made a profit on all of them.  Where I now live houses have gone up 30% in the last 5 years so even with a 20% price drop you would have made a profit. I bought 3 years ago and if I sell next year might make a loss on the price of the house but not if I add in the cost of renting for that period.
Sharp movements can happen very quickly. I was going to sell the second property when I took an overseas posting, prices had been flat for several years and I thought it would be a hassle to rent it. In the end I couldn't  sell in time do decided to rent it out and sold 3 years  later during which time the price had nearly doubled. If I  had sold when I originally intended I would not have been able to get back in at the same level.
In your situation , if prices go down you will benefit by being able to trade up to a property which is more affordable as it will have dropped in value more than yours.  Whilst you only plan to be in your next property for 4 to 5 years it sounds like you plan to be owning property for much longer.  This is what posters are thinking about when they talk about staying in a house for a decent time, it doesn't have to be the same house.
Track the market, I doubt prices will rise in the next year so you can take your time but when you find a house you like that you can afford make the move

The past is not necessarily a guide to the future though, you participated in the biggest property bubble in history, that won`t apply to someone buying now, and being caught in a sharp downward movement at London price levels with the economy in the state it is could be very financially painful indeed.

What is the alternative though? 

The alternative to buying during a pandemic and possibly just before a massive recession?..........tricky one.............maybe the alternative is not buying just now? Why do you need to buy right now, why didn`t you buy last year or the year before?