Is it stupid to buy a house right now?

Crashy_Time

blue_max_3 said:

Crashy_Time said:

 My version of "armageddon" is that rates will rise before they allow a major currency to collapse, that will be armageddon for big debt holders. The only big debt most people have is for a house, and in a scenario where being able to service that debt is even a question people need to ask themselves, things will be so bad that the value of that house will be falling, putting them into negative equity if not repossession/bankruptcy. The best thing for people who can easily service debt and/or put up sizeable deposits is to wait for cheaper property with a lower debt load. You are banking on the PTB being able to backstop everything all the time, I think that is a dangerous assumption to make.

I think this has to be my final comment in this thread as it has been derailed enough.
The government is a debtor and wants interest rates low to mitigate their debts (ever increasing).
Not sure what the PTB is, but I'm not expecting anyone to bail me out.
I've made more money through property ownership than I have ever earned. That simple fact gives me confidence that it's my best hope going forward.

The UK government doesn`t control the interest rate on international debt markets, and if there was a "run" on the currency (as happened in the early 90`s) they could be forced to raise rates to backstop the £, the main thing that has protected the pound so far is that we can create unlimited amounts of our own currency (unlike countries tied to the Euro) To base all your forward planning on having made money in a previous property bubble doesn`t sound very sound to me!

Splatfoot

Crashy_Time said:

Splatfoot said:

Crashy_Time said:

Splatfoot said:

Moxley said:

Why is there a certain faction on here that takes it completely as read that homeowners are all desperately afraid of a price crash? I bought my home two years ago, and intend to live here for at least another decade. It makes zero difference to me whether prices go up or down in that time, as long as I continue to earn enough to keep paying my mortgage.

The HPC gang make the mistake of thinking everyone else is as obsessed with prices and getting the best deal possible as they are.

To the OP, I just echo the advice of others on this thread. As long as you feel secure in your ability to keep paying the mortgage, and expect to want to live there for a decent amount of time, it’s absolutely not silly to buy right now.

Exactly. As long as it's not just a short term property. I bought not long before the last crash and have certainly not lost. If I'd been renting for the last 13 years though, that definitely would have been around £160,000 down the drain. As well as the money aspect, there is also the security aspect. Being able to decorate, personalise and make a house a home without fearing in a few months time, you might have to leave. That's worth a million. 

Actually it isn`t, and most people don`t move rental every few months, that is just a myth people with big mortgages peddle to make themselves feel better.

Also, I didn't say every few months.  I said a few months after decorating. Being in somewhere for 5 years and having to move when your kids are settled, is even worse.

 I thought renters were not allowed to decorate, according to many posters on here anyway? The key thing about making up narratives about renting, or anything else for that matter is to stick to one believable narrative, otherwise people see it for what it is....made up nonsense from people who want you to do what they did.

Tiresome. You make no sense. Ever. 

lisyloo

Unicorn_cottage said:

Remember never listen to Crashy types. I blocked him ages ago apparently as the legend goes he never bought a house and is still waiting.

I listened to crashY types in 2001, decided to buy in 2003, became mortgage free in 2019.

There isn’t a blanket answer but if it’s a perfect place and you have to pay for rent anyway and you’ve mitigated the risks as much as you can e.g. fixed rate, then it’s best just to go ahead as there are always things to worry about.

lisyloo

Crashy_Time said:

Davesnave said:

Crashy_Time said:

Davesnave said:

jimbog said:

Not 'stupid' if it is the right decision for you in your circumstances at this moment

This is it in a nutshell. You know your circumstances, so ought to be able to judge the suitability of the house for long term occupation and your likely ability to pay for it. None of us can do that for you. Everyone's life includes an element of uncertainty, but that's not necessarily a reason for following 'jam tomorrow' doctrines. For some, tomorrow never comes.

Sounds like you really don`t want hard working people to get their Jam as far as decently priced property goes? 

No, they can speculate on the right place being available at any point in the future, and in the current economic climate they might well save money. What I want is for people to recognise the subtleties of markets, which may stymie their plans if there are specific kinds of price movements

This isn't based on theory, but what happened when the affordability of a certain type of property altered while we planned ahead. Two years from when we decided in principle to make a move, we returned to view the market and found ourselves priced-out.

It's quite possible property won't fall uniformly, or that it will  hold its price, or even increase in certain places, but I don't know what type of house the OP wants, or where it is.

."Hard working people" ? Nice sound bite phrase, generally much disliked by...um.. hard working people!

There isn`t much subtlety involved though, cheap credit is pumped in, sentiment decides it can only go one way and then we have a massive bubble, withdraw the cheap credit by asking for higher deposits and sentiment turns and you get the opposite i.e the bubble bursts and everyone involved feels some pain. Even when the bubble is going full steam the only real beneficiaries are people downsizing....and of course the banks.

This I factually incorrect.
if you own a mortgaged property and the paper value goes down and you lose equity (even in negative equity) this does not cause you a financial issue as long as you don’t wish to sell or move.
it could cause psycological distress but only if you are tracking your house price and never expect it to go down (which is a silly thing to do).

lisyloo

lisyloo said:

Crashy_Time said:

Davesnave said:

Crashy_Time said:

Davesnave said:

jimbog said:

Not 'stupid' if it is the right decision for you in your circumstances at this moment

This is it in a nutshell. You know your circumstances, so ought to be able to judge the suitability of the house for long term occupation and your likely ability to pay for it. None of us can do that for you. Everyone's life includes an element of uncertainty, but that's not necessarily a reason for following 'jam tomorrow' doctrines. For some, tomorrow never comes.

Sounds like you really don`t want hard working people to get their Jam as far as decently priced property goes? 

No, they can speculate on the right place being available at any point in the future, and in the current economic climate they might well save money. What I want is for people to recognise the subtleties of markets, which may stymie their plans if there are specific kinds of price movements

This isn't based on theory, but what happened when the affordability of a certain type of property altered while we planned ahead. Two years from when we decided in principle to make a move, we returned to view the market and found ourselves priced-out.

It's quite possible property won't fall uniformly, or that it will  hold its price, or even increase in certain places, but I don't know what type of house the OP wants, or where it is.

."Hard working people" ? Nice sound bite phrase, generally much disliked by...um.. hard working people!

There isn`t much subtlety involved though, cheap credit is pumped in, sentiment decides it can only go one way and then we have a massive bubble, withdraw the cheap credit by asking for higher deposits and sentiment turns and you get the opposite i.e the bubble bursts and everyone involved feels some pain. Even when the bubble is going full steam the only real beneficiaries are people downsizing....and of course the banks.

This I factually incorrect.
if you own a mortgaged property and the paper value goes down and you lose equity (even in negative equity) this does not cause you a financial issue as long as you don’t wish to sell or move.
it could cause psycological distress but only if you are tracking your house price and never expect it to go down (which is a silly thing to do).

Btw - I did go through the falling prices of the 90s.
it affected a minority badly if they needed to move e.g job relocation.
the majority (like me) we’re fine, carried on paying the mortgage and then had equity in the long term
if I’d had perfect hindsight I’d have bought in 1993 but that would be a very difficult trick to pull as the best prices would be when Everyone was really nervous so most people would find that hard to achieve and of course no guarantee of getting your perfect property if you are choosing the time.

i don’t think those happy in their homes with their families have anywhere near as much vested interest as those who are unhappy and trying to get into the market but haven’t achieved what they wanted for decade.

danlightbulb

lisyloo said:

i don’t think those happy in their homes with their families have anywhere near as much vested interest as those who are unhappy and trying to get into the market but haven’t achieved what they wanted for decade.

I do agree with this. Someone in a decent house and stable job has no need to think about it. They can continue paying their manageable mortgage (which will be quite low now if they're 20+ years in to it).

However this doesn't mask that there is a massive issue in the current market for people who don't own. Firstly, many people are completely priced out full stop and left locked into rents. What are those people supposed to do? 

For those who do have the ability to buy at the bottom end (I'm in this bracket), there is a severe lack of supply of good quality houses. There are lots of heavily overpriced dumps, but very limited good houses. If those dumps were cheap, then fair enough, buy one and build it up, trade up over time. But when even buying a dump is stretching someone to their absolute limit - then what?

At the end of the day it comes down to intergenerational fairness. Many members here are in an older group who were able to buy either before the house prices started running away with themselves or in the early days of inflation starting (late 90's/early 00's). These people probably weren't earning mega bucks when they bought, yet were able to buy a good sized, decent, desirable house that they are now sitting pretty in for decades whilst others are left behind. If you're the type who's spent the last 30+ years in the same house, genuinely think about whether you could buy that house now on the modern day equivalent of the salary you were on when you bought it, and how quickly you could save up that 10% deposit on your house now.

A 25 year, £30k mortgage in the 80's or early 90's, even at 12% interest rates, is still only £300 a month. If that mortgage was now coming to its end on current rates it would be under £100 a month. The house that many here may be sitting comfortably in paying under £100 a month may be costing someone else £1200+ and their salaries are no higher than yours are.

You should be able to understand why there is resentment there. 

Those wanting a crash don't want to stuff normal people over, but what choice do they have left when their needs are not being catered for? There is a massive inequality and its getting worse.

bigpappa

Around where I live the homes have gone for full price post opening up. These are in a very sought out area.

It seems there are two markets - those people who were not affected by the virus at all - people generally working in the public sector, healthcare, IT.

bigpappa

danlightbulb said:

lisyloo said:

i don’t think those happy in their homes with their families have anywhere near as much vested interest as those who are unhappy and trying to get into the market but haven’t achieved what they wanted for decade.

I do agree with this. Someone in a decent house and stable job has no need to think about it. They can continue paying their manageable mortgage (which will be quite low now if they're 20+ years in to it).

However this doesn't mask that there is a massive issue in the current market for people who don't own. Firstly, many people are completely priced out full stop and left locked into rents. What are those people supposed to do? 

For those who do have the ability to buy at the bottom end (I'm in this bracket), there is a severe lack of supply of good quality houses. There are lots of heavily overpriced dumps, but very limited good houses. If those dumps were cheap, then fair enough, buy one and build it up, trade up over time. But when even buying a dump is stretching someone to their absolute limit - then what?

At the end of the day it comes down to intergenerational fairness. Many members here are in an older group who were able to buy either before the house prices started running away with themselves or in the early days of inflation starting (late 90's/early 00's). These people probably weren't earning mega bucks when they bought, yet were able to buy a good sized, decent, desirable house that they are now sitting pretty in for decades whilst others are left behind. If you're the type who's spent the last 30+ years in the same house, genuinely think about whether you could buy that house now on the modern day equivalent of the salary you were on when you bought it, and how quickly you could save up that 10% deposit on your house now.

A 25 year, £30k mortgage in the 80's or early 90's, even at 12% interest rates, is still only £300 a month. If that mortgage was now coming to its end on current rates it would be under £100 a month. The house that many here may be sitting comfortably in paying under £100 a month may be costing someone else £1200+ and their salaries are no higher than yours are.

You should be able to understand why there is resentment there. 

Those wanting a crash don't want to stuff normal people over, but what choice do they have left when their needs are not being catered for? There is a massive inequality and its getting worse.

I know a few people who continue to live in grand edwardian style mansions - 6/7 bedrooms who bought these homes 30/40 years ago on average salaries now sitting on homes worth millions. They are near retirement so hit the jackpot.

lisyloo

danlightbulb said:

lisyloo said:

i don’t think those happy in their homes with their families have anywhere near as much vested interest as those who are unhappy and trying to get into the market but haven’t achieved what they wanted for decade.

I do agree with this. Someone in a decent house and stable job has no need to think about it. They can continue paying their manageable mortgage (which will be quite low now if they're 20+ years in to it).

However this doesn't mask that there is a massive issue in the current market for people who don't own. Firstly, many people are completely priced out full stop and left locked into rents. What are those people supposed to do? 

For those who do have the ability to buy at the bottom end (I'm in this bracket), there is a severe lack of supply of good quality houses. There are lots of heavily overpriced dumps, but very limited good houses. If those dumps were cheap, then fair enough, buy one and build it up, trade up over time. But when even buying a dump is stretching someone to their absolute limit - then what?

At the end of the day it comes down to intergenerational fairness. Many members here are in an older group who were able to buy either before the house prices started running away with themselves or in the early days of inflation starting (late 90's/early 00's). These people probably weren't earning mega bucks when they bought, yet were able to buy a good sized, decent, desirable house that they are now sitting pretty in for decades whilst others are left behind. If you're the type who's spent the last 30+ years in the same house, genuinely think about whether you could buy that house now on the modern day equivalent of the salary you were on when you bought it, and how quickly you could save up that 10% deposit on your house now.

A 25 year, £30k mortgage in the 80's or early 90's, even at 12% interest rates, is still only £300 a month. If that mortgage was now coming to its end on current rates it would be under £100 a month. The house that many here may be sitting comfortably in paying under £100 a month may be costing someone else £1200+ and their salaries are no higher than yours are.

You should be able to understand why there is resentment there. 

Those wanting a crash don't want to stuff normal people over, but what choice do they have left when their needs are not being catered for? There is a massive inequality and its getting worse.

Totally agree, but there is a difference between those who have genuine grievances and the crash trolls who wish for misery on others so they can get a bargain as they’ve failed to time the market.
my comments were aimed at the former (as indeed some of crashys comments were aimed at me).
I have sympathy for those at the rough end of a genuine grievance. 

What are they meant to do? Make the best of it or make another plan. If I was struggling to buy I’d look at career options, other countries, living with mum and dad, moving to a cheaper area or perhaps just giving up on buying. I’d analyse all my options and then put everything into going after it, the thought of just being miserable all the time doesn’t really appeal. Are their people who can’t change their circs? Almost certainly there are people with limitations of various kinds, Ive had elderly dependents for many years which has limited where I’d consider living. If you can’t change it or leave it then you have to accept it but I’d like to think I’d fully explore all the options.

there are people on certain websites who’ve been waiting for a crash since 2001citing - sars, mers, bird flu, swine flu, 9/11, gfc etc. Etc. Whilst during that period others have worked hard and bought a home and are now mortage free. 

That’s a totally different issue to your (completely valid) point of genuine grievances.

lisyloo

bigpappa said:

Around where I live the homes have gone for full price post opening up. These are in a very sought out area.

It seems there are two markets - those people who were not affected by the virus at all - people generally working in the public sector, healthcare, IT.

There are absolutely people with money. Just look at the reports of explosions in holiday bookings. Some people have done well from this - lower costs, overtime and sadly inheritance.