House buying risks

getmore4less

Crashy_Time said:

getmore4less said:

Crashy_Time said:

Mickey666 said:

Sunsaru said:

Mickey666 said:

getmore4less said:

There is no real issue for the OP,

They are looking at a 3bed house for studio money
they have around double that spare to do it up overpay etc.
They could get a lodger and smash the mortgage in a few years or cover it if they lost their job.

It would need every crash duck to line up in a row and topple like dominoes for the OP to be in trouble.

Seems the houses will be cheaper tomorrow is so intrenched that even when they do drop and bottom out they are so convinced they will drop again they mis the great opportunity to get in at the low or just after they start rising again

Yep.  Buying a home instead of renting one is so overwhelmingly advantageous over a lifetime (and we all need somewhere to live out our lives!) that the only real question is HOW MUCH financial advantage is gained.  Fact is, some home buyers will end up better off than others, depending on a whole load of parameters, but over the long term they'll ALL benefit financially.

Buying a home IS is big step, a daunting step, and for some people overwhelmingly so.  I well remember agonising over buying my first home - could I REALLY afford it?  What if this happened, what if that happened, what if something I hadn't even thought about happened?   But within a few years I couldn't believe I'd agonised over the decision.  After 3 years I was moved to a bigger house but with a proportionally cheaper mortgage . . . and so it went on.  I now wish I had committed earlier!   
If I hadn't bought my own home, I couldn't have afforded to retire early because I'd be needing to find around £3500 a month to rent the house I'm now living in . . . . which I would not have been able to afford anyway!

People need somewhere to live for their entire lives so THAT should be their planning timescale . . . not the next few months or even years.  What happens to house prices this year or next won't matter a jot in 20 years time.  What will matter in 20 years time is whether you're still paying rent or whether you're living in your own home with the end of your mortgage in sight and no further housing costs for the remainder of your life.

Although I wholeheartedly agree with everything you say, I must point out that buying a house is not for everyone. For some the risks are to great and/or they just don't want that responsibility.
Both options have their pros and cons, but for you,me and a whole host of others, the pro's outweigh the cons.
Buying a house for me has been a lifelong dream and ranks only second to being a dad.

I was focusing purely on the financial aspects because that's the focus for a money-saving forum, but you raise a very fair point that there are other non-financial considerations as well - if you can afford them

You would accept that buying property at the peak of a historic bubble at the lowest interest rates in history with massive government intervention to keep it all going isn`t very "money saving" though? You didn`t do that yourself did you?

The swing in price cycle is quite long as you well know as you have missed enough of then.

The right time to transition into ownership comes and there is often no point in delaying just in case there is a dip.

Some get lucky some don't.
Trying to time the market is hard but once in you do ok long term no need to get out.

Volunteering  to exit back into rental looking to catch a dip to get back is bonkers as it needs timing the market twice.

No doubt there may be stall and a few bargains about pretty predictable you won't be spotting them as every day property will be cheaper tomorrow

Sounds like you recently bought?

Odd conclusion very wrong.

MobileSaver

Crashy_Time said:

MobileSaver said:

Crashy_Time said:

I am saying that we have an obvious property bubble ... for property that may be cheaper in future, that`s all.

The thing is when you first joined this site you said we were in a property bubble and that it was "going to collapse in the near future" in 2014... You said the same in 2015 and 2016... And again in 2017, 2018, 2019, 2020 and now 2021.

Covid isn`t a Black Swan, Covid or similar was on the radar of many scientists way before it happened, ... Being able to "afford one now" doesn`t mean you can still afford it if mortgage rates rise, that is the problem with excessive debt for basic shelter!

No comment on your myriad of failed predictions?

Even more embarrassing for you is that the very definition of a black swan event is that in hindsight it was "on the radar of many way before it happened!"

Your "excessive debt for basic shelter" is just another easily proven lie from the HPC crowd, there's plenty of affordable basic shelter available in this country.

Anyway your "near future" collapse is currently  at seven years and counting, is it definitely going to happen in 2021? And if it does happen will it be at least the 30% drop necessary to bring house prices back to the level when you joined this site?

Getting_greyer

It could fall down.

SpiderLegs

MobileSaver said:

Crashy_Time said:

MobileSaver said:

Crashy_Time said:

I am saying that we have an obvious property bubble ... for property that may be cheaper in future, that`s all.

The thing is when you first joined this site you said we were in a property bubble and that it was "going to collapse in the near future" in 2014... You said the same in 2015 and 2016... And again in 2017, 2018, 2019, 2020 and now 2021.

Covid isn`t a Black Swan, Covid or similar was on the radar of many scientists way before it happened, ... Being able to "afford one now" doesn`t mean you can still afford it if mortgage rates rise, that is the problem with excessive debt for basic shelter!

No comment on your myriad of failed predictions?

Even more embarrassing for you is that the very definition of a black swan event is that in hindsight it was "on the radar of many way before it happened!"

Your "excessive debt for basic shelter" is just another easily proven lie from the HPC crowd, there's plenty of affordable basic shelter available in this country.

Anyway your "near future" collapse is currently  at seven years and counting, is it definitely going to happen in 2021? And if it does happen will it be at least the 30% drop necessary to bring house prices back to the level when you joined this site?

I find that a fun way to amuse oneself in these difficult times is to look back at what crashy was posting on the same day last year.

Crashy_Time

Getting_greyer said:

It could fall down.

Did you just recently buy?

Getting_greyer

Crashy_Time said:

Getting_greyer said:

It could fall down.

Did you just recently buy?

Yes, but it hasn't fallen down as yet.

Salemicus

> The Black Swan that bursts the bubble will be a stock market/credit market event IMO

Yes, something sort of financial crisis would probably hurt house prices.

Of course, we already had one of those. Tell me, if you'd bought at the peak, just prior to the 2007-8 financial crisis, and held until now, would you have made money, or lost money?

Time in the market >> timing the market.

Crashy_Time

Salemicus said:

> The Black Swan that bursts the bubble will be a stock market/credit market event IMO

Yes, something sort of financial crisis would probably hurt house prices.

Of course, we already had one of those. Tell me, if you'd bought at the peak, just prior to the 2007-8 financial crisis, and held until now, would you have made money, or lost money?

Time in the market >> timing the market.

You shouldn`t try to "make money" from a highly illiquid asset IMO, especially one that is designed for living in and not as an investment vehicle because you would have to downsize AND time the market to actually make any money. Most recent buyers are hoping to UPSIZE not downsize. The 2007 bubble was pumped back up with zero interest rates and massive money printing, but they can`t drop interest rates again and the amount of money printing required now, after a never in living memory deflationary event, is actually threatening to RAISE mortgage rates. The mistake you are making is in thinking that the next "Black Swan" will be the same as the last one.

IamWood

The lesson I've learned from my father: buy a house to live as soon as I can.

Crashy_Time

IamWood said:

The lesson I've learned from my father: buy a house to live as soon as I can.

How much did your father pay for his house can I ask?