Property -Views please

wibble68_2

crankup wrote:

I dont think there is ever a good time to buy. My point? If you see a house you like and can afford it, then go for it - dont beat yourself up about if it will be cheaper in a years time etc. You'd have paid a shed load on rent I expect by then anyway!
Get in there!!

10 years of booming prices have made people think the housing market is immortal. The only reason prices are high is greed.

And greed could be the trigger to send prices lower when people bale out.

One thing to remember is that many people who are living with their parents have the ability to save very large deposits. People in this situation (many of them being MSE fans) are not going to blow their savings on an overvalued market. Even if prices stagnate for 2 - 3 years this is another 20 - 30k that can be saved.

Being as these people will need a very small mortgage, low interest rates are not an issue. The price is the important factor.

So the "Get in there!!" advice is not good advice for some people.

Woby_Tide

wibble68 wrote:

So the "Get in there!!" advice is not good advice for some people.

apart from their parents

GreenB_2

wibble68.

I agree the best thing people can do is live at home as long as possible - its the best way to save money (provided your parents don't expect you to pay the going rate for rental!).

However it appears many younger people over the past few years no longer want to stay at home and try and move out as fast as possible so never get the chance to save - perhaps the tide is turning back again?

lush_walrus

wibble68 wrote:

Even if prices stagnate for 2 - 3 years this is another 20 - 30k that can be saved.

True, but what does that give ultimately? A higher affordability again to first time buyers and therefore further price rises. If most people stay at home and save, then the money they can afford to pay is still high, going on 4 times wages plus deposit.

And Meanmachine, although technically correct in that not many mortgage providers provide higher than 4 x income, you would be horrified to know how many people decide that self cert on mortgages where books arent reqiured (of which there are still scarily many providers willing to do this) is the way to afford property. IFA's happily go along with this, and so do the corresponding banks providing the lending. One of the sales going through at the moment is a couple with only the guy working, two children, who is a self employed courier who apparently is earning £80,000 a year and borrowing £340,000 with less than 5% deposit, now I might be wrong but I very much doubtthat a courier (outside of London) takes home that level of money. The lender, has questioned nothing and the mortgage is approved, now I think that without showing any proof of income that is reckless!

ManAtHome

wibble68 wrote:

So the "Get in there!!" advice is not good advice for some people.

Woby_Tide wrote:

apart from their parents

Who want their property to appreciate at 20% pa and everyone else's to depreciate by 20% pa so the kids can move out....

Anyone for cake.?

Ian_W

Originally Posted by Woby_Tide
apart from their parents

Posted by ManAtHome: Who want their property to appreciate at 20% pa and everyone else's to depreciate by 20% pa so the kids can move out....

Parents have rights too!!
Plan A: Get rid of bread-snappers soonest, downsize to the coast and spend equity, equity release downsized property and spend that too, scrounge off now middle-aged and half wealthy property owning offspring on grounds "I kept you for 20 odd bloody years", die leaving nothing.
OR
Plan B: Let them stay at home to age 40, now with wife & 4 kids, rent free whilst they save for a 90% deposit. Work fingers to bone to keep them, die leaving them equity in house, pay IH tax on estate.

It's a no brainer - Plan A for me.
IH Tax Planning - SORTED!!
:rotfl:

meanmachine_2

lush_walrus wrote:

And Meanmachine, although technically correct in that not many mortgage providers provide higher than 4 x income, you would be horrified to know how many people decide that self cert on mortgages where books arent reqiured (of which there are still scarily many providers willing to do this)

Sadly I wouldn't be horrified, as I have a number of seemingly intelligent mates who have done this very thing, thinking that they'd forever be "left behind", or had "missed the boat".

Sound familiar? It's typical EA speak - lies, in other words.

And the Bank of england is suddenly wondering why the economy ground to a halt at 4.75%.

With such huge mortgages, even a .25% cut or rise suddenly seems very large. Which is why the bank only nudges up and down, unlike in the good/bad old days when int rates were push up a whole percentage at a time.

michaels

meanmachine wrote:

With such huge mortgages, even a .25% cut or rise suddenly seems very large. Which is why the bank only nudges up and down, unlike in the good/bad old days when int rates were push up a whole percentage at a time.

You have all the information there now use it - in a low inflation / low interest rate environment then affordability not price/income ratio is the key - hence an increase of 0.25% from 4% will have the same impact as a .5% increase from 8%.

meanmachine_2

Fair point. So yes, on the point of nudges up and down I'm being contradictory. A small nudge down has a bigger impact than it might appear on paper, particularly when most new buyers don't have the "average mortgage" of 80K, more like 160k.

However, I take the view that it's not the best idea in the world to base a long term debt on short term rates.

At 4.5%, the only way is up, and "affordability" is nothing more than a trap banks use to trick people into thinking they can afford a huge mortgage over the longer term.

Effectively my spending/savings habits are out of kilter with the current market, or what the economy needs. I have savings and would benefit from a high interest, higher inflation, but lower house price economy. That would be the death of today's consumer led economy.

Sadly, I'm beginning to think that the circumstances will never be right for me to buy, therefore I never shall. I'll probably just rent, then inherit a place in 25 years' time. It'll be much cheaper that way - for me personally anyway.

Spendless

meanmachine wrote:

Sadly, I'm beginning to think that the circumstances will never be right for me to buy, therefore I never shall. I'll probably just rent, then inherit a place in 25 years' time. It'll be much cheaper that way - for me personally anyway.

Hope it's not your dad then with the username IanW