Never mind the house prices, I'm saving a deposit.

granville_2

Good luck born_again_saver. You are doing the right thing and should be proud.

:T

It's the 'buy now pay later' binge-credit culture in the UK that has got us into a mess which is now about to bite hard.

izzybusy23

Ivrytwr3 wrote: »

Exactly, hopefully. What if they don't and they continue to rise? You will be ven more priced out of the market. I hope they do come down and i can afford a nice family home. But they way things have been i see a small rise, and certainly not the crash some people are forecasting.

Can I just ask why you cannot see a crash that people are forecasting?

I ask because everything indicates that this is exactly what will happen. Things happening across the pond are happening at an astronomical speed.. which will affect the UK certainly and the rest of the world. My folks live in Kentucky and are always reporting about the economics over there. Did you know that you can now pick up a house in Detroit for ... $100!!!! Ok, its detroit, but still, £50 for a house that they thought they would probably never see in their lifetime. They were all spun a yarn just like the people who took out the subprime mortgages over here.

A crash happened in the late 80's, early 90's so why are so many people adverse to that this can't happen again??

Ephemera

Ivrytwr3 wrote: »

Exactly, hopefully. What if they don't and they continue to rise? You will be ven more priced out of the market. I hope they do come down and i can afford a nice family home. But they way things have been i see a small rise, and certainly not the crash some people are forecasting.

How much more CAN they rise?
Who is actually buying homes at the moment? Where are they getting the money?
What happens if the money dries up?

Having witnessed the last housing market crash, and bought as the market started to climb (although due to a divorce and moving areas I am currently renting but saving for a deposit!) I am certainly hedging my bets that the market will correct itself - by how much and in what timescale is anyone's guess. I have been expecting a house price correction for some years and it is overdue. In my humble opinion of course! :rotfl:

Saving for a deposit is a good idea (I should know, I'm doing it too, so modest, me!) As other posters have said, max out your ISAs, put money in high interest accounts (make sure it pays more than inflation or you effectively lose money - RPI is at 4.1% (including mortgage interest and data as of Jan 08) RPIX is at 3.4% (excluding mortgage interest). Check http://www.thisismoney.co.uk/economy for latest data. And explanation. Wikipedia is useful too.

I'm well on the way and on target to have £35k saved by the end of this year with a land asset in Devon on top, value at today's prices around £20k. So by the time the housing market sorts itself out I should have a good deposit! :T

...and my fall back plan is getting planning permission to build a modest home on my plot in Devon. Long shot but hey, you don't know till you ask...! :rotfl:

Well done to all those savers out there... taking control is the best thing you can do to help yourselves, now all we need is for the housing market to do its' bit!! :cool:

Ephemera

izzybusy23 wrote: »

I am 36 and have never had the inclination to buy a house without saving for a deposit first. I've owned 3 houses in my lifetime (don't ask, bad choice of men was my downfall, lol) and each time a deposit was saved and put down. I think the lowest deposit ever put down was 5%.

I wouldn't dream of going for a 100% or more mortgage. I am aiming to have a 30% deposit saved by 2011, thats all according that house prices go down and play to my tune!!

The young people of today seriously want everything handed to them on a plate without any hard work. I get downhearted about the state of the housing market, but I can't change things, so I just get on my life and chip away at the debts knowing that in 4 years time I will be in a stronger position, financially, not age wise mind..

Crikey, thought you were describing me there!! :D:D

Just think,

By some accounts houses are overpriced by 100%. In a crash they tend to overcorrect. So a £300,000 house now is probably only really 'worth' £150k and an overcorrection could drop it's value to less than £150k. Hope for those of us saving now for speculating later.

Of course, it might never happen, but then again, it already has....three times in the last 30 years...!

Ephemera

Ooops this is turning into a 'house price crash' thread.... :eek::eek::eek:

better get back on topic pronto!! :rolleyes:

bryanb

I bought a 3 bed urban semi-detached in 1972 for £12700 (no there is not a 0 missing) A friend on the same wages decided to wait for house prices to come down (didn't have the crash mentality then) He's still renting. People ask how much higher prices can go. There is no limit to inflation. At the time I refer to £1 bought 40 mars bars.

lethal0r

Ephemera wrote: »

Ooops this is turning into a 'house price crash' thread....

haha most of them do!!

well done OP im doing exactly the same. hope you enjoy having a nice house a year or two down the line with a SMALL and AFFORDABLE mortgage I know I will.

MrSafeGaz

Glad to see there are plenty of other people taking the same approach as myself. I am 25 years old, living with parents and currently saving approx £20k a year. In 3 years time I will have 60-70k saved up and will take another good, hard look at the housing market to see what it's like.

Saving is a win-win scenario in my opinion. At the very worst house prices will continue to rise and the money that I will have in a few years will offset those rises. At the very best, house prices will come down as my savings go up and in a few years time I will be in an excellent position to buy a house without financially crippling myself.

A couple of my friends recently bought houses alone, just because it seemed like the 'right thing to do' and I believe they have been rather naive in their approach. They are both now finding finances tight and for what? I am struggling to find the justification for their decision. The amount in interest that you can potentially save by saving up for a larger deposit is huge, you are talking 10's of thousands of pounds which can equate to a good year or two of a persons annual salary.

I am confident that I have made the right decision and its really great to hear of people in a near identical position.

skap7309

Yep, im doing the same as the OP. Im 25, still living with parents and saving approx £24000 a year in my current situation. Im looking to buy my first house and am piling all my money into 4 seperate savings accounts and currently have £24000, aiming for £65000 as for the area i live and my wages this is the ideal amount. It'll take a while but ive got into this routine quite nicely for the past two years. It will be strange when i can finally spend money on things!

skap7309

MrSafeGaz wrote: »

Glad to see there are plenty of other people taking the same approach as myself. I am 25 years old, living with parents and currently saving approx £20k a year. In 3 years time I will have 60-70k saved up and will take another good, hard look at the housing market to see what it's like.
I am confident that I have made the right decision and its really great to hear of people in a near identical position

LOL, see my above post!