A Good Time For First-time Buyers?

beer_tins

neverdespairgirl wrote: »

What part of the UK are you in?

A 10% drop in house prices would see yours down to £171,000, and a 20% drop down to £152,000.

Sticking my neck out, I reckon the average house will be 10 - 15% lower, at least, by the end of 2008.

I'm in Crystal Palace, South London. Well, personally I don't think any drop would be that much and if it is that's fine and dandy as I'll be looking to move up the ladder eventually when I have kids. I won't be in negative equity (should be about 145,000 on the mortgage by then), so the drop in houses I'm looking at will be bigger than the drop in mine.

But the experts can't agree if houses will drop or not and if so, by how much. So it seems that any house price predictions for the end of 2008 are pure guess work.

beer_tins

Toto wrote: »

I struggle a bit to understand why people think as long as you can afford the house it's the right time to buy. yes if people are planning to stay long term the house prices don't make a difference until they come to sell. But paying less for a house is always better, no matter how long you plan to live in it. I'd rather pay a mortgage on a £150k house than the same house at £200k wouldn't you?

What I mean is that it can be the right time to buy for your stage in life. Of course it's better to buy something for less, but there's no guarantee that will be the case. Sure, if you pay 200,000 and after a year it's worth 150,000 and you want to move that's bad, but if it's worth 250,000, it's good. There's no guarantee those things will happen. Some people are saying prices will stay flat, others predict a 5% drop and anything up to a 20% drop! It's pure guess work. So what if you can afford a place for 150,000 now and prices in your area go up and it's more expensive next year? And please don't tell me it's not possible, some are predicting just that, stable house prices nationally over the year, with some areas seeing gains and some losses. I suppose it depends if you buy a house as an investment or as a home (as I did). I'm happy where I am and don't much care if prices go up or down for the moment, I bought this place to live in, not to get rich from the rise in property prices. If the slowdown means less speculation and more people buying homes for themselves, I think that's a good thing.

neverdespairgirl

beinerts wrote: »

I'm in Crystal Palace, South London. Well, personally I don't think any drop would be that much

But the experts can't agree if houses will drop or not and if so, by how much. So it seems that any house price predictions for the end of 2008 are pure guess work.

I don't think it's purely guesswork. The massive tighening over the part fortnight will have a huge impact, IMHO. If people suddenly need a 10% or more deposit, when before they could borrow up to 125%, that really is a big squeeze.

I certainly don't think CP would be immune. I know the area quite well - I went to school in East Dulwich, and my best mate lived in CP. It's nice in lots of ways, but nothing hugely special about it, and the transport connections aren't the greatest.

Gorgeous_George

I'm going to rent for the first time in 23 years so you should be able to work out what I think will happen to prices. But I could be wrong

GG

jaype

CP won't be immune. We're nearby and I am monitoring SE20. Have seen 3 bed houses reduced from 425 to 400, 479 to 459, 415 to 399 and 400 to 350 as the most extreme. That's a lot of money... The amount of property on the market is stacking up, too. CP is a nicer area (mostly), but I bet if the crunch goes on that prices will soften and fall there too. when people talk about London prices holding up they mean Kensington and Chelsea, Westminster, wandsworth and Wimbledon. SE London could be on the Moon for all the attention they pay it!

beer_tins

Only time will tell. SE19 will behave differently to SE20, but you could be right that the same thing might happen. To what extent, well that's in the stars really. Just a note about transport, well it's not too bad, about 20 mins into Victoria or London Bridge and pretty frequent service. Takes me just under 1 hour door to door to my office near Moorgate (city). That's not too bad compared to some of my colleagues! Add the East London line extension (or "London overground" when it reopens) and the Croydon tram extension to CP in the next few years and we'll be very well served indeed for transport. Either way, as already stated I'm not too fussed if prices drop, as it will help me climb up the ladder once my family expands! Besides, I love living in CP so am quite happy to stick where I am for the time being.

GG, yes you could be wrong. You could be right as well! No one knows for sure, but I'm not going to panic at this stage.

brit1234

No area will be immune, there are no areas in the UK which aren't highly overvalued. Its not are prices going to fall but by how much. Yes there will be areas that will hold their value better but they will all fall during this correction helped by the credit crunch.

If anything property prices will start to fall quicker now as the credit crunch gets worse and shows no signs of ending. Just look at Bear Stearns today. Its a big US bank and its collapsed just like Northen Rock.


http://news.bbc.co.uk/1/hi/business/7296678.stm

neverdespairgirl

beinerts wrote: »

Just a note about transport, well it's not too bad, about 20 mins into Victoria or London Bridge and pretty frequent service. .

I didn't mean to cuss CP - it's a nice area. I just don't think there's anywhere in London which isn't vastly overpriced. Actually, anywhere in England!

You are right, though, that if prices do drop, you can more easily buy a family house later on should you wish to do so.

Gibber_2

Wow - thanks everyone for your brilliant responses. I've been looking at this forum for a long time but have never posted anything - I knew I could rely on you lot for some great food for thought! :T :T

Until recently, we were renting a 1 bed flat in London for £1.1k pcm which was loads but it was a lovely area, we could walk to work and the borough was Westminster so council tax was very low. It worked for us but we'd NEVER be able to buy there so it was always going to be temporary.

So, we moved back to our native Bedfordshire and now commute into work. We've done some maths and I know we could afford a 2 bed house with garden - after years of a flat in London, this is very exciting! We're looking for a home rather than an investment but you never know what's around the corner so negative equity is a bit of a concern. We only have about a 5% deposit at the moment so we've decided to batton down the hatches, save like crazy and see how things look in say, six months. I think I'll have to get used to the taste of tea rather than beer at the weekends...

Thanks again folks!

granville_2

Gibber wrote: »

[SNIP]

So, we moved back to our native Bedfordshire and now commute into work. We've done some maths and I know we could afford a 2 bed house with garden - after years of a flat in London, this is very exciting! We're looking for a home rather than an investment but you never know what's around the corner so negative equity is a bit of a concern. We only have about a 5% deposit at the moment so we've decided to batton down the hatches, save like crazy and see how things look in say, six months. I think I'll have to get used to the taste of tea rather than beer at the weekends...

Thanks again folks!

IMO you've done the right thing. Carry on saving and see what the property market is doing in 6-12 months time. A bigger deposit will mean a better mortgage deal.

:T

For what it's worth, I think we are going to see the UK housing market deteriorate as more economic poisons hatch out of the mud.

ymmv!