To buy or not to be in current climate

Lotus-eater

johnycoldears wrote: »

Too true they're guesswork but the comment "any fortune tellers out there" from GBY seemed to imply that he was looking for some (educated) guesswork, and to be fair lotus eater's comment about us all dying seems pretty accurate :rolleyes:

You know what they say, taxes and dying.........

House prices a little more tricky
However if you have a look at the house price graph going back a way.... then it maybe looks a little clearer and it does look like we have built up a bubble.

GBY

I invite all comments be they guesses educated or not.

We're in it for a place to live, not an investment. The loan is a variable rate 0.24% above the Bank rate, chose this as rate decreases anticipated and can afford any increases. After two years it reverts to the standard rate, at which time we will have surveyed the lending market for other offers. It's a 20 year term but intend to overpay as much as possible, default of £200/month.

glen8

I wish people would stop thinking equity is wealth. It's not!

If house prices come crashing down and you loose equity then so what. If after 5 years you decide you want a bigger house then you would be better off as the more expensive house would have dropped by the same percentage, therefore the difference being smaller.

If you want a home (not an investment) and can afford the mortgage then go for it. I would fixed the rate though for peace of mind.

Don't forget, it's a buyers market. Knock them down!!!!!

We are doing the same at the minute. If people really want to sell, they will accept less

GBY

Lotus-eater wrote: »

Tbh, of all the people that have come on here (alot) and asked, should I buy now or not? You are about in the best situation. Just worries me that you are only thinking of staying there for five years, might be just in the middle/end of a [strike]cra[/strike] price correction.

Good point, but at the end of the day we can't continue to rent where we are indefinitely, could possibly be much more than 5 years in the property just hard to say at the moment.

Thanks again for all answers/suggestions so far.

GBY

glen8 wrote: »

I wish people would stop thinking equity is wealth. It's not!

If house prices come crashing down and you loose equity then so what. If after 5 years you decide you want a bigger house then you would be better off as the more expensive house would have dropped by the same percentage, therefore the difference being smaller.

If you want a home (not an investment) and can afford the mortgage then go for it. I would fixed the rate though for peace of mind.

Don't forget, it's a buyers market. Knock them down!!!!!

We are doing the same at the minute. If people really want to sell, they will accept less

That's what I thought, but we have lost a couple of houses by trying that. And they weren't as good as this one in my opinion. The market here seems to follow its own rules.

We're more inclined to go for it than not. Think I'll go and toss a coin.:D

Lotus-eater

glen8 wrote: »

I wish people would stop thinking equity is wealth. It's not!

If house prices come crashing down and you loose equity then so what. If after 5 years you decide you want a bigger house then you would be better off as the more expensive house would have dropped by the same percentage, therefore the difference being smaller.

No wealth is the £60k he has in the bank. If the worst happens and he buys and moves in 5 years, he buys a bigger house it will cost him £60k more.
IF he rents and the worst happens, he buys a big house in 5 years, he has £60k in the bank as a deposit on a cheaper big house.

If the prices don't fall then he would be much better off buying now.

If he was planning to stay there for 10+ years I think he would be much better off buying as any price change will have little effect of him.

Maybe......... just a shot in the wind, why may you be moving in 5 years? Maybe think about buying a house you will be happy in for longer?

GBY

Lotus-eater wrote: »

No wealth is the £60k he has in the bank. If the worst happens and he buys and moves in 5 years, he buys a bigger house it will cost him £60k more.
IF he rents and the worst happens, he buys a big house in 5 years, he has £60k in the bank as a deposit on a cheaper big house.

If the prices don't fall then he would be much better off buying now.

If he was planning to stay there for 10+ years I think he would be much better off buying as any price change will have little effect of him.

Maybe......... just a shot in the wind, why may you be moving in 5 years? Maybe think about buying a house you will be happy in for longer?

No reason in particular to mention 5 years. Perhaps if a change of job necessitated it but I have no reason at this stage to think that. If anything, were we to move in the future it would most likely to be to an area where the prices would be significantly cheaper.

Lotus-eater

GBY wrote: »

We're more inclined to go for it than not. Think I'll go and toss a coin.:D

Come back in five years time and let us know how it went
Then we'll know what has happened and argue about the next five years.

It sounds like you want stability to me, instead of renting. What about kids? Do they play a part in your choices.

GBY

Nice reply ;-).

No kids, nor will there be, and no debts. I understand the benefits of renting but over time it's frustrating being limited as to what you can do to or invest in a property.

Microstar_2

Anything you read on this thread will self-evidently be guesswork. I can only go on my experience and gut feeling (I've own a number of properties and been a LL for 20+ years).
If you think you will stay there for 8+ years and have secure jobs then go for it.
If you think you might move 'up' to a more expensive property at any time then go for it.
If there is any chance of short-term instability (forced move due to job/personal circumstances etc) or a move to a cheaper property, then don't go for it.

My feeling is that the bubble is bursting very quickly. In some ways the current situation is a lot worse than the early '90's crash because of the wider crisis in the financial sector. Its not just houses - its going to hammer any kind of long-term capital investment on a global scale, and that has a lot of very nasty implications. I think things are going to unravel much faster than many people previously thought.
If I were in your shoes then I would continue to rent - but then I don't know all of your circumstances.