To buy or not to buy...?

flakmunky

Hi All,

I currently own a four bed semi which my wife and I are thinking of selling and buying a larger brand-new four bed semi with double garage....

We have been guaranteed £200k for ours and the new one would be £260k...

My question is: should we or shouldn't we?! We can afford the bigger mortgage, have no other committments and we would have around 60k equity (mortgage would be 200k), the house is in a prime location on the development... BUT!

1) I am a little worried with the housing market - a 25% crash and our equity would disappear...
2) What premium do you pay for a brand-new house?
3) Can any time travellers please come back here and tell me what the housing market did between August '05 and August '10?


What are other peoples thoughts? Is it sensible to buy now?

TIA,

fM

GingeG

Mate

!!!!!!, If its house you want buy it! In 5 or 10 years time it will have ridden over any blips in house prices.

Property ALWAYS rises in value as a wise man said "buy land they dont make it anymore"

hopefulfooluk

Hi Flak,

I would definitely not consider buying just now if I wasn't on the ladder. But seeing as you already are, then any house price crashes/increase will typically be relative, as if the market crashes, your house will fall, and so will the house you want to buy. This is especially true if the houses are in a similar area.

So I would go for it if you really like the place - I have just moved from a £92k flat to a £140k house - and the current housing market doesn't bother me at all as I know that if the price of the house I've just bought crashed, then my flat would have too. And houses recover better than flats after a crash anyway.

So go for it if you really like it - I don't think you've got anything to lose really.

I also think that new builds have to be priced competitively - some also offer incentives so you may find it cheaper to buy a new build as the company has quotas to meet.

Cheers,

Chris

flakmunky

You're right, you're right...

But I have made a lot of stoopid heart over head decisions in the past!! And I don't want it to go FUBAR....

I really wanted an answer to my second question! I (stupidly) looked on https://www.housepricecrash.co.uk and that has just made me peenoid...

Anyway, the other thing is that we are getting a 5% staff discount - my wife works for the Developers - and the site is selling like hot-cakes so we are in a difficult negotiating position. They have already (unfairly for the other interested buyers) given us first refusal - the plot has not even been released yet, but we are halfway down the line to securing it...

meanmachine_2

Yes, if you're already on the ladder, falls or rises shouldn't really bother you.

I wish homeowners would get used to this idea.

If the market corrects, the rungs on the ladder close in, making it easier to trade up. If the market rises, it actually makes trading up trickier.

But in your position, don't worry about it.

housepricecrash is a site for those not currently on the ladder who would like prices to fall back to their historical average. Really, you shouldn't be worrying.

Hunnymonster

Bad Taste or not - it's true.... and sometimes the truth makes people wince.

Reaper

flakmunky wrote:

I (stupidly) looked on https://www.housepricecrash.co.uk and that has just made me peenoid...

They created that web site on 26th October 2003. I can't help wondering if they followed their own advice and sold up. If so they must be regretting it now.

meanmachine_2

Reaper wrote:

They created that web site on 26th October 2003. I can't help wondering if they followed their own advice and sold up. If so they must be regretting it now.

Depends where you live. If you're a Londoner and you sold at that time, you ain't got much to worry about.

Further north and yes, you've probably lost money...at the moment.

Whatever you think of that site, it does have some interesting graphs and stats.

And if prices *seem* crazy to someone that site simply confirms the fact.

If someone's determined to buy though, then it won't make much difference either way.

nelly_2

A 25% drop on your 200 grand house would be a 50 grand loss.
A 25% drop on the 260 grand house would be a 65 grand loss.

What you want to do is tell the builder to give a 10% discount they make between 30 and 50% profit on the new houses I work on.

Ian_W

flakmunky wrote:
1) I am a little worried with the housing market - a 25% crash and our equity would disappear...
2) What premium do you pay for a brand-new house?
3) Can any time travellers please come back here and tell me what the housing market did between August '05 and August '10?

My answers:
1) So what? Provided you are confident you can pay your mortgage for the forseeable future what are you going to use the equity for? As nelly points out to make a different point, you'll lose most of your equity in either situation!!
2) What you think it's worth - personally not a lot for the poxy boxy little numbers they build now but it's your call.
3) No. Another wise man [or it may have been a woman ] said, The only certainty in life is .. UNCERTAINTY. Get used to it.