FTB's - don't buy now!

carolt

Absolutely fair point, fischer79. Though I don't think Capital Economics are by any means the ones predicting the greatest drop - the IMF said the UK was 40% overvalued, !!!!!!!!!!

And if the International Monetary Fund think property prices are overvalued, that's enough for me!

wibble68_2

carolt wrote: »

"Ed Stanford, property economist at Capital, said it was 'entirely plausible' that house prices would fall by between 20 per cent and 25 per cent in the next two years.

Although I'm firmly in the housing market is still cyclical camp, the guys at
capital economics have been completely wrong about the housing in the past
5 years.

However, I fear they could well be correct this time

snarffie

carolt wrote: »

Sorry, I remember 2002 quite well, thank you. Nothing 'clever' about it - it wasn't that long ago. Would you like to produce some evidence to back up your assertion, please?

Oh. You can't. What a surprise.

Do you always answer your own questions? Strange.

Anyway.

"Analysts at Capital Economics suggest that the most serious effects will not be felt until the end of next year. They predict price increases of 12% in 2003, followed by falls of 5% in 2004, 10% in 2005 and 7% in 2006. This would see the average house price falling from £117,000 now to £102,000 at the end of 2006."

I think their predicition in 2001 was much more silly, but I can't find it, and won't spend my time looking, after all this is MSE, not HPC.co.uk. I can't find th 40% drop prediction-dammit.

"I believe that house prices will continue to rise about 5% or a little more until next summer, 2003. Then I expect British house prices to fall by around 30%."

Andrew Oswald, Professor of Economics, Warwick University

People can read this message on the front of every national newspaper on a weekly basis. What, you going to try and shoot them all? You're going to have one hell of a job on your hands....

Honestly, i'm not going to shoot anybody. Where on earth did you get that idea from? :A

m00m00

here's one question HPI cheerleaders should ask themselves

could you buy your current home NOW, on your current earnings at it's current value as an FTB (ie with no more than 10% deposit) ?

I'll bet most of the people who bought 3-4 years ago couldn't.

snoopy78

Tozer wrote: »

If you want to believe the doom-mongerers then fine when on any analysis we are not in the same territory as the last property fall as interest rates, employment and so many other factors are so, so different.
."

In some ways we are in a worse position than the last house crash, mortgages make up a lot higher percentage of a persons income now. What percentage of people would be on the street if interest rates went up to 10% let alone 15-20%?

We simply don't have the slack that was there before the last house price crash, with higher fuel costs and food cost squeezing the average family as well potentially a crash could be a lot worse then the previous.

There are many ways the housing market can crash don't assume just because it is not like the last housing crash that there may not be one on its way.

You are right that high employment and lower interest rates does help the situation, but if we just take interest rates a 1% increase in the rates will have a far greater effect on the market than even a 2-4% increase in the last crash, as a nation we are far more highly geared.

The greatest factor potentially stopping a crash is the British attitude to property and owning their own, not high employment rates (last statement is IMO)

carolt

Thanks for resrearch snarffie - but, as I recall, Capital Economics were very much out on a limb back in 2003 or whatever, predicting falls. The wider market, and certainly all the vested interests, eg Nationwide, Halifax etc all predicted rises.

Now we're in situation where EVEN THE NATIONWIDE is predicting 5% drops!!!! When they start saying the market is going to tank, then, to me at least, that is clearly hard-hat time.

I am putting my money where my mouth is - into rent, not buying. Back in 2002, I read everything on the subject as I do now, and back then I was still definitely planning to buy. Two children and several failed attempts to buy a house later, I find myself glad I didn't buy recently. Had I bought when you did, I very much doubt house prices round here since then would have doubled, but I would probably still be sitting on sufficient equity not to be too terrified of price falls. But I didn't, and in the current economic climate, my message stands as originally phrased:

If you are a FTB, DON'T BUY NOW!

dannyboycey

Tozer wrote: »

Extremely open-minded thanks. I can only go on REAL experiences from what I have seen in the market

Personal experience. Isolated, anecdotal, not representative of what is happening elsewhere. Not exactly my idea of open-minded, but hey.

Tozer wrote: »

If you want to believe the doom-mongerers

'Doom mongers'? With terminology like that, you imply a certain standpoint on your part. Mine is clearly towards the other end of the spectrum.

Tozer wrote: »

we are not in the same territory as the last property fall as interest rates, employment and so many other factors are so, so different.

Quite right. The level of debt is much, much higher now than it was then, effectively meaning that the rates now are comparible to that of the last crash. In fact, the whole economic picture was rosier then that it is now! Doesn't bode well does it? House prices will be the least of our worries if things continue like this.

Tozer wrote: »

it is quite wrong for people to say that things are "100% guaranteed."

You mean like the Daily Express saying 'house prices soaring again!' and other such rubbish?

Like you say.... we'll agree to differ. Speak to you after the crash (I'll be on my yacht sipping Moet, but you're welcome too leave a message)

snarffie

carolt wrote: »

Thanks for resrearch snarffie - but, as I recall, Capital Economics were very much out on a limb back in 2003 or whatever, predicting falls. The wider market, and certainly all the vested interests, eg Nationwide, Halifax etc all predicted rises.

Now hold yer horses sonny-Joan. You asked for an example. I gave you two. Now you say they don't qualify, because they went 'out on a limb.' :rolleyes:

If you are a FTB, DON'T BUY NOW!

You are a classic HPC member. Shout down everybody else to get YOUR VI message heard.

Please understand that from a financial point of view, I would benefit from a drop in prices. I'm just saying that I've heard it all before. Many times.

Gonzo

Wow!

This is like cage fighting but without the dodgy T-shirts.

It's good that everyone has an opinion, let's just not try to ram it down each other's throats pepole!

Agree to disagree and all that.

Personally, I've just sold a house for just a bit under asking, and had an offer rejected also just under asking. So I'll try to rent for a bit, as none of the other houses really appeal to us. I hope if I buy a house it doesn't lose 'value' wildly, but I want a home so I'll take a punt as I can afford it. It seems to be quite hard to rent a decent place when you have a dog, so it will be good to find a nice house to buy again.

Just like, cool it everyone. It's sunny outside. No'one knows exactly what's going to happen, just don't borrow more than you can afford?

(2 pence duly inserted)

snarffie

Gonzo wrote: »

Wow!

This is like cage fighting but without the dodgy T-shirts.

It's good that everyone has an opinion, let's just not try to ram it down each other's throats pepole!

Agree to disagree and all that.

Personally, I've just sold a house for just a bit under asking, and had an offer rejected also just under asking. So I'll try to rent for a bit, as none of the other houses really appeal to us. I hope if I buy a house it doesn't lose 'value' wildly, but I want a home so I'll take a punt as I can afford it. It seems to be quite hard to rent a decent place when you have a dog, so it will be good to find a nice house to buy again.

Just like, cool it everyone. It's sunny outside. No'one knows exactly what's going to happen, just don't borrow more than you can afford?

(2 pence duly inserted)

Yep, it's turned into the HPC forum! And I'm contributing to it!

Doh! :silenced: