FTB's - don't buy now!

2bFrank

I am slightly confused here. So ill throw in my two pence. If all these ftb's are waiting for a crash...
...because the chains are not being completed, more people will lower the price of houses...
...then will it continue in a loop until its low enough to attach a buyer.

however because all these people are waiting for the prices to lower...
...they will go out a buy when the price is right...
...which buyers will start to outbid each other because they can afford a little more...
...which inflates the price

To me its swings and roundabouts. and it doesnt matter what anyone says, the true facts are out there. There is too little houses so demand is more than supply. We have a credit crunch so getting 100%+ mortgages are a no no, but people always find a way (loans from families, overdrafts etc). Prices will start to fall, but when they do they will soon rise again.

for me im buying now. Will not overstrech myself, negitive equity wont effect most people as it will only mean something when they wish to sell the house. mortgage payments will still be the same no matter how much the house it worth. only thing that will effect the market is intrest rates, if these go up then more people will struggle to afford the hosue and will be bankrupt, however because of this people will not spend as much as they will panic. People will stay put, which will reduce the amount of supply even more and the only cheap houses will be re-possed but becuase of the housing shortage, they will still fetch a far amount.

If you can afford now then buy now..if not then wait until you can afford it, dont wait to see if prices crash, because you could be in for a very long wait.

WTF?_2

Isn't it strange that when there are posts about price falls there is such an 'enthusiastic' response from those who believe that houses are a one way bet?

It's pretty clear that many can't actually approach the subject in a rational and logical manner - which is unfortunate since buying into the property ladder is likely to be the biggest single financial commitment most people will make in their lifetime.

This is supposed to be a discussion forum about buying and selling houses yet any advice or viewpoint which doesn't chime well with the 'see no evil, hear no evil, houses are a one way bet' troup gets screamed down.

How sad. I just hope that some potential FTBers read this thread and get put off making a huge mistake.

carolt

I'm afraid, JonnyBravo, you may find the name of the ghetto is 'the real world'.

Welcome to it.


Got any arguments to post, out of interest, or just personal abuse?

baileysbattlebus

Telegraph January 2003

http://www.guardian.co.uk/business/2003/jan/09/housingmarket.houseprices

It doesn't really matter what happens to prices, you haven't made or lost any money until you have to sell and if interest rates stay stable and you can pay your mortgage today you will still be able to pay your mortgage tomorrow.

You can wait forever for the price to be right, but you have to decide what is right for you, no one can make that decision for you. Prices might fall 20% in the next 2 years, they might fall 10%, who knows. In some areas they might not fall at all.

Surely it's a double edged sword, if FTB don't buy, but need somewhere to live they will rent and I don't see rents dropping 20% or more. Which will erode their ability to save for a deposit if all of 100% and 95% mortgages have disappeared, which according to this site they all but have. I'm certainly no expert but wouldn't this create a greater demand for rented properties? Or do all FTB already live in rented accommodation?
What of the potential first time renters during the next couple of years ?
If people aren't buying and more people are coming into the rental market won't that fuel rent rises ? Potentially.

Sorry to ramble

JonnyBravo

carolt wrote: »

I'm afraid, JonnyBravo, you may find the name of the ghetto is 'the real world'.

Welcome to it.


Got any arguments to post, out of interest, or just personal abuse?

Ha ha, no, I have no arguments with your analysis that house prices are going to drop, maybe even crash.

I'm just amused that you presume to pass on your advice to all FTB'ers without any qualifying thoughts, or indeed allowing for any individual circumstances. No, it's simple. FTB's - don't buy now.


Of course I realise that you, (like countless others), do need a drop in prices to afford to get "on the ladder".
It's just that those who are shouting loudest and longest are, in my opinion, only doing so through some sense of injustice at having missed out on the recent "gains".
In my opinion you are one of those people, but this is of course only my opinion, please read on.


Some people make the mistake of getting into heated arguments with you, you wind them up, they wind you up.
Perhaps they are the people who have bought recently and will now stand to lose some money, or worse, their home. Who knows?


What is interesting is you refuse to enter reasoned discussion. eg snarffie supplying the example of people who wrongly started predicting the crash back in '01 or '02.
I think a simple acknowledgement of that fact would portray you as a person capable of reasoned discussion rather than simply dismissing it as "out on a limb" and moving back to your previous points.

Indeed your post of 2:47PM was more than reasonable and it's a shame I didn't see that whilst I was posting... (I'm a slow typer.... or is that thinker?).
However, what I said could apply to many of the consistent "advice givers" (zealots?) on this and similar threads and as such was written in a light-hearted manner. I'd ask you not to take it to heart but of course this is difficult for people with such a "vested interest?".


Good luck with your merry band!

Paul_N_4

2bFrank wrote:

...negitive equity wont effect most people as it will only mean something when they wish to sell the house...

baileysbattlebus wrote:

...It doesn't really matter what happens to prices, you haven't made or lost any money until you have to sell and if interest rates stay stable and you can pay your mortgage today you will still be able to pay your mortgage tomorrow...

Not strictly true. Running into negative equity will cause you much grief when you re-mortgage. Which will be essential if you MUST avoid the lender's SVR.

carolt

Thanks baileysbattlebus for your find - it certainly shows that predicting house prices is not an easy call! However, the fact that some people were predicting house prices would fall in 2003 does not, to me, disprove the likelihood of them falling in 2008-9; in fact rather the reverse. If people thought prices stood in need of a correction in 2003, how much more have prices moved out of kilter with average earnings since then!

Factor in the credit crunch, and I know which way I think house prices will be going pretty soon.

JonnyBravo, thanks for acknowledging, albeit in the penultimate paragraph, that maybe I am 'reasonable' after all! (After several paragraphs explaining why I'm not!).

I've never made any secret of which side of the fence I'm on - as a history graduate, I'm well aware that everyone has a bias: the ones you have to watch are the ones who don't declare it.

After all, as you correctly point out, it's not as though the title of this thread was subtle.

You're right - I do presume to advise other FTB's - partly, I'm older than a lot of FTB's and so have a slightly longer perspective, having been trying to buy my first home since 2000 (and failing); partly, because as an educated part-time working mum, I have more time than most and plenty of inclination to read as much as I can on the subject of the housing market. I'm shocked by the number of FTB's who come on here still posting the 'house prices can only ever go up, renting is dead money...' mantra they've swallowed hook line and sinker off some property !!!!!! show. I am old enough to remember the last crash, and if I can save a few of those innocents from a ghastly mistake, then, yes, I do think I've done some good in my day.

If that's patronising, then I'm happy to be patronising.

wriggly

!!!!!!? wrote: »

No one can tell the future but the signs are all there for anyone with a modicum of intelligence to figure out where the market is going. Not just the house market, but the economy generally.

Is there anyone here with a modicum of intelligence who will tell me where the economy is going generally?

Does it matter if I own the house or the cash if we're going the way of Zimbabwe?

carolt

wriggly wrote: »

Is there anyone here with a modicum of intelligence who will tell me where the economy is going generally?

Does it matter if I own the house or the cash if we're going the way of Zimbabwe?

No. Fingers crossed all the 'this is just like the Great Depression' articles will turn out to be wrong.

If inflation goes through the roof, you'd be better with the house; then again, you could use the cash to flee to somewhere (where...?) far far away with an economy not founded on debt, house price bubbles and mysterious financial dealings in entities known only by initials.....

baileysbattlebus

Paul_N wrote: »

Not strictly true. Running into negative equity will cause you much grief when you re-mortgage. Which will be essential if you MUST avoid the lender's SVR.

Assuming you have taken out a short term fixed rate deal and interest rates may have fallen - the standard variable rate could be better than your fixed rate or may be not. It's a bit like house price predictions.