Why not buy a property now?

carolt

formulaonefan wrote: »

Now I'm confused! If everyone is holding back for another year or so! Then surely there will be serious slide in property values. oh my! what to do!

I'm afraid I'm another one holding back for a year or two because I think prices will fall.

And yes, that may well mean that prices fall!

However, beware making your life decisions on the basis of what a couple of people say on a internet forum. We may be atypical. (I don't think we are - but you need to decide.)

If you are worried about potential resale value, on the positive side, if prices fall, assuming that they fall roughly evenly across the board, it should make it easier to move up the ladder, as the more expensive houses will have come down more in price as they cost more to begin with. Even if you're only looking at moving somewhere equivalent, you should lose no more than the buying/selling costs.

BUT the main risks are if prices fall too far and too fast, you could end up finding it hard or even impossible to remortgage if you no longer have 10% equity or whatever deposit lenders are then demanding, thus sticking you on a possibly prohibitive SVR. As inflation rises, you could find mortgage rates rise too, even if the Bank of England bows to pressure and lowers interest rates. So even if you still had equity in your property, you might find the monthly mortgage payments unaffordable.

If you decide you want to buy, do make sure whatever mortgage you get is fully portable. I'm no mortgage expert but a broker should be able to tell you if there is any reason why you can't take the mortgage with you when you move. Obviously, assuming a 25% deposit and (genuine) 20% discount from current prices, then, you should be protected from negative equity - which would stop you being able to move - for some time, maybe completely, if your predictions are correct.

Also do check your 20% discount is a genuine discount on achieved prices, rather than just a mark off an intentionally over-inflated asking price.

dannyboycey

formulaonefan wrote: »

So how would i lose?

You asked. I gave my opinion. Simple.

As I said, you are your own man. If you think it's a good time to buy, then go for it and best of luck to you sir. I don't, so I wont. My concern is with my own financial management.

neas

formulaonefan wrote: »

I'm trying to understand why not buy a property now?

If I have 25% deposit
If I have got a property 20% less than the asking price?

Is there any reason not to buy now?

I'm a FTB and I don't think there is going to be a crash. There is going to be price correction atleast 20% in the next two years (10% this year and 10% next year)

What do you think?

Just promise me this


















































Let me buy your house in 4 years time when you are repossessed ok? :rotfl:

Pez2

formulaonefan wrote: »

I'm a FTB and I don't think there is going to be a crash. There is going to be price correction atleast 20% in the next two years (10% this year and 10% next year)

Apart from one sounding better than the other what really is the difference between a crash and a correction? 20% in two years is comparable to the rate prices fell in the first two years of the last crash. Or perhaps I should say the last correction. No real difference.

And for what it's worth, if you can negotiate 20% off the market value of a property - and note I say market value, not the asking price which may well be over-inflated by 20% anyway - then you may well be able to insulate yourself from the crash/correction. But that's a lot easier said than done.

izzybusy23

formulaonefan wrote: »

I'm trying to understand why not buy a property now?

If I have 25% deposit
If I have got a property 20% less than the asking price?

Is there any reason not to buy now?

I'm a FTB and I don't think there is going to be a crash. There is going to be price correction atleast 20% in the next two years (10% this year and 10% next year)

What do you think?

Because you could get it significantly cheaper next year?

teabelly

How many million properties are there? How many are empty? Is this a long term empty or a short term empty? Are holiday homes counted in this? Are they empty for someone to buy or between tenants or part of a dead person's estate? Are the empty homes just in places where no one actually wants to live? Without knowing answers to those it is hard to tell whether 1 million empty homes in total is a lot or a little.

Plus if norfolk and the rest of the east coast start to disappear under water then there is going to be a mass migration inland which can only mean prices will rise for property higher above sea level and out of flood plains.

sarah_elton

neas wrote: »

Let me buy your house in 4 years time when you are repossessed ok? :rotfl:

Oh please. If the OP can comfortably afford the mortgage repayments (i.e. isn't planning on paying out 60% of his income each month on his mortgage), and is in a relatively secure line of work, why would he end up getting repossessed?

WTF?_2

teabelly wrote: »

Plus if norfolk and the rest of the east coast start to disappear under water then there is going to be a mass migration inland which can only mean prices will rise for property higher above sea level and out of flood plains.

Congratulations! You win the Award for going above and beyond the call of duty to dig up excuses for irrational property bullishness.

PasturesNew

formulaonefan wrote: »

I'm trying to understand why not buy a property now?

If I have 25% deposit
If I have got a property 20% less than the asking price?

Is there any reason not to buy now?

I'm a FTB and I don't think there is going to be a crash. There is going to be price correction atleast 20% in the next two years (10% this year and 10% next year)

What do you think?

Let's do some maths using your figures.

You want to buy a house at £100k
You have a £25k deposit
You are buying the house at £80k
Mortgage is £80-25k = £55k

Or, wait two years:
House at £100k will have dropped by 10% per year, so it is down to £90 after year 1 and £81k in year two.
Your £25k savings at 5% after basic tax paid is now worth £27.5k
You've saved another £6k each year, so total savings are more like £40k
You get no discount on the house price of £81k
Your mortgage is now £81-40k = £39k

However, if you are buying it now at £80k, it isn't 20% under value ... THAT is the value today.
What if the prices drop more than you think?
You will also be able to probably find another "20% off" bargain in 2 years' time.

Wait for the froth to go off the situation at least, say another year.

Unless you really HAVE to have THIS house because it is THE best house EVER and you will never want to leave it. And you promise to love it forever, forsaking all others with a bigger garden or more bedrooms for at least the next 10 years.

Doozergirl

formulaonefan wrote: »

I does matter because if I want to sell and move (ie. due to job change etc) and If I can't sell then its not good is it? So I personally don't think a house to live in means property crash doesn't matter. Nothing is certain in our life. I may buy a house on which I plan to live for the next 5-10 years but there are other aspect (ie. job, relationship, area, health etc) comes to play. It would be good if there is re-sale value. I don't plan to move for another 5-10 years but if I have too then I should be able too. So it doesn't matter. That's my thinking.

Er, talk about taking something out of context! There were four lines in my reply and part of that reply was very similar to an argument you just used as an argument in another of your posts.

I would never say 'If it is a home it doesn't really matter' so matter of factly. It absolutely depends on your circumstances.