Why not buy a property now?

MrSafeGaz

teabelly wrote: »

As you had already said deposits were increasing due to a possible price crash then where do you think al those FTBs that can't scrape together the 5% deposits needed now are going to find the 10-20% deposits necessary to avoid negative equity if your house price crash scenario plays out? You can't jump up and down about banks lowering LTVs and not see the obvious consequences.

FTB's who can only 'scrape' together 5% of a deposit shouldn't be buying a house anyway. These people either don't have enough income to be able to save a deposit which means they would struggle to pay for a house. Or, they need to tighten up expenditure a little and spend a little longer saving a deposit. This is how is should be, this is how it always should have been. The fact that over the past 10 years or so any and every person could just throw themselves into a 100% mortgage because prices were gonna go up to cover any financial boo boos they made has only served to brainwash people now into thinking that things would be terrible if lending LTV's dropped down to 75-80% again.

Personally, I can't wait for that to be the case if it happens. I certainly would be jumping up and down because I have been financially savvy enough to put effort into saving for a deposit which means that when the time comes I will be able to get a house. For those who would struggle to put down enough deposit it's just tough, people have been able to casually throw themselves into mortgages for too long. This is what the ever increasing house prices brought with it and I repeat, I can't wait to see what this all brings.

pickledtink

teabelly wrote: »

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.

Not to mention that if all the other houses in England suddenly just fall down yours would be worth a fortune!:cool:

dannyboycey

MrSafeGaz wrote: »

FTB's who can only 'scrape' together 5% of a deposit shouldn't be buying a house anyway.

It's all relative. It's not that these people should be saving double, as in many cases that's just not possible. What needs to happen (and will happen) is that prices fall to a level whereby the 5% they have saved actually becomes 10% as a result of the decreases.

Gorgeous_George

mr.broderick wrote: »

Like I've always said GG It's ok to talk the talk on here but who out of the big noises on here, when the optimum time comes and they drop, who's going to walk the walk and go for it, can't wait for it to all happen, sat here with popcorn watching my laptop...

I'm making enquiries. A well-built 3 bed end of terrace (of four) with tenants already paying £425 per month is advertised at £75K. It sold for £90K at the peak. IF I can buy it for £50K, it'll be mine.

GG

mr.broderick

Gorgeous_George wrote: »

I'm making enquiries. A well-built 3 bed end of terrace (of four) with tenants already paying £425 per month is advertised at £75K. It sold for £90K at the peak. IF I can buy it for £50K, it'll be mine.

GG

Sounds promising, i like your style..sounds more like £65k though if you are very lucky...

oneandonlyboy

I think people are also leaving out what could happen to the interest rates.
I know the bank of England lowered it, but if inflation carries going up then the bank of England will have to increase the interest rates to lower it and that might go up a % or 2.

Will a low housing price and a high interest rate people who are in trouble now will be in fair greater trouble then.

I'm looking at buying now but looking at putting at least 50% down as a deposit and putting in offers that i feel is correct for the current market.

This is only my view and what i believe "could" happen.

PasturesNew

The average interest rate always used to be 8% over the lifetime of a mortgage.

Low interest rates are newish and gone hand in hand with 4-6x joint salary lending, 100-125% advances and liar loans.

A return to "the olden way of doing things" would knock property for six for a good 10-15 years, but overall would give stability to people, a reason to save and "do things properly" and a good chunk of disposable income left over so they can enjoy their lives and buy things ... things that create jobs.

All would be happy in the world.

There will always be people who are priced out of the market. That's a fact of life. But if the bar is set low and achievable and kept there then there's no mad urgency to jump onto the bandwagon before people are ready, meaning those that buy are doing so because they WANT to, not because they're too scared not to.

A lot of buying recently has been frantic and desperate "now or never". I wouldn't be surprised if it's been the subject on some first dates ... some people seem to buy/move in together SO quickly these days it must have been thrashed out as an idea right before the first kiss.

geoffky

How Times Change/// April 2008

ukcarper

PasturesNew wrote: »

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.

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 or 1% £25,502
You've saved another £6k each year, so total savings are more like £40k £37.5 - rent £9k per year 18k =£19.5k
You get no discount on the house price of £81k
Your mortgage is now £81-40k = £39k or £81k -£19.5k= £61.5k

kriss_boy

surely this depends hugely on the type of property and where its located.

Myself, my parents and my brother have been viewing houses as an investment opportunity. Considering between the 3 of us we could comfortably afford the mortgage repayments we are asking ourselves how low will properties up in Scotland drop?

Surely there comes a point where the dangling carrot becomes too enticing. Surely the property market cannot fall so drastically as many people like myself with reasonably secure jobs will be interested.

Im in a position where I could rent my own 1 bed semi out easy peasy in the condition its in and then go any buy another place...

Its just having the guts to do that though huh