Another report that says housing market continues to cool

Doozergirl

Bargains for cash in the very near future? Nice idea,but I don't think so.

With good employment figures and no sign of significant interest rate rises, mass repossession, the source of bargain property, is highly unlikely. As long as people can afford to pay their mortgages they will just not sell.

I fear you may be as disappointed in the short term as those people marketing their properties so near to the 4% SD threshold.

Mr_Proctalgia

I have agree with Doozergirl. How many properties are on the market because they are distress sales, how many sellers are just "testing the water", how many properties are on the market because the vendor fancies a change of location, how many vendors are empty nesters? It goes on and on. I realise that the consensus on this board to have a buyers strike until prices fall, what would happen if there was a vendors strike?
I would suggest that most people do not HAVE to sell, but they wouldn't mind a change, that is why their homes are up for sale! I would also suggest that those of you with a bearish view of the market will change your minds the second that contracts are exchanged. My gaff is up for sale, I'm also a happy bunny because in the 16 years I have owned it it has gone up by approximately 1050% so I'm not fussed about a few £KKK's correction. I will then be a cash buyer (a homeless cash buyer) Shall I rent or shall I buy Hmmmm.....for me it is a no-brainer I shall buy and tuit de bloody suite too!. I do not subscribe to the notion that you can rent a better property than you could buy, it is false logic, rent is money out for no return, Ok the nay sayers will say it could be earning in the bank instead, if so where does the rent money come from? If I pay rent I can GUARANTEE that there will be no gains in it for me - ever, if I buy I MIGHT get some increase in equity short term (but I can GUARANTEE long term gains) If I cannot sell - Well I'm not bothered I can support a £25K mortgage indefinately. Other than that I will be looking for a home to LIVE in.
Houses are selling, people are buying, the estate agents are still making a living, Pickfords hasn't gone bust, FTB's are getting on the ladder. I do realise that houses are relatively more expensive nowadays, but interest rates are much lower, financial instutions realise this too. To put it bluntly anyone who buys a house with the intention of actually paying there mortgage off (especialllly as a FTB) is living a lie, it is human nature to want to move or improve your position in life, all the people on this and other sites who say I'll not buy at these prices are delaying the inevitable, buy a home - wait till it goes up (it will eventually) then sell it and do it again. Once you cease to be a FTB then prices are largely irrelevant, it is the price differntial that should concern as to affordabily.

spottydog

I agree with Dozergirl too.

I expect sometime soon people will be quoting a house near me as an example of a large price drop (assuming the vendors actually want to sell). The house has been put on the market for £265k. It is part of a terrace of identical houses, the highest one has ever sold for was about 6 months ago when one sold for £220k (from Land Registry figures) therefore I would expect an asking price of about £225k to sell for around £210k to £220k (same as other similar ones have been on at and sold in the last year). I'm waiting for the "asking price decreased by 20%" headline on a website forum when it should really have been "property originally overpriced by 20% asking price now realistic".

Prior to our neighbours selling their place people could have said the asking price dropped by 5 to 10% but in reality they got what they hoped for but they initally expected people would want to get a bigger discount from the asking price and therefore priced it according to that logic.

meanmachine_2

I heartily relish the fact that so few people on this forum can foresee any "problem" with house prices as they are now.

Delicious.

Because, if you could all predict a crash, there wouldn't be one.

I simply note the massive change in the market in the last six months alone.

Not so long ago we were in an economic "miracle" and everything was fine.

High employment, flat inflation, house prices still soaring.

All I read now are headlines about recession, soaring oil prices and redundancies.

In another six months time I wonder what the general mood will be. Think you can predict it? No, nor me.

But if we're back in the miracle stage, I'd be mightily surprised.

Doozergirl

I can't see anybody that's given much of a prediction on what will happen to house prices, certainly nobody on this thread, except Kenny. My points are:

1) We should not generalise about asking prices. Consider every property on it's own merit.

2) In the very near future (his words), or in six months time (yours), Kenny will not be rushing around York picking up houses formally advertised at half a million for tuppence. It just doesn't work like that. Nothing to do with refuting anyone elses prediction of a fall in prices.

I'm not here to make predictions. I will tread carefully and base my decisions on experience and the impartial evidence presented to me. If I were a FTB, there'd be no benefit to me to take any stance but yours, but the house price boat set sail with me on it and the equity in my property means I can afford to smile .

Ian_W

Kenny4315 wrote: property values are paper dollars ... there is a saying that we always use CASH IS KING ...

Interesting thought Kenny, but aren't all dollars made of paper these days? And, unless you want your breeches around your ankles from the weight of pound coins in your pockets, isn't king cash also just a promisary note, on paper, from EG at the BofE? Just a thought, you being an accountant and all. :whistle:

I always thought when times were really bad the advice was to buy gold - seems it's now to buy property, but when prices are toast, but why? Couldn't be that in the long term it would recover and be a good investment [as well as a place to live] could it? So can we all agree on that?

I go with [no surprise] with D/G, Mr P & spottydog comments. 12months-2yrs ago prices were booming because everything in the economy looked good, now things look less good they've stopped booming & are increasing slower and may even be falling slightly but they're not dropping like a stone and won't unless the economy goes t*ts up.

If it does then prices will drop because of repos's and forced sales. The irony is that loads of people who are praying for a big fall won't be able buy because they'll be out of work or uncertain if their job's next for the chop. In past reccessions industry has taken the brunt of job losses but in the next it won't, cos we don't have much left. So whose jobs are for the chop - builders, IT, customer services, call centres, financial services? Doomsters ask yourself - how safe's your job - don't answer, SAFE AS HOUSES!! :rotfl:

$$$_12

Some very good points from both sides of the debate made here.

Buying a house should always be because you want a home rather than an investment in property. Although inevitably because it's the most expensive purchase most people will ever make - a lot people tend to regard it as an investment.

Like most investments timing is key. It's true that house prices tend to go up in the long term but they can also have long periods of slow gradual decline (which only afterwards are called a crash). Prices tend to be sticky downwards so the journey to the trough might be longer than the rise to the peak.

But all of this is moot if you need a house - for whatever reasons - now. For you now is the right time to buy if you can afford it and your life/partner etc demands it.

Personally speaking as a FTB I'm happy to wait and see. I don't need a house right now, my rent is pretty cheap (less than half what I'd pay for a mortgage) and I'm a bit worried about the economy (so would prefer to have some spare cash rather than a big debt if my job ends up disappearing).

Where I live, prices (asking and land registry) are falling - not much asking pricewise (but the land registry prices have probably come down up to 10% from peak in the streets I've been looking at). So I'm continuing to save (around 2/3 of my take home each month) rather than buy as a) this will give me a bigger desposit making any mortgage cheaper and/or b) give a cash buffer if things get nasty economy wise.

Why am I worried about the economy? Here's a few reasons:

High St spending has dropped quite sharply. As a country that manufactures and exports less than we did many more jobs are dependent on people feeling rich enough to shop.

Unemployment is creeping up. Partly because of above but also due to the trend for offshoring jobs which have previously been huge growth areas for the UK (IT and call centres).

Debt is pretty high. I don't know if interest rates are going up or down - but it wouldn't take much movement upwards for some people to start struggling to pay off their debts. And the last rate cut hasn't made much difference to most mortgage payments.

Cost of living rises. I don't know about the rest of you - but the kinds of things I spend money on seem to be getting quite a bit more expensive than the official inflation rate would seem to indicate. A few examples - household energy bills, petrol prices and council tax. I spend more on these than cheap DVD players.

Economic shock. It's difficult to see what will to the US economy post Katrina - but if the economy there gets a cold I think the UK might catch it. Our petrol prices are already due to go up this weekend because of it.

All of these, of course, won't mean very much to you if you've paid off your mortgage or will continue to find the repayments affordable whatever happens. You're lucky and/or smart and I wish you continued good fortune.

GingeG

Mr_Proctalgia wrote:

I have agree with Doozergirl. How many properties are on the market because they are distress sales, how many sellers are just "testing the water", how many properties are on the market because the vendor fancies a change of location, how many vendors are empty nesters? It goes on and on. I realise that the consensus on this board to have a buyers strike until prices fall, what would happen if there was a vendors strike?
I would suggest that most people do not HAVE to sell, but they wouldn't mind a change, that is why their homes are up for sale! I would also suggest that those of you with a bearish view of the market will change your minds the second that contracts are exchanged. My gaff is up for sale, I'm also a happy bunny because in the 16 years I have owned it it has gone up by approximately 1050% so I'm not fussed about a few £KKK's correction. I will then be a cash buyer (a homeless cash buyer) Shall I rent or shall I buy Hmmmm.....for me it is a no-brainer I shall buy and tuit de bloody suite too!. I do not subscribe to the notion that you can rent a better property than you could buy, it is false logic, rent is money out for no return, Ok the nay sayers will say it could be earning in the bank instead, if so where does the rent money come from? If I pay rent I can GUARANTEE that there will be no gains in it for me - ever, if I buy I MIGHT get some increase in equity short term (but I can GUARANTEE long term gains) If I cannot sell - Well I'm not bothered I can support a £25K mortgage indefinately. Other than that I will be looking for a home to LIVE in.
Houses are selling, people are buying, the estate agents are still making a living, Pickfords hasn't gone bust, FTB's are getting on the ladder. I do realise that houses are relatively more expensive nowadays, but interest rates are much lower, financial instutions realise this too. To put it bluntly anyone who buys a house with the intention of actually paying there mortgage off (especialllly as a FTB) is living a lie, it is human nature to want to move or improve your position in life, all the people on this and other sites who say I'll not buy at these prices are delaying the inevitable, buy a home - wait till it goes up (it will eventually) then sell it and do it again. Once you cease to be a FTB then prices are largely irrelevant, it is the price differntial that should concern as to affordabily.

Good God

A sensible post on this thread at last. It seems all FTB's seem to think that every vendor is desperate to seel up, this is not the case as most people buy a house to live in not to make a profit.

I have just bought a place and was worried for a while that I was buying at wrong time but now I just cant wait to get in and when I subtract what I pay in rent from my mortgage repayments I am actually only paying out a little more but now I am chipping away at my own capital asset rather than just throwing money at some landlord.

nelly_2

Just take a look in the debt free wanna be forum to see how people are living well beyond their means.

All these people who bought houses for 50 grand and is now worth 150 grand, have remortgaged up so they owe 150 on their house anyway.

Divorces are at 40%, one partner used to buy the other half of the house in a divorce except these days they cant afford too because its too expensive.

meanmachine_2

GingeG wrote:

Good God

A sensible post on this thread at last. It seems all FTB's seem to think that every vendor is desperate to seel up, this is not the case as most people buy a house to live in not to make a profit.

I have just bought a place and was worried for a while that I was buying at wrong time but now I just cant wait to get in and when I subtract what I pay in rent from my mortgage repayments I am actually only paying out a little more but now I am chipping away at my own capital asset rather than just throwing money at some landlord.

Good for you, but I fear your understanding of how the market works is a little misty eyed.

If a home owner chooses not to sell their pile of bricks for X amount, then fine.

It's those who do have to sell, for whatever reason, whose price is put into the official figures.

Prices are set at the margins, not be unmotivated vendors who think their 3 bedroom new build is worth 1000% more than it was last Tuesday.

And good luck with your move. I've chosen to hold off for a few years and save X amount more. For every pound I save I get "cashback" in the form of another quid that I don't have to give to my lender. See how that works?

And if prices slide by even 5% in that period, that's shaved another few years off my mortgage.