A worried first time buyer!

Dogz111

andys15 wrote: »

There appears to be hundreds off you all acting like vultures ready to pounce on the sale of the centuary, but wont that just lead to higher demand again

And that is exactly the point I made earlier. The housing market is cyclical. Currently prices are overvalued in my opinion. A fall looks likely and you are correct when prices become cheap enough buyer will pile back in creating a strong demand position and prices will increase. I bought my first house in early 2001 and sold in 2007 just as conditions were starting to worsen. I also bought a few more properties in that intervening period which I still have. Obviously I wish I'd bought more, but isn't hindsight a wonderful thing. I guess I'm just trying to make the point I have no axe to grind.

As a shrewd investor I am obviously not going to buy something which I consider is overvalued. In the current climate the economics of buying for me do not work. If you on the other hand you consider prices will remain static or increase then you obviously start from a different position to myself. Which way the market will go is anyone’s guess. My view is a fall is likely based on the facts given in the posts above.

At the end of the day you need to act on what you think is going to happen. If you don't buy and prices rise then you will kick yourself. If prices fall well then it’s a lesson in life I guess. You do right to follow your own intuition but tread carefully as it’s a very uncertain market. I would also ensure you negotiate hard to get the best deal on your purchase as no one is paying full price, despite what estate agents might tell you.

ickledee

andys15 wrote: »

I am just in the process of purchasing as a FTB. If people read these boards and take on board what is said, then noone would ever buy a house ever again.
If you read forums like this one back in 2000 and took on the advice then you would be kicking yourself. There is noone on here who has a clue what will happen. Most people on here are praying for a crash, but when are you prepared to jump on the ladder yourselfs.. There appears to be hundreds off you all acting like vultures ready to pounce on the sale of the centuary, but wont that just lead to higher demand again. I reckon the guys on here expecting a crash are the same fools who refused to buy in 2000 expecting one, and are just bitter as hell. I know you will come back to me with statistics etc, and I am not disputing that it looks bleak, but advice like wait 2 years and the house prices will be 40% lower is nonsence. They might be who knows, but I sure as hell wont wait 2 years on the hope they might be. As in 2 years time, they might still be going down in price, and you will be saying "wait another 2 years and they will be etc etc.
I came on here originally asking for advice, because I was worried about the situation, but if I spent every day worrying about it then I would be waiting for ever.
My view now is, I am buying a house which is 3 times my salary, I could have had 5 1/2 times my salary, but I want to have a good standard of living too. I am fixed for 3 years, wish it was 5 but never mind. I now know for the next 3 years I have no worries in terms of my house. I am paying repayment and overpayments, another good reason to go for a house 3 times my salary.
If I am in negative equity in 3 years, then I wont be happy, but I have got a mortgage well within my means, I would have to go on an SVR, which will hopefully be ok. If I took on the advice of some of the people on here, I would never ever buy a house, I have never seen a posting by anyone, anywhere, saying prices are going up in value buy one now.

Great post Andy

I am a FTB too and have spent hours upon hours reading these boards - I am so excited to be buying my first property but with every post I get told how stupid I am to be buying just now. I have saved long and hard and am finally in a postition to buy. Perhaps its a risk but I am not going to wait a few YEARS and see what happens.

andys15

Dogz111 wrote: »

And that is exactly the point I made earlier. The housing market is cyclical. Currently prices are overvalued in my opinion. A fall looks likely and you are correct when prices become cheap enough buyer will pile back in creating a strong demand position and prices will increase. I bought my first house in early 2001 and sold in 2007 just as conditions were starting to worsen. I also bought a few more properties in that intervening period which I still have. Obviously I wish I'd bought more, but isn't hindsight a wonderful thing. I guess I'm just trying to make the point I have no axe to grind.

As a shrewd investor I am obviously not going to buy something which I consider is overvalued. In the current climate the economics of buying for me do not work. If you on the other hand you consider prices will remain static or increase then you obviously start from a different position to myself. Which way the market will go is anyone’s guess. My view is a fall is likely based on the facts given in the posts above.

At the end of the day you need to act on what you think is going to happen. If you don't buy and prices rise then you will kick yourself. If prices fall well then it’s a lesson in life I guess. You do right to follow your own intuition but tread carefully as it’s a very uncertain market. I would also ensure you negotiate hard to get the best deal on your purchase as no one is paying full price, despite what estate agents might tell you.

I am absolutely no expert what so ever, but I cant hide from the fact that prices are falling and no doubt will continue to do so for a while. As an investor you obvioulsy need to be shrewd and know a lot more than me.
I bought my first house in 1999 for £45000 and at the time it was 3 times my wage, I then sold that and rented due to work. In the years that followed I couldn't afford a house so I didn't get one. Now I am getting a £240000 house which is again 3 times my wage. The point I am making, is that I am not going to be put of buying a home for my family now that i can afford it. In my humble opinion people should have never been allowed a house on much more than 3 or 4 times wages and this has caused all the problems. I feel a lot of resentment to those who allowed this to happen,

Bosworth

andys15 wrote: »

If I took on the advice of some of the people on here, I would never ever buy a house, I have never seen a posting by anyone, anywhere, saying prices are going up in value buy one now.

So why on earth are you going to buy a house if every single person you ask for advice from says don't do it?

For the record, I am a homeowner and I still think 30-40% nominal falls will happen over the next 30 months. I have no interest or desire to make this happen - price falls are simply an inevitable mechanical response to the lack of availability of credit, the collapse in the numbers of people buying houses, the total loss of confidence in the market, and the chronic OVER-supply of homes in this country.

Do what makes you happy, but please do it with your eyes open.

Dogz111

andys15 wrote: »

In my humble opinion people should have never been allowed a house on much more than 3 or 4 times wages and this has caused all the problems. I feel a lot of resentment to those who allowed this to happen,

I would agree with that point. Although income multiples only tell half a story. Banks really should of looked at affordability calculations instead of turning a blind eye to all the unsecured debt that people carry (loans, store cards, credit cards etc) and basing it on 3, 4 or 5 times people's salary.

andys15

Bosworth wrote: »

So why on earth are you going to buy a house if every single person you ask for advice from says don't do it?

A valid point, but what kind of advice is buy in 2 years.
I personally think buying a house is a lifestyle choice. Would you advice me not to buy a car, because in 3 years it will have lost 60% of its value.
I am hopefully looking forward to a nice hot summer,(another thing in life difficult to predict), The house I am buying is the house I currently rent. Anyway I have had a landscape gardener here today giving me a quote so I can have a nice garden this year with the wife the kids and friends (bbq etc) to enjoy. I am having the works, patio, decking , new lawn, hot tub. I would never dream of doing that for a house I am renting as that would be totally insane (even though some of you would think buying a house at the moment is even more insane). This is what I mean by lifestyle choice. So whilst people on here are all waiting for the crash, I will be chilling in the garden. The price this comes at is anyone guess, but if the house has dropped in that time by whatever, I will just have to see the position I find myself in in 3 years time.

moneysavinmonkey

andys15 wrote: »

A valid point, but what kind of advice is buy in 2 years.
I personally think buying a house is a lifestyle choice. Would you advice me not to buy a car, because in 3 years it will have lost 60% of its value.
I am hopefully looking forward to a nice hot summer,(another thing in life difficult to predict), The house I am buying is the house I currently rent. Anyway I have had a landscape gardener here today giving me a quote so I can have a nice garden this year with the wife the kids and friends (bbq etc) to enjoy. I am having the works, patio, decking , new lawn, hot tub. I would never dream of doing that for a house I am renting as that would be totally insane (even though some of you would think buying a house at the moment is even more insane). This is what I mean by lifestyle choice. So whilst people on here are all waiting for the crash, I will be chilling in the garden. The price this comes at is anyone guess, but if the house has dropped in that time by whatever, I will just have to see the position I find myself in in 3 years time.

that's all very well and good if money is no object... but this is a moneysavingwebsite :rotfl:

andys15

moneysavinmonkey wrote: »

that's all very well and good if money is no object... but this is a moneysavingwebsite :rotfl:

Money is very much an object, and I am still pooing myself in some respect in regards to buying.
But to be honest I am getting bored with this crash now, all the hype is becoming old news and my attitude has changed to sod it. I think others in my position will also feel the same.
Why worry about house prices everyday for the next 2 years, when I can buy now and not worry about it at all for the next 3 years.

emujuice

hey andy,
I sympathise and agree - buying our first home is a lifestyle choice. after 10 years of renting and dreaming of buying we're now settled in one place, have a deposit and raring to go. Unfortunately our mortgage is probably going to be pulled, so we might not be able to buy now. But we'll probably try again if we find another house we like. I want to decorate as I like (no more magnolia!), I want to garden, and I want to have a home for my future kids. I'm sick of waiting!!!! I can't help but think that a lot of the people saying wait haven't rented in a long time, if ever, or they're just not the 'homey' type who don't care about how their home looks. Just a thought!

I hope all goes well for you.

moneysavinmonkey

andys15 wrote: »

Money is very much an object, and I am still pooing myself in some respect in regards to buying.
But to be honest I am getting bored with this crash now, all the hype is becoming old news and my attitude has changed to sod it. I think others in my position will also feel the same.
Why worry about house prices everyday for the next 2 years, when I can buy now and not worry about it at all for the next 3 years.

You can afford to buy a house big enough for your needs and your family for the foreseeable future and still have plenty of spare cash to buy hot tubs with!! :rotfl: have the grace to realise that that is not going to be the case for 99.9% of ftbs - which this thread is about!

The situation with an FTB is that if they are able to afford somewhere to buy they are likely to be very stretched mortgage and savings wise....in order to buy somewhere in all likelihood will not be suitable for very long if they find a partner/have kids/get a new job etc. If the credit crunch continues and house prices continue falling in two-three years they may find they are stuck and can't sell to upgrade or move or worse still are in negative equity and can't re-mortgage at the end of their fixed term deal as they have no spare cash to restore their LTV - this last point is key!!!

I realise that renting is not ideal, I have rented for the last 4 years and had more than my fair share but now in a lovely house, nicely decorated (homely!) with a garden I can dig up, so I feel settled!! Much more settled than I would if I was mortgaged to the eyeballs heading towards financial armageddon!

To be honest I was getting sick of all this house prices only go up, the government won't let it happen, buy now or you'll never get on the ladder crap that has been spewed for the last 5+ years!!! The crash/adjustment/falls hype has only really hit the mainstream in the last 6 months - so it's hardly old news yet!