A worried first time buyer!

exiled_2

andys15 wrote: »

Thanks for your wise words though. I look forward to your reply

I just brought up the issue of being a FTB as you posts seemed inconsistent. If you are in the eyes of a bank / BS a ftb then fair enough, I stand corrected on that point.
If you believe (as I would in your position) that with your salary you should be living in a significantly better than average house does that not prove to you that the market is vastly over inflated and is due for a significant correction. A 80k a year salary will make you immune to most downturns but your circumstances are not typical and it is danerous to give advice to buy when the vast majority of people on these forums will earn a salary around the 25K average.

RecoveringAlcoholic

Save.
Save.
Save.

.............and do not pi$$ it up against a wall.


.............and Save!

Dogz111

To be honest this is an interesting thread that has mutated into people just giving their view with no substance to their arguments. People should do what they consider to be the best thing by considering all the empirical evidence. My vote is for a fall based on the following facts. I would also be interested on views as to why we expect the housing market to increase as well. I also expect base rate to fall by at least 25bips if not 50 over the coming year. This though doesn't automatically translate to a fall in the mortgage SVR.

Reasons why house prices will fall / evidence to this effect (in no particular order):

a) Lack of liquidity in financial markets
b) Financial stressed consumers (especially unsecured debt)
c) Diminishing returns for BTL investors with properties now coming on the market
d) 100% mortgages are a thing of the past or at stupid rates
e) Auctions are showing properties going for a fraction of their original value. Especially new build flats.
f) Lack of confidence in the economy
g) Banks now looking for rights issues to bolster reserves to carry them through this turbulent time.

Sure there are more if I put my thinking cap on.

Any thoughts ?

emujuice

As all of the house price crash talk in the news has progressed I've supposed that it's wishful thinking/the media talking us into a crash. If buyers think that house prices are falling they'll offer less for houses and refuse to pay asking price, inevitably leading to a fall in prices.
However, I can now see how real this is going to be if FTBers can't get mortgages. The bottom of the market will fall out - and unless you have a chain that doesn't include FTB's it's not going to get completed. Especially if the mortgage is originally agreed and is only pulled weeks later as the underwriters change their mind. Weeks into a sale and surveys all done will demoralise everyone, and also give the market time to adjust, so that the price offered 2 months ago seems unreasonably high, so everyone wants to readjust the prices causing more collapses of sales and falls in prices, in a perpetual loop. However, if the current crunch is just a glitch and as long as FTBs have the 10-15% they can have a mortgage, it might all level out - fingers crossed.
Let's see how many more mortgages that were happily in place a month or two ago are now going to be pulled before completion.

(a house is not worth what you're willing to pay for it, but what the banks are willing to lend you!)

lisal0u

Hi All,

I am also a FTB hoping to buy my first home. I live in North Lincs and houses are very cheap compared to the rest of the country. I do not see such a big drop in house prices happening here. The 3 bed semi we are looking at is currently on the market for £105k but we are not willing to pay anymore than £90k. It needs £20k worth of work doing to it to modernise it so I am hoping the 14% lower offer and the added work will secure us from negative equity.

We are also only borrowing 2 x our combined income so the mortgage is comfortably affordable, Halifax are also doing a first time buyer rate of 5.9% fixed for 5 years.

The most important thing to me as a first time buyer is can I afford the monthly repayments. I have been renting for 10 years and have no parking or garden and now is definately the time to buy for me. I'm intending to stay in the house for 5 years plus and there is plenty of scope to extend should we need extra room.

I think it is very much down to personal circumstances, I have read so much useful information on here and I do feel I am pretty well informed about what we are doing.

Good luck to all you FTB's out there!
Lisa x