A question for potential FTB's

FaTB

It seems to be fairly common knowledge now, that House prices are at best not going anywhere for the foreseeable future, and at worst may drop 25% - 30 %.

So my question is what reasons do people still have to buy now ?

My personal feeling is why buy now when I may be able to buy the same place in 18 months time for maybe £15k - £20k less !! Also in that time I will be saving more so further reducing the size / term of my future mortgage.

Even if prices just stagnate and don't move anywhere, why buy now ?

All urgency seems to have gone at this moment in time, as FTB's no longer need to worry about a rising market "missing the boat"

Please can anybody explain their reasons for wanting or needing to buy now ?

dean_ham

Well if a FTB needs to purchase a home, he/she will.

Other FTB's like myself are fortunate enough that we can hold on and like you said wait 18+ months untill it becomes more reasonable to enter the property market.

I do start to worry that i am as you put it "missing the boat" but at the end of the day i have £15k saved, and im saving minimum £250 a month, some months £500. In 18-36 months i will have a good £20-30k saved for deposit/fees/furniture etc etc.....

thaylock

A work colleague of mine is a FTB, she is buying a house with her b/f. They have been renting for the last several years & see this as dead money. They recently put an offer on a house which was accepted. I think it's really difficult for FTB to make the right decision, do they wait another 2 years for prices to drop, or continue renting ? If your are buying a home (not an investment) there probably isn't a 'good time' to buy unless you are hell bent on making a profit out of your home. For FTBs who want a 'home' then you can't put it off forever, it would be nice to wait 2 years but what if prices don't drop by that much (though it does seem as though prices will indeed drop by a significant amount over the next few years). Interesting to hear from FTBs about this.

skylight

Prices will rise again in about 8 months to a years time after the pension laws change.

dean_ham

charlotte664 wrote:

Prices will rise again in about 8 months to a years time after the pension laws change.

I honestly cant see this to be honest, the property market needs more FTB's why will a change in pension law encourage FTB's.

With petrol price rises, inflation, and general cost of living rises etc etc in my opinion theres only one way the prices are going to go and thats down.

https://www.housepricecrash.co.uk for more info

And i dont think there will be a crash. Over the next 5 years i predict steady decline....

If im wrong, im wrong.
If im right, im right.

Wait and see

Doozergirl

dean_ham wrote:

And i dont think there will be a crash. Over the next 5 years i predict steady decline....

I think that is what will retrospectively be called a crash.

FaTB

charlotte664 wrote:

Prices will rise again in about 8 months to a years time after the pension laws change.

I also cannot see this having a major effect, on the downward slide.

Within the next 6 month even the average "Joe Bloggs" on the street will look at property as a "Lemon" of an investment.

I think many Buy to let amateurs with 100% Interest only mortgages will come unstuck, and rush for the exit soon, contributing to the slide in prices.

I also do not believe it's going to be a sudden crash, it will be a gradual but constant decline over the next 4-5 years, but will be referred to as a crash after the event.

YorkshireBoy

dean_ham wrote:

why will a change in pension law encourage FTB's.

Charlotte didn't say that. She said...

charlotte664 wrote:

Prices will rise again in about 8 months to a years time after the pension laws change.

6th April next year is pensions 'A' day when lots of changes take place. One of these is the ability for people to 'use' their pension fund money to buy/invest in property and incorporate this into their pension plan. This could be instead of/as well as money which would normally be used to buy an annuity (I believe, but I'm not 100% up on it, so someone will correct me if I'm wrong).

My biggest concern over the next 12-24 months is a fall in interest rates (quite possible due to various home and world events and economies, eg oil prices as I heard on the news today), coupled with a likely surge in FTB type house prices due to the above pensions reforms. Even if the pensions changes don't drive up prices, the lower interest rates alone will - look what happened 12-24 months ago.

Whatever happens, whilst I'm pleased my own mortgage will be paid off in 18 months time, I do worry greatly for my kids who'll be FTB's over the next 3-10 years or so.

YorkshireBoy

Al_Mac wrote:

I seem to remember something about Australian mortgages going across generations of a family, could it happen here?

Not sure about that one, but something we've discussed with friends recently is that possibly we'll see inheritances "skip" a generation, ie missing out children and passed straight through to the grandchildren to give them a start.

The current pensioner generation is possibly the first where there are more owners than renters, so this could become a way to help the current FTB generation get on the property ladder - providing later life care costs don't swallow up the house/money first.

But what happens with the following generations?

FaTB

YorkshireBoy wrote:

My biggest concern over the next 12-24 months is a fall in interest rates (quite possible due to various home and world events and economies, eg oil prices as I heard on the news today)

I think its very unlikely that Interest rates will fall further, my geuss would be that IR's will stay the same until the end of the year, then they will start to rise due to inflation.

Personal debt is at an all time high and many are struggling to pay off massive debt even at current rates. If /when rates go up this will contribute in a big way to prices coming down, as reposessions go through the roof.

I also think it is unlikely that even if IR's were lowered that it would kick start the market again. With prices as high as they are now IR's become almost irrelavant.

socks_uk

I'm not a FTB but it's the first time I've bought/sold a house.

I've lived in my current house for 20 years when I 'gradually' moved into it from my parent's house (it was my boyfriend's house -> husband's house -> ex-husband's ex-home).

I'm looking to move right now because I want to be in a bungalow when I'm older and if I wait I won't be able to take out a 20 year mortgage as I'm 40 at the moment and don't want to be still paying a motgage beyond 60. I could stay where I am and continue to live mortgage free but who knows what life has in store for me healthwise?

Jill