FTB..confused

beecher

dopester wrote: »

Has the wife studied economic history.

As an aside, what makes me most angry about the situation we've got ourselves into is the fact that Gordon Brown studied economic history - I did the same course in the late 80s and our lecturers would boast about their famous student. I guess they're not so keen on doing so now that he's proven he didn't pay heed to any of the past mistakes made by people throughout the centuries who have believed that 'things are different this time'......

Glen0000

beecher wrote: »

You are in a much stronger position than your friends who have 'made' £100k in 7 years, unless they've sold and realised that money.

Thank you for saying that. It really does not feel that way sometimes. Most of my friends think I am an idiot for still renting. I was on a very low wage, until about 3 years ago. By that time prices had become unaffordable and I couldn't find the will to save for a deposit. Had dad on the phone this morning asking if I had looked at any houses yet. The pressure mounts!

beecher

Glen0000 wrote: »

Thank you for saying that. It really does not feel that way sometimes. Most of my friends think I am an idiot for still renting. I was on a very low wage, until about 3 years ago. By that time prices had become unaffordable and I couldn't find the will to save for a deposit. Had dad on the phone this morning asking if I had looked at any houses yet. The pressure mounts!

I feel so sorry for some of my younger colleagues who are pressurised to buy at every turn. When I was 29 and still renting no-one ever described renting as wasted money, and I was never questioned on why I wasn't buying, perhaps because house prices were stable. It has become like panic buying at its worse!

If you install propertybee and keep an eye on house prices in your area it'll give you an idea of what is going on and probably make you feel better when you realise the only changes in prices you're seeing are downwards! Gives you a strong argument to put to your wife too.

I had a quick search on rightmove for your area and there seems to be a lot of 3 bed houses on sale - seems like they're in a standing off position at the moment with no one willing to sell. I know you say that if they can't get the price they 'need' they'll take their house of the market, but eventually someone will have to move and will have to cut their price to do so. When the people selling at £120,000 realise that the next rung up is suddenly cheaper, they're realise they can't keep asking for the same price.

Good luck - it is all very easy for me to say having bought in the 90s when it was all so much more simple.

skap7309

Glen0000 wrote: »

Ok then. Please explain to me in simple terms how a crash can happen. I read today on BBC news that the simple fact that there is a huge shortage of houses will prevent a crash.

I understand that prices are falling now, but I don't see how we can see falls of 30% or more as some people are thinking here.

Hi, i dont mean to be rude but have a long, hard read in the 'house prices' section and then come back and say a crash 'cannot' happen.
Everywhere you turn its 'worst since records began' over and over again - its THAT bad at the mo.

carolt

Glen0000 wrote: »

We are just ordinary working class people. When friends have ours have made £100k in 7 years on a 3 bed semi, it is really hard to see how a crash could be allowed to happen. Many people have borrowed on their houses and will not sell for less than they are worth now as they just can't. Not one ex council house has sold on my estate in over a year. People just can't afford to sell for less and won't put the prices down.

It's not so much a matter of how a crash could be allowed to happen as how it could be prevented. There is nothing Gordon & co could throw at the situation now that would stop it.

The fact that your friends (and many others) have borrowed against the equity in their houses does not, whatever they may think, mean the house is 'worth' that much. It just means they have spent a load of money on other items and payback time is coming. The house is actually 'worth' not the figure they would like but the figure a buyer is both prepared to pay and able to pay. If people can't get mortgages because of the credit crunch to borrow 5 or 6 times earnings, then prices will have to revert to 3 or 4 times average local salaries, whether your friends like it or not.

On a £350 a month guaranteed rent and secure tenure, on your salary, you must be (relatively) rolling in it. Most private tenants and homeowners would give their eye teeth for such a low set monthly figure. As rates rise, repossessions rise etc, due to the credit crunch, there are going to be lot of ex-council tenants rueing the day they were persuaded to buy their own place. I've already seen some stories and they'll be a lot more soon.

Sit tight, earn lots of interest on your money and you should be able to buy somewhere much nicer in a couple of years. And then see who gets the last laugh - you or your friends...

By the way, have a look at today's news stories for more fuel for your fire: Caroline Flint, the housing minister lets slip the govt. is expecting minimum 5-10% falls in house prices this year; RICS (estate agents/chartered surveyors survey) has given worst results in its entire 30 year history (ie falls more widespread than in the early 90's crash), and the RICS survey is generally agreed to be the best indicator of future price trends; Redrow (builders) post numbers down 26% on last year; mortgage lending hits 33 year low...etc etc.

And that's only 1 days news!

There's more coming every day, and none of it good news for those who think house prices can only ever go up...:eek: But great news for would-be first time buyers.....

jamtart6

hmm Im a FTB and in a similar situation.

If you aren't going to move from your house in the next 10 years, then I don't see the problem personally. Go for it!

If you plan to make money/sell and move to bigger in the next 10 years then don't do it.

I'd reckon you could borrow max. £120k, with repayments of approx £750 per month on that amount for 25 years.

Hope that helps good luck

carolt

But why would he want to literally double his monthly costs overnight?

It might make sense in a rising market but in a falling market, it's madness.

dean_ham

jamtart6 wrote: »

hmm Im a FTB and in a similar situation.

If you aren't going to move from your house in the next 10 years, then I don't see the problem personally. Go for it!

If you plan to make money/sell and move to bigger in the next 10 years then don't do it.

I'd reckon you could borrow max. £120k, with repayments of approx £750 per month on that amount for 25 years.

Hope that helps good luck

So even though he is renting @ £350 a month and is generally happy your still telling him to buy a home. This beggers beleif....

Hes on £30k a year right? so that means roughly takehome salary per month of £1900.

If i was you hold out for 12-24 months. Save another £10k-£15k on your deposit. Leaving you with upto £35k deposit.

Them houses that are selling for £120k at this moment in time could be as low as £100k - £90k when you come to buy. On top of that you have your deposit meaning your only looking for a mortgage of £60k.

I know what i would do (but im gambling on the fact that the market will drop a fair bit over the next 18 months )

And no im not doing it "make money" im doing it to put me in a great financial position for the rest of my life and to live comfortably which is what we all want isnt it........ :beer: