when will people start buying again?

carolt

As a potential FTB, I'll look at buying again

(a) when the monthly cost of a mortgage - or certainly the interest part - is the same or preferably less (given the cost of maintenance etc) than I am currently paying in rent. We work on a tight monthly budget, so monthly costs matter far more to me than headline prices.

(b) when a bank/building society is prepared to lend that money to me ie when the credit crunch is sufficiently relaxed

(c) when I don't see huge falls likely to continue - as otherwise, I'd rather wait a bit longer eg if I could afford a 3 bed semi but thought that within a year I could afford a 4 bed semi, I'd wait.

I personally expect that to take around 4 years - very substantial drops within 2 years, but more like 4-5 to fulfil all my 3 criteria.

SquatNow

confused31 wrote: »

Ive got my house up for sale, its been up for 7 months and we have had 3 viewings, when do you think the prices are going to bottom out?

About 2014, maybe a little later...

confused31 wrote: »

Im not in a rush to move, but some people are saying 2 years, which i dont mind waiting, but when do you think the first time buyers will be back? and the so called house market crash end?

Why do people assume that when the crash ends prices will somehow be as high as they are now? While the bottom may be 5 years away it could take a DECADE after that to recover to current levels.

If people are planning to "wait it out" they had better be in it for the VERY long term.

bo_drinker

I don't think it will be a crash as such, just needs the ftb back. Banks and Gov't to stop bickering plus of course everything has come to a head at the same time. House sales price of fuel and everything else is on the up. No confidence anywhere at present in all walks of life, except pawn brokers apparently.

EdInvestor

!!!!!!? wrote: »

3.5x single salary, 2.5x double is historically the standard for mortgage lending. Look for prices to adjust accordingly.

Unrealistically low - this was the norm in the days of double digit + interest rates, and was never applicable in London in any case.

bluejake

Quote:
Originally Posted by !!!!!!?
3.5x single salary, 2.5x double is historically the standard for mortgage lending. Look for prices to adjust accordingly.

EdInvestor wrote: »

Unrealistically low - this was the norm in the days of double digit + interest rates, and was never applicable in London in any case.

Oddly enough I remember people said that before the last crash. They simply couldn't imagine prices could drop...of course they did and returned to the historical norm.

I remember 'prices wont fall'...'population is increasing'...'it's different this time'...'blah blah blah'.

In fact the same stuff I hear now. What people really mean to say is prices wont fall because I will be screwed. People are masters of self delusion.

brit1234

EdInvestor wrote: »

Unrealistically low - this was the norm in the days of double digit + interest rates, and was never applicable in London in any case.

Let me challenge you on that false comment. Below is a table of Bank of England Interest rates. It shows lots of periods when interest rates were single figures and I think you would agree that lending was based on 2.5 and 3.5 times.

http://www.bankofengland.co.uk/statistics/rates/baserate.pdf

You are falsely trying to talk the market up with spurious comments.

The last decade has been awash with cheap credit due to the huge mistakes by Alan Greenspan. We are now feeling the fallout of this mistake in the form of the credit crunch.

This housing bubble was created by this explosion of unsustainable credit. How can homes retain their value when the credit tap is turned off. Its back to normal lending again and we will won't see loose lending again for a very very long time in this clamp down.

SingleSue

As I posted before on another thread....our house took 10 years to recover to the price it was at the top of the market in the 80's. Prices may have stopped falling and hit the bottom after about 5 years but they sure took their time to come back up again.

I can see that this will possibly happen again this time, it won't be a magical 2 years, crunch over, house prices back to 2007 levels but possibly 3-4 years of falling prices, a year or so of stagnating prices and then gradual increases back to where they were by the time a decade has passed (from the start of the fall/correction etc etc).

And then it will all start again!

Of course I don't have a crystal ball, I could be completely and utterly wrong but looking at the signs this time and comparing them to last time gives a pretty good idea of what is ahead.

And before anyone says I am saying this because I have a vested interest in the market falling....well I don't. I neither own or want to own a house as I was one of those who got burnt in the last house price crash. The only partial interest I have is a supposed 3rd share in my parents house when they plop their clogs which I don't actually count as I keep telling my parents to sell and go on a round the world cruise with the proceeds before they are too old to enjoy whatever money they have built up.

lostinrates

EdInvestor wrote: »

Unrealistically low - this was the norm in the days of double digit + interest rates, and was never applicable in London in any case.

My father bought a house in West London (desirable area) 30 years ago on a modest wage (civil servant) for just that. (in fact less than three and a half times his wage). It was a large family home and it was in need of a fair bit of TLC, and I rememeber daily lifestyle was less flash in the early years of my childhood but it was possible. It was a tremenously roomy home with a garden and opposite lovely gardens and they sold it in '89 I think for a substantial profit but nothing like one of the four flats it has been turned into recently went for.

It certainly isn't possible in London now, but it was for my parents generation, and reasonably centrally too. My geration commutes greater distances aking he day longer, to pay porportinally more for portions of these homes. :rolleyes:

sirhan_sirhan

People will start buying again when sellers are more realistic about their expectations.

I saw a vastly overpriced house almost two years ago, and suggested a more realistic price to the agent. I was not taken seriously. The price was then chipped away, until it now stands at £100k less than it was then, and a good deal below what I then wanted to pay.

I agreed to pay the asking price, the same day that it came onto the market, only to find that the vendor has now decided that they want more money for it.

See here for the story in more detail:

http://forums.moneysavingexpert.com/showthread.html?t=964435&highlight=sirhan

People want to buy, but too many sellers have unrealistic expectations of what their properties are now worth.

dopester

dhassen wrote: »

Me and my gf are potential FTBs and where originally planning to try to buy this summer. We saw the prices falling as a good thing at first, but there's no way we're going to buy now, what with the rates of mortages having gone up so much. The house we like has only dropped by 5K, but a 95% mortgage we would be looking at cost around 750 pcm about 6 months ago, and now costs 900pcm now. we'd have to save for ages to double our deposit, and the pcm on a 90% deal is around 780!!

We won't be buying till rates drop back down.
EDIT: unless they never come back down, in which case we'll have to grin and bear it!!!

Also, I do thing houses are priced rediculously at the moment. How is a 3 bed terrace in north manchester (although a good area) worth 186K (in one or 2 cases).. madness

You forgot to mention how inflationary forces to pay for petrol and electricity and gas have put added pressure on FTB (renting) incomes.

So beyond taking out and trying to pay a whack-off mortgage (if you can get one) to pay for an over-valued property, you've also got huge running costs slaughtering your take-home pay, whilst home-owners are reluctant to pass back any of the 200%+ HPI gains over the last 12 years and reduce their asking prices for the new world.