what would you do? Buy or hang on?

sportbeth

We've finally got a sale agreed on OH's house and touchwood it should all go through in the next couple of weeks. We now have a couple of options

Stay in my flat and put his stuff into storage, with combined salaries we can save over £1,000 a month doing this towards deposit on the new place. If we do this through to August next year we can get a good idea of the market and maybe get a great deal being cash buyers

Stay put until spring 06, still saving but then look at new properties. They're starting to offer no deposit deals now and stamp duty paid as they don't seem to be shifting as fast as they did. We really fancy a new place, and if we could get a good deal on one we would be sorely tempted to go for it now.

What would you chaps do though? Hang on with the money in the bank and the mortgage agreed in principle and see what happens? In all honesty renting is costing us naff all as I have such a good "mates rate" on my flat. We could save a fortune if we hang on and the market goes down but they're been talking that way for yonks!

lush_walrus

What the market will and wont do aside, as no one ever really knows on this one and I dont think a debate on that will help you I personally would wait until you have saved enough to make you personally comfortable with the amount you may need to borrow against the type of property you want.

It is always better to keep any mortgage as low as possible as obviously interest is charged on the loan, but also the more equity you have in a property the more prepared you will be for any rises, falls or stable times ahead.

The market generally starts to quieten down in the next couple of weeks anyway, and you will probably find that over the weeks there will be less and less properties coming onto the market, as most vendors are now starting to see Christmas coming and will wait until Jan.


The other part of your decision seems to be whether to buy new build or not. That is really a personal preference, personally I would never touch a new build, probably because I am often working for developers designing them for them to minimum standards. Which, beleive me developers always do and regardless of what offers they but on any new build you will pay a higher premium for the fact that they are 10 year guaranteed. But if you do go for the new build make sure that you have looked around the local area for comparable properties that arent new to see if you are getting value for money as far as possible, ie look at properties in the same area with simular size of rooms, gardens etc and check that the new build compares against the price.
If you do find a new build you check what else they are putting on the development, where they are placing the housing association properties, whether it is built on contaminated land or a flood plane, how well connected you will be to transport (if you need it) how much parking provisions are there really in the area, not just the allocated parking but is there space on the street to park outside the property (as is needed when you have visitors etc).

Modern properties not brand new might be an option for you, as these generally like cars have already lost their money.

FaTB

The way I look at it is,

At best - House prices start tumbling next year, so I stay put save like mad and buy
when the time is right for me.

At worst - House prices stagnate, so there is still no rush to buy, and I can stay put
and save up and watch the market until I can afford to buy.

You can't lose by waiting, but you could lose Big time if you jump in now.

GDB2222

Very good advice from both Lust and Fat, imho.

I have been expecting a drop in house prices for so long that I am beginning to doubt my own sanity, so ignore what I think on that.

Prices may rise (probably gently), stagnate or fall - my guess is 'fall' but I seem to have been wrong for quite some time. However, I think the one thing you can rule out is a gentle fall in prices. If prices start to drop, there will be a snowball effect, with buyers holding off until they are pretty sure prices are not going to drop any further. So, if prices drop say 5%, I cannot see that being it, and I am pretty sure that we would then see maybe a 20%/30%+ drop, until buyers come back into the market and we start the whole cycle again. That initial 5% may never happen, of course, but if it does happen, you can see what the problems would be.

So, buying is quite a risk, whilst the upside potential is pretty limited. If you can rent cheaply, that is looking like a really good option at the moment.

mooncat

im in the same position as you at the moment. was trying to buy but put it off as the girlfriend is pregnant. saving a good sum of money every month at the moment whilst watching prices fall. first they start off as no offers then 1 month later they are 15 grand cheaper. if it carries on like this then ill save quite a bit of money

Robert_Sterling_3

Beware of "A" Day when prices may increase. A Dady 06 Apr 2007.

meanmachine_2

In 2004, prices were rising at 20% a year. Ridiculous.

That isn't happening now. and it doesn't look like big rises are on the horizon - but who knows?!

And as you're not a FTBer, the sort of properties you're looking at won't be the ones that are affected by SIPPs.

But no one can know where the market's going or what impact SIPPs will have (if any). I'd have thought that the raising of stamp duty to £120K would have had a huge boost in the market, but it didn't, did it? Except maybe it delayed any serious correction.

I do know that every pound you put into the bank is two quid you don't have to give a lender.

But it's up to you, if money was no object I'd happily look for a place right now - few buyers and therefore no pressure, and no need to rush.

I'd also take advantage of the quiet season just before and just after Xmas. Lush might be right when she says fewer properties come onto the market, but there's still tonnes out there at the mo.

You might also like to wait until next month when it's possible the Bank of England cuts rates (although that's not guaranteed)

My honest advice is, if price isn't your main concern, it doesn't hurt to go have a look. But I personally wouldn't buy a new build. I'd certainly consider conversions of quality older buildings (schools etc), but these new estates are often in the middle of nowhere.

There was a feature in the Mail, I think, about this posh development nr Chelmsford. I know it well - out in the middle of nowhere!!

Jake54

Their are people out there who have waited a while, and seems like an eternity to some, for the house market to do something.
And the thing is that what you will find is the majority of them will jump! 'Together'
They will all of a sudden think, iv'e had enough of this I'm not waiting around any longer.
I'm not waiting to see if the market goes this way or that.
I want a house of my own! or I want to move!
Yeap! It's quite at the moment.But!
I'll take a chance.
There will be a made rush and it will start all over again. (Hopefully not)
It's suprising how things change so quickly.
How long ago was the housing boom? eh!
If the bank drops the rate the market will move ahead again(but again hopefullyslowly)
I don't think anyone on this forum really want's another BIG! rise in property prices.
Steady as she goes is the best way

Sput2001

mooncat wrote:

im in the same position as you at the moment. was trying to buy but put it off as the girlfriend is pregnant. saving a good sum of money every month at the moment whilst watching prices fall. first they start off as no offers then 1 month later they are 15 grand cheaper. if it carries on like this then ill save quite a bit of money

By and large, that isn't how the market's going, though. Sure, people may drop their asking price by 15k after the first six weeks, but the chances are they won't drop any further after that unless it's critical that they sell quickly, which for most people it probably isn't.

meanmachine_2

Jake54 wrote:

I don't think anyone on this forum really want's another BIG! rise in property prices.
Steady as she goes is the best way

That's a bit selfish.

Why shouldn't those who bought in 2004 have a 20% rise y-o-y? After all, those who bought before last year have "enjoyed" rampant house price inflation.

also, if the market stays flat for the next ten years, how is anyone going to be able to move up, down or sideways?

Doesn't sound practicable to me.

If you're honestly telling a buyer that, yes, they should buy now and no their property won't go up in value at all for ten years, that doesn't sound particularly appealing, does it?

Robert_Sterling_3

If prices rise then the gap between the price at which you can sell yours house and the price you would have to pay to get something better gets bigger.