Donna Ferentes
jubliado
But why? This is what I don't understand.
Might pull out of house purchase - housing market looking ever more fucked
- Thread starter ChrisFilter
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ChrisFilter
Like a boss.
dolly's gal
killing things
heh. i reckon you should go for it! but then i'm very much heart-driven when it comes to making these sorts of decisions
ChrisFilter
Like a boss.
Well, I suppose you're right. Everywhere else will have fallen, it would just mean we're paying 30% more for our mortgage, but then to counter that I suppose we'll have paid 5 years of the mortgage off and will have more equity.
oh dear, i did understand then
ChrisFilter
Like a boss.
If I was in your position, I'd just ignore the headlines, think "I love this house!" and carry on regardless!
We'll be nearish neighbours if we buy, we can live in trapped fear together
Donna Ferentes
jubliado
There might be a problem if you wanted to sell without buying (we have a similar problem now) but that doesn't seem to be the plan.
Yes, you might want to wait if you think you'll be overpaying for your mortgage, but is that really so important set next to the chance for security and the likely waste of money in rent?
ChrisFilter
Like a boss.
Cheers for this Badgers, it's helped. We're buying 'cos we love it, we can afford it, and we want a place to call our own. It's 2 bedroom, so space for a kid if that happens in the next few years. If we need to move, other houses will have fallen as well.
Fuck it, I'm gonna buy it. Finances can't dictate every decision, even if it might seem foolish to some.
ChrisFilter
Like a boss.
I can't image we'd want to sell without buying, if we did it'd be either through divorce or emigration, and both seem highly unlikely.
As for your second point, no, I don' suppose it is that important.
If the interest rates do go up brutally then landlords will try to (and no doubt will) raise rents to cover the increased outgoings. This will mean that tenants will be able to save less towards deposits than they could before.
Many people will lose homes through repossession but these will be snapped up by auction houses etc. who will punt them at knock down prices to the big portfiolio landlords who will let them out under (high) market rates perpetuating the cycle.
You may feel trapped in a house you brought but you will also be trapped in a place you rent....
Lose/lose?
Many people will lose homes through repossession but these will be snapped up by auction houses etc. who will punt them at knock down prices to the big portfiolio landlords who will let them out under (high) market rates perpetuating the cycle.
You may feel trapped in a house you brought but you will also be trapped in a place you rent....
Lose/lose?
ChrisFilter
Like a boss.
Things would have to be very, very fucked for it to get that bad. It's a very different slump to the early 90s, and for very different reasons.
Chairman Meow
Perth, WA
Yep, that was me - we were offered €100k less mortgage than last year, and have to find an 8% deposit which we didn't last year.
So, are prices here are still falling through the floor and no-one is buying we are going to wait 6 months and re-evaluate (and save up!). Unless we decide to take an offer from one of the new builds who are getting desperate and offering free cars, mortgage paid for two years etc etc in an attempt to flog their moribund over-developments.
ChrisFilter
Like a boss.
Again, good points. I think I've made my mind up. Just needed to hear some second opinions.
My parents, who know the market very well, both feel we should stick with the purchase.
Still, no-one can predict how bad it'll get. When I'm considering buying a place (sometime next year I think), I'm going to make sure I can afford my mortgage to go up a fair bit.
ChrisFilter
Like a boss.
Well, this is the other thing. The house was on the market for a month at £225k, over priced. She then dropped to £210k and it went within 2 days. 2 months later the buyers pulled out, and we viewed that day, before she even knew the buyers had pulled out (she was on holiday).
This meant we could go in very low, and got it for £194k, which is the minimum she needs to be able buy the property she's moving to, so we're already ok on that front.
g force
Affects Shatner's Basoon
Very tricky one....but if you can afford the mortgage, it isn't 100% and you plan to stay there i'd be minded to stick with it. Of course prices are likely to go down now but that doesn't mean homes will be more "affordable" - rents are going up, mortgages are getting harder to come by, especially the deal you mentioned in the previous thread.
Yes it's a huge financial commitment but if you can afford it - and I remember you'd purposely not over-streched yrself with a crazy mortage - and plan to stay there for 5 years, buy it, decorate it, make it a home.
Yes it's a huge financial commitment but if you can afford it - and I remember you'd purposely not over-streched yrself with a crazy mortage - and plan to stay there for 5 years, buy it, decorate it, make it a home.
ChrisFilter
Like a boss.
House prices will fall by about 20% minimum over the next two years. Interest rates are likely to go up to 5.75% over the next 6 months.
Unless we decide to take an offer from one of the new builds who are getting desperate and offering free cars, mortgage paid for two years etc etc in an attempt to flog their moribund over-developments.
Totally false economy I am afraid....
They do not want to admit that these new builds have falsely inflated prices, worse than older properties in the main. So they are luring people in with stupid offers like 'free carpets, surveys, legal costs, etc' which they claim has a value of £X but they get for a LOT less as they can buy in larger quantities than you.
Several developers have buyers but as soon as the survey is done the finance offered is pulled as the lender will not lend 100-125% of market value as they did a year ago.
trebling though? i doubt many people will be able to keep up with their mortgage trebling/
5.75 is only what they were a year ago anyway isn't it? in fact weren't they 6?
Is it a house or a flat?
ringo
Macaroni cheese controller
The CEO of the property website I work for reckons this downturn could go on for 2 to 5 years and see prices drop by 20% - 40% if it replicates the only two house price crashes ever seen in this country (defined by a fall in house prices six months in a row). But that's a big if, 'cos circumstances are different now from the previous two.
The fall in 1974 was caused by the recession when we had strikes by the miners, binmen etc (I blame Thatcher) and specifically the oil crisis, when the price of oil quadrupled in a very short time. In relative terms it's about the same now, but the rise has been less sharp and less of a shock. In addition house prices had just doubled in a single year, whereas in our current situation they've done so over 8 or 9 years.
The 1989/90 housing crash was part of the more general recession and also followed a period of unusual house price growth.
Both of these were caused by massively inflated house prices over a short period of time and followed periods of recession. It's hoped by those in the industry that the slower, more sustainable growth in house prices this time will mean that a smaller adjustment will be necessary before they reach a more realistic price.
The boss made it clear that the people who lose out in these situations are those who join the housing ladder or massively borrow to buy at the very peak before the housing market plummets. But you've also got to weigh that against the amount of time you want to live somewhere, completely different to buying for profit.
If you buy now and watch the price fall by 25%, then over 5 years it rises 25% you're back where you started. Except that the mortgage you've paid off over 5 years is yours instead of renting and paying someone elses mortgage. You've still got to watch interest rates and make sure you can still afford to keep up the payments.
I'm no expert, but hope that helps.
The fall in 1974 was caused by the recession when we had strikes by the miners, binmen etc (I blame Thatcher) and specifically the oil crisis, when the price of oil quadrupled in a very short time. In relative terms it's about the same now, but the rise has been less sharp and less of a shock. In addition house prices had just doubled in a single year, whereas in our current situation they've done so over 8 or 9 years.
The 1989/90 housing crash was part of the more general recession and also followed a period of unusual house price growth.
Both of these were caused by massively inflated house prices over a short period of time and followed periods of recession. It's hoped by those in the industry that the slower, more sustainable growth in house prices this time will mean that a smaller adjustment will be necessary before they reach a more realistic price.
The boss made it clear that the people who lose out in these situations are those who join the housing ladder or massively borrow to buy at the very peak before the housing market plummets. But you've also got to weigh that against the amount of time you want to live somewhere, completely different to buying for profit.
If you buy now and watch the price fall by 25%, then over 5 years it rises 25% you're back where you started. Except that the mortgage you've paid off over 5 years is yours instead of renting and paying someone elses mortgage. You've still got to watch interest rates and make sure you can still afford to keep up the payments.
I'm no expert, but hope that helps.
really, i had heard that demand for family houses was much higher, there's loads of 1/2 bed flats around and thousands more being built already.
I just bought somewhere a couple of months ago and I'm really, really happy with it. We're not looking at making a quick profit off it, just somewhere to live for a few years and I feel better living in my own place and doing it up as we like rather than living in someone else's place and giving them a big chunk of my cash each month.
Definitely don't go for a new build though.
Definitely don't go for a new build though.
ChrisFilter
Like a boss.
Ground floor Victorian maisonette (i.e. purpose built to be a flat, not a conversion from 1 big house, i.e. better than a conversion, on the whole).
Chester Copperpot
Triple stones
If you can afford to pay the mortgage and take a long term view on how long you're going to live there there's no reason not to buy however if you're looking to move over the next 2 years you could lose out IMO.
The truth of the matter is the market is in decline and no one knows how bad it's going to get. I would keep a close eye on the regional figures though as the ones you see quoted in the new and papers are very deceptive as they're always National figures.
We currently have 37.5% equity in our flat in London which is a nice cushion but we'll need to remortgage in December 2009. If prices drop by 30% we may not be able to and the cost of our mortgage would shoot up.
The truth of the matter is the market is in decline and no one knows how bad it's going to get. I would keep a close eye on the regional figures though as the ones you see quoted in the new and papers are very deceptive as they're always National figures.
We currently have 37.5% equity in our flat in London which is a nice cushion but we'll need to remortgage in December 2009. If prices drop by 30% we may not be able to and the cost of our mortgage would shoot up.
Idaho
continuity character
Yeah - buy it.
It isn't a poor financial decision at all. You are looking to buy something fairly abstract and difficult to quantify - namely stability. You aren't looking to speculate on property values and you are buying a 2 bed flat in London (which is about as recession-proof a property as you can get).
And the most significant thing to remember is that you house won't drop in value at all after you buy it. While you are staying in it the value of it won't change one bit. In fact to you and your family it may well increase in value. It is only when you sell something is it revalued in the eyes of the marketplace. It does make me laugh when people buy a place and say they have "made" £40k on it when such value is entirely notional.
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