Does property still make sense?
Does it make sense to buy property? Halifax said this week that house prices are falling at the fastest rate since the crash of the early 1990s. Will today's buyers become trapped in negative equity? Patrick Collinson asks the pundits: are you mad to buy a property right now?
"No, you're definitely not mad to buy at the moment. You have to look at it all relatively. The reality is, people talk about a dip in the market but if you are buying a home today you are going to be in it for five, 10 or 15 years.
"Over that sort of time period it is just not going to be a problem. Even if your home does come down a little in value, that just means the next one you buy will be cheaper as well."
She says that potential buyers are in the grip of irrational fears. "Interest rates really aren't at that high a level and it's quite a different economic climate to the early 1990s when rates were at 15%. People aren't in a position where they have to sell because they can't afford the mortgage."
She warns firmly against trying to play the market.
"I think you would be a right idiot if you sell now and try to make a profit by buying back later. I know people - even quite clever guys - who have tried to do this in the past, believing that prices were at a peak. Within six months they couldn't afford to buy back the flat that they had sold."
But the true idiots, she says, are those who are tempted into investing in buy-to-let properties at this stage of the market. "I have thought for some time now that buy-to-letters are bordering on the mental, buying properties on yields of just 3% or 4%."
There's no sign of any downturn in the market for TV property programmes. Beeny has recently been shooting a new series of Property Ladder for broadcast early next year and even if interest in property does dry up, she has an alternative career up her sleeve. She's the founder of the UK's fastest-growing dating website, mysinglefriend.com which now boasts more than 150,000 users.
Edited by drrayjo, 08 December 2007 - 09:22 AM.