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House Price Crash Forum


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About Wannabebear

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  1. Hi, just wanted some advice from people on whether to buy a property that is in good order vs one that needs doing up. A rough outline of my situation is below: 1. Im married with 2 children under 4 years old 2. We are searching in the Wokingham-Berkshire area 3. Our house criteria is 3 bed, decent garden with car parking under 250k. [This is rare, only 2/150 properties in our search meet this at this price point] 4. We are FTB's. 2 house meet our requirements, they are about 1/2 mile apart: 1. Victorian - 100ft+ garden, extended and extremely well finished inside. I have scoured the inside of the house and found a broken floor tile, that was it. The 3 bedrooms are a decent size for a Victorian house. We could move in and not have to do a thing. Built in dishwasher and halogen hob in a huge kitchen won me over... 2. 1950's - 50ft garden, backs onto school playing fields, which we don't mind. Needs modernisation, but not renovating. Could move in and live in it fine, would need to buy fridge, washing machine, etc. In time we would need to redo the bathroom and kitchen and knock 2 walls through. Needs a new laminate floor and the doors of the conservatory need replacing. Its been rented for 15 years and not maintained to a high standard so it is a bit tatty. We would do it up ourselves. Both houses are very equal in floor space. We can get the Victorian for 250k and the 1950's house for 231k. So 20k difference, or about 36k over the lifetime of the mortgage. A lot of people I ask tell me to buy the one that needs work. But the difference in payments every month is only £100. It seems to me like we could easily throw 5k at the house that needs doing up over a few years, it just does not seem worth it, plus all the time spent on it. What could be an issue for us is re mortgaging in 2 years time. If the value has dropped then we will struggle to get a decent rate as the LTV will have increased. I dont know if making the right choice in property can protect against this, vs the market situation as a whole. Of course we could rent (currently living with my mum which is not ideal) but that would be stuffing 10k+ away per year into a landlords pension fund. thoughts please? Nick
  2. Screw it, lets do it. If anyone has a better idea to show off the collective power of the people then please interject. To be honest, I'm getting pissed off with the whole thing, it cant get worse by doing this, can it? This deserves a facebook page to gather some momentum
  3. Just to clarify my take on paranoia; I am able to believe that the government does not want house price falls, as it would be politically unpopular. Besides, it is true that most MP's are also BTL landlords. I draw the line at the BBC removing posts mentioning high prices on its comments though.... Or that news stories are somehow created out of thin air to support high house prices. House prices vary massively from region to region. Please forgive this massive understatement. I live and work in the SE in electronic engineering. Any country neighbouring London is hugely skewed because its commuter belt. Its basically got to the point where I cannot really afford a house in my region of work. Its true Swindon and Bristol has small pockets in what I do, maybe i should uproot the family and move there. I don't see house prices falling in Berkshire as i do the same search every Monday, the labour market is too strong. Maybe I will be proved wrong in time...
  4. There was a thread on here a while back, pointing out the massive paranoia exhibited by some members on here. Wish I could find it again. There are many interesting comments on economics here but to suggest these people are being paid off by the CML? That the BBC moderate comments on high house prices? Please.... We should be happy that the BBC actually showed this at all. Its called raising awareness and its a good thing. The main blockage at the moment for FTB's IS the huge deposit requirements. After that, we have the issue of high prices in general. Now we could explore the argument that high house prices have inadvertently led to the deposit requirements but we are where we are. There is no way the government/banks/vi's will let house prices fall. Low IRs, extra support for BTLs - whatever it takes to support it. I have said it before about inflation, we will have to suck it up. Sad but true, so we may as well forget about it and get on with life. The banks invest speculatively with OUR money. They should be providing a socially useful function in return, as opposed to the ruthless pursuit of ever increasing wealth creation for themselves.
  5. I guess it depends on how many people are actually at the tipping point. We will all suffer from VAT, NI, inflation and base rate (i dont personally see them lifting IRs much at all). I did see a stat on mortgage arrears once. Maybe there should be a repo + arrears tracker on this site, unless there is one already!
  6. Really? Take my mother, bought at 25, paid off mortgage, now 65. Don't see her ready for a care home just yet...
  7. catmandu: This is kind of my point - who really needs to sell? When houses were more affordable and we had a fully functional ladder, people could progress upwards. So settle down, have a kid, get a 2 bed. Have another kid, get a 3 bed. Once the kids are out of childcare etc maybe they have some more money available, move up and get a 4 bed until retirement with a view to downsize at some point. All this is because they had the option to do so. Cant do that now so people will make do. Have 1 or 2 kids and put them in the same bedroom. My Job is now 2 hours away but so what, commute. None of this will kill people, it just makes everything a little harder. Of course, everyone dies and those properties need to sell. And those type of properties (bungalow, old peoples homes) will be bought by people who have owned for like 40 years and have tonnes of equity. Alright, you can make a case out of separations I suppose. Anyone have any stats on divorce rates? Just what is going to cause a flood of properties onto the market - only forced sellers as I see it. These would be people who bought at 0.5% base rate (last 2 years?) and wont cope with small IR increases and high general inflation. Last I saw repo rates were dropping due to low IRs. I think we were running at 10,000 in the 3 months prior to October in 2010. Maybe we will start to see these pick up again in 2011?
  8. Fellow: Well i do recognise this - "This may come about slowly through the effect of inflation effecting luxury purchases of course, but this is going to take time". Maybe I was not as explicit as I could have been. But when they bought at record prices as you put it, IRs were not at 0.5. So now all mortgages are cheaper than they ever have been for existing home owners. So they already have a big cushion. My belief is IRs will be sub 1% for quite some time. Inflation will be through the roof, but I think this is all part of the grand plan.
  9. Was just wondering what mechanism will actually cause falls in house prices. Like any market, once sellers exceed buyers I guess. Well FTB's are priced out of the picture and transactions are through the floor. So not that many buyers about. But what would actually make someone sell? The way I see it, no one is going to sell their house for less than they bought it for [neg equity], or indeed what they believe it should be worth now [uK property owner mindset]. So they would need to be forced sellers, with no alternative left, i.e - they cannot afford the mortgage any more and have to move to a cheaper place or downsize. If some one loses their job and gets another one and has to commute 3 hours a day instead of 1, they will do it. If they have another baby and it has to share a room with a sibling, they will do that. Anything but sell for less. Unemployment vs IR vs Inflation I think people can cope with inflation. They will adjust, shop in Asda and not Sainsburies any more, no foreign holiday, maybe negotiate a day working from home per week, no more take outs or eating out. You get the picture. It will hurt but people will cope. IR - I really dont see these increasing much. They have been far too low for too long so we know inflation is not the target any more, its protecting home owners that counts. And although I hate to admit it I can kind of see why. People can handle inflation but as long as they can pay the mortgage, that's all that counts to keep the whole game going. If IRs raise back anywhere near 4% or 5% that's going to hurt everyone's mortgage payment and they don't want to risk too many mortgage defaults and repo's. Anyway, they want inflation to erode the debt we have. Unemployment is the only solid mechanism I see for price falls. This may come about slowly through the effect of inflation effecting luxury purchases of course, but this is going to take time. Of course there are more public sector cuts to come. I know the last unemployment measure was 7.9% back in December 2010. Do we know what the forecasts this year for further cuts? Surely the govt know how much they can push it before it starts to effect house prices. I really don't see huge house price falls coming, just because people adapt and can survive just where they are. They will stick it out until the last. I can see a steady downward pressure on house prices though, maybe 5% a year for the next 5 years or something. That will be the return to the mean. Houses are not like stocks and shares that can be sold in an instant, they are peoples homes that people want to hold onto. Unfortunately this is the reality that I have come to understand. Us FTB's are going to be kicking around for a while yet, trying to save a huge deposit in a high inflation, low IR environment. Maybe i will be buying in 2015. thoughts please
  10. I don't know why the government don't just nationalize the housing losses on a personal basis. So starting with the 2007 peak, and then adding 10% a year to that, just to keep the dream alive. They can pay for that by introducing a rental tax. So we HPC'ers can never afford a home, and the BTL lot and property owning class can sit back and reap the rewards. After all, it was an American problem that came blowing this way. Without that, house prices would have never stopped rising!
  11. Anyone know anything more about them than has been in the general press? Apparently you have to have an appointment with them, which i don't really disagree with ti be honest. I might do it and find out what they have available for FTB's. Will I be able to get 90% at a decent rate being an FTB?
  12. What i should clarify is that I meant 'life on hold' with regards planning for a family. Life goes on renting or owning as many of you have said. Plus you can be happy renting too! Its just that lately I have been feeling in a total minority amongst my peer group, they all settled down and bought years ago. I was kind of late settling down but now I have my own little family. I was wondering if there is or is going to be some sort of social change - ppl having families later, etc. I would still like to hear the opinions of more women, as maybe they have a different outlook when it comes to having kids. Maybe we need to wait 10 years to know the answer
  13. The people who claim that renting is ok must be earning enough to pay the rent + enough to save for buying or continuing to rent after they have retired. If you are renting and are unable to save I would say your going backwards - putting off the start of paying off your house. That's gotta be 50K single salary at the very least in the South East.
  14. Funny, when I say I am renting, all i get is why don't you buy? Then I have to go down the whole house price thing, with 25% deposit, etc. Why dont you do shared equity, etc etc. I don't really believe owning your own house is that bad is it, as some people like to make out. Yes i know the banks technically own it, but your not getting chucked out if you keep up the payments right? Also, home is somewhere you can make your own, decorate it and do stuff in the garden. You know the nesting thing women do, well that's limited in rental.
  15. Well traditionally you move in with someone, then buy a house then have kids right? The situation is different now. I am sure a women has a different mindset when it comes to having children too - stability. I find a lot of renters of family homes are off working in the East or the US on short term contracts. We have been on the end of this twice now. I am not saying your life is over because you don't have a house, far from it. Just wondering about the social change - if any.
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