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MrNobody

Serious Chat About When To Buy

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Ok when house prices were steaming ahead it was easy - couldn't afford to buy so nothing to worry about.

Now the old deposit fund has gone up a bit and prices have fallen a bit, the chance is coming into view.

But when do I buy? when the opportunity comes or do I go greedy and wait for more falls risking to "miss the boat".

Bet I get flamed for that last bit.

Edited by MrNobody

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Ok when house prices were steaming ahead it was easy - couldn't afford to buy so nothing to worry about.

Now the old deposit fund has gone up a bit and prices have fallen a bit, the chance is coming into view.

But when do I buy? when the opportunity comes or do I go greedy and wait for more falls risking to "miss the boat".

Bet I get flamed for that last bit.

1....2......3.......NOW !!!!

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Ok when house prices were steaming ahead it was easy - couldn't afford to buy so nothing to worry about.

Now the old deposit fund has gone up a bit and prices have fallen a bit, the chance is coming into view.

But when do I buy? when the opportunity comes or do I go greedy and wait for more falls risking to "miss the boat".

Bet I get flamed for that last bit.

If you are dependent on a mortgage, its best to ask the banks as from what I am reading its unlikely they would give you one at present.

I guess when prices have bottomed out, and risen for a couple of years the banks will return to providing mortgages secured on property, but that is a long way off, and the intererst rate will of course be alot higher than today at a 200 year low.

Edited by laurejon

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A thing to consider, maybe, is getting a fixed rate mortgage deal before rates go right up again. If you could time that right, the interest payment savings would go a long way to mitigating buying at what some would say is NOT the bottom, or anywhere near it.

A big discount on the price would help too. :P

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Thanks - so most seems to think but when you can afford it, and get the best deal at the time (assuming you get a mortgage)

Isn't that against HPC philosophy. I thought alot of people weren't buying now not because they couldn't afford it but becuase they thought prices were going to come down further.

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Would you rather be 10 % off the bottom on the way down - not knowing that you are when you buy, or be 10 % off the bottom of the market on the way up knowing you bought pretty close to the floor?

Just mind the bull trap.

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Ok when house prices were steaming ahead it was easy - couldn't afford to buy so nothing to worry about.

Now the old deposit fund has gone up a bit and prices have fallen a bit, the chance is coming into view.

But when do I buy? when the opportunity comes or do I go greedy and wait for more falls risking to "miss the boat".

Bet I get flamed for that last bit.

When you start getting the tight knot of fear in the pit of your stomach.

Then give it another 12 months - should be about right.

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When you start getting the tight knot of fear in the pit of your stomach.

Then give it another 12 months - should be about right.

This actually sounds like pretty good advice, although it would be nice to buy during the summer and I've got the knot now.

Edited by MrNobody

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That is right. I could afford to buy in 2007 but didn't because prices were too high and had to come down soon. I can afford to buy now but am not yet because prices have quite a long way to fall still. I might not buy for 5-10 years. It depends on what happens but if this turns into a depression then 10 years + more likely. They are way overvalued. The sooner people fall out of love with property the better.

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That is right. I could afford to buy in 2007 but didn't because prices were too high and had to come down soon. I can afford to buy now but am not yet because prices have quite a long way to fall still. I might not buy for 5-10 years. It depends on what happens but if this turns into a depression then 10 years + more likely. They are way overvalued. The sooner people fall out of love with property the better.

Well thats quite the opposite of what the others were saying but still makes sense.

Fear - greed - fear - greed - which to choose?

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I love the idea that it is possible to miss the boat with the houseing market.

With stocks or currancy then a day is a long time, but how fast do you really think prices will rise when they are finally ready to go up? Look at the chart on the front page of this site and see how long the last bottom lasted. I think that in the houseing market it is totally safe to actually wait to check that the market has properly turned before jumping in.

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I love the idea that it is possible to miss the boat with the houseing market.

With stocks or currancy then a day is a long time, but how fast do you really think prices will rise when they are finally ready to go up? Look at the chart on the front page of this site and see how long the last bottom lasted. I think that in the houseing market it is totally safe to actually wait to check that the market has properly turned before jumping in.

Wasn't the last crashed primarily by interest rates though?

This ones seems to be about sentiment and lack of bank funding. Does that make much of a difference?

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Wasn't the last crashed primarily by interest rates though?

This ones seems to be about sentiment and lack of bank funding. Does that make much of a difference?

This one will be about unemployment and hyperinflation.

Buy, if you can guarantee your employment and salary for the duration of your mortgage.

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Wasn't the last crashed primarily by interest rates though?

This ones seems to be about sentiment and lack of bank funding. Does that make much of a difference?

Hit the nail on the head there. This crash is very different to the last one. The primary driver of the unparalleled speed of this crash is the lack of funding/liquidity, which remained constant during the last crash, but then it was purely confidence that was driving prices down. This time we have an artificial liquidity restraint, as well as confidence.

The government (and the opposition parties) and big business know damn well that liquidity must return to slow and then end the recession. WHen it does, I expect prices to bounce back far quicker than last time. Particularly when you add in the supply constraints that no new-building for a couple of years will create.

This may yet get much worse. But the recovery will be far quicker than the last crash's charts seem to suggest.

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Thanks - so most seems to think but when you can afford it, and get the best deal at the time (assuming you get a mortgage)

Isn't that against HPC philosophy. I thought alot of people weren't buying now not because they couldn't afford it but becuase they thought prices were going to come down further.

i say buy when you can get the place you want at the right price , there are a lot of people on here who sold and are waiting for the bottom so they can cash in , if you are buying it as a home and you see what you want then go for it thats what i am going to do

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Wasn't the last crashed primarily by interest rates though?

This ones seems to be about sentiment and lack of bank funding. Does that make much of a difference?

yes but interest rates are only relevant as back in the 90's peoples mortgages were a lot lower , most people have borrowed large amounts of money over the last ten years so even a 4 or 5% rise in interest rates will cripple a lot of peoples finances, and how do you think the banks are going to recoup their losses when we finally come out of this situation interest rates will rise considerably to balance out their books

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if you are tired of renting and want a 'home' go for it - if you can afford the payments if interest rates rise, if you can get a good deal on a mortgage, if you can factor in a discount for future falls in the offer you make, if you are buying in an area and a house that will suit you for a good number of years (in case you are stuck there for that long) and you keep some of your savings just in case. Life is too short to try and get everything right and most of us 'muddle through' and learn from our dodgy decisions. ;)

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1990 £59,589

1991 £54,549

1992 £52,189

1993 £50,130

1994 £51,329

1995 £51,086

1996 £51,369

1997 £55,812

1998 £62,905

You aren't going to miss any boat. Look at the average house prices (according to Nationwide) during the last crash. The peak of the bubble was 1990 and the bottom was 1993. Prices pretty much stagnated for 3 years. I remember this because I bought my first house for £50k in 1995 and sold it for only £1k more in 1997.

Yes, people are correct about the interest rates, but then who knows what dizzy heights they will go to in future to pay for Gordys mess. He has to inflate his way out of this, it's his only option. My intuition is buy at 40% off peak which will be mid 2010. But get a mortgage agreement in place in Spring 2010 (which lasts 6 months) so you can get a good long term (at least 5 years) fixed rate.

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although it makes some sense to buy when you can afford to, an extreme example would be wanting a burger and having a credit card with 10k limit in your wallet. you wouldn't buy it for 10k just because you were hungry and 'you could afford to'.

At the moment there isn't one single sign of the housing market picking up besides the totally misplaced rightmove hit-count figures which only show more people are looking to see how far prices are dropping. At least one of the main housing/economy indicators should be looking positive before the nerves appear, and then still wait a lot longer for a few more to turn.

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According to former chief economist at Barclays, Michael Hughes, the housing market will bottom out in about 2017.

Buying anytime before then means you're probably going to be waving goodbye to some, if not all, of your deposit. And you'll certainly have the opportunity cost of what else you could have done with your deposit.

Here's what Hughes has to say:

I think this is the beginning of a new era. We'd had a remarkable period where people became very wealthy.

In fact by the end of 2007, the wealth of individuals in the UK was eight times their income and that compares with the long-term average of somewhere between three and four times.

So people became very wealthy and very confident because their house prices had gone up, share prices obviously had gone up, and so indeed had you know various other assets.

But of course that doesn't last and what we've now started to see is an adjustment in all these markets and I don't think we will see the confidence rebuilding probably for a generation, so I'd be looking at nearly twenty years.

In the case of the UK particularly where housing is such a big part of our lives, that is now being questioned as well because house prices frankly have only begun to fall and if you look back in time they peaked in the second quarter of 1989 but they didn't reach a trough until the fourth quarter of 1995, so that's six and a half years later.

Arguably this time it's going to be a bigger cycle.

The peak that we saw in 2007, in the third quarter of 2007, may not deliver a trough for about ten years onwards, somewhere around 2017.

So against that particular background, I don't think people are going to feel making money through housing is going to be as big a part of their lives as it has been.

Time to get a life and stop worrying about buying pwoperty.

edit : Link

Edited by redwing

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Ok when house prices were steaming ahead it was easy - couldn't afford to buy so nothing to worry about.

Now the old deposit fund has gone up a bit and prices have fallen a bit, the chance is coming into view.

But when do I buy? when the opportunity comes or do I go greedy and wait for more falls risking to "miss the boat".

Bet I get flamed for that last bit.

Your wish is granted

Actually, I think it is a serious question, if inflation does take off then the old wisdom of 'stretch yourself as far as possible' would apply again. Used to be the case in the 1970s, since inflation would vaporise your mortgage in a few years.

Of course, if deflation takes serious hold then any form of debt could get you sucked into the debt deflation death spiral.

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According to former chief economist at Barclays, Michael Hughes, the housing market will bottom out in about 2017.

Buying anytime before then means you're probably going to be waving goodbye to some, if not all, of your deposit. And you'll certainly have the opportunity cost of what else you could have done with your deposit.

That just about matches my prediction of 2016. And that's if we don't have a japanese style lost two decades or worse - at least they have a decent manufacturing base. What are we going to do in the future?

Property will fall for several years and then level out over several years. There are too many of these paniciky 'when to buy' threads appearing on this site and they are all getting very tiresome. Come back in a few years and then lets have a serious discussion about it.

Edited by munimula

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  • 284 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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