w_n_s Posted January 22, 2009 Share Posted January 22, 2009 bit of advice from someone who is fast approaching negative equity but not quite yet (but who luckily has a 5 year fixed mortgage deal). Don't buy now. Prices are still going down. A guy in work is panicking too, he was reading the media which was indicating latest price rises. I gave him a link to here. I bet he goes and buys in the next couple of months anyway. Prices can't rise and will only fall until everyone knows where the economy is at. Quote Link to comment Share on other sites More sharing options...
Swipe Posted January 22, 2009 Share Posted January 22, 2009 bit of advice from someone who is fast approaching negative equity but not quite yet (but who luckily has a 5 year fixed mortgage deal).Don't buy now. Prices are still going down. A guy in work is panicking too, he was reading the media which was indicating latest price rises. I gave him a link to here. I bet he goes and buys in the next couple of months anyway. Prices can't rise and will only fall until everyone knows where the economy is at. With advice like that, why do you still consider yourself a bull? Quote Link to comment Share on other sites More sharing options...
tiggerthetiger Posted January 22, 2009 Share Posted January 22, 2009 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. That boat is stuck at harbour,the hull is holed and rusting away,with the port fees overdue.. Quote Link to comment Share on other sites More sharing options...
tiggerthetiger Posted January 22, 2009 Share Posted January 22, 2009 Your wish is grantedActually, 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. On the other hand though....maybe,coulda,woulda,shoulda,,, Quote Link to comment Share on other sites More sharing options...
chelston Posted January 22, 2009 Share Posted January 22, 2009 House prices won't hit bottom for years yet. Houses will be at 3 -4 times average earnings for the lucky few in work. The average suburban terrace in outer London that was 300-400k at the peak will be 75k-100k and will stay at those levels for many years. Miss the boat? Not a boat I would want to board. In Japan property was still sliding a generation later. And we are in worse shape than Japan. Quote Link to comment Share on other sites More sharing options...
nickd Posted January 22, 2009 Share Posted January 22, 2009 Whether its sensible to buy or not now depends very much on how much deposit you put down. If the deposit is small, you risk negative equity, and mortgage payments will be large, and severely affected if interest rates rise, and losing your job could lose you the house. Waiting it out seems good. If your deposit is large, it may make perfect sense to buy, because otherwise you waste money on rent and get a cr*p rate of return now on your savings. Plus, what you do borrow, you can lock in at an interest rate which may not be available in 5 years time. And losing your job would not lose your house too. In fact if you pay less mortgage than you would have on rent its safer. You could even rent out a room if hard times hit, which is not generally an option in a rented place. You could try my strategy, which was to buy a 2-up 2-down, and wait until the market hits bottom before trying to upgrade later. Kind of a hedge. OTOH, I did that in '05, when mortgage interest rates were lower, a crash hadn't really begun yet, and the job market didn't look so shaky. Maybe now's not the best time. Then again, renting is a rip-off anyway .... Quote Link to comment Share on other sites More sharing options...
redwing Posted January 22, 2009 Share Posted January 22, 2009 With advice like that, why do you still consider yourself a bull? I can't speak personally for w_n_s but imo there are a lot of so-called bears on this forum, that are just bulls in bears clothing. A bull can easily spot that prices are falling and that they will continue to fall for some time. Only a complete idiot would recognise that. A bull is someone who still thinks that property is a good long term bet. They're rubbing their hands with glee at the prospect of picking up a house cheaply in a year or two then making the sort of gains that we had in the 2000s. There are too many people like that on here. Masquerading as bears. At least w_n_s knows what he is. I think the true bear debate needs continual stoking. We are in for the most god-almighty awful property crash. There is no light at the end of any tunnel. There won't be good times again in even the medium term. Whether there will be in the long term (25-50 years) is in itself debatable. There is the prospect that property will never 'recover' to the heights of 2007 ever (or in our lifetimes whichever is shorter). This time it's different. Quote Link to comment Share on other sites More sharing options...
w_n_s Posted January 22, 2009 Share Posted January 22, 2009 With advice like that, why do you still consider yourself a bull? denial to the very end. Quote Link to comment Share on other sites More sharing options...
Let-them-Burn Posted January 22, 2009 Share Posted January 22, 2009 This one will be about unemployment and hyperinflation.Buy, if you can guarantee your employment and salary for the duration of your mortgage. If you are scared where interest rates could be going, there are 10 year fixed rate mortgages out there at 5.29% and GBP99 fees. If the house ticks all the boxes and you don't need to move again for a long time, then get that 30% off peak price and cap your mortgage payments as this economy rollercoaster has just started. For what its worth, I'll be waiting another 12months. Quote Link to comment Share on other sites More sharing options...
threetimesdead Posted January 22, 2009 Share Posted January 22, 2009 (edited) 1990 £59,5891991 £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. Your data and, hence, the advice based on the data is useless. There was no QE and hyperinflation in that recession. Edited January 22, 2009 by threetimesdead Quote Link to comment Share on other sites More sharing options...
shindigger Posted January 22, 2009 Share Posted January 22, 2009 With todays repo and arrears news, you have ZERO to worry about as regards HPI. Just keep your job. Quote Link to comment Share on other sites More sharing options...
Executive Sadman Posted January 22, 2009 Share Posted January 22, 2009 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. I doubt missing the boat will be a problem, after the last housing bust prices stagnated for a number of years. Did horseface Beckett spook you with her mumbo-jumbo? Quote Link to comment Share on other sites More sharing options...
Visa Steve Posted January 22, 2009 Share Posted January 22, 2009 Banks have no money to lend to prospective buyers of property unless you put down a hefty chunk. They are only being encouraged to loan to business customers. I believe that the right time to buy is when you see 95% mortgages being offered again across the board. Although this will not mean we have house price inflation. Quote Link to comment Share on other sites More sharing options...
south_side_sceptic Posted January 22, 2009 Share Posted January 22, 2009 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. Exactly what I've been thinking to be honest. If you could get a fix at 4% for 5 years at the end of this year or start of next I would think about buying then. Quote Link to comment Share on other sites More sharing options...
geoffk Posted January 22, 2009 Share Posted January 22, 2009 (edited) Banks have no money to lend to prospective buyers of property unless you put down a hefty chunk. :lol:They are only being encouraged to loan to business customers. I believe that the right time to buy is when you see 95% mortgages being offered again across the board. Although this will not mean we have house price inflation. 95% to return!! don't hold your breath..It will be a long time before 95% return on any large scale:lol: Edited January 22, 2009 by geoffk Quote Link to comment Share on other sites More sharing options...
w_n_s Posted January 22, 2009 Share Posted January 22, 2009 (edited) Your data and, hence, the advice based on the data is useless.There was no QE and hyperinflation in that recession. Also if the rumours are to believed about housing shortages, then this will also affect how low things go and for how long. All the discussion over whats going to happen is a waste of energy. Noone knows how bad things are going to be. You are better using your energy into figuring out how to make money (or accrue assets) that will help you through hard times whenever or however they might occur. (whether that is now or in the future). Property is not the answer. Hard work is the new get rich quick scheme and rightly so. I've never been in debt to a credit card in my life. All this talk of credit crunch has me thinking "What credit crunch?". I was never dependant on it, but I am being punished with a lower house value and crap interests rates on my savings all because some people are greedy. Don't get me started on people who are fully capable of working, but claim benefits for years because after bills and food etc "it pays better than working". http://news.bbc.co.uk/1/hi/magazine/7816500.stm makes my blood boil . Also, lets not forget that there are supposedly LOTS of FTB's out there holding off. Can they all stay where they are forever??? I'm assuming circumstances will change for some and they'll soon be forced to have to make a choice. You could see a snowball effect in that once some FTB's start to move, the rest follow suit. This probably won't cause a rise in prices, but will see less houses available. Edited January 22, 2009 by w_n_s Quote Link to comment Share on other sites More sharing options...
rumour Posted January 22, 2009 Share Posted January 22, 2009 I doubt missing the boat will be a problem, after the last housing bust prices stagnated for a number of years. Personally, I think there is a boat to miss in the housing market... When the bottom is in sight sellers no longer have as much incentive to accept significantly lower offers on their properties. Therefore as the bottom nears I believe there is a reduction in the gap between asking price and price paid. The true bottom will therefore be different for each individual case but for many we may well have already passed it (those who are currently getting very low offers accepted). Shortage of housing stock and pent up demand could mean there is in fact a bounce rather than a protracted bottom to this fall particularly when credit restrictions are eased and people once again join the national obsession of getting on the housing ladder Quote Link to comment Share on other sites More sharing options...
redwing Posted January 22, 2009 Share Posted January 22, 2009 Personally, I think there is a boat to miss in the housing market... When the bottom is in sight sellers no longer have as much incentive to accept significantly lower offers on their properties. Therefore as the bottom nears I believe there is a reduction in the gap between asking price and price paid. The true bottom will therefore be different for each individual case but for many we may well have already passed it (those who are currently getting very low offers accepted). Shortage of housing stock and pent up demand could mean there is in fact a bounce rather than a protracted bottom to this fall particularly when credit restrictions are eased and people once again join the national obsession of getting on the housing ladder Oh for Pete's sake. Where do these newbies come from with their pent up demand drivel? Why don't all you bulls just sod off to Singing Pig and get on with your love in about bounces and the right time to buy on there. AWOOGA to the whole lot of you on this thread. You're all completely deluded. Go form a website called housepricebounceback.co.uk Quote Link to comment Share on other sites More sharing options...
Soul Reaver Posted January 22, 2009 Share Posted January 22, 2009 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. You need to buy on February 14th 2010 at 1017am Any later than that and you will miss the boat Quote Link to comment Share on other sites More sharing options...
TeddyBear Posted January 22, 2009 Share Posted January 22, 2009 If your deposit is large, it may make perfect sense to buy, because otherwise you waste money on rent and get a cr*p rate of return now on your savings. Umm, ...say you spend 10,000 pounds on rent this year and the place you want to buy is 15,000 cheaper next year? Have you wasted money on rent? Quote Link to comment Share on other sites More sharing options...
Doesn't Commute Anymore Posted January 22, 2009 Share Posted January 22, 2009 Fred Harrison's 18-year cycle suggests another 3 years of falls! However, be careful of inflation/deflation, currency devaluation and institutional collapse with your savings in the meantime! Quote Link to comment Share on other sites More sharing options...
threetimesdead Posted January 22, 2009 Share Posted January 22, 2009 Oh for Pete's sake. Where do these newbies come from with their pent up demand drivel?Why don't all you bulls just sod off to Singing Pig and get on with your love in about bounces and the right time to buy on there. AWOOGA to the whole lot of you on this thread. You're all completely deluded. Go form a website called housepricebounceback.co.uk Telling people to shut up instead of defending your point only strengthens the other side's argument. Quote Link to comment Share on other sites More sharing options...
OnionTerror Posted January 22, 2009 Share Posted January 22, 2009 Then again, renting is a rip-off anyway .... What a load of utter twaddle.. You have to live somewhere, unless youre lucky to find an abandoned shed.. Let me see, rent a 3 bedroom house for 600 a month, or spend 1100 quid on an IO mortgage, and then watch you fall into hideous negative equity (and then you may lose your job)...hmmm, what a choice... Quote Link to comment Share on other sites More sharing options...
threetimesdead Posted January 22, 2009 Share Posted January 22, 2009 (edited) Fred Harrison's 18-year cycle suggests another 3 years of falls!However, be careful of inflation/deflation, currency devaluation and institutional collapse with your savings in the meantime! The prices may well fall for another 5-10 years in real terms. But in nominal terms - money terms - ticket price - they can start rising as soon as QE/printing of money kicks in. This would be detrimental for those who own a house. But it would be DEVASTATING for the FTBs and their deposits. All the "Bears" on this site have still got to come with a credible contr-argument on this one and try convince an FTB with deposit and a reasonably safe job not to buy NOW. Edited January 22, 2009 by threetimesdead Quote Link to comment Share on other sites More sharing options...
GregG Posted January 22, 2009 Share Posted January 22, 2009 Telling people to shut up instead of defending your point only strengthens the other side's argument. Not if the otherside, wisely, take his advice. Quote Link to comment Share on other sites More sharing options...
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