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Knowing What We Know....

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Viewing a property later today.

Purchased in June 2003 for 240K, on the market for 270K.

Being a kind chap, I am thinking of offering 240K on it as it needs some work (gas CH, gas installation basic renovation and moving a couple of stud walls round etc)

What you think? Its a 4 bed detached in North Wilts....

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God, I hate these "pick a year" questions, as they assume that the boom was uniform in both time and geography, which it wasn't.

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Halifax index was £130k in June 03

Currently Halifax is £154k

I expect that avge to drop some way below £120k.

I also think that if the house you are considering bidding for is on the market for £270k, then they are probably hoping to get £240k. In effect you will have shaved nothing off the vendors expectations.

Go in at £195k. Remember, if you arent embarrassed by your bid, its too high!

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Yeah if you think this'll be the shortest HPC in history with no overshoot for the first time ever, go for it, fill your boots

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Halifax index was £130k in June 03

Currently Halifax is £154k

I expect that avge to drop some way below £120k.

I also think that if the house you are considering bidding for is on the market for £270k, then they are probably hoping to get £240k. In effect you will have shaved nothing off the vendors expectations.

Go in at £195k. Remember, if you arent embarrassed by your bid, its too high!

I did think of that. Its on a busy road and is quite close to a minor substation, but I was thinking they are unlikely to go below the 240K mark as that is what they paid for it... It gets psycological doesnt it, once you go past what someone paid for it...

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I did think of that. Its on a busy road and is quite close to a minor substation, but I was thinking they are unlikely to go below the 240K mark as that is what they paid for it... It gets psycological doesnt it, once you go past what someone paid for it...

Prediction time.

There will be a new trend in the coming months and years. That trend will be people selling at a price lower than they paid. Some will transact direct with the buyer, some will do it via those nice repossession people employed by their lender.

All the same, selling for less than the vendor paid will be getting very popular in the near future.

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Prediction time.

There will be a new trend in the coming months and years. That trend will be people selling at a price lower than they paid. Some will transact direct with the buyer, some will do it via those nice repossession people employed by their lender.

All the same, selling for less than the vendor paid will be getting very popular in the near future.

Fully agreed, don't forget they may well have some equity, pretty likely. At this time i think a lot of people will just be glad to get most or any of their equity out. But watching the docs on TV there are so many muppets who think they can price their house according to the amount of money they need to buy the next one for cash or something. I think you're a bit nuts to think about buying now but completely crazy to make a first offer over 200k. You could always increase it if you had to.

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If it's your dream house and you can afford it, then buy it. But by the sounds of it (substation, busy road) you're making a compromise on what you want.

If you currently own a house it makes little difference anyway, but my advice in that case would be sell it and rent for 2 years. If you're renting at the moment then don't buy this year, and possibly not next year either.

Patience is a virtue, and in this HPC patience will save you tens of thousands of pounds. (Although I understand you might be getting frustrated, as I am. I've been waiting for this crash to come along and bottom out since 2005! I'm resigned now to waiting for a full 6 years before it's time to buy)

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If it's your dream house and you can afford it, then buy it. But by the sounds of it (substation, busy road) you're making a compromise on what you want.

If you currently own a house it makes little difference anyway, but my advice in that case would be sell it and rent for 2 years. If you're renting at the moment then don't buy this year, and possibly not next year either.

Patience is a virtue, and in this HPC patience will save you tens of thousands of pounds. (Although I understand you might be getting frustrated, as I am. I've been waiting for this crash to come along and bottom out since 2005! I'm resigned now to waiting for a full 6 years before it's time to buy)

Good advice. You have to wait until people really have got it through their heads that prices have to go back to pre-bubble, and then just take your time. Near a busy road and a substation is going to be a major obstacle to selling going forward IMO. Jumping in now for any reason to me is just stupidity. We have North Korea kicking off, we are likely to see a bond market crisis of some sort. You need a state of emergency in the air to get sheeple motivated a bit. the one`s that missed the seventies have not really experienced the "government has lost control" feeling......yet.

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If you're buying a house as a home and intend to keep it for some time and can afford it, go for it.

If you're buying a house mainly as an investment - forget it for the time being and sit on the money!

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Guest DissipatedYouthIsValuable

If you need a mortgage, you can't afford it.

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No but I paid the 2001/2 price at the market peak! If I can get a better discount at the peak Im sure you can match it....

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No but I paid the 2001/2 price at the market peak! If I can get a better discount at the peak Im sure you can match it....

Thanks for the replies guys. I have been here (as you can see) since late 2005 when prices got rediculous... I rent (350 quid for a 3 bed detatched) right now, and burrowing away another 3K per month.... Thing is, I like to think I am fairly reasonable, Houses I should have been expected to afford are now coming into my reach... which is nice. Last 4 years saving have been tough, but having squirrelled away nigh on 70k, I am also thinking, f*ck 'em, they priced me out the market, I am going to take them for as much as I can.

Problem is mrs MBGA wants to buy, as saving for 4 years, saving every penny with few luxuries in between, has taken its toll, and now we are starting to be able to afford 'dream home' I can see why she wants to buy....

Concerns at the Mo:

Said bond crisis could easly push rates up considerably. I can currently fix for 10 years at 5% (abbey). IF we get a bond crisis this year, those mortgage deals will evaporate. having done a LOT of sums on Excel, rates of 7% fixed would completely cancel out any saving I am doing up to a purchase price of around 280K. Purchase Price of 240K and I can wait for rates to go up to 10% fixed. This is the deal. I reckon we are 50/50 for rates going up this year and certainly next year post-election.

We are about half way through the crash, sellers know they have to take a big hit to shift, but we still have the benefit of cheaper rates... Kind of best of both worlds. At the end of the day, all this is about is getting the cheapest house over the term of the mortgage, NOT getting the cheapest initial purchase price. Sometimes we forget about this. I still think medium term deflation is the most likely route though.

Difficult decision with LOTS of variables. :(

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Thanks for the replies guys. I have been here (as you can see) since late 2005 when prices got rediculous... I rent (350 quid for a 3 bed detatched) right now, and burrowing away another 3K per month.... Thing is, I like to think I am fairly reasonable, Houses I should have been expected to afford are now coming into my reach... which is nice. Last 4 years saving have been tough, but having squirrelled away nigh on 70k, I am also thinking, f*ck 'em, they priced me out the market, I am going to take them for as much as I can.

Problem is mrs MBGA wants to buy, as saving for 4 years, saving every penny with few luxuries in between, has taken its toll, and now we are starting to be able to afford 'dream home' I can see why she wants to buy....

Concerns at the Mo:

Said bond crisis could easly push rates up considerably. I can currently fix for 10 years at 5% (abbey). IF we get a bond crisis this year, those mortgage deals will evaporate. having done a LOT of sums on Excel, rates of 7% fixed would completely cancel out any saving I am doing up to a purchase price of around 280K. Purchase Price of 240K and I can wait for rates to go up to 10% fixed. This is the deal. I reckon we are 50/50 for rates going up this year and certainly next year post-election.

We are about half way through the crash, sellers know they have to take a big hit to shift, but we still have the benefit of cheaper rates... Kind of best of both worlds. At the end of the day, all this is about is getting the cheapest house over the term of the mortgage, NOT getting the cheapest initial purchase price. Sometimes we forget about this. I still think medium term deflation is the most likely route though.

Difficult decision with LOTS of variables. :(

Good luck when you have decided stop thinking about it and stick with your decision. Take them for as much as you can, the first offer you make is lowest possible you will pay, and you will meet somewhere in the middle after a week or two of EA poker. If you offer too much on your first offer you will kick yourself later on...

I currently regret going for a 5 year fixed, but if I was doing it again today I would be tempted.... The problem with a fix rate is the inability to get out of the deal without getting charged for it.

Edited by moosetea

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Thanks for the replies guys. I have been here (as you can see) since late 2005 when prices got rediculous... I rent (350 quid for a 3 bed detatched) right now, and burrowing away another 3K per month.... Thing is, I like to think I am fairly reasonable, Houses I should have been expected to afford are now coming into my reach... which is nice. Last 4 years saving have been tough, but having squirrelled away nigh on 70k, I am also thinking, f*ck 'em, they priced me out the market, I am going to take them for as much as I can.

Problem is mrs MBGA wants to buy, as saving for 4 years, saving every penny with few luxuries in between, has taken its toll, and now we are starting to be able to afford 'dream home' I can see why she wants to buy....

Concerns at the Mo:

Said bond crisis could easly push rates up considerably. I can currently fix for 10 years at 5% (abbey). IF we get a bond crisis this year, those mortgage deals will evaporate. having done a LOT of sums on Excel, rates of 7% fixed would completely cancel out any saving I am doing up to a purchase price of around 280K. Purchase Price of 240K and I can wait for rates to go up to 10% fixed. This is the deal. I reckon we are 50/50 for rates going up this year and certainly next year post-election.

We are about half way through the crash, sellers know they have to take a big hit to shift, but we still have the benefit of cheaper rates... Kind of best of both worlds. At the end of the day, all this is about is getting the cheapest house over the term of the mortgage, NOT getting the cheapest initial purchase price. Sometimes we forget about this. I still think medium term deflation is the most likely route though.

Difficult decision with LOTS of variables. :(

Fully understand what's going through your head.

However, if you're putting away £3k a month and already have £70k saved (good work by the way!) then in 2 years you'll have over £130k saved up. In 2 years time property prices will have really crashed and you (and the Missus) will have your pick of detached lovelies in your area for sub £200k. This leaves you with needing a mortgage of £70k and buckets of dead safe equity. Alternatively you could buy now and in 2 years time have no equity, but a much larger mortgage.

If (sorry, when) mortgage rates go up that'll bring prices down even further, so you need to weigh that up against the cost of not fixing now.

The above doesn't even consider the risk of buying now in uncertain times when you might lose your job over the next 24 months. Then you'd really kick yourself.

My opinion, hang fire, and invest £1,000 per month in the wife until the crash comes to completion. That way you'll both be happy as chuff in 2009, 2010 and 2011. Oh, and treat yourself, you've done exceptionally well to put that kind of money away and not fritter it.

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Identical house around the corner from me:

April 2001 sold for £84,000.

Feb 2003 sold for £120,000.

Nigh on 50% increase in 2 years. I'll wait for it to come off again.

Edit:

To answer the OP - have a look at the selling prices for the postcode and surrounding areas on the various websites - it should give you an idea how much further prices can fall.

Edited by Young Goat

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Fully understand what's going through your head.

However, if you're putting away £3k a month and already have £70k saved (good work by the way!) then in 2 years you'll have over £130k saved up. In 2 years time property prices will have really crashed and you (and the Missus) will have your pick of detached lovelies in your area for sub £200k. This leaves you with needing a mortgage of £70k and buckets of dead safe equity. Alternatively you could buy now and in 2 years time have no equity, but a much larger mortgage.

If (sorry, when) mortgage rates go up that'll bring prices down even further, so you need to weigh that up against the cost of not fixing now.

The above doesn't even consider the risk of buying now in uncertain times when you might lose your job over the next 24 months. Then you'd really kick yourself.

My opinion, hang fire, and invest £1,000 per month in the wife until the crash comes to completion. That way you'll both be happy as chuff in 2009, 2010 and 2011. Oh, and treat yourself, you've done exceptionally well to put that kind of money away and not fritter it.

Cheers guys....

Think I will be window shopping later ;)

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Said bond crisis could easly push rates up considerably. I can currently fix for 10 years at 5% (abbey). IF we get a bond crisis this year, those mortgage deals will evaporate. having done a LOT of sums on Excel, rates of 7% fixed would completely cancel out any saving I am doing up to a purchase price of around 280K. Purchase Price of 240K and I can wait for rates to go up to 10% fixed. This is the deal. I reckon we are 50/50 for rates going up this year and certainly next year post-election.

Question: What do you think will happen to house prices if reates go up to 7%... or higher?

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Oh, and....

This website was started in 2003, precisely because house prices were overpriced. When we get back to 2003 prices, they will still be overpriced.

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