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rent slave

Who Is Buying Now?

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I can just about get my head around all the figures/stats/trends of the current housing market, but despite asking everyone I know I cannot find anyone who has bought for the first time recently.

A guy I work with and his wife have a household income of nearly £200k, but gave up house-hunting because they couldn't find anything they could afford that they would want to live in. If the very wealthy are intimidated by current prices, who is buying?

Does anybody know of any recent First Time Buyers? How many rich, insane people can there be? :blink:

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I don't know of any ftbs. Even out of people trading up that I know, I'd divide them into two groups: the very status conscious; and very nice people who aren't concerned with or knowledgeable about money :( .

Oh and my friends who've emigrated of course.

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There is still activity in the market, but I suggest this is 'like for like' buying. In other words people moving for job reasons and selling/buying similar houses.

This is 'carrying inflation across' from one overpriced house to another similarly priced property and probably with substantial equity.

What is clearly not happening is FTB purchases and upgrading - in the latter case the gaps in the ladder rungs are simply too big. Without this activity the market grinds to a halt - as we are now seeing.

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I can just about get my head around all the figures/stats/trends of the current housing market, but despite asking everyone I know I cannot find anyone who has bought for the first time recently.

A guy I work with and his wife have a household income of nearly £200k, but gave up house-hunting because they couldn't find anything they could afford that they would want to live in. If the very wealthy are intimidated by current prices, who is buying?

Does anybody know of any recent First Time Buyers? How many rich, insane people can there be? :blink:

Umm there are quite a few places around for less than half a million, they might even consider building thier own.

With a joint income of 200K why dont they work hard for 3 years while living economically and just buy a place outright.

All seems rather odd to me.

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Umm there are quite a few places around for less than half a million, they might even consider building thier own.

With a  joint income of 200K why dont they work hard for 3 years  while living economically and just buy a place outright.

All seems rather odd to me.

Maybe working your hole off for years to achieve success puts you off buying a terraced house in a distant suburb. In London, a one bedroom flat would cost 250k, a family home 500k+. I think they're now considering moving abroad. Can't say I blame them

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It is optimism and positive sentiment that keeps people buying property. The people who are buying now are probably thinking that their property will be worth more than what they paid for it.

Would people really buy an asset if they thought that there was a strong possibility that the asset will be worth less in the future?

Maybe the people buying now may have got a significant reduction off the asking price which makes them feel that they have got themselves a bargain but any kind of reduction negotiated from the asking price will still make the property very expensive and way overpriced.

Probably some buyers have got a good mortgage deal that involves paying relatively low interest rates which encourages them to buy a property regardless of the high price because the cost of servicing the mortgage is so low.

The real reason why people are buying now is because some people have been convinced by the regular showing of property programmes on TV that house prices can only ever go up.

Edited by Bill Gates

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Maybe working your hole off for years to achieve success puts you off buying a terraced house in a distant suburb. In London, a one bedroom flat would cost 250k, a family home 500k+. I think they're now considering moving abroad. Can't say I blame them

Yea i just dont get it though....

They could work for lets say 5 years and save as much as possible, then move anywhere else in england and buy a really nice place in cash in some leafy suburb. They would have a mass of savings, they could invest the quarter of a million and take the easy life.

Each to thier own i suppose - differnt levels of expectation and goals for the short time were on this planet.

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Yea i just dont get it though....

They could work for lets say 5 years and save as much as possible, then move anywhere else in england and buy a really nice place in cash in some leafy suburb. They would have a mass of savings, they could invest the quarter of a million and take the easy life.

Bingo. I reached that goal a couple of years ago. Only thing that keeps me attached to London these days is that I can still find well paid contract work (£650-£800 per day) - try doing that elsewhere in the UK. Oh, and I rent a place that I've rented for many years; great landlord, nice house, nice area and dirt cheap rent. Will probably move out of London for good when my landlord wants his house back, which he tells me isn't for a few years yet. So, I just carry on adding to the pile - and wait for the HPC to happen (which around these parts, it already is.) :D

Nomadd

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Guest muttley

Conversation in the pub.

"...but if you buy now you do realise that your house will be worth more in 10 years time."

ME "S'pose so.I think I'll wait a bit though"

The above conversation demonstrates how people think.Even if my friends statement is true,it is unlikely that the line between the two points will be a straight one.

In the good times people prices will go up forever,just as in the bad times they think they will never recover.Markets are always overvalued on the way up and undervalued on the way down.Bubbles and crashes always occur,they are simply a matter of degree.

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Conversation in the pub.

"...but if you buy now you do realise that your house will be worth more in 10 years time."

ME "S'pose so.I think I'll wait a bit though"

The above conversation demonstrates how people think.Even if my friends statement is true,it is unlikely that the line between the two points will be a straight one.

In the good times people prices will go up forever,just as in the bad times they think they will never recover.Markets are always overvalued on the way up and undervalued on the way down.Bubbles and crashes always occur,they are simply a matter of degree.

It depends on how long you can finacially hold your breath for.

Whenever i hear the "in the long run house prices go up" I instantly feel mentally drained.

Prices in the long run have gone up in the past and probably will do in the future but people need to realise that long term plans can only be met by achieving short term goals.

If you need 500 quid now.. right now and you've not got it then it really dosnt matter that the house that you will own in 25 years time will be worth half a million.

You have to be able to meet your short term obligations....

My usual answer to the "in the long run house prices go up" is

"yes, which is why it seems weird that people let themselves be repossessed, surely they must know that the price will be higher in 10 years time"

At that point i walk away and find something else to do.

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More importantly,

I think someone has found out Bill Gates password to HPC and is posting under his "handle" either that or Bill swallowed some civility pills by mistake.

:D

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Conversation in the pub.

"...but if you buy now you do realise that your house will be worth more in 10 years time."

ME "S'pose so.I think I'll wait a bit though"

The above conversation demonstrates how people think.Even if my friends statement is true,it is unlikely that the line between the two points will be a straight one.

In the good times people prices will go up forever,just as in the bad times they think they will never recover.Markets are always overvalued on the way up and undervalued on the way down.Bubbles and crashes always occur,they are simply a matter of degree.

Most people have no interest in, or knowledge of finance, money or the economy. Let's face it, many don't even have a grasp of basic arithmetic (and that includes a lot of people who are wealthy and "educated").

Do they spend hours thinking about whether to buy or not, what might happen in the future etc? No - they just go with the conventional wisdom that house prices always go up. That is because in the long run in this country they always have.

Ask 100 people in the street if they think now is a good time to buy a property. I reckon at least 90% will have no idea what are talking about or answer yes.

In my opinion, we have to thank the banks for putting an end to all this. The only reason people are not buying is because they can't buy anything even if they stretch to the very maximum that the banks will lend. If they could borrow 10x or 15 times income, I think many would.

Fortunately the banks aren't so stupid as to lend them this much, as they know it will quickly damage both their profits and reputations. They think they have stretched it to the limit as it is. There is no way they will increase borrowing multiples above where they are now.

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I know a few people who have bought this year.

I finished a training programme last year. everyone who completed the 4 year training (8 people) are looking at or have bought a house. The wage jumps up by 10K when the training finishes so most buy property as they are fed up living with parents and earning a few grand a month. Or spunk it all on cars/bikes/women.

My mate and his bird have just bought a 2 bedroom house for 180K in yateley. I tried to tell him that it wasnt a good time but he reckons that the market may drop, but it will rise again (in the long term view). He also said that if he could afford his mortgage now then he's happy. He is one of these people who feel that he's right your wrong always.

I want to buy, but instead I'm waiting and saving. Got a nice deposit for a house which keeps growing. I'm in no rush to buy so waiting is fine for me. Though my mum would probably like me gone.

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Conversation in the pub.

"...but if you buy now you do realise that your house will be worth more in 10 years time."

ME "S'pose so.I think I'll wait a bit though"

The above conversation demonstrates how people think.Even if my friends statement is true,it is unlikely that the line between the two points will be a straight one.

In the good times people prices will go up forever,just as in the bad times they think they will never recover.Markets are always overvalued on the way up and undervalued on the way down.Bubbles and crashes always occur,they are simply a matter of degree.

Yes, but what if you need to sell in five years? :o

A question. What are incomes like in the UK? You guys talk about housing prices being X amount. What are incomes?

For example, where I live (Northern Nevada) a house, just an average house will run you about 300K USD. An average income is about 60K a year. So, the average person can not afford to buy just a house at todays prices. It is worse in other areas. Like Orange county Ca (L.A.). They have an affordabiality of 5%. Meaning only 5% of the population can afford to buy the mean priced house.

Karen

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I guess they must do - otherwise why would people buy cars?

People buy cars because they 'need' them or like them - it doesn't matter which - but cars have built-in obsolesence.

Cars (apart from classic cars), historically, have never been seen as an asset. Houses, by contrast, are seen by the vast majority of people as their single, only, (and, by definition,) largest asset.

Houses / cars - the rationale behind the purchase decisions - simply cannot be compared.

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Most people have no interest in, or knowledge of finance, money or the economy. Let's face it, many don't even have a grasp of basic arithmetic (and that includes a lot of people who are wealthy and "educated").

This is my experience of people I know who are buying now - mostly well-educated, intelligent people, but who don't really look at anything beyond their own lives or see how factors beyond their control can affect things.

Of the people I know who are buying now or have recently bought in London, one couple think they have got a good deal because their offer of £5k less than the asking price was accepted after 2 years of having this turned down, but they don't believe prices will go down any further - they can't offer any reason as to why they think this though. I suppose they are just sick of waiting and will avoid looking at house prices once they've bought.

However, another couple I know actually paid over the asking price (in London earlier this year) to gazump another buyer and have furnished the flat (everything brand new, top of the range) entirely on credit. He works in recruitment sales though, so while he can often earn alot in the good times, it will certainly be effected by any downturn.

I am still constantly hearing 'rent is dead money' and 'get on the ladder as soon as possible', but am ignoring it and continuing to save,

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Guest absolutezero

A colleague of mine is about to buy a house (terraced, £100,000 :rolleyes:).

I told her the market is about to go tits up and she could get it cheaper in 3 years or so.

She says she wants to get out of the parental house and can afford the mortgage payments (£600 a month or so but is always skint.).

Renting is "dead money" despite my demonstrations of otherwise.

I tell her the price will drop and her reply "It'll be worth more in 10 years even if it does drop".

I tell her "why spend £600 a month when you could spend £400". She doesn't seem bothered.

I ask her "what if interest rates shoot up?" Again, she's not bothered.

"What about negative equity?". That doesn't matter unless you're trying to move.

I do worry about her because as soon as she gets paid she is overdrawn and shes about to buy a house in the biggest housing bubble we've ever seen.

EDIT: She doesn't even haggle over the price.

Edited by absolutezero

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I finished a training programme last year. everyone who completed the 4 year training (8 people) are looking at or have bought a house. The wage jumps up by 10K when the training finishes so most buy property as they are fed up living with parents and earning a few grand a month. Or spunk it all on cars/bikes/women.

Yes, there are a couple of people at my workplace who have got good promotions and go from being FTB bears (not the FTB Bear obviously) to being FTBs. Also another chap with an inheritance coming in, who went from bear to bull.

However these numbers will be limited, and more limited than sellers whose circumstances change.

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A car is not an asset. It is an expense.

Karen

We have to be a little careful to avoid playing with semantics :)

I personally hate it when the comparrison of a car and a house are used

3 years to pay off the car loan... 25 years to pay of a house loan.

If something that i want is worth £1 i might pay £2 and not care in the slightest..

If something is worth £50K i would not pay £100K for it.

Its relative to the the money you have, if you earn £500K pa you might not care if you pay £100K for the house.

I see the point BlueLady was making though I just hate the way the car analogy has been used in the past as justification of depreciating assets / negative equity.

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My sidekick at work is just buying now, in Peckham/Crystal palace for about £200k. God knows why, he's not dim financially. So has one of the young accountants for a similar price. I don't get it - I earn about double what he does and I can't see how its a good idea.

I put it down to havng been more mobile in my life, and just not caught by the obsession with bricks and mortar. If I can rent cheaper (even in the long term) then I will. A house is just somewhere to sleep and store your stuff, as far as I can see.

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Here are some of the people who are buying with their reasons for doing so:

http://boards.fool.co.uk/Message.asp?mid=9485560&sort=whole

From what i can tell theres only 1 person on that thread trying to buy, and thats with a reduction, a 30% deposit and a 35 year mortgage, .

Reason being .. bascially because they want too, presure from the other half.

Everyone should keep this in mind though...

There has to be people buying all the way down otherwise the prices wont change, so we need people to buy and chase the market down.

Edited by theChuz

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  • 301 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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