Dr Renter Posted June 2, 2010 Share Posted June 2, 2010 So, another one bites the dust. The truth is, that I just got sick of waiting and being screwed over by government policy. House prices may rise, stay the same or fall, it has just become impossible to pedict, so I took the option that I felt hedges against the most outcomes. The bottom line in the UK seems to be that it's much better being a home owner than a renter. The decision wasn't made lightly because the bear within was still convinced that prices would drop. However I'd been saying that since summer 2009 and despite the poor fundamental, they just keep rising. I kept a very close eye on the local market, as one does, and at the start of the year there were some reasonably priced houses coming to market. However, they were selling within days, with many going to sealed bids. A house came up for sale that was reasonably priced, even taking into account that it needed some work doing to it, had 4 bedrooms with room for extension and had a forced seller due to the need to move into sheltered housing. We started at 15% below asking and to our surprise had an offer accepted at 9% below asking within days of going to market. It was bought with a 5-year fix at 3 times income, so no horrible surprises for at least 5 years!!!! The main reasons for buying were: 1. Inflation & low interest rates eroding our savings. 2. Inflation is clearly the intended outcome, so its better to be leveraged than a saver. 3. We can live in this house for ever if the market tanks. 4. Nominal price stagnation seems very likely, making it relatively easy to hop up the ladder in the net few years. So that's the story, we moved in 2 weeks ago and it's job done... family home owner. Not the outcome I expected in 2008, but a still a satisfactory one for me and the family. Quote Link to comment Share on other sites More sharing options...
porca misèria Posted June 2, 2010 Share Posted June 2, 2010 Go on then! Where's the rightmove URL? Or at least photo? [congrats on getting out of renting]! Quote Link to comment Share on other sites More sharing options...
Guest_James Toney_* Posted June 2, 2010 Share Posted June 2, 2010 So, another one bites the dust. The truth is, that I just got sick of waiting and being screwed over by government policy. House prices may rise, stay the same or fall, it has just become impossible to pedict, so I took the option that I felt hedges against the most outcomes. The bottom line in the UK seems to be that it's much better being a home owner than a renter. The decision wasn't made lightly because the bear within was still convinced that prices would drop. However I'd been saying that since summer 2009 and despite the poor fundamental, they just keep rising. I kept a very close eye on the local market, as one does, and at the start of the year there were some reasonably priced houses coming to market. However, they were selling within days, with many going to sealed bids. A house came up for sale that was reasonably priced, even taking into account that it needed some work doing to it, had 4 bedrooms with room for extension and had a forced seller due to the need to move into sheltered housing. We started at 15% below asking and to our surprise had an offer accepted at 9% below asking within days of going to market. It was bought with a 5-year fix at 3 times income, so no horrible surprises for at least 5 years!!!! The main reasons for buying were: 1. Inflation & low interest rates eroding our savings. 2. Inflation is clearly the intended outcome, so its better to be leveraged than a saver. 3. We can live in this house for ever if the market tanks. 4. Nominal price stagnation seems very likely, making it relatively easy to hop up the ladder in the net few years. So that's the story, we moved in 2 weeks ago and it's job done... family home owner. Not the outcome I expected in 2008, but a still a satisfactory one for me and the family. i agree with all your points, and i think more and more people are changimg their minds about it all, well done geetting it and being happy with it all Quote Link to comment Share on other sites More sharing options...
okaycuckoo Posted June 2, 2010 Share Posted June 2, 2010 Won't be surprised if it turns out to be a wise decision, but when things are wrong they do get put right. Some strange twists in store. Good luck! Quote Link to comment Share on other sites More sharing options...
ARIMA Posted June 2, 2010 Share Posted June 2, 2010 So, another one bites the dust. The truth is, that I just got sick of waiting and being screwed over by government policy. House prices may rise, stay the same or fall, it has just become impossible to pedict, so I took the option that I felt hedges against the most outcomes. The bottom line in the UK seems to be that it's much better being a home owner than a renter. The decision wasn't made lightly because the bear within was still convinced that prices would drop. However I'd been saying that since summer 2009 and despite the poor fundamental, they just keep rising. I kept a very close eye on the local market, as one does, and at the start of the year there were some reasonably priced houses coming to market. However, they were selling within days, with many going to sealed bids. A house came up for sale that was reasonably priced, even taking into account that it needed some work doing to it, had 4 bedrooms with room for extension and had a forced seller due to the need to move into sheltered housing. We started at 15% below asking and to our surprise had an offer accepted at 9% below asking within days of going to market. It was bought with a 5-year fix at 3 times income, so no horrible surprises for at least 5 years!!!! The main reasons for buying were: 1. Inflation & low interest rates eroding our savings. 2. Inflation is clearly the intended outcome, so its better to be leveraged than a saver. 3. We can live in this house for ever if the market tanks. 4. Nominal price stagnation seems very likely, making it relatively easy to hop up the ladder in the net few years. So that's the story, we moved in 2 weeks ago and it's job done... family home owner. Not the outcome I expected in 2008, but a still a satisfactory one for me and the family. Yup. Quote Link to comment Share on other sites More sharing options...
lulu Posted June 2, 2010 Share Posted June 2, 2010 So that's the story, we moved in 2 weeks ago and it's job done... family home owner. Not the outcome I expected in 2008, but a still a satisfactory one for me and the family. Good for you, I hope everything goes well. Personally I think you have made a good move, prices are seriously overvalued but I am now getting round to the believe that they really are not going to fall. It is far too ingrained to the British psyche that prices can only ever rise (or possibly stagnate a bit) that it will become self fulfilling. Even if prices drop slightly they wil become even more attractive to investors who are still holding cash and again all the cheaper properties will be bought for BTL. The only thing that might help would be interst rates rising but I now think that no matter what happens this simply will not happen. They will continue to fiddle and manipulate to provide justification to keep them low. Even today there was a girl at work who got married a few months ago. Both her and her partner owned one bedroom flats before they got married (bought many many years ago) they are going to keep both and let them out, and are moving into a new house they have just bought. They are not going to sell the flats as they are 'not going to be able to get what they are worth' in the current market'. So long as this behaviour is not discouraged there is no hope for the FTB's coming after them. Quote Link to comment Share on other sites More sharing options...
the stig Posted June 2, 2010 Share Posted June 2, 2010 Similar story for us. Found a great place with "motivated" (retiring) sellers. Bought at a decent discount, so a bit of protection from falling prices. Personally i think they "should" fall, but so far what i think should happen has been thwarted by govt intervention. Hey-ho. We're buying at 2x joint income so who cares. Life must go on. Seriously considering changing to Bull status. All the people i know that are still moaning about house prices are wasting money on crappy toys, cars and gadgets. I do point out that their moaning about house prices is ironic given their spending habits but it falls on deaf ears. You wanna own a house? Do what your parents did and make sacrifices! Quote Link to comment Share on other sites More sharing options...
ZeroSumGame Posted June 2, 2010 Share Posted June 2, 2010 The main reasons for buying were: 1. Inflation & low interest rates eroding our savings. 2. Inflation is clearly the intended outcome, so its better to be leveraged than a saver. 3. We can live in this house for ever if the market tanks. 4. Nominal price stagnation seems very likely, making it relatively easy to hop up the ladder in the net few years. Yip. Economics 101 and you've just secured a pass. Don't know how old you are, but I've got this horrid feeling that we're gonna get 1970s style inflation with the connivance of the politburo and the BoE. Quote Link to comment Share on other sites More sharing options...
magneticworld Posted June 2, 2010 Share Posted June 2, 2010 (edited) Interesting..seems every week a thread comes up stating "Property bought". It is a wide spread feeling i.e. patience running out etc etc and jumping in. I'm tempted too....but I have got to see the effect of that darn emergency budget. Either way I'm truly convinced that flatline or dip is inevitable in the immediate horizon i.e. rest of the year (...then again what do I know). Let's face it my area, properties are coming back on the market at somewhat reduced prices albiet very slight reductions and infact I have seen some auction homes at prices which are similar to what I saw some advertised at during the dip of 2008. This, I noticed, started happening just after the election. Curiosity can be a bad thing sometimes and in my case I need to see wtf happens after June 22 ( i.e. wtf is in that darn budget) Things may remain as they are or indeed even escalate upwards. But I'm hoping for a flatline or at least modest dip...WE SHALL SEE. Concrats though!! Edited June 2, 2010 by magneticworld Quote Link to comment Share on other sites More sharing options...
BOOM=BUST Posted June 2, 2010 Share Posted June 2, 2010 We are at the return to "normal" stage of the boom & bust cycle, good luck & best wishes for the "FEAR" Quote Link to comment Share on other sites More sharing options...
Si1 Posted June 2, 2010 Share Posted June 2, 2010 Good for you, I hope everything goes well. Personally I think you have made a good move, prices are seriously overvalued but I am now getting round to the believe that they really are not going to fall. It is far too ingrained to the British psyche that prices can only ever rise (or possibly stagnate a bit) that it will become self fulfilling. Even if prices drop slightly they wil become even more attractive to investors who are still holding cash and again all the cheaper properties will be bought for BTL. The only thing that might help would be interst rates rising but I now think that no matter what happens this simply will not happen. They will continue to fiddle and manipulate to provide justification to keep them low. Even today there was a girl at work who got married a few months ago. Both her and her partner owned one bedroom flats before they got married (bought many many years ago) they are going to keep both and let them out, and are moving into a new house they have just bought. They are not going to sell the flats as they are 'not going to be able to get what they are worth' in the current market'. So long as this behaviour is not discouraged there is no hope for the FTB's coming after them. no, behaviour like this will make the wipeout so much bigger Quote Link to comment Share on other sites More sharing options...
scottbeard Posted June 2, 2010 Share Posted June 2, 2010 Despite what some people may say, buying a house is not (and should not) be solely a financial decision. A balance needs to be struck between a financial view of matters and the rest of life. I hope the recent buyers enjoy your new homes. I have just sold my house and signed a year's rental contract. However, whilst I do believe houses are overpriced and prices will fall, my decision is in part a lifestyle choice as well: I don't want to be tied down, and i'm fed up with sorting out house repairs. Quote Link to comment Share on other sites More sharing options...
Number79 Posted June 3, 2010 Share Posted June 3, 2010 Despite what some people may say, buying a house is not (and should not) be solely a financial decision. A balance needs to be struck between a financial view of matters and the rest of life. I hope the recent buyers enjoy your new homes. I have just sold my house and signed a year's rental contract. However, whilst I do believe houses are overpriced and prices will fall, my decision is in part a lifestyle choice as well: I don't want to be tied down, and i'm fed up with sorting out house repairs. Agreed. We were just about to exchange in de08/jan09 but let the place go. I would have been buying at the bottom, had a lifetime tracker rate of BOE +0.5% and would have saved a lot of money. The house is no supposedly worth a good deal more than I would have paid, the mortgage would still have been cheaper than my rent and I would not have paid the best part of £20k in rent since. Houses have to fall a good deal further for me to break even now against the inreased mortgage costs that I will face but we do live in a nicer area and my daughter enjoys a good school now. Cant have everything but a happy daughter in a nice village isnt a bad trade off. Quote Link to comment Share on other sites More sharing options...
Realistbear Posted June 3, 2010 Share Posted June 3, 2010 So, another one bites the dust. The truth is, that I just got sick of waiting and being screwed over by government policy. House prices may rise, stay the same or fall, it has just become impossible to pedict, so I took the option that I felt hedges against the most outcomes. The bottom line in the UK seems to be that it's much better being a home owner than a renter. The decision wasn't made lightly because the bear within was still convinced that prices would drop. However I'd been saying that since summer 2009 and despite the poor fundamental, they just keep rising. I kept a very close eye on the local market, as one does, and at the start of the year there were some reasonably priced houses coming to market. However, they were selling within days, with many going to sealed bids. A house came up for sale that was reasonably priced, even taking into account that it needed some work doing to it, had 4 bedrooms with room for extension and had a forced seller due to the need to move into sheltered housing. We started at 15% below asking and to our surprise had an offer accepted at 9% below asking within days of going to market. It was bought with a 5-year fix at 3 times income, so no horrible surprises for at least 5 years!!!! The main reasons for buying were: 1. Inflation & low interest rates eroding our savings. 2. Inflation is clearly the intended outcome, so its better to be leveraged than a saver. 3. We can live in this house for ever if the market tanks. 4. Nominal price stagnation seems very likely, making it relatively easy to hop up the ladder in the net few years. So that's the story, we moved in 2 weeks ago and it's job done... family home owner. Not the outcome I expected in 2008, but a still a satisfactory one for me and the family. You have been waiting a long time if you began the vigil in the summer of 2009. A whole year is enough to break even the strongest will and its natural that you would have broken ranks. How could you have stood it for so long? Quote Link to comment Share on other sites More sharing options...
ChadzKhan Posted June 3, 2010 Share Posted June 3, 2010 You have been waiting a long time if you began the vigil in the summer of 2009. A whole year is enough to break even the strongest will and its natural that you would have broken ranks. How could you have stood it for so long? Quote Link to comment Share on other sites More sharing options...
cupidstunt Posted June 3, 2010 Share Posted June 3, 2010 You may have made a good decision, although this depends on many factors. I bought at the end of last year, for fairly much the same reasons. Interest on my STR savings had dropped and were only just covering rent, also getting worried about inflation ,and after four yesrs of renting I wanted my own place. Assumed the values would drop after I moved in (bought at 2004 price) but how wrong I've been. After six months an identical house has just sold (four doors down) at 10% more than I paid! Now here's the rub - the house hasn't been modernised since it was built in 1968! The place is a complete dump, mine had been totally refurbished by previous owner, only difference is one just sold has a slightly bigger garden. It's a mad, mad World out there, I certainly can't see prices dropping here in the SE, everything seems to be selling very quickly. Quote Link to comment Share on other sites More sharing options...
Bug16 Posted June 3, 2010 Share Posted June 3, 2010 I'll raise my head above the parapit and admit that I also recently bought a house, for similar reasons to the OP. In fact I moved into the property over the Bank Holiday. I'm sure that house prices will fall further, possibly even dramatically, but for me it was a case of the right house (I moved from renting a horrible noisey 2 bed terrace newbuild, to a nice well built 3 bed semi with decent garage and garden) in the right location for the right price on the right mortgage. Sure I could wait another year and throw another 9k on rent on the possibility of further falls or I can put that money into a mortgage right now and continue with the hard saving, as my monthly mortgage payment is a lot less than my rent, and get my mortgage paid off quickly. Quote Link to comment Share on other sites More sharing options...
Dorkins Posted June 3, 2010 Share Posted June 3, 2010 I'm 27 and don't know a single person my age who is even thinking about buying anymore. I think all of us went through a phase in our mid-20s when it felt like time to start thinking about these things, but given that most of us put such a big chunk of our income towards rent and no payrises are on the way it quickly became clear that wasn't going to happen. Unless you are on double the national average wage or have access to a big pot of (somebody else's) cash, the idea of buying even a small flat in Britain is a fantasy. That doesn't make any sense in a country with over 22 million houses and only 20 million full time workers. I don't know if it will be inflation, deflation, hyperinflation, or whatever, all I know is this won't be over until ordinary people on ordinary wages can buy ordinary houses again. Nonetheless I wish the OP all the best, it sounds like he is living well within his means so he should be fine whatever happens. Quote Link to comment Share on other sites More sharing options...
The Masked Tulip Posted June 3, 2010 Share Posted June 3, 2010 Wish I had bought 2.5 years ago now judging by the sharp rise in asking prices. I now have the dilemma of biting the bullet and buying, putting the last few years down to experience, or waiting for the house crash to come. I know that the above thought of buying will annoy all the hardcore bears but living in a city where 69% of jobs are public sector I am just seeing asking prices soaring. Over on the Wales sub-forum a loca EA posts that people in my part of the World have MEWED so much they have to sell at the ludicrous asking prices or be in large debt - in a normal World of no QE and rising IRs they would have lost their homes by now, but in the World of QE and IRs remaining low for years to come they are the 'winners. Quote Link to comment Share on other sites More sharing options...
non frog Posted June 3, 2010 Share Posted June 3, 2010 .... Over on the Wales sub-forum a loca EA posts that people in my part of the World have MEWED so much they have to sell at the ludicrous asking prices or be in large debt ... This phenomena is a new thing to the housing market. Years ago "taking out a second mortgage" was considered unwise and only people that wanted to buy a business or something like that did it. When the massively indebted sell up their house the buyer of that property effectively wipes out that person's mistake and takes it on themselves. You have bought their MEW and paid for their SUV and holiday. Billions of pounds have be lent in this manner (far more than the QE). It is imperative that the banks and the government keep prices at their current level and encourage as many people as possible to pay of the loans. Those that cannot afford to pay it off must find someone that can to pay it off for them. Failing that the taxpayers must pick up the tab, or the cost spread over the bank's customer base by eroding savings value and overcharging on mortgages. The bank's "super sucker" is someone that buys someone else's house and pays off the MEW that person couldn't afford, then has an expensive mortgage at 3-4% over bank rate and at the same time is stupid enough to save money at a negative rate (ISA or pension scheme - that kind of thing). These super suckers tend also to pay tax and pick up that part of the tab also. The person that MEW'ed will call it a day, sign on and claim housing benefit to pay their rent. God help us all if this thing goes down. Quote Link to comment Share on other sites More sharing options...
Bloo Loo Posted June 3, 2010 Share Posted June 3, 2010 i agree with all your points, and i think more and more people are changimg their minds about it all, well done geetting it and being happy with it all not really, just 45,000 mortgages a month. half the normal rate. most get a shock when losing their job, or are turned down for finance. Quote Link to comment Share on other sites More sharing options...
The Masked Tulip Posted June 3, 2010 Share Posted June 3, 2010 This phenomena is a new thing to the housing market. Years ago "taking out a second mortgage" was considered unwise and only people that wanted to buy a business or something like that did it. When the massively indebted sell up their house the buyer of that property effectively wipes out that person's mistake and takes it on themselves. You have bought their MEW and paid for their SUV and holiday. Billions of pounds have be lent in this manner (far more than the QE). It is imperative that the banks and the government keep prices at their current level and encourage as many people as possible to pay of the loans. Those that cannot afford to pay it off must find someone that can to pay it off for them. Failing that the taxpayers must pick up the tab, or the cost spread over the bank's customer base by eroding savings value and overcharging on mortgages. The bank's "super sucker" is someone that buys someone else's house and pays off the MEW that person couldn't afford, then has an expensive mortgage at 3-4% over bank rate and at the same time is stupid enough to save money at a negative rate (ISA or pension scheme - that kind of thing). These super suckers tend also to pay tax and pick up that part of the tab also. The person that MEW'ed will call it a day, sign on and claim housing benefit to pay their rent. God help us all if this thing goes down. I believe I am a super-sucker. Quote Link to comment Share on other sites More sharing options...
Guest_James Toney_* Posted June 3, 2010 Share Posted June 3, 2010 Wish I had bought 2.5 years ago now judging by the sharp rise in asking prices. I now have the dilemma of biting the bullet and buying, putting the last few years down to experience, or waiting for the house crash to come. I know that the above thought of buying will annoy all the hardcore bears but living in a city where 69% of jobs are public sector I am just seeing asking prices soaring. Over on the Wales sub-forum a loca EA posts that people in my part of the World have MEWED so much they have to sell at the ludicrous asking prices or be in large debt - in a normal World of no QE and rising IRs they would have lost their homes by now, but in the World of QE and IRs remaining low for years to come they are the 'winners. I would wait until the end of the year MT, if they rise then, it will not be by much, or they will be in crash mode, if the gov do what they say they are by getting rid of 200,000 public sector workers then your area will be the first to go. i too am only giving it until the end of the year, and unless it is happening then i will be prepared to wait a little more, if not then i am buying Quote Link to comment Share on other sites More sharing options...
Bloo Loo Posted June 3, 2010 Share Posted June 3, 2010 I would wait until the end of the year MT, if they rise then, it will not be by much, or they will be in crash mode, if the gov do what they say they are by getting rid of 200,000 public sector workers then your area will be the first to go. i too am only giving it until the end of the year, and unless it is happening then i will be prepared to wait a little more, if not then i am buying buy now...rates are low, sellers are out there in numbers... unless, you are looking for an investment that is. Me, renting is fine, Ill buy if I can be bothered. saying that, work is crap at the mo...and im not alone in this situation.....otherwise my customers would be buying too. Quote Link to comment Share on other sites More sharing options...
scottbeard Posted June 3, 2010 Share Posted June 3, 2010 I'll raise my head above the parapit and admit that I also recently bought a house, for similar reasons to the OP. In fact I moved into the property over the Bank Holiday. I'm sure that house prices will fall further, possibly even dramatically, but for me it was a case of the right house (I moved from renting a horrible noisey 2 bed terrace newbuild, to a nice well built 3 bed semi with decent garage and garden) in the right location for the right price on the right mortgage. Sure I could wait another year and throw another 9k on rent on the possibility of further falls or I can put that money into a mortgage right now and continue with the hard saving, as my monthly mortgage payment is a lot less than my rent, and get my mortgage paid off quickly. What a strange post. So you are SURE that house prices are falling, yet regard renting as throwing away money? I think in reality you aren't so sure that they are going to fall. And why do people regard rent as money thrown away, yet mortgage interest payments as savings? I hope you enjoy your house, but I don't follow all the logic. Quote Link to comment Share on other sites More sharing options...
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