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LuckyOne

If You Have To Buy A House ...

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For most of us, buying a house at the moment seems like a really silly idea.

That said, I can understand that a small number of people might want to buy a house now for non-economic reasons even though they think that prices are heading lower.

The only question then becomes the strategy.

For any given price, there seem to be two choices :

- A smaller house on a bigger plot.

- A bigger house on a smaller plot.

During a house price crash, it is the value of the land that really collapses. The replacement cost of the actual building itself doesn't fall that much and might actually rise. If this is the case, is the choice to limit the exposure to land prices the "least worst" strategy for current buyers who are buying for non-economic reasons which means that buyers should look for a larger house on a smaller plot?

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If that were the case, then surely there would be a floor on house prices.

However, you see houses in some of the less desireable areas selling for sub-£10k.

Why would anybody "need" to by, rather than renting? What other reason could there be?

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Looking at the area I keep tabs on the smaller houses are dropping in price but the bigger ones are sticking.

If you buy a lower priced one you will lose less relatively when prices tank.

So,if you have to buy...I'd go as cheap as you can in an area you are happy to live in.

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If that were the case, then surely there would be a floor on house prices.

However, you see houses in some of the less desireable areas selling for sub-£10k.

Why would anybody "need" to by, rather than renting? What other reason could there be?

An extreme example but imagine an otherwise perfect wife getting so nesty and broody that she threatens to leave if you don't buy something and a 100% HPC would cost a lot more than losing 50% of assets through a divorce.

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Looking at the area I keep tabs on the smaller houses are dropping in price but the bigger ones are sticking.

If you buy a lower priced one you will lose less relatively when prices tank.

So,if you have to buy...I'd go as cheap as you can in an area you are happy to live in.

+1

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An extreme example but imagine an otherwise perfect wife getting so nesty and broody that she threatens to leave if you don't buy something and a 100% HPC would cost a lot more than losing 50% of assets through a divorce.

In that instance, the house to go for is the one that she likes.

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my plan is to self build

once plots regain some sense of reality

Me too :D

I'm not sure good plots will become any more affordable. It is the one area of housing where you can still use the formula 1/3 land 1/3 build and 1/3 profit.

I would also like to self-build, my budget will be £225k (including the land). £125k almost buys you a nice plot, kist not quite there yet.

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my plan is to self build

once plots regain some sense of reality

+1

At some point (who knows when though) they will realise that they need to build more houses and that to free up planning permission would mean a miniboom for builders, plumbers, architects etc. It would give a much needed boost to the economy and cost the goverrnment nothing.

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Looking at the area I keep tabs on the smaller houses are dropping in price but the bigger ones are sticking.

If you buy a lower priced one you will lose less relatively when prices tank.

So,if you have to buy...I'd go as cheap as you can in an area you are happy to live in.

This

Edited by wealthy

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I would go for the best built with character and no structural problems freehold house, ignoring what the decoration looks like (the worse it is the better, highly decorated houses mean high prices) but would go for one that has a garden in the area you want to live in....talk to the neighbours before you buy if you don't know the area well. ;)

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Nobody "HAS" to buy a house.

This a fundamental fact and the main reason the market will crash.

There is never anyone who HAS to buy, but plenty of people who HAVE to sell.

So you would buy one from someone who has to sell?...is that what you are saying or you would never buy one? :unsure:

Edited by winkie

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For most of us, buying a house at the moment seems like a really silly idea.

That said, I can understand that a small number of people might want to buy a house now for non-economic reasons even though they think that prices are heading lower.

The only question then becomes the strategy.

For any given price, there seem to be two choices :

- A smaller house on a bigger plot.

- A bigger house on a smaller plot.

During a house price crash, it is the value of the land that really collapses. The replacement cost of the actual building itself doesn't fall that much and might actually rise. If this is the case, is the choice to limit the exposure to land prices the "least worst" strategy for current buyers who are buying for non-economic reasons which means that buyers should look for a larger house on a smaller plot?

I hate to be pedantic but.... Those are two options, still only one choice.

Solidarity is the the way forward. No going back. We should promote lower house prices for the better good of all or revolution!!!!

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If you have a sixty percent deposit, it'd be worth buying a house wouldn't it?

For example, rent a house for 1365 a month. Have 200K in bank doing mainly nothing. Buy house for 360K, pay 4.2 percent on mortgage, overpay 500 a month so paying 1365 a month. Same as renting. The house is yours after 12 years. The only thing that can stuff up the maths is the dreaded rate rise that doesn't seem to be ever happen.

If you fix your mortgage for five years, you then prey to the god of inflation, and hope for the hyper inflationary holocaust. By the time your five years are up, even if you have to go onto a higher rate, your wages will be getting bigger.

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If you have a sixty percent deposit, it'd be worth buying a house wouldn't it?

For example, rent a house for 1365 a month. Have 200K in bank doing mainly nothing. Buy house for 360K, pay 4.2 percent on mortgage, overpay 500 a month so paying 1365 a month. Same as renting. The house is yours after 12 years. The only thing that can stuff up the maths is the dreaded rate rise that doesn't seem to be ever happen.

If you fix your mortgage for five years, you then prey to the god of inflation, and hope for the hyper inflationary holocaust. By the time your five years are up, even if you have to go onto a higher rate, your wages will be getting bigger.

I certainly won't buy now and I have 100% sitting in the bank.

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+1

At some point (who knows when though) they will realise that they need to build more houses and that to free up planning permission would mean a miniboom for builders, plumbers, architects etc. It would give a much needed boost to the economy and cost the goverrnment nothing.

I agree

This would be a game changer and would a very positive move for the country - althought the Nimbys would certainly object.................

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I certainly won't buy now and I have 100% sitting in the bank.

Keep clutching at straws :rolleyes:.

House prices are falling. In my case the interest on the money I'd have to draw out of the bank to buy the house I'm renting more than pays my rent. I'd rather lose a few percent of my cash to inflation than a few tens of percent to house price deflation ;).

Clutching at straws? All I see is inflation, inflation, inflation. And as I live in London, House price inflation. I'm starting to worry the printy printy, no big nominal falls crowd are correct. I used to think Daddy bear was a numpty. Not too sure now.

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I certainly won't buy now and I have 100% sitting in the bank.

Keep clutching at straws :rolleyes:.

House prices are falling. In my case the interest on the money I'd have to draw out of the bank to buy the house I'm renting more than pays my rent. I'd rather lose a few percent of my cash to inflation than a few tens of percent to house price deflation ;).

Clutching at straws? All I see is inflation, inflation, inflation. And as I live in London, House price inflation. I'm starting to worry the printy printy, no big nominal falls crowd are correct. I used to think Daddy bear was a numpty. Not too sure now.

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Clutching at straws? All I see is inflation, inflation, inflation. And as I live in London, House price inflation. I'm starting to worry the printy printy, no big nominal falls crowd are correct. I used to think Daddy bear was a numpty. Not too sure now.

It appears we disagree, I see inflation in everyday things that are bought with cash (food etc), but deflation in things that are normally bought on credit (houses etc).

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It appears we disagree, I see inflation in everyday things that are bought with cash (food etc), but deflation in things that are normally bought on credit (houses etc).

Even more worryingly, things that should be bought with cash (food etc) are being bought on credit.

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  • 259 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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