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jamjar99

Buying Now (More Falls For Sure) But Prices In 15-20 Years?

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Hi all,

Opinions invited please!

We're buying a new build house in Shropshire (300k asking, haggled down to 277k) and part exchanging our current house for a fair price. The house ticks all the boxes and is in a good area, good schools etc. We intend to stay there for 15-20 years until retirement then possibly downsize. The mortgage will be paid off by then. We've stress tested a high interest rates scenario and we're still OK.

I do think that prices will fall further, however, my question is this. With or without your crystal ball, do you think:

a) The house will be worth less in 15-20 years

b ) The house will be worth about the same (60k lost on interest though)

c) The house will be worth more (covering the 60k interest aswell)

d) The house will be fetch more than the initial price and interest combined.

Whenever you look back 20 years, prices always seem to be higher. Or have the rules changed this time! Not bothered about making a profit, but would be nice to break even.

Cheers

James

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My GUESSES would be as follows

The house will be worth more (not sure about the interest part), im a complete bear but 15-20 is a long time

But then i also think if you traded in your old house part ex then you have lost money on that, as builders always give you less than its worth in the same way car dealerships do

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I don't think its possible for anyone to reasonably answer this.

What I would say is that if you are happy with the amount you will be re-paying each month, and you aren't stretching yourself AT ALL, and you plan on living in the house for a while, is just enjoy the home. Try not to look at it as an investment.

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Thanks all for your comments.

Yep, most p/x deals are probably not so good and I was expecting the worst, but I think we did OK. We bought in May 2007 for 164k and they are offering 165k (and paying estate agents fee 1.25%). The house is on the market for 175k. However, the house needed complete modernising when we bought(which cost about 7k). We've got a 120k deposit from selling our old house.

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I think that the Bank of England doesnt seem to care about fighting inflation (unfortunate for a central bank with a mandate to keep inflation low). In the nearer term, prices will go a bit lower. However, due to the addiction to printing and high inflation rates, eventually even house prices will get pushed up over that time frame. As much as it hurts me to admit it, in 20 years, they might even be double the current price (or more if hyperinflation takes over).

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In response to "Whenever you look back 20 years, prices always seem to be higher. Or have the rules changed this time! Not bothered about making a profit, but would be nice to break even."

It is a market and it goes up and down around a trend line, every 10 years or so. In 15 years you may be in a trough, in 20 maybe at a peak, but it all depends on the wiggle, even if appreciation is set to be flat. Personally I think that expensive houses will gorw in value as the elite becomes richer and cheaper houses will flatline as the proles work for peanuts. Maybe 20 years of living where you want is worth more than a few bucks either way....

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a) The house will be worth less in 15-20 years

...

Firstly: less of what? The price in inflated pounds will probably be higher and in gold (or wheat or hours at minimum wage) the picture will be very different.

Secondly: House prices fluctuate on a ~18 (?) year cycle.

My guess is that house prices in real terms will fall from here for 5 years. They went up further than most of us thought possible so they may over swing on the way back.

Interest rates are now at their lowest in a very long while. Am nowhere near retirement and even I can recall interest rates (BoE) over 14% so things do change. They went down further than most of us thought possible so they may over swing on the way back.

We've been a society obsessed with house prices to the point where the coming generation in their 20's and 30's can barely afford a roof over their heads. Hopefully that too will swing back and they will be able to afford a civilised quality of life and well being.

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  • 312 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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