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Have I Missed My Only Chance?

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hi guys and girls,

i am new on here and i needed a bit of advice. about me, i know very little about the housing market and what economics are.

my story is i live in london and last year i finally thought i was in a position to buy a house in the area i am currently living in. there was a property that i nearly had enough funds for however it came a couple of months early and i missed out on buying this for £275k. this was about 12 months ago. i thought, 'never mind, i shall buy the next one that comes up'. nothing in the area really came up until now where there is a sudden boom in houses on the market however prices now for the same house in the same area are 350k!

i worked long and hard to try and save up 10% for a property and now suddenly i have been blown out the market again! i get the feeling i have missed my only chance to buy a place in the area i have grown up in and i have been trying to do some research and it suggests that properties will rise by a further 25% in the next 5 years! i really wish i had went all out for that house which was on the market for 275k 12 months ago as i can never afford a property for 350k!

is this it? have i missed the only downturn on the market? i am so upset at the moment and really feel hard done by my own actions.

regards

sad guy

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hi guys and girls,

i am new on here and i needed a bit of advice. about me, i know very little about the housing market and what economics are.

my story is i live in london and last year i finally thought i was in a position to buy a house in the area i am currently living in. there was a property that i nearly had enough funds for however it came a couple of months early and i missed out on buying this for £275k. this was about 12 months ago. i thought, 'never mind, i shall buy the next one that comes up'. nothing in the area really came up until now where there is a sudden boom in houses on the market however prices now for the same house in the same area are 350k!

i worked long and hard to try and save up 10% for a property and now suddenly i have been blown out the market again! i get the feeling i have missed my only chance to buy a place in the area i have grown up in and i have been trying to do some research and it suggests that properties will rise by a further 25% in the next 5 years! i really wish i had went all out for that house which was on the market for 275k 12 months ago as i can never afford a property for 350k!

is this it? have i missed the only downturn on the market? i am so upset at the moment and really feel hard done by my own actions.

regards

sad guy

So you are saying that housing in London is getting beyond the reach of those who have to work for a living?

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So you are saying that housing in London is getting beyond the reach of those who have to work for a living?

not sure what you mean by that. im not on a great salary so cant save up as much nor does my wife work. i know someone who has bought houses in the last couple if months because they can afford to. im just trying to understand if i have missed the boat to buy a house as the increase of 75k plus in 12 months has been a hammer blow to me.

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not sure what you mean by that. im not on a great salary so cant save up as much nor does my wife work. i know someone who has bought houses in the last couple if months because they can afford to. im just trying to understand if i have missed the boat to buy a house as the increase of 75k plus in 12 months has been a hammer blow to me.

That's the oh-so-obvious effect of H2B you're looking at. Much of London is up 20% (in asking prices) in the last six months alone. If you want a house, it's a H2B mortgage with an extra 20% of debt I'm afraid. That's the Government helping you "get on the ladder" (translation - rewarding their rentier mates and boomer voting block).

As for where another 25% increase could come from in the next 5 years - it's certainly won't be from economic fundamentals. Still, I'm sure you could creatively imagine any number of financial scams that the powers-that-be could implement to force prices higher. Stamp duty changes, H2B deposit increase to 30/40%, tax-deductible mortgage payments etc. etc.

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not sure what you mean by that. im not on a great salary so cant save up as much nor does my wife work. i know someone who has bought houses in the last couple if months because they can afford to. im just trying to understand if i have missed the boat to buy a house as the increase of 75k plus in 12 months has been a hammer blow to me.

You either can afford to buy a house or you cannot.

To the best of our knowledge, you only get one life on Earth. How are you going to spend it?

http://www.youtube.com/watch?v=iMUiwTubYu0

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i am new on here and i needed a bit of advice. about me, i know very little about the housing market and what economics are.

I'm sure you will pick up a few ideas on here.

my story is i live in london and last year i finally thought i was in a position to buy a house in the area i am currently living in. there was a property that i nearly had enough funds for however it came a couple of months early and i missed out on buying this for £275k. this was about 12 months ago. i thought, 'never mind, i shall buy the next one that comes up'. nothing in the area really came up until now where there is a sudden boom in houses on the market however prices now for the same house in the same area are 350k!

i worked long and hard to try and save up 10% for a property and now suddenly i have been blown out the market again! i get the feeling i have missed my only chance to buy a place in the area i have grown up in and i have been trying to do some research and it suggests that properties will rise by a further 25% in the next 5 years! i really wish i had went all out for that house which was on the market for 275k 12 months ago as i can never afford a property for 350k!

I know how you feel, I felt the same some time ago. It can feel disheartening to see these percentages gains on property running ahead of your savings and wages. The thing is you managed to save and the funny thing about saving, is that it gets easily the longer you do it for. Compounding is a powerful force and it doesn't only affect house prices!

As far as feeling that you have missed out, don't and never say never! Its impossible for house prices to continuously outpace the real growth of wages. The whole 'I must get on the housing ladder' thing assumes that property, as an asset, will continuously outperform other assets, forever. It can't and it won't.

However, I can't tell you when or how any sort of equilibrium will return. So, keep on saving. Be it, for a house in the future or early retirement and take underscored's advice. Find a nice place to rent or move to a cheaper location/country and don't worry about the ride, no-one says you have to take on huge levels of debt to buy a pile of bricks. There are more important things in life and you can always come here to vent the excess frustration you might feel from time to time! B)

Edited by renting til I die

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If you are not on a great wage, why are you trying to stay in London? It is unaffordable for anyone without a good level of capital (property/savings) already. You are much better off leaving either London, or the whole UK, and going somewhere you can really live.

If you salary drops by 20% but your rent drops by 50%, you have had a pay rise! MOVE! Leave London to burn in it's own self made disaster.

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i thought, 'never mind, i shall buy the next one that comes up'. nothing in the area really came up until now where there is a sudden boom in houses on the market however prices now for the same house in the same area are 350k!

Well it's not all bad if you're now describing a rush of sellers to market.

Is there also a sudden boom in buyers... and if there is, do you thin such buyer demand will continue for long . It's just sucking in the final idiots at higher prices in my opinion.

Values are set at the margin. Values of houses in an area decided by prices of a few sales between sellers and buyers that money.

They can fall in value just as quickly as they rose in value. And I want to see them fall hard.

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I feel for you mate. It sounds exactly like my experience of London circa 2004 - rises outpacing my ability to save. It did slow again in 2005, giving hope then Merv cut interest rates and we were off again.

Will things get better in London price wise? There will probably be a dip in the future. There was one in 2005 and again in 2009. Whether it'll be enough, who knows. I've been expecting a really hard crash in London for more than ten years as frankly things looked unsustainable as early as 2002/3. They look absolutely fricking mental now.

Remember London isn't the be all and end all. I ended up buying outside of it in a part of the country where prices are dropping. Also depending on your skills, maybe you can earn extra cash through consultancy, freelancing etc. Keep saving and earning - maybe an opportunity will present itself.

Edited by StainlessSteelCat

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not sure what you mean by that. im not on a great salary so cant save up as much nor does my wife work. i know someone who has bought houses in the last couple if months because they can afford to. im just trying to understand if i have missed the boat to buy a house as the increase of 75k plus in 12 months has been a hammer blow to me.

The fact this website exists and its popularity shows you that you are not the only one in that position. For a long time, the government has used the basic norms that people expect in this country against us to enable a higher standard of living for a very minor set of wealthy people. Those are the owners of capital - and in a capitalist system they rule the country not the Government. We live in a kleptocracy that is why all the political parties seem the same and when they come into power very little changes.

Food, Housing, Heating, Children. Marriage, Pensions, Savings, Death, and Medical Care are all manipulated to give the population just enough to stop a revolt whilst elites move nation to nation using resources across borders with no interest in nationalism, or countries. These are all concepts created to keep the people in line, nationalism is not important to anyone in power, they just use it to gain control over people.

The summary at school is always - you can do anything if you work hard enough, and a few examples are always cited. The reality is a few outsiders to societies norms actually achieve these things - they are outsiders for many reasons, being adopted, chip on their shoulder, bullied, mentally or physically persecuted for being different - what ever it is they do not want the norms of society and strive for something else. Generally these are the inventors and real changers of society - they have nothing to lose and that is a dangerous thing for the Elites. Everyone else simply want the right to live free, love, own something they can call their own, and provide for their loved ones and die in piece.

So you have a choice to make - step outside your norms e.g live somewhere you didn't grow up so you/ your children can have a better quality of live or cling to society's norms which are always manipulated to give you less and less unless a large shift in public opinion forces change (e.g a revolt!, poll tax riots, etc).

Eventually there will be a house price crash just because hot money from the elites will eventually flow into something/somewhere else but that doesn't mean that you will suddenly be able to buy in London. You only have a short life (compared to these long term trends). You should decide what you want the next 10-15 years to look like and then try and achieve it wherever it is achievable rather than thinking about missing out.

Thinking about it another way - in 1939, there were people of your age looking to possibly start a family and buy a house and enjoy life - they all got conscripted and spent the next few years in a war they probably never recovered from mentally or physically. They were just the same as you but world events transpired against them. The "lucky" ones moved to Switzerland (and were called traitors by the nationalist propaganda). Just aim to do what you want and find somewhere you can achieve it. IF your job is moveable I would find somewhere comparable like Bristol and have a look at prices there or look to move to Europe or America?

Good luck with your decisions.

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i have been trying to do some research and it suggests that properties will rise by a further 25% in the next 5 years!

25% over 5 years is actually not a high rate of increase. That would be 4.5% per year. It's barely over the rate of inflation in our badly managed economy.

An investor would consider such an increase pitiful and once you factor in the costs of buying/selling, it suddenly turns property as very unattractive. There are numerous better ways of investing your money if you are so inclined.

If there was a slowdown in prices, I would expect a real, hard stabilisation and not a "soft landing" to more reasonable rates. Investors are only in the London market because they expect increase rates of close to 10%. As soon as that's not achievable, they will all pull out and then the real value of all these properties will be discovered.

What people have forgotten completely is that prices have to follow fundamentals. Sure, speculation and the effects of human psychology can cause people to pay over the odds with the hope of ever-increasing prices but "hope" and "expectation" are not what underpin any market. Anything has an intrinsic value based on supply and demand.

A bunch of estate agents can "hope" that prices will increase 10% year-on-year as much as they like and try to spread the word that this will be what happens, thus generating fear among people that they have missed the boat. Hope they may but that's not going to happen. Ever. Sorry buddy.

Even for London as a whole: London was in doldrums in the 70s until the "big bang" and the liberalisation of our markets. London suddenly became a major global financial centre with few rivals. This is no longer the case and with the regulatory market and the political atmosphere, London's place in the world is not secure for ever. I wouldn't predict that London suddenly dropped off the map of financial centres (then again, wouldn't rule it out entirely as there is political will from governments to look tough) but it may lose the focus of foreign banks and of overseas investors. If things changed in the City in the space of just a few years, why can't it happen again? It would be incredibly naive to thing that it wouldn't.

I'd also point out that you are as much responsible for prices as the next person. If you fear and obsess about the "property ladder".

I'm not saying that going against the grain is any smarter. Plenty of wealthy middle-class kids have done very well from having parents obsessed with property and who pushed them to purchase (let's not forget that hardly any FTBs are buying without help from wealthy parents now) as early as possible but it's worth observing what is going on and deciding if you want to jump on the bandwagon or if you know better (or not)

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Well it's not all bad if you're now describing a rush of sellers to market.

Is there also a sudden boom in buyers... and if there is, do you thin such buyer demand will continue for long . It's just sucking in the final idiots at higher prices in my opinion.

In my area of East London where I've been living for close to a decade, that's exactly what is happening. It's one last desperate from Hong Kong and Singapore-based investors to cut their profits while they can as they know that price increases aren't sustainable and that potential buyers are dwindling in numbers: there are fewer overseas investors as the rental yields are too poor and domestic buyers just don't have the affordability even with HTB. They've had their 10% year-on-year increase for a couple of years. They're happy. They can now take that money and place it somewhere else, with better returns and just as secure. London may be a safe haven for investment but it's not emerging.

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Good luck with your decisions.

25% over 5 years is actually not a high rate of increase. That would be 4.5% per year. It's barely over the rate of inflation in our badly managed economy.

+1, Great posts

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As far as feeling that you have missed out, don't and never say never! Its impossible for house prices to continuously outpace the real growth of wages. The whole 'I must get on the housing ladder' thing assumes that property, as an asset, will continuously outperform other assets, forever. It can't and it won't.

Agreed.

The disconnection between house prices and salaries is currently being maintained thanks to domestic and overseas investors but even they rely on rental yields. When I hear of people spending half their salary on their rent just to have the kind of living standard they aspire, it seems like the property market really is trying to get blood from a stone.

When you hear the property bulls saying "London house prices will always increase", you ask them "but who's going to pay for this? Sure investors love parking their money in London property but few are comfortable with the idea that only speculation will drive capital appreciation and after 2-3 years of sitting on their empty property they can sell it on to another speculative investor... They want rental yields. Who supplies that?

You hear people saying "affordability doesn't matter anymore". When you start making those kinds of statements, then you are entering dangerous bubble territory.

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thanks all for your responses.

i would love to move out of london and buy a bigger house for half the price however i am not staying in london because i love london, only because all my family and friends are here and moving away from them just does not seem like an option. i would hate the commute! plus sadly i am not a very skilled person so would struggle for employment elsewhere.

i do believe as someone has stated that people like me are perhaps responsible for the house price increase as we are desperate to get on the property ladder. i guess the scaremongering tactics work on people like me and the H2B scheme might bleed some people out of their cash again. i guess what i can derive from all the comments above is that its a fake bubble which may or may not be sustained for a few years. i doubt prices would go down in my area from 350k to 275k in the next year or two so maybe i am best to wait and sit tight. but this current price increase is higher than i have ever seen before as initially it was 300k the top end and went down to 275k. now its burst that ceiling by another 50k in 12 months.

i guess no one can really tell if this bubble will stay and price me out of buying a home close to my elderly mother. i shall sit in hope!

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thanks all for your responses.

i would love to move out of london and buy a bigger house for half the price however i am not staying in london because i love london, only because all my family and friends are here and moving away from them just does not seem like an option. i would hate the commute! plus sadly i am not a very skilled person so would struggle for employment elsewhere.

i do believe as someone has stated that people like me are perhaps responsible for the house price increase as we are desperate to get on the property ladder. i guess the scaremongering tactics work on people like me and the H2B scheme might bleed some people out of their cash again. i guess what i can derive from all the comments above is that its a fake bubble which may or may not be sustained for a few years. i doubt prices would go down in my area from 350k to 275k in the next year or two so maybe i am best to wait and sit tight. but this current price increase is higher than i have ever seen before as initially it was 300k the top end and went down to 275k. now its burst that ceiling by another 50k in 12 months.

i guess no one can really tell if this bubble will stay and price me out of buying a home close to my elderly mother. i shall sit in hope!

The sad thing is that this is the strength of this whole game. Houses and housing are a huge driver of quality of life, location, design space, control etc. Therefore people are willing/driven to put their all into them, this has been the financial dynamite of the last 30 years.

Shackling this drive to a corrupt and self-serving financial system has been highly profitable for some. However it is terribly destructive, destroying communities, crippling the young, crippling the productive economy, stressing families.

A small minority benefit (short term), for the rest of us it is just destructive. My greatest fear is that the beast will lurch on till the Earth is scorched.

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all my family and friends are here and moving away from them just does not seem like an option.

I know a couple in a very similar situation to you, they have been waiting years in crappy london rentals scraping together a deposit. They have now finally decided to move out to Bristol not because they like Bristol but because they did all the sums in detail - commuting costs, visiting family costs, drop in salary etc and came to the reluctant conclusion that leaving London just had to be done.

Even if they do eventually move back to London, they will be better able to save the required deposit by not being there.

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The sad thing is that this is the strength of this whole game. Houses and housing are a huge driver of quality of life, location, design space, control etc. Therefore people are willing/driven to put their all into them, this has been the financial dynamite of the last 30 years.

Shackling this drive to a corrupt and self-serving financial system has been highly profitable for some. However it is terribly destructive, destroying communities, crippling the young, crippling the productive economy, stressing families.

A small minority benefit (short term), for the rest of us it is just destructive. My greatest fear is that the beast will lurch on till the Earth is scorched.

Don't be sad, you haven't missed your chance. You just need to look in a different area where prices are a bit cheaper. You'd be surprised how many places in London are really nice with loads going on, full of interesting cool people and free from Chelsea tractors and what comes with them... Life doesn't stop beyond hackney!! ... or wherever it is you are looking to buy...:)

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The sad thing is that this is the strength of this whole game. Houses and housing are a huge driver of quality of life, location, design space, control etc. Therefore people are willing/driven to put their all into them, this has been the financial dynamite of the last 30 years.

Shackling this drive to a corrupt and self-serving financial system has been highly profitable for some. However it is terribly destructive, destroying communities, crippling the young, crippling the productive economy, stressing families.

A small minority benefit (short term), for the rest of us it is just destructive. My greatest fear is that the beast will lurch on till the Earth is scorched.

Yep you only get one life.

Be like me I live in a detached property 2 minutes from the sandy beach plenty of fishing and trips to France. Wonderful train service to London and Paris. All for £80 a week. I can invest nearly 80% of my earnings which will stand me in good stead if i ever want to buy a house in the pit that is London.

All this can be yours simples.

Will post a photo it will amaze you.

Right off to the Gym then a swim in my pool. :D

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