Jump to content
House Price Crash Forum
Sign in to follow this  
999house

Caving In. Viewing Potential Houses

Recommended Posts

Prices are insane, but as Im a first time buyer, I figure if prices fall I'll gt a much bigger house for cheaper. Its only bad if you buy at the top end, it crashes and then you want to downsize.

Since I'm first time buyer, its 99pc chance I will need something bigger than a 1 bed flat in future.

1 bed 300k, lose 25% =75k loss sell 225

3 bed 500k lose 25% = 125k gain buy 375

gain 50k

So even if the market is to crash, as long as you are young enough to need a much bigger upgrade. your fine.

Edited by 999house

Share this post


Link to post
Share on other sites

What if the £75k loss in your first purchase wipes out your deposit and leaves you in negative equity?

Prices are insane, but as Im a first time buyer, I figure if prices fall I'll gt a much bigger house for cheaper. Its only bad if you buy at the top end, it crashes and then you want to downsize.

Since I'm first time buyer, its 99pc chance I will need something bigger than a 1 bed flat in future.

1 bed 300k, lose 25% =75k loss sell 225

3 bed 500k lose 25% = 125k gain buy 375

gain 50k

So even if the market is to crash, as long as you are young enough to need a much bigger upgrade. your fine.

Share this post


Link to post
Share on other sites

I think his point is he buys a £300k property now, and at some (distant) point in time he upgrades to a 3 bed property. If prices stay up he pays £200k to upgrade. If prices drop 25% he only pays £150k for upgrade. So in theory buying at a peak with a view to upgrading doesn't matter if it crashes or not. In fact, you want it to crash.

The main issue is your equity gets hit first, so no one may be willing to lend you an extra £150k whereas without the crash you may be lent £200k

Share this post


Link to post
Share on other sites

To the OP.

In a world where people buy houses simply to live in, I think your logic has got some legs. However, properties now are investment vehicles, pension pots and the government are now propping up the new build market by 40%!

It's a whole new ball game now and has been since since around the mid noughties.

Edited by bomberbrown

Share this post


Link to post
Share on other sites

Buy now,next year your flat will be 400k and your mortgage will be less than you're paying today! You have the banksters on your side, what could possibly go wrong!

Share this post


Link to post
Share on other sites

I think his point is he buys a £300k property now, and at some (distant) point in time he upgrades to a 3 bed property. If prices stay up he pays £200k to upgrade. If prices drop 25% he only pays £150k for upgrade. So in theory buying at a peak with a view to upgrading doesn't matter if it crashes or not. In fact, you want it to crash.

The main issue is your equity gets hit first, so no one may be willing to lend you an extra £150k whereas without the crash you may be lent £200k

Negative equity is a good point.

But the theory of it is no different to a finance hedge

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • Next General Election   90 members have voted

    1. 1. When do you predict the next general election will be held?


      • 2019
      • 2020
      • 2021
      • 2022

    Please sign in or register to vote in this poll. View topic


×

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.