When Do You Expect To Buy?

[streamingfreedom]

Quite a few people on here believe the correction is happening, so what's your plans? Everyone has a different idea about how far it will fall and how long it will take. Some don't believe it's happening.

So here's the question, when do you expect to buy? And what's your conditions interest rates etc?

I would probably buy if we returned to 2013 prices in SE, which would be about 20-25% down.

[honkydonkey]

In this country, never. Abroad, most likely.

A nice house in a nice area for £100k. Most likely France or Germany.

I'm about to head off for a several month full Euro roadtrip to see if I find anywhere for future reference.

[MattW]

I've really lost interest in buying now. I was looking at the bottom of market so 1 or 2 bedroomed flats. They are about £90-130k in my area but imo their value is half that as they are leasehold.

[Bland Unsight]

I'm not going to even think about buying until there is a decent amount of evidence that the interest-only money is all off the table. I'm anticipating that falling BTL mortgage approvals for purchase and a contraction of the absolute size of the PRS will be the two big tells, if all else remains equal. If there is a material amount of build-to-rent that will throw off the usefulness of the absolute size of the PRS as an useful indicator that the interest-only money is a spent force.

My take for a couple of years has been that if there is mug money flowing into interest-only financed buy-to-let then prices are speculators prices and when a fair minded appraisal of the balance sheet risk is taken into consideration the value lies in renting. I choose to stomach the fact that renters' rights are so dogshit and get on with everything else in life that matters a great deal more than the cost and quality of housing, matters over which I cannot exert any control.

[streamingfreedom]

When property value reach there true real value, which at a guess I would say around £100k for the average house. But then again I could be way out and the real value could be much less, after all years of high house prices and 24hr 7 day week 12 months a year 365 days a year indoctrination might even be effecting me more than I am aware of.

That would be nice. So I guess you're looking for around a 50% drop then. Might see that in Central London in the not too distant future.

[Bland Unsight]

As the DCLG tenure data has a massive lag (years not months) I don't propose to rush into anything.

[davidg]

In this country, never. Abroad, most likely.

A nice house in a nice area for £100k. Most likely France

They are building some rabbit hutch flats on a round-a-bout overlooking an industrial estate near me, starting at 280K for a single bedder if you are interested.

[spunko2010]

SE here cash buyer. Probably 2006 prices.

[jiltedjen]

probably in the next 12 months. which is when i have exhausted living with mine and the GF's parents. I dont want to rent again after having done it for years.

could probably stretch it to 18 months. Deposit is large now and in 12 months time much bigger.

i no longer worry about 30% falls as we could have factored that into the deposit. Now a 30% loss is sadly the cost of securing a home before the crash.

I have seem some reductions in devon, i really really need the BTL selloff to happen quickly, but many seem to be holding steady for now.

[latterdaysinner]

London buyer here. Having looked at past property bubble collapses (HK, Japan, Spain, Ireland, etc.) they all take about 4-5 years to unroll properly, so not before 2020. A 50% nominal fall in London would take us back to 2004 in nominal terms, so probably quite reasonable in real terms. We'll see.

[streamingfreedom]

probably in the next 12 months. which is when i have exhausted living with mine and the GF's parents. I dont want to rent again after having done it for years.

could probably stretch it to 18 months. Deposit is large now and in 12 months time much bigger.

i no longer worry about 30% falls as we could have factored that into the deposit. Now a 30% loss is sadly the cost of securing a home before the crash.

I have seem some reductions in devon, i really really need the BTL selloff to happen quickly, but many seem to be holding steady for now.

Hearing you on the sick of renting bit. I could hang it out another 3 or 4 years before starting to run out of years on a mortgage, but my better half won't wait that long. Not unless renting conditions improve or rents drop significantly.

You mention the potential falls being the cost of securing before the crash, so I guess you expect lending to dry up leaving a market for cash buyers only?

[streamingfreedom]

London buyer here. Having looked at past property bubble collapses (HK, Japan, Spain, Ireland, etc.) they all take about 4-5 years to unroll properly, so not before 2020. A 50% nominal fall in London would take us back to 2004 in nominal terms, so probably quite reasonable in real terms. We'll see.

That would coincide with the scheduled end of HTB. Thinking about it, since HTB is non-recourse lending, if prices are known to be dropping then really it should be pulled rather than throw good taxpayer money at a falling market. Oh wait, they already did that.

Somehow I don't think you'll have to wait that long for the London bubble to unravel, hasn't PCL been on a downturn for almost 12 months now?

Edited July 18, 2016 by streamingfreedom

[streamingfreedom]

SE here cash buyer. Probably 2006 prices.

Are you talking nominal or inflation adjusted? Wasn't 2006 a touch higher than 2012 in some parts? East Mids was down about 10% by 2012.... Certainly was down slightly the UK average, not sure about SE.

[AvoidDebt]

NW London. Would consider jumping in at a 20% drop.

Already offered 15%, 10%, 12.5% below asking prices recently (testing market) and all rejected. Viewed around 12 properties in past few months and only 1 has sold, market is dead and polluted by deluded sellers.

Anyone with a half decent deposit in London could have bought 2 properties pre Osborne boom in 2012. Sold 1 in 2016 and used the gainzzz to pay off all the mortgage on your main property.. and then sent Osborne a thank you card and box of chocolates in the post..hindsight...

[SavingBear]

When someone with about the average household income, can afford an average house, suitable for a aveage size family. WITHOUT help from BOM&D or shared equity or HTB or any other interference.

Anything else is still bubble territory.

[A.steve]

Would consider jumping in at a 20% drop.

I can't make sense of 'drop' numbers... as a marker of a point at which to buy. I'm expecting 20% falls - and I am comfortable to buy a place that devalues by 10%.

I am actively looking at the moment - but that doesn't mean I'm intending to pay asking prices. I am hoping to find a deal that represents "value" for me - and would buy despite knowing that a cold analysis of the numbers say that renting would be financially rewarding.

My perception is that the market is improving - for buyers... but only because I'm seeing places I considerable habitable for prices that are within my budget. That hasn't been the case for several years.

[Dorkins]

Hopefully at some point in the 2020s. I don't expect to see value before then.

[Pork Pie]

When someone with about the average household income, can afford an average house, suitable for a aveage size family. WITHOUT help from BOM&D or shared equity or HTB or any other interference.

Anything else is still bubble territory.

WELL SAID!

We NEED 50% CRASH for the above scenario to happen, AND it will...

I live in one of the worst sh*t holes in the SE, and a 2 bed semi in this area is 300k ...MENTAL or what?

[spunko2010]

Are you talking nominal or inflation adjusted? Wasn't 2006 a touch higher than 2012 in some parts? East Mids was down about 10% by 2012.... Certainly was down slightly the UK average, not sure about SE.

Not down my way. The market has risen steadily since the early noughties, excusing the past 6 months or so.

I'm only going on prices that I've seen in the LR for houses I like. Most of them were sold in 2005-2006 period, at a guess about 30-40% less than today.

Of course ideally I'd want them to fall further, to 2001-levels. I'm constantly shocked that someone managed to buy a 5 bedroom house for £125k then, that's now on the market for £1m+ without lifting a finger. Crazy stuff.

Edited July 18, 2016 by spunko2010

[jiltedjen]

Hearing you on the sick of renting bit. I could hang it out another 3 or 4 years before starting to run out of years on a mortgage, but my better half won't wait that long. Not unless renting conditions improve or rents drop significantly.

You mention the potential falls being the cost of securing before the crash, so I guess you expect lending to dry up leaving a market for cash buyers only?

at worst they will restrict small deposit mortgages no more 5% deposit. The BTL exiting etc, may help.

But i'm happy to loose a chunk of my deposit/equity to price falls. Its basically 'spending' 2 years savings, to save an additional 2-3 years waiting for falls, with associated risks.

The key is that i know to expect 30% falls, and i have factored it in.

I feel the clock is ticking for me, and 12-18 months i really need things to move. The market should soften a lot in that time period. i have also heard stories of people finding out the 'real acceptable selling price' can often be hugely under the advertised asking price. Which brings a bit of hope.

This winter i will have to deal with estate agents and calls about crap properties etc. Start viewings etc. And im really not looking forward to it.

if there is absolutely nothing suitable, then i wont buy. simples. If i have to i will rent with partner a small flat or somesuch, and instead build up the investment portfolio.

Pay rent out of dividends is basically living mortgage free anyway!

something glorious about dividends and zero stress/commitments, plus it can help with job prospects and opportunities.

Those are the options i guess.

[canbuywontbuy]

WELL SAID!

We NEED 50% CRASH for the above scenario to happen, AND it will...

I live in one of the worst sh*t holes in the SE, and a 2 bed semi in this area is 300k ...MENTAL or what?

Same for me. I'd only consider buying after there's a real economic "clean out" - I really want to see a massive change in the UK. Massive economic crash, kill all those zombie companies, get rid of housing benefits and tax credits, flush out all those useless jobs and companies creating them, resurrect the manufacturing industries but for the 21st century. It would take 20 years+ to get that kind of environment. I'm in my mid 40s so I actually think if things (magically) went my way, I might retire in the UK. As it is, I'm emigrating to Thailand next month....

[man o' the year]

I will not by unless I have value. Percentage reductions are meaningless. I have seen sporadic appearances of what I consider value properties on the market sporadically over the past few years but have been unable to borrow what I need to buy. The amount I need to borrow is decreasing rapidly although I see the value at the higher price end of the market and will not buy a tiny sh1tbox. I am very choosy and there is nothing on the market that I would buy at the moment. If I don't buy before 2021 I may never buy as my kids will have left for college by then and having them visit us in a rented property on the Med, or wherever else in the world will be fine.

[LiveinHope]

I always thought the crash would be around 2016-2018 and I live in hope. But I'm in the SW and here, a 6 bedroom Taylor Wimpey newbuild on a cramped estate goes for £600k, and given that 2 beds are in the attic and one is the dining room, it's actually a 3 bed house for which I'd pay 180k top. So quite a big crash.

I'm now too old for a mortgage and so can only buy for cash. Renting is the better option. I quite think that I may never buy.

[Venger]

My buying-time could be at any point, even vs new peaks. (Or never, if the HPIers get their way).

Create your own personal HPC, such as from an inheritor, if and when market cools.

Missed out on 1 such house opportunity (which I regret) in 2012, when inheritor cut and cut and cut and then accepted weighty offer from an FTB. Member of my family got talking to the young new buyers a few months after they moved in - happy happy, and good reason to be with a 2002 price, less debt and money to spend of their family). Pre HTB...errr BTLer double-down (h/t Neverwhere).

...Help to Buy is an issue but the volumes are so low that I don't think it can hold up prices without speculators taking up a significant portion of the market. It's mainly a sentiment driver and speculators are likely the strongest reactors to sentiment drivers, hence without the speculators it has substantially less teeth to drive prices.

Although in South Manchester / Cheshire edges, which I track a lot for family, so much is SoldSTC, and even new listings go SoldSTC. Still a very hot market.

...Of course ideally I'd want them to fall further, to 2001-levels. I'm constantly shocked that someone managed to buy a 5 bedroom house for £125k then, that's now on the market for £1m+ without lifting a finger. Crazy stuff.

And certain market participants telling them to snub cashing in and downsizing.

[canbuywontbuy]

I will not by unless I have value. Percentage reductions are meaningless. I have seen sporadic appearances of what I consider value properties on the market sporadically over the past few years but have been unable to borrow what I need to buy. The amount I need to borrow is decreasing rapidly although I see the value at the higher price end of the market and will not buy a tiny sh1tbox. I am very choosy and there is nothing on the market that I would buy at the moment. If I don't buy before 2021 I may never buy as my kids will have left for college by then and having them visit us in a rented property on the Med, or wherever else in the world will be fine.

Same here. Percentages mean nothing. Affordability is everything. 20% off takes you back to 2014, when wages were the same as they are now. Big whoopdy doo.