To buy or not to buy???

[winkie]

6 minutes ago, zilly said:

I'm over 50 and I'd say it's the worst time to buy in my lifetime.

Certainly don't bank on the highly abnormal credit conditions of the last decade continuing.

NB I have no vested interest in property prices falling. It's my genuine opinion that the UK in 2018 is like Japan in 1990 and anyone looking to buy is going to be in negative equity for many, many years and could be looking at serious IR rises if sterling gets attacked post-Brexit.

Caveat emptor.

 

Bad time to buy as as an investment using debt.......fine to buy to live in as a home long-term, there are good properties to buy and bad properties to buy, good places to buy in and bad places to buy in.....some rather good bargains out there for those looking for a long-term home to live in.....now is the time to kill you debt not take evermore on, now is the time to realise profits spending it and or find new and better homes for it.?

[goldbug9999]

4 hours ago, Jabbabhoy said:

I don’t actually think things will go higher if Brexit doesn’t happen, I think people have been stretched enough.

if Brexit happens and there is a run on the pound rates might have to go up quickly 

Well it seems like all the risks are to the downside so doesn't that answer your question ? - what have got to lose by hang on another 6 months ?

[localhero1983]

"To buy or not to buy???"

.....

 

Seriously?

The one thing I will say is the way the property market has been in the last 15 years and what I have seen with my own two eyes, anything is possible.

But with the political events we have this year and the fact that there are so many negative possibilities in the economies here and around the world I would if I was you just sit it out just that little bit longer, but I do know where you are coming from.

[Captain Kirk]

4 hours ago, zilly said:

I'm over 50 and I'd say it's the worst time to buy in my lifetime.

Certainly don't bank on the highly abnormal credit conditions of the last decade continuing

I believe the same. Look at how they had to floor interest rates to reflate the 2008 bubble. They can't do that this time round. They are still floored.

4 hours ago, Beaker said:

Just a little word of caution. The bottom is likely to be when 25% of priced out potential purchasers are priced in. This will then give the market enough of a kick to stabilise and potentially climb again. There was a lot of talk a few years back of 'pent up demand'. Unfortunately i think its still there, and it'll jump in (credit allowing) before it gets to the drops we're wishing for. 

That assumes the priced out will still be in a position to buy. It's unlikely there will be a crash without a recession.

[rockerboy]

lots of ifs, but if you have the money and the "house of your dreams" is up for sale, buy it - it may never be up for sale again.

 

 

 

 

[scottbeard]

It's hard to imagine many people wanting to buy a house pre-Brexit.  So if you come across a desperate seller with a house you love you might just be in a position to get a low offer accepted.  But don't do anything hasty with such a key decision.

Otherwise I'd be tempted to wait until later in the year, after the anticipated recession hits (globally - not just the UK incidentally) and the picture around both price falls and interest rate rises may become clearer.

[ebull]

Just now, Captain Kirk said:

I believe the same. Look at how they had to floor interest rates to reflate the 2008 bubble. They can't do that this time round. They are still floored.

That assumes the priced out will still be in a position to buy. It's unlikely there will be a crash without a recession.

I hope not but .... HTB for used houses plus QE to provide the money to the banks?

Not even sure that would crash the pound. Why would it? Gov lends newly printed fiat and receives 2% with security of houses ensuring that security does not lose value by continuing to provide liquidity for it.

Only way that could go wrong is there's an excess of supply. Likely?

[ebull]

It's all deja vu with folk on this forum saying it has to crash there's no other option. [Just like folk on this forum were saying 2004-2007].

The assumption of most posts on this fred that everyone who wants to buy needs a mortgage is also wrong. Some have cash. The decision is then different. One of the things I would worry about with a mortgage is the generally nasty [to customer] terms. Don't know if some are better than others but banks have a recent history of doing all sorts of dishonourable crap previously thought unthinkable. I would be concerned and keen to read the small print of a mortgage before signing one. Not sure they're mucvh better than the rip off that leasehold often is these days. Expect some banks are worse than others.

[Confusion of VIs]

10 hours ago, Jabbabhoy said:

I don’t actually think things will go higher if Brexit doesn’t happen, I think people have been stretched enough.

if Brexit happens and there is a run on the pound rates might have to go up quickly 

The BoE will let the £ and QE take the strain, if we get a hard Brexit interest rates are much more likely to go down than up.

If May gets her deal, nothing much will change for years and years.   

[Ballyk]

My thinking is - 

1.  Hard Brexit - economy contracts, recession, house prices fall (probably in house price terms the best outcome for most of us here, but not so great for society and the vulnerable);

2.  Remain - economy picks up slightly but interest rates rise (which many will be unprepared for), house prices fall.  Certain amount of civil unrest, or maybe just a prolonged period of grumbling;

3.  Theresa May's deal - pound rises, interest rates probably rise slightly.  House prices probably rise very slightly or are at least stable.  Risk of world recession around the corner though...

[24gray24]

The risks in my view are all on the down side. 

Brexit is a whipping boy, being blamed for collapse of a debt bubble that was built up years ago. 

There's a recession now. Prices not likely to go up in next 3 years. However prices could go down 50% in a global meltdown.  

So just wait 2 years while debt bubble unwinds then see. 

I don't think they can stop it unwinding now as they did in 2009. 

[GreenDevil]

Think of it as a seller. If youre flexible equity rich then someone offers you 500 for what your ea tells you was wrth 650 last year. What do you do? Nothing. Wait till the bad news is out of the way. Youd only sell now to close an estate, if youre repossed or think prices will be less than 500k next year.

 

[“Nasty Piece of work”]

Think:  Recession is a price worth paying to get rid of the pus engorged May, and the EU.  Only buy if the house will suit your needs for 5 years plus.

Edited January 7, 2019 by Freezer? Best place for it
Bizarre spaces.

[PeanutButter]

45 minutes ago, GreenDevil said:

Think of it as a seller. If youre flexible equity rich then someone offers you 500 for what your ea tells you was wrth 650 last year. What do you do? Nothing. Wait till the bad news is out of the way. Youd only sell now to close an estate, if youre repossed or think prices will be less than 500k next year.

 

So buying now could nab a bargain. 

People also sell because they have more children, because their jobs move, because they need to be nearer old relatives, because they inherit, because they’ve broken a hip and can’t go upstairs. 

[iamnumerate]

I have no idea where prices will go but I can't believe they can go up.  Waiting is probably a good idea, then again I would have said that in 2003 so what do I know.

However the difference is that now rates can't really drop more - although some want them to go back to .25 !

[Captain Kirk]

11 hours ago, ebull said:

Only way that could go wrong is there's an excess of supply. Likely?

Not sure about that. Excess of supply tends to be an effect rather than a cause. There was plenty of demand in Spain until it all went wrong. Then there was an excess of supply.

[b_real]

21 hours ago, Fromage Frais said:

Its not really a choice is it.

Buy now

• House prices still expensive
• Falls mainly in London from insane to very expensive
• Not much for sale

Buy after Brexit

• Possibility of 30% falls (boe)
• Possibility of 40% falls if rates rise (HPC)
• Forced sellers meaning more choice
• You know what your buying into
• You may have a better idea of what your employment will be like

It's already an overpriced market and could have fallen significantly even without Brexit.

I am of the mind that you simply cannot afford to buy before such an event given that valuations are this high unless...

• It's a one off property
• You get compensated ie 10% -20% off and you dont mind being another 10% ish out medium term (5-10 years).

Nobody is more desperate than me I even tried to make a few offers recently some even just under 10% off but people have refused.

Some vendors have the mind that they will also wait until after Brexit in case there is a magical rebound..,,there are also a lot of properties waiting to be listed after I have been told.

So they dont really want to sell and you would be foolish to buy.... so wait.

Where I live the owners of nice houses are often remain voters they called the referendum wrong and they are calling this wrong also imho.

Do you honestly think house prices are going to jump 10%+ on a EFTA/EEA deal?  Even Mays WA is two years of more waiting about.

Even a second referendum would need a general election to be morally acceptable and if remain won that we would have protests and more arguments etc etc etc.

It's either we are out right away or its months/years of this crap which is not going to be wonderful for the housing market either.

 

Nothing short of more QE, More funding for lending, reversal of S24 and cutting rates is good for house prices from here on in.

In a similar boat to the OP and this response pretty much sums up my thoughts. I'm tempted to put in super low (-15% to -20%) offers for one off properties (old builds, nice areas) and if accepted that would mitigate a good proportion of any future falls (or would it... assuming the fall would be from todays asking price rather than todays sale price if it sold). And even if price fell, i'd have a nice house in a decent area to live in for years or rent out if I need to move. 

The one thing I'm struggling to get my head around tho, is how easy it will be to obtain a mortgage after Brexit compared to before Brexit? I've already had a mortgage agreed on a previous house (that ended up failing the banks survey for being non-standard construction material). 

[iamnumerate]

25 minutes ago, b_real said:

In a similar boat to the OP and this response pretty much sums up my thoughts. I'm tempted to put in super low (-15% to -20%) offers for one off properties (old builds, nice areas) and if accepted that would mitigate a good proportion of any future falls (or would it... assuming the fall would be from todays asking price rather than todays sale price if it sold). And even if price fell, i'd have a nice house in a decent area to live in for years or rent out if I need to move. 

The one thing I'm struggling to get my head around tho, is how easy it will be to obtain a mortgage after Brexit compared to before Brexit? I've already had a mortgage agreed on a previous house (that ended up failing the banks survey for being non-standard construction material). 

I don't know how easy it would be to get a mortgage in the future.  However unless most buyers have cash, the harder for you to get a mortgage the harder it will be for everyone else and BTL's to re-finance so the cheaper prices will be for you.

Therefore I don't think it is something that you should worry about unless you have zero deposit.

I hope this helps.

[rockerboy]

As valid a question the "buy or not buy" is,  I think the following question should be asked first

"is anything going to really change the current housing market?"

I believe that anyone betting on a significant step change down in house prices sometime soon (outside of the capital) is taking a very risky bet for the following reasons.

Increase in renting

Recent times have unfairly rewarded those who took out "high risk" mortgages. I think this has made this last decade a "last roll of dice" chance to get on the housing ladder for most first time buyers (who had no "financial help"). I can't realistically see this changing for another 20 years or so now, and so I believe the percentage of people renting will continue to increase in the long term (to a level like in Germany?). This will continue to fuel BTL and "corporate" social housing.

Inherent IR Increase protection

If you look back since 2009, all house buyers have enjoyed fantastically low IR. They all should have been easily paying off debt and they all  should  have built up substantial equity (compared to the initial mortgage). If IR were to increase dramatically now, all that these people have to do, is re-mortgage back up to 25 years so that they can continue to afford where they live. Paying a mortgage for 35 years and gaining tax free HPI benefit is still (and always has been) better than paying rent all your life with the saving of what's left over into a housing fund. The difference gets sharper if you rent a room out as well. 

Skewed thinking

If you were to ask the "non-buyers" on this board, if they regret not buying when they could have done, you are likely to find the majority saying they wished they had bought and this skews what "non-buyers" say. The irony here is that those that bought against the advice of "non-buyers" have enjoyed significant HPI and are positive about what they did and their future. However, those that didn't buy, have locked themselves into a mindset of irrationally hoping "things will change" to justify their decision.

In the end...

Now where does that leave new house buyers today? My personal opinion is that I don't see anything hugely significant which will majorly de-stabilise the housing market. If a buyer really wants to buy and is financially prepared for significant changes,  then the question should be more if they wan to buy that house or not for the correct reasons whcih I believe are "Do I want to live there and I will be happy there"

[iamnumerate]

3 minutes ago, rockerboy said:

As valid a question the "buy or not buy" is,  I think the following question should be asked first

"is anything going to really change the current housing market?"

I believe that anyone betting on a significant step change down in house prices sometime soon (outside of the capital) is taking a very risky bet for the following reasons.

Increase in renting

Recent times have unfairly rewarded those who took out "high risk" mortgages. I think this has made this last decade a "last roll of dice" chance to get on the housing ladder for most first time buyers (who had no "financial help"). I can't realistically see this changing for another 20 years or so now, and so I believe the percentage of people renting will continue to increase in the long term (to a level like in Germany?). This will continue to fuel BTL and "corporate" social housing.

Inherent IR Increase protection

If you look back since 2009, all house buyers have enjoyed fantastically low IR. They all should have been easily paying off debt and they all  should  have built up substantial equity (compared to the initial mortgage). If IR were to increase dramatically now, all that these people have to do, is re-mortgage back up to 25 years so that they can continue to afford where they live. Paying a mortgage for 35 years and gaining tax free HPI benefit is still (and always has been) better than paying rent all your life with the saving of what's left over into a housing fund. The difference gets sharper if you rent a room out as well. 

Skewed thinking

If you were to ask the "non-buyers" on this board, if they regret not buying when they could have done, you are likely to find the majority saying they wished they had bought and this skews what "non-buyers" say. The irony here is that those that bought against the advice of "non-buyers" have enjoyed significant HPI and are positive about what they did and their future. However, those that didn't buy, have locked themselves into a mindset of irrationally hoping "things will change" to justify their decision.

In the end...

Now where does that leave new house buyers today? My personal opinion is that I don't see anything hugely significant which will majorly de-stabilise the housing market. If a buyer really wants to buy and is financially prepared for significant changes,  then the question should be more if they wan to buy that house or not for the correct reasons whcih I believe are "Do I want to live there and I will be happy there"

Interesting post - btw renting a room is not 100% easy for home owners - it is not always an option.

(Whether the rest of your post is correct, no idea, I really can't say where prices will go).

[Jabbabhoy]

15 minutes ago, rockerboy said:

As valid a question the "buy or not buy" is,  I think the following question should be asked first

"is anything going to really change the current housing market?"

I believe that anyone betting on a significant step change down in house prices sometime soon (outside of the capital) is taking a very risky bet for the following reasons.

Increase in renting

Recent times have unfairly rewarded those who took out "high risk" mortgages. I think this has made this last decade a "last roll of dice" chance to get on the housing ladder for most first time buyers (who had no "financial help"). I can't realistically see this changing for another 20 years or so now, and so I believe the percentage of people renting will continue to increase in the long term (to a level like in Germany?). This will continue to fuel BTL and "corporate" social housing.

Inherent IR Increase protection

If you look back since 2009, all house buyers have enjoyed fantastically low IR. They all should have been easily paying off debt and they all  should  have built up substantial equity (compared to the initial mortgage). If IR were to increase dramatically now, all that these people have to do, is re-mortgage back up to 25 years so that they can continue to afford where they live. Paying a mortgage for 35 years and gaining tax free HPI benefit is still (and always has been) better than paying rent all your life with the saving of what's left over into a housing fund. The difference gets sharper if you rent a room out as well. 

Skewed thinking

If you were to ask the "non-buyers" on this board, if they regret not buying when they could have done, you are likely to find the majority saying they wished they had bought and this skews what "non-buyers" say. The irony here is that those that bought against the advice of "non-buyers" have enjoyed significant HPI and are positive about what they did and their future. However, those that didn't buy, have locked themselves into a mindset of irrationally hoping "things will change" to justify their decision.

In the end...

Now where does that leave new house buyers today? My personal opinion is that I don't see anything hugely significant which will majorly de-stabilise the housing market. If a buyer really wants to buy and is financially prepared for significant changes,  then the question should be more if they wan to buy that house or not for the correct reasons whcih I believe are "Do I want to live there and I will be happy there"

Great response, I like your answers. I think we have found somewhere that will be good for us to stay for medium to long term. Looking at securing the longest deal possible i.e. 10 year if we can for stability. Thank you

[rockerboy]

Just now, Jabbabhoy said:

Great response, I like your answers. I think we have found somewhere that will be good for us to stay for medium to long term. Looking at securing the longest deal possible i.e. 10 year if we can for stability. Thank you

I hope you make the right decision for yourself -  we all have to wake up feeling great that we live where we live etc

IMO, one of the biggest things to think about are travel costs (from home to whereever). It rarely makes financial sense to buy the same sort of house in a cheaper location, because any saving in mortgage rarely covers the monthly spend on increased transport costs (for 2 people?).

[Aidan Ap Word]

51 minutes ago, rockerboy said:

As valid a question the "buy or not buy" is,  I think the following question should be asked first

"is anything going to really change the current housing market?"

I believe that anyone betting on a significant step change down in house prices sometime soon (outside of the capital) is taking a very risky bet for the following reasons.

Increase in renting

Recent times have unfairly rewarded those who took out "high risk" mortgages. I think this has made this last decade a "last roll of dice" chance to get on the housing ladder for most first time buyers (who had no "financial help"). I can't realistically see this changing for another 20 years or so now, and so I believe the percentage of people renting will continue to increase in the long term (to a level like in Germany?). This will continue to fuel BTL and "corporate" social housing.

Inherent IR Increase protection

If you look back since 2009, all house buyers have enjoyed fantastically low IR. They all should have been easily paying off debt and they all  should  have built up substantial equity (compared to the initial mortgage). If IR were to increase dramatically now, all that these people have to do, is re-mortgage back up to 25 years so that they can continue to afford where they live. Paying a mortgage for 35 years and gaining tax free HPI benefit is still (and always has been) better than paying rent all your life with the saving of what's left over into a housing fund. The difference gets sharper if you rent a room out as well. 

Skewed thinking

If you were to ask the "non-buyers" on this board, if they regret not buying when they could have done, you are likely to find the majority saying they wished they had bought and this skews what "non-buyers" say. The irony here is that those that bought against the advice of "non-buyers" have enjoyed significant HPI and are positive about what they did and their future. However, those that didn't buy, have locked themselves into a mindset of irrationally hoping "things will change" to justify their decision.

In the end...

Now where does that leave new house buyers today? My personal opinion is that I don't see anything hugely significant which will majorly de-stabilise the housing market. If a buyer really wants to buy and is financially prepared for significant changes,  then the question should be more if they wan to buy that house or not for the correct reasons whcih I believe are "Do I want to live there and I will be happy there"

 

35 minutes ago, Jabbabhoy said:

Great response, I like your answers. I think we have found somewhere that will be good for us to stay for medium to long term. Looking at securing the longest deal possible i.e. 10 year if we can for stability. Thank you

Great discussion.

 

For me this is how it worked out, I also bought because the security of tenure was more important than how ridiculous the price(s) was/are/is.

Defensive mortgaging (5yr fix, overpaying as much as possible etc) ... will hopefully get to me before any price crash happen(s) - if at all.

The thing is: I DO hope a serious correction occurs (so serious it might even need to look like a crash) - simply because I have children.

I don't want them to be treated like second class citizens for years and then have to compromise so much simply because the feckless are being/have been bailed out.

[Captain Kirk]

37 minutes ago, rockerboy said:

As valid a question the "buy or not buy" is,  I think the following question should be asked first

"is anything going to really change the current housing market?"

I believe that anyone betting on a significant step change down in house prices sometime soon (outside of the capital) is taking a very risky bet for the following reasons.

Increase in renting

Recent times have unfairly rewarded those who took out "high risk" mortgages. I think this has made this last decade a "last roll of dice" chance to get on the housing ladder for most first time buyers (who had no "financial help"). I can't realistically see this changing for another 20 years or so now, and so I believe the percentage of people renting will continue to increase in the long term (to a level like in Germany?). This will continue to fuel BTL and "corporate" social housing.

Inherent IR Increase protection

If you look back since 2009, all house buyers have enjoyed fantastically low IR. They all should have been easily paying off debt and they all  should  have built up substantial equity (compared to the initial mortgage). If IR were to increase dramatically now, all that these people have to do, is re-mortgage back up to 25 years so that they can continue to afford where they live. Paying a mortgage for 35 years and gaining tax free HPI benefit is still (and always has been) better than paying rent all your life with the saving of what's left over into a housing fund. The difference gets sharper if you rent a room out as well. 

Skewed thinking

If you were to ask the "non-buyers" on this board, if they regret not buying when they could have done, you are likely to find the majority saying they wished they had bought and this skews what "non-buyers" say. The irony here is that those that bought against the advice of "non-buyers" have enjoyed significant HPI and are positive about what they did and their future. However, those that didn't buy, have locked themselves into a mindset of irrationally hoping "things will change" to justify their decision.

In the end...

Now where does that leave new house buyers today? My personal opinion is that I don't see anything hugely significant which will majorly de-stabilise the housing market. If a buyer really wants to buy and is financially prepared for significant changes,  then the question should be more if they wan to buy that house or not for the correct reasons whcih I believe are "Do I want to live there and I will be happy there"

Except mortgage debt is the highest it's ever been and is distributed between fewer people. People are more in debt than ever before, even those without a mortgage. We have a bubble not a permanently high plateau in house prices.

[Houdini]

6 minutes ago, Captain Kirk said:

Except mortgage debt is the highest it's ever been and is distributed between fewer people. People are more in debt than ever before, even those without a mortgage. We have a bubble not a permanently high plateau in house prices.

+1 our current economy is based on / supported by / screwed by low interest rates that are little different to inflation - if and when this changes a lot of people are going to rapidly discover they have problems.

I was thinking about it earlier today with the announcement of another year of low new car sales. Car leases are currently cheap as they are based on deprecation and very low interest rates. When interest rates rise who is going to be able to buy a new car on credit....