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Psymon

Do I Buy A House Now Or Not?

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I have recently been given a pay raise that has bumped my salary up enough to catch the bottom of the housing ladder (single applicant FTB), with this in mind I've been looking what was available to buy in my area, before that is coming across this site! Now the problem I have is that I've found a 1 bedroom semi-detached in a very nice, near perfect, area and I am very fussy on areas! I reckon after negotiations I will be able to get it for less than £95K, which is a rarity in today's climate.

If I wanted this house then I would have to strike now, but then I came across this site and it got me worried. Would buying a house now, regardless of how affordable it is, be a big mistake? If some of these predictions that house prices will drop by 30% next year are true then this house will suddenly be worth around £65K! However that being said if I did move I wouldn't be planning to sell it for at least 5 years, maybe longer, so perhaps I would not end up with negative equity but just end up missing the chance to make a big profit!

I'm not in any rush to buy, living at home is a bit restrictive at 24 but it's not as if I'll have to live on the streets if I don't buy now. But if I don't buy now then there is a risk that house prices won't drop or worse still raise, and if that happens I'd be back to square one and unable to afford a house until my next big pay raise comes along.

So my question is what would you do in my position? Would you go for the property you know you can afford today, or would you take the gamble that this miraculous price crash, that everyone but this site seems oblivious to, will happen and suddenly I go from being able to afford a 1 bed semi to affording a 3-bed detached!!!

Remember I'm not sat here saying "oh why oh why can't I afford a house, please let there be a price crash", I'm saying "I have a small window of opportunity of getting on the property ladder in an area that I like now, but is that the right decision".

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You should try living at home at 30! Thats restrictive!

Anyway, if you've just had a decent payrise, why not start saving hard for a huge deposit?

Also you don't mention how safe your job is - this is one factor stopping me from buying at overinflated

prices. I'm assuming my salary will be 10K lower in a worse case scenario. Maybe I'm over cautious.

What are your motivations for buying? Could you rent for cheap?

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Im sure there will be no crash in your particular area.

Also if it does crash as you say it will crash by 30% in one year then climb back to original price within 5 giving you no negative equity.

Also sounds like you have found yourself an absolute bargain and if there is a crash your house will be safe.

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Would buying a house now, regardless of how affordable it is, be a big mistake?

Define affordable. If you get £2,000 a month and over night the apple market goes boom and apples are £1900 a pound are they affordable? Yes because you can buy a a pound and still have £100 to spare.

Are they good value that's a whole different matter. If you can only now just afford to buy after a pay rise, what about all the other Joe Bloggs how haven't had one or worse still lost their job lately. Affordable to you maybe but not in general.

I assume if you're in a position to consider buying you have a deposit? You can currently rent for less than the cost most mortgages so you would be no worse off renting for a year and seeing how things are then. The risk with that is if house prices go up significantly you are in a worse position but if they go down you're in a better one. You need to decide which is more likely, either way the wrong decision will cost you money while the right one will save you money.

If you want opinion then don't buy. If you want adivce, do research, look at the local trend by being here you seem to have taken the first step.

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If you dont take the small windows of oppotunity they will shut then you will regret not taking them, you dont want to live with regret for years now do you? Buy yourself a house and live happily ever after.

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Psymon,

I think you need to ask yourself some questions first:

You've just had a significant payrise, but where do you see your wages going from here?

Might you want more than one bedroom within the next, say, 10 years?

Why do you think you only have a small window of opportunity? If you think you can predict the future, then why are you asking for opinions here? ;)

Compare the costs of buying and owning this house against renting a similar property. What does that tell you?

This scenario would worry me if I were you: At age 30, you could be earning the same as today, living in your one-bed house in nice area worth, say, £75k with £80k of debt and a broody spouse. You now want to buy a £130k house. Do the math.

Don't take this decision lightly. More houses will come along and may be cheaper. Why do you think your "nice" house has suddenly come into your price range?

If the house is perfect then go for it. But be sure to drive a hard bargain: ask EA what offer vendor is looking for and offer 8-10% below this. You're in a very strong position as a first time buyer.

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Pysmon,

Prices are definately on the up. I was bearish for a time last year so I have no reason to suddenly become bullish other than as a result of the way I see the market going. We've had a stagnant market for 2 years, affordability is definately not an issue (unless you are brainless or on a very low income).

I know of several FTBs now buying. They are on modest incomes (£24000 ish) and are getting into £130+ mortgages I/O.

Longer term, sure there could be a crash, crippling illness, job loss et al, but IMO you just have to go for it if it makes you happy. Personally I would buy as I couldnt stand renting as for me personally I just dont like the idea.

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Psymon,

I think you need to ask yourself some questions first:

You've just had a significant payrise, but where do you see your wages going from here?

Might you want more than one bedroom within the next, say, 10 years?

Why do you think you only have a small window of opportunity? If you think you can predict the future, then why are you asking for opinions here? ;)

Compare the costs of buying and owning this house against renting a similar property. What does that tell you?

This scenario would worry me if I were you: At age 30, you could be earning the same as today, living in your one-bed house in nice area worth, say, £75k with £80k of debt and a broody spouse. You now want to buy a £130k house. Do the math.

Don't take this decision lightly. More houses will come along and may be cheaper. Why do you think your "nice" house has suddenly come into your price range?

If the house is perfect then go for it. But be sure to drive a hard bargain: ask EA what offer vendor is looking for and offer 8-10% below this. You're in a very strong position as a first time buyer.

Oh i dont know, the flats near me have gone from 99K -> 105K -> 107K and now today i see one listed at 115K seems to me that everyone should buy whilst they can before its all to late,

Sieze that oppotunity psymon!

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Can we treat newbies with a touch more respect please?

Why be sarcastic to someone coming on the board showing interest in our lines of thought.

He/She isn't the first to ask a question that we ALL know the answer to, and certainly won't be the last.

Lets stick to hitting newbies with the facts of the situation and drop the sarcasm.

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Can we treat newbies with a touch more respect please?

Why be sarcastic to someone coming on the board showing interest in our lines of thought.

He/She isn't the first to ask a question that we ALL know the answer to, and certainly won't be the last.

Lets stick to hitting newbies with the facts of the situation and drop the sarcasm.

Well what i said was factual :)

If he had read a word of this site .... cant be botherd to finish must go. Ill pick it back up later if i can be ars*d

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Psymon, spend a week or two reading through all of this site to get an understanding of what is actually going on in the property market.

I would also strongly suggest that you go to the websites of The Economist and Moneyweek and read their extensive articles on UK and global property prices, what they think is going on in the property market and where they think property prices are going. Frankly, once you have read those articles you will probably be too afraid to take on a mortgage either now or in the foreseeable future.

Two years ago The Economist had a very long article on property prices, which I believe is up on their website, and last Summer they had an article describing the property market as the biggest financial bubble in history.

Here is one link:

In Come The Waves

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Think carefully about buying into a 1 bed place. It wont be long before you wish you waited that bit longer to save up the extra deposit for a 2 bed place for extra space, other half etc...

The other factor you must consider is that in harder times, 1 bed places will suffer the most.

Dont fall into the trap of "I'll just let it out when i move up the ladder".

Your living at home and that should hopefully give you a lot more leverage to save as much as possible, patience is the key.

End of the day its your decision and you have to live with whatever path you take.

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It's up to you. Kudos to you for trying to gather as much information as possible. It's more than most people do!

For what it's worth I'm waiting until I can buy somewhere I could potentially live in (or make use of) for a decent period of time, not just a property so I'm on the mythical (and some might say now deceased) 'property ladder'. At the moment those properties are still at silly prices but those silly prices have been coming down, albeit slowly, for the past 18 months.

Take a deep breath, there's no rush. There are plenty of properties out there. Don't rush into buying the first one that you can afford. It could be an expensive mistake. With a joint income of ~£75k my fiancee and I could 'afford' plenty of places. Have we any intention of buying when we have only just passed the peak of the biggest property bubble this country has seen? I think not.

And as for this being your last or only chance, take a step back and have a think about how ridiculous that sounds. If you dive in and buy this place is that it for the rest of your peers or those still at school and University who haven't even thought about buying a house? Are they all doomed because you were the lucky last person to jump on the good ship Property Ladder. I think not.

But as I say, it's your choice. I wish you luck whatever you decide on doing.

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Guest Winners and Losers

bumped my salary up enough to catch the bottom of the housing ladder

Ummm, sorry, buy nowing and you are buying at the TOP OF THE MARKET. Never a good idea. Even if there is no crash, don't bank on prices going up significantly for the next 7 years at least. If you are happy to possibly end up in a negative equity situation for a few years, go for it. If not, what have you got to lose by waiting? Prices are stagnant at best. Don't believe the hype.

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Last time round, in 87/88, people were saying all the same things about if I don't buy now, etc etc. A friend of mine bought a one-bed flat near Cambridge, same sorts of arguments you're making.

Result - when the crash came, he was in massive negative equity and couldn't move. The next generation of FTBs skipped the one-bedders and went straight into two-bedders or small houses. The people who bought studios/one bedders at the top of the market got completely stuffed. He ended up getting his parents to guarantee a mortgage on a house as the only way of moving with NE.

History will repeat itself. You're 24, FFS, why do you want to submit to the mortgage - the grip of death - already?

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Never in the history of housing markets has there been a worse time to buy. We stand on the summit of the greatest housing bubble the world has ever known with a run up in prices of over 130% in 5-6 years. History shows that markets do eventually crash and the higher they have risen the further they fall. Look at the signs: rising unemployment, rising bankruptcies, rising company liquidations, increasing numbers of houses for rent and for sale, builders offering deep discounts on new houses.

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Can we treat newbies with a touch more respect please?

Why be sarcastic to someone coming on the board showing interest in our lines of thought.

He/She isn't the first to ask a question that we ALL know the answer to, and certainly won't be the last.

Lets stick to hitting newbies with the facts of the situation and drop the sarcasm.

I though newbies weren't allowed to start topics 4 this very reason, because we"re fed up of their inane ramblings and will only give them abuse.

Mods they need to be protected by not allowing them to post.

Coming on a hpc forum and asking whether you should buy a house is like asking in a church whether you should live a live of debauchery <_<<_<:o

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I noticed you are in the north of England which as far as I am aware is only just peaking now (unlike the south which has already peaked and is now falling). If you were in the south and you were able to haggle the seller right down (say 20%) asking I would say perhaps it's worth considering.

But, you are in the north. You have a good income and low outgoings. You said yourself you are in no rush. House prices in the north are probably not going much further up (if at all) in the near future. They might tread water for a bit but so what, you are in no hurry. I think now would be a good opportunity to really save hard while your income is good, keep your eyes open, then review what prices are doing in a year or so.

Once it has become established that prices are falling in the north it will be much easier to drive a hard bargain on a place you actually want to live in for a long time.

frugalista

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A one bedroom semi-detached?? I didn't even know you could get those.

I'm also a first time buyer to be. I'm now of the opinion that a crash is going to happen in the price of flats and new builds, but is less likely in houses except for those areas that have spiked dramatically in price in the last year to 18 months. IMHO I would steer well clear of flats but a proper house is still worth considering if in the right area.

I'm going to buy because I'm not happy waiting any more for a crash that was supposed to happen 2 years ago. I am borrowing less than what my lender is prepared to loan me, and my repayments as a proportion of my income are much, much less than the amount the lender considers the 'maximum'. My mortgage is also only slightly higher than my current rent, but I would be living in a 3 bed house instead of a 1 bed flat.

PS I will buying in an outer region of London

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  • 301 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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