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xsilver

I Just Don Know How Long I Can Wait!

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Right at the begining of all the house price rises infact before it all started kicking off around 1999-2000. My girlfriend and I were on the look out for a property and we found the ideal one which cost at the time £44000 (Those were the days) the problem was my girlfriend was at university and my wage was the only we had and all the bank would lend was £40000.

Cutting a ramble short i offered £40000 which was rejected and basically we did not buy a house. Now we have been watching in amazement property go through the roof (forgive the pun) and not only double but treble on some properties. The very same house is now "worth" around £140000

I have been telling my girlfriend to hold on until a crash happens which i have been convinced is going to happen and well is has not. Now she has got a good job as a teacher and i am working and after 5 years of saying a crash is going to happen, well nothing has.

I am getting an itchy trigger finger, and watching the the house prices still climbing be it a a smaller pace. I just really dont know what to do. I did say to my girlfriend if we purchased a house for £130000-£140000 now and the market crashed it would end up in a house worth £80000. Bankruptcy would look good then.

What do i do?

Thanks all

xsilver

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I really sympathise. There must be tens of thousands, if not more, people in your position. It's tough to resist the pressure when the correction is slow to develop. But why not keep renting and saving? That's what I'm doing and I will be prepared to keep on doing it for a a few more years if necessary. It's by far the best option in the perspective of the next two or three years. By holding out now you will reap the benefits.

Almost all the risk is on the buying side at the moment. Prices are unsustainable and even the bullish assessments don't see prices going up much. Despite the headlines the Nationwide and Halifax interpretations are getting more and more cautious in tone. And with good reason. A global credit squeeze is developing and this will create a new wave of downward prssure on prices. A recession is on it's way, signalled by rising unemployment, rising bankruptcy, rising CCJs, rising reposessions etc. There has never been a worse time to buy and those who do will get very, very badly hurt.

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What do i do?

Thanks all

xsilver

Do what you want. If you feel that buying at the top of the market is for you then go ahead. Personally I don't see a 'crash' happening without a trigger. I suspect prices will decline slowly over the next 7-8 years. The end result will be the same. In fact when I look at actual prices paid I believe that trend started in many areas in 2003/04. Of course there will be blips like now, but the trend will be down.

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welcome aboard - we have missed this "boat" [bad choice of puns]

have you ever raced to get to the ferry only to miss it and kiss it goodbye? Standing at the dock all alone and feeling sorry for yourself?

you dont have much choice but to wait for the next one - or swim after the one you ve missed (can you afford to get wet / i.e be in negative equity and live in a small home?)

The time to buy will come round again - its just unfortunate we want to "buy" now. Just bad timing i suppose.

There will be other people arriving at the dock who arent late - do you think the next ferry will never come? I.e. There are no new first time buyers? Thats very hard to see.

Edited by notanewmember

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If houses are £140K around your way, then with two salaries then you, like me, are much better off than most people in the country.

You could try doing the figures to see how much owning would cost you (don't forget to figure in extra maintenance, buildings insurance, etc.) For me it comes out as renting being cheaper than buying, and therefore without capital appreciation, it makes more sense to rent than buy right now. Given house prices round your way being similar to here, it might be the same for you.

Billy Shears

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A few questions you should be asking yourself;

How much rent do you pay?

How much would a mortgage and running costs be?

Do you see prices dropping in nominal terms?

How easy would it be to survive on one salary?

I wouldn't start digging your bunker yet, Japan, Europe and the US economies are motoring away I would expect the UK economy to show signs of improvement this year too. I don't expect another housing boom for a while but I don't expect a crash either.

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xsilver,

I empathise. You've been unlucky, but there are many more like you. I'm in a similar position and I can't bring myself to risk all for an overpriced dump, which is what I would have to do to buy now. I wouldn't mind taking a long term financial risk on a house that I really wanted to live in, but to overstretch oneself for a rabbit hutch could prove ultimately self-destructive. I waiting for some sort of correction. In the mean time I amuse myself by writing to Gordon Brown and my local MP. It's cheaper than going to the pub, which means I save more for my deposit.

Wasn't "Prosperity for All" the Labour slogan at the last election. Should have been "Prosperity for all homeowners and sloblocks to the rest of you".

Why not apply for a council house?

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Right at the begining of all the house price rises infact before it all started kicking off around 1999-2000. My girlfriend and I were on the look out for a property and we found the ideal one which cost at the time £44000 (Those were the days) the problem was my girlfriend was at university and my wage was the only we had and all the bank would lend was £40000.

Cutting a ramble short i offered £40000 which was rejected and basically we did not buy a house. Now we have been watching in amazement property go through the roof (forgive the pun) and not only double but treble on some properties. The very same house is now "worth" around £140000

I have been telling my girlfriend to hold on until a crash happens which i have been convinced is going to happen and well is has not. Now she has got a good job as a teacher and i am working and after 5 years of saying a crash is going to happen, well nothing has.

I am getting an itchy trigger finger, and watching the the house prices still climbing be it a a smaller pace. I just really dont know what to do. I did say to my girlfriend if we purchased a house for £130000-£140000 now and the market crashed it would end up in a house worth £80000. Bankruptcy would look good then.

What do i do?

Why would you come on here and ask?

If you can afford it buy it. Housing is more than money. It is 'putting down roots' and 'having a place to call your own'.

If you find somewhere you like AND can afford it then get it.

OR wait for this crash which MAY happen this year, next year or in 7 (7!!!!!) years time.

And in 7 years time you may still be asking if this year is the time to buy!

One thing you won't get back is the time you spend deliberating and reading this website for advice.

HTH

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Why would you come on here and ask?

If you can afford it buy it. Housing is more than money. It is 'putting down roots' and 'having a place to call your own'.

If you find somewhere you like AND can afford it then get it.

OR wait for this crash which MAY happen this year, next year or in 7 (7!!!!!) years time.

And in 7 years time you may still be asking if this year is the time to buy!

One thing you won't get back is the time you spend deliberating and reading this website for advice.

HTH

Great point. One thing many bears skirt around, is that many of the dramatic graphs they publish are actually real prices, in nominal terms prices dropped about 13% in the 90's but inflation did most of the damage.

You could spend your entire life convincing yourself it is never a good time to buy shares, property or any other assets, even when they are cheap. Remeber the time around the Iraq war? The number of people that poked the finger of doom at the markets....

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Why would you come on here and ask?

If you can afford it buy it. Housing is more than money. It is 'putting down roots' and 'having a place to call your own'.

If you find somewhere you like AND can afford it then get it.

OR wait for this crash which MAY happen this year, next year or in 7 (7!!!!!) years time.

And in 7 years time you may still be asking if this year is the time to buy!

One thing you won't get back is the time you spend deliberating and reading this website for advice.

HTH

I think xsilver made his reason for coming here clear:

"I am getting an itchy trigger finger, and watching the the house prices still climbing be it a a smaller pace. I just really dont know what to do. I did say to my girlfriend if we purchased a house for £130000-£140000 now and the market crashed it would end up in a house worth £80000. Bankruptcy would look good then."

Seeking views about the risk of taking on a big debt now seems to me to be very sensible.

As for affordability, is it the house price that is affordable or the debt repayments? If the latter, what would happen if circumstances changed, like IR going up or income falling? In a a low interest rate, high debt environment these are crucial questions.

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If you want to get away from renting and all the hassles that it brings then buy.

Some people can never think of putting down roots in rented accommodation.

Just get used to the fact your house may temporarily go down in price. Your guess on how much it will go down by is just as good as anyone elses. If you pick a house you like then what will it matter? Keep it until it goes up in price then sell.

Put in a few ridiculously low offers to get a real feel for the market and buy one that you are comfortable paying the price, dont overstretch yourselves.

Equally when it eventually comes round to selling then spruce the place up and hold out for top dollar.

Good luck.

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Why would you come on here and ask?

If you can afford it buy it. Housing is more than money. It is 'putting down roots' and 'having a place to call your own'.

If you find somewhere you like AND can afford it then get it.

OR wait for this crash which MAY happen this year, next year or in 7 (7!!!!!) years time.

And in 7 years time you may still be asking if this year is the time to buy!

One thing you won't get back is the time you spend deliberating and reading this website for advice.

HTH

All this putting down roots stuff strikes me as being unrealistic. When you buy a house it's not as if it's yours permanently. You might want to sell it, you might be repossessed... but if you keep hold of it then sooner or later the Grim Reaper will take it from your grasp and give it to your heirs. You won't get a penny in compensation. By continually renting you're accepting the transitory nature of life, and you're also giving yourself the freedom to make the most of what's on offer.

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All this putting down roots stuff strikes me as being unrealistic. When you buy a house it's not as if it's yours permanently. You might want to sell it, you might be repossessed... but if you keep hold of it then sooner or later the Grim Reaper will take it from your grasp and give it to your heirs. You won't get a penny in compensation. By continually renting you're accepting the transitory nature of life, and you're also giving yourself the freedom to make the most of what's on offer.

That's all fine but where are you going to find the rent money each month when you retire? Try renting a 3 bed semi on a pension. You are more likely to end up renting a squalid council flat in a crime ridden area.

Most working people today have little or no savings. Why will this be any different when they retire? i ask again, where's the rent money going to come from?

Most people pay off their mortgage at an earlier age than retirement, often in their late 40s.

That's a hell of a lot of rent money saved... and you get the option of downsizing when you retire to fund other ventures. What were you saying about freedom?

(Try funding a holiday on a pension AND paying rent)

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By continually renting you're accepting the transitory nature of life, and you're also giving yourself the freedom to make the most of what's on offer.

And the transitory nature of landlords. Which is no fun if you've faced being moved onfour times in five years, as my mother has. Fine if you're young, footoose and fancy free, not so fine if you're my mum struggling on a pension and unable to afford anything but a tiny flat on HB. And not good at all if you have children.

Edited by vicster

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Looks like we have some new members from the CH4 forums offering advice.

Advice from OO's who's only worry in life is that the housing market will correct enabling people to afford reasonably price homes, so they offer up the likes of the following.......

Just get used to the fact your house may temporarily go down in price. Your guess on how much it will go down by is just as good as anyone elses. If you pick a house you like then what will it matter? Keep it until it goes up in price then sell.

Put in a few ridiculously low offers to get a real feel for the market and buy one that you are comfortable paying the price, dont overstretch yourselves.

Equally when it eventually comes round to selling then spruce the place up and hold out for top dollar.

Good luck.

You can take such advice from unknown forum contributers, there again you could take the advice of Mervyn King Governor of the Bank of England

"House prices are a matter of opinion. Debt is real"

You may well ask why when the rest of the world is raising interest rates [turning off the tap, removing liquidity from the market by cost pressure] The BOE is holding theirs? Short answer the UK economy is weak because it centers around retail being funded by people who live under the illusion they are wealthier the more housing debt they have around their necks. [Remember Debt is Real, house valuations are a matter of opinion]

Germany has strong exports, Japan has strong exports [check out how well Japans residential market valuations have done over the past 15 years even on near Zero interest rates ] We on the other hand incur debt buying imported goods and servicing housing debt.

It's a Catch 22, either way the Bank is hamstrung, all Merv is trying to do is the bidding of his political masters supporting the pyramid scam that generates taxes for Grasping Gordon. Plus they do not want everybody heading for the Exits at the same time. And for those who believe the spin and cannot see the writing on the wall, he has gone on record with the obvious warning. That's for when the shit hits the fan, he will be able to refer all those blind baying fools looking for his blood to the above quote.

Fact is this lastest and largest ever housing boom has been fuelled by cheap money from Japan being lent out by other western banks to home buyers at larger than the norm earnings ratio's. Japan however has now put the world on notice this cheap never ending supply of money that has fuelled all this debt is coming to an end, THE TAP IS BEING TURNED OFF. Don't belive it ? Well the precursors to a correction are there for all to see........

World Interest rates rising

Repossesions up

Bankrupcies up

More debt help lines being set up

Bigger part of earnings going to service housing debt

Banks setting billions aside for the antisipated defaults due to bad lending.

Unemployment rising.

House ASKING prices raising as discounting demands are rising.

House Builder profits warnings

Lowest ever First Time Buyer participents in the market [only the dumb and or bank rolled, less informed are still buying]

Pound dropping in value because the rest of the world see we are in the sh*t

There again if you believe the housing market has finished it's correction via a "Soft Landing" at the peak of the market [work that one out] .....you better get on that ladder...there again you are also in a position to step aside that very same ladder that is in danger of crashing on your head.

100% Interest only Mortgage at a rate of 5% on the house I currently rent at current Land Registary valuations, would be 12K excluding insurance, boiler servicing contact, maintainance and renewals. I pay 6.9K so you tell me if renting is dead money ?

Edited by Catch22

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Guest Winners and Losers

World Interest rates rising

Repossesions up

Bankrupcies up

More debt help lines being set up

Bigger part of earnings going to service housing debt

Banks setting billions aside for the antisipated defaults due to bad lending.

Unemployment rising.

House ASKING prices raising as discounting demands are rising.

House Builder profits warnings

Lowest ever First Time Buyer participents in the market [only the dumb and or bank rolled, less informed are still buying]

Pound dropping in value because the rest of the world see we are in the sh*t

You forgot to add 'Year of the Dog' ;)

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I have basically been told that my mortgage payments without any insurances would be £991 per month (25 year repayment fixed till 2009) . This would effectively take all of my wages and leave my girlfriends to live on. If as someone stated i lost my job or even worse my girlfriend lost her job that would pretty much finish us off.

Thanks to everyone who gave constructive advice. I did come hear to listen to everyones opinions but the choice is still difficult. I did say to my girlfriend that negative equity really becomes a problem but only when you want to move.

I know from my three sisters that the most money/profit that enabled them to move up the ladder was to be made in all three instances from the first house that they purchased. I just feel that if the goes belly up that you will be forever fighting to move in bigger and better properties.

And remembering the old saying "location , location , location" There is a specific reason for stating that these are the three most important facts about purchasing property by enforcing the same point three times because it is that important. And to buy in a good location just adds to the problem.

Thanks everyone

xsilver

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Do what you want. If you feel that buying at the top of the market is for you then go ahead. Personally I don't see a 'crash' happening without a trigger. I suspect prices will decline slowly over the next 7-8 years. The end result will be the same. In fact when I look at actual prices paid I believe that trend started in many areas in 2003/04. Of course there will be blips like now, but the trend will be down.

I also think about this posibility (although in my opinion, there are many red flags flying around and they could well be the trigger). If your scenario is true, well that is still very good, in real term the price will have groppes quite a lot. In the mean time I save significant monney and I keep the liberty of moving if needed :) .

TWT

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Guest The_Oldie
Thanks to everyone who gave constructive advice. I did come hear to listen to everyones opinions but the choice is still difficult. I did say to my girlfriend that negative equity really becomes a problem but only when you want to move.

It really boils down to what you think the housing market is going to do. Never mind negative equity, if you pay £200K for a house that is only worth £150K in two years time, you have lost £50K, regardless of whether or not you are in negative equity.

Only you can decide whether it's worth the risk. Of course, the bulls could be correct and property prices may rise, in which case you would have made a good investment. However, most people who post here believe that house prices will fall in the short to medium term, but that's the nature of this site.

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Hi everyone

Just a quick update! A property that we viewed last week has now been reduced by £5000 from £140000. My girlfriend had a phone call today to tell her of the reduction. When she asked why it was reduced, he told her that the vendor wanted a quick sale.

The slide begins! well maybe lol

See you later

xsilver

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  • 302 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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