Jump to content
House Price Crash Forum
boo

Help Please! - When Should I Buy?

Recommended Posts

Hi

My husband and I are looking to buy our first place. I only want to get a mortgage for 2.5 times our joint salary which should be around the 250,000 mark.

The question is when should we buy? We have been holding off for ages and it seems as if we will never get on the property ladder if we keep waiting, but I am scared of negative equity, even though we will make over payments when we can.

Does anyone think it is a good time to buy?

We are looking in South West London/ Surrey btw

Share this post


Link to post
Share on other sites

Bump

Are you saying wait for the "crash"? As we have been doing that for nearly 2 years, and paying rent when I could have been paying a mortgage off....

Share this post


Link to post
Share on other sites

Hi

My husband and I are looking to buy our first place. I only want to get a mortgage for 2.5 times our joint salary which should be around the 250,000 mark.

The question is when should we buy? We have been holding off for ages and it seems as if we will never get on the property ladder if we keep waiting, but I am scared of negative equity, even though we will make over payments when we can.

Does anyone think it is a good time to buy?

We are looking in South West London/ Surrey btw

Boo,

When do you think is a good time to buy? Also why buy now? Can you rent somewhere cheaply and save? If so, with your earnings, you should be able to save one hell of a deposit.

Share this post


Link to post
Share on other sites

Look at the graph on the front page. It has stopped going up, it will start going down shortly, when it stops going down buy then.

Share this post


Link to post
Share on other sites

Are you saying wait for the "crash"? As we have been doing that for nearly 2 years, and paying rent when I could have been paying a mortgage off....

No offence, but if you're genuinely soliciting advice from an internet forum, you're mad.

If you're genuinely soliciting it from this forum, you're stark raving bonkers.

Share this post


Link to post
Share on other sites

Are you saying wait for the "crash"? As we have been doing that for nearly 2 years, and paying rent when I could have been paying a mortgage off....

You can pay a mortgage off by saving. If your rent is less than an Interest Only Mortgage on the same type of property. You win!!

Count the rent as the "interest only" part of the mortgage (though lower than a real mortgages interest) and the savings as the repayment

part, though you will get interest on that too.

Edited by OzzMosiz

Share this post


Link to post
Share on other sites

Are you saying wait for the "crash"? As we have been doing that for nearly 2 years, and paying rent when I could have been paying a mortgage off....

No he is saying... Bump Up My Post!!! :lol::lol:

Share this post


Link to post
Share on other sites

No offence, but if you're genuinely soliciting advice from an internet forum, you're mad.

If you're genuinely soliciting it from this forum, you're stark raving bonkers.

And if you listen to Seamaster you'll end up bankrupt.

Share this post


Link to post
Share on other sites
Guest

It looked like things were going belly-up last year, until the interest rate cut in August. It would appear that the rate cut has massaged people's sentiments about the market - at least for the time being.

It's on a fine line now. It was last year, and it still is. Fights break out on this forum about whether such-and-such piece of news indicates we're going down again, or whether we're going to hold up.

Some people say it will take 15% interest rates to kill it off (like 1989), but this could not be further from the case. House prices are astronomic now and wage rises have been very poor compared to decades past. This puts us very sensitive to rates, as last year, and the ongoing fights on this forum, prove in my opinion.

edit- "bump" is just a way people have of shoving an interesting topic back to the top of the list. It doesn't mean anything.

Edited by megaflop

Share this post


Link to post
Share on other sites

Hi

My husband and I are looking to buy our first place. I only want to get a mortgage for 2.5 times our joint salary which should be around the 250,000 mark.

The question is when should we buy? We have been holding off for ages and it seems as if we will never get on the property ladder if we keep waiting, but I am scared of negative equity, even though we will make over payments when we can.

Does anyone think it is a good time to buy?

We are looking in South West London/ Surrey btw

Simple answer: STAY RIGHT OUT!!!!!! - http://www.housepricecrash.co.uk/forum/ind...showtopic=28431

Share this post


Link to post
Share on other sites

I am not looking for someone to say yes or no to buying now. I just want to get a general opnion on what people think is happening to the market.

Homeowner friends of mine think we are mad to not have bought yet, and say that there wont be a crash as there is too much demand for housing.

Also I dont understand the "interest only" mortgage situation, how is this better than just a plain old repayment?

Share this post


Link to post
Share on other sites
Guest Charlie The Tramp

edit- "bump" is just a way people have of shoving an interesting topic back to the top of the list. It doesn't mean anything.

Or in this case disappearing into the blueyonder before being approved and giving fair exposure on the main page to the poster. ;)

Share this post


Link to post
Share on other sites

Hi Boo,

I just bought. I wouldn't really say it's a "good time to buy" as such - might be worth waiting a bit longer yet, and I know plenty here would advise that. So don't take this as me necessarily advising you to buy, however here is a summary of my reasons for buying...

Firstly I have a daughter who needs a bedroom, and as my partner is forty, we can only get a 24 year mortgage - this will reduce over time. That affects my calculations.

I'm in North London. My personal feeling (disputed by some here) is that London is less overpriced than last time (because in 1996 the crash had made it underpriced and some of the increases were a "correction") and may fall less than other areas. I've bought in an decent area that suffered less than average falls last time and hoping that I won't get wiped out if there are falls. Plus which if the falls aren't too severe, it may help me move on to another place in future.

I think the comparison between renting and buying is very relevant. If you can save a lot by renting, then you are building a bigger deposit and improving your position. For me, there is not such a big gap between renting and buying. So waiting will only improve my buying power if there are significant falls. I think that might happen, but I also think there may be stagnation or slow falls, and that wouldn't help me.

Waiting for me takes a risk of meaning I'm priced out again. That doesn't sound like it applies to you. However do bear in mind when you do you sums that if you rent for a few years now, that is a few years (in 25 years time) when you will still be paying off a mortgage. I think the most honest way of making the comparison is between a 25 year mortgage, and say 3 years of renting plus a 22 year mortgage. That gives you a more accurate idea of the real comparison.

This is probably a big bubble and the falls may be large. But prior to the last crash, the previous two crashes were crashes in real prices, but not nominal ones (ie inflation helped wages catch up with house prices). Not sure what will happen this time, but I think you need to at least consider the possibility that there won't be a crash in nominal prices.

Finally if you do the sums and think you want to buy now there are a few obvious things to bear in mind which may help cushion you against possible falls. Go for the best area you can afford. Look for a property with lasting appeal. Avoid urban new-build flats like the plague as they are clearly overpriced in an investment bubble. Maybe try to get something that is underpriced because of its condition and do it up, if you have the time and energy as that may help protect your equity. Personally I also went for a fixed rate mortgage because higher interest rates would be a problem.

I like being an "owner" after many years of renting - I find it much more emotionally rewarding to have a place I can do up. Some are happy renting. Personally I think the current state of house prices is a bad thing for the country and probably unsustainable. But I don't think we can wave a magic wand and be where we were ten years ago either - so all we can do is make an informed decision based on our own situation. This is an excellent site for information (not always reliable...) and for seeing how different people make their decisions, but it obviously has a bias towards not buying now, so a few people will probably tell me what an idiot I am now....

Good luck whatever you do.

Share this post


Link to post
Share on other sites
Guest
Homeowner friends of mine think we are mad to not have bought yet, and say that there wont be a crash as there is too much demand for housing.

Did your friends predict a doubling / tripling of house prices back in 1997?

I am being serious here.

Also I dont understand the "interest only" mortgage situation, how is this better than just a plain old repayment?

You must have some way of making extra payments or else you will never actually own the house at the end of the term.

Share this post


Link to post
Share on other sites

Also I dont understand the "interest only" mortgage situation, how is this better than just a plain old repayment?

It's not, it's much much worse. People seem to think it is a sensible thing to do, and the banks love it because they can sell more mortgages by offering these. It's very irresponsible because they are not checking how people are going to pay off the mortgages, and many people will end up with massive debts after 25 years.

I think it's appalling that the banks are doing this, and it's helped to sustain high house prices.

Share this post


Link to post
Share on other sites

I am not looking for someone to say yes or no to buying now. I just want to get a general opnion on what people think is happening to the market.

Homeowner friends of mine think we are mad to not have bought yet, and say that there wont be a crash as there is too much demand for housing.

Also I dont understand the "interest only" mortgage situation, how is this better than just a plain old repayment?

I think the market has reached the top and is starting to fall in some places. Possibly we are in a bit of a spring bounce at the moment but I don't think it will last.

I think we should have a much clearer picture at the end of the year but I'm afraid it will be three of four years before buying become a sensible option. I don't like it but I don't like negative equity either.

Share this post


Link to post
Share on other sites

Homeowner friends of mine think we are mad to not have bought yet, and say that there wont be a crash as there is too much demand for housing.

"Too much demand" is a pretty bogus argument incidentally. People said that in 1989, and then strangely enough that massive demand fell hugely once prices started falling.

I do think though that it is possible that the huge wave of BTLers has artificially raised the equilibrium level of the market. That's not an argument that prices can keep going up though - only one that they might not fall quite as far.

Share this post


Link to post
Share on other sites

Does anyone think it is a good time to buy?

There may be one or two down the road in the local mental hospital who think so... Oh, and Kirstie Allsop.

Buy when average house price = three times average salary. Not before.

Share this post


Link to post
Share on other sites

I am not looking for someone to say yes or no to buying now. I just want to get a general opnion on what people think is happening to the market.

Homeowner friends of mine think we are mad to not have bought yet, and say that there wont be a crash as there is too much demand for housing.

Also I dont understand the "interest only" mortgage situation, how is this better than just a plain old repayment?

I'm sorry, I really can't believe your posts. Why are you asking this forum wether you should buy or not? Take time to read through the many news items, have a look at the graphs, look out for posts by Dr Bubb (check out his own website), Realistbear etc.

Is it me ? or do some of these types of posts sound like they're orchestrated by the same person, stating as many reasons why everyone else thinks it's such a great idea to buy, and not enough reasons not to buy.

I'm sorry boo - but if you're genuine this website is seriously going down the toilet.

Regards

JBeau a HPC fan for many yeras until now :angry:

Share this post


Link to post
Share on other sites
Guest Charlie The Tramp

Also I dont understand the "interest only" mortgage situation, how is this better than just a plain old repayment?

Borrow 200k at an average 5% over 25 years. On an interest only you will pay 100k plus in extra interest over a repayment mortgage and still owe the original 200k.

Share this post


Link to post
Share on other sites

Also I dont understand the "interest only" mortgage situation, how is this better than just a plain old repayment?

When you get a 250K mortgage, you will need to pay interest over the life of the mortgage. This is likely to be around 150K in total (or around this depending on interest rates). Therefore you will end up paying 400K by the end of the term.

You can, however, get mortgages where you just pay the interest and defer the repayment til a later date (to make it easier to mange in the beginning, or to invest the repayment somewhere to build up). Lots of first time buyers are doing this at the moment to get on the ladder - a bad idea in my opinion.

If you can rent somewhere that is less than the interest only part of the mortgage (if you bought that place), then you have more capital (repayment) available to save. Therefore you are better off renting than buying. Also you don't have to maintain the house if anything breaks (boiler, leaks etc).

The downside is you could have to move onto other rented accomdation after the 6/12 month lease, if the landlord wants to sell/move in.

Edited by OzzMosiz

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 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%



×
×
  • Create New...

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.