Taking The Plunge

[blind_canary]

I am a bear who has been predicting a crash for 3 years and still do not see it happening.

I have delayed purchasing a house for the last 2 years based on the fact that house prices can only come DOWN.

After all the excitement of IR increases and the credit crunch/stock crash, I see no change in HP's. IR look set to decrease next month if anything, Fed bailed out the banks and credit tightening is not happening.

I sold my house last month with the intention of renting and watching prices come crashing down and bagging a bargain. After finally giving in to the wife I agreed to have a look around some houses and as you can guess we found the perfect house.

We are taking out a huge mortgage (150k) 950 a month, which is ridiculous I know, but i'v decided to just go ahead with it as I remortgaged 2 years ago instead of upgrading and I noticed that the ownders of the house i am buying bought the house for 150k. So not buying 2 years ago has cost me 10k (my house has gone up 10k in that time).

My question is, if I am in the house for 5years and prices do come down next year say 10%, surely over the 5 year period prices can only be HIGHER than they are now. I just dont think waiting for a HPC that may never come is worth the financial risk and more importantly my marraige.

No doubt I will get slated by you all for joinging the growing list of debt slaves but Iv missed out once and i dont want to miss out again.....

[LargelyIgnorant]

I am a bear who has been predicting a crash for 3 years and still do not see it happening.

I have delayed purchasing a house for the last 2 years based on the fact that house prices can only come DOWN.

After all the excitement of IR increases and the credit crunch/stock crash, I see no change in HP's. IR look set to decrease next month if anything, Fed bailed out the banks and credit tightening is not happening.

I sold my house last month with the intention of renting and watching prices come crashing down and bagging a bargain. After finally giving in to the wife I agreed to have a look around some houses and as you can guess we found the perfect house.

We are taking out a huge mortgage (150k) 950 a month, which is ridiculous I know, but i'v decided to just go ahead with it as I remortgaged 2 years ago instead of upgrading and I noticed that the ownders of the house i am buying bought the house for 150k. So not buying 2 years ago has cost me 10k (my house has gone up 10k in that time).

My question is, if I am in the house for 5years and prices do come down next year say 10%, surely over the 5 year period prices can only be HIGHER than they are now. I just dont think waiting for a HPC that may never come is worth the financial risk and more importantly my marraige.

No doubt I will get slated by you all for joinging the growing list of debt slaves but Iv missed out once and i dont want to miss out again.....

Another 'Bear turned Bull'. Couldn't you wait more than a month?

You should buy 2 houses to make extra sure you don't miss the boat - all of this credit crunch subprime fallout stuff could never affect the UK housing market - we're an island after all.

[OzzMosiz]

You haven't lost 10K until you buy. Also interest rates are not coming down next month or even next year in all probability.

[The Colour]

My question is, if I am in the house for 5years and prices do come down next year say 10%, surely over the 5 year period prices can only be HIGHER than they are now. I just dont think waiting for a HPC that may never come is worth the financial risk and more importantly my marraige.

Interestingly, you did not pose this as a question, although you started with "My question is". You are kind of making a statement ie "surely over the 5 years..."

It may be that you are making this statement to convince yourself.

Surely over the next five years no-one knows what will happen. But if you look at the last crash they indeed took about 5 years to recover (citation needed).

[Rachel]

I am a bear who has been predicting a crash for 3 years and still do not see it happening.

I have delayed purchasing a house for the last 2 years based on the fact that house prices can only come DOWN.

After all the excitement of IR increases and the credit crunch/stock crash, I see no change in HP's. IR look set to decrease next month if anything, Fed bailed out the banks and credit tightening is not happening.

I sold my house last month with the intention of renting and watching prices come crashing down and bagging a bargain. After finally giving in to the wife I agreed to have a look around some houses and as you can guess we found the perfect house.

We are taking out a huge mortgage (150k) 950 a month, which is ridiculous I know, but i'v decided to just go ahead with it as I remortgaged 2 years ago instead of upgrading and I noticed that the ownders of the house i am buying bought the house for 150k. So not buying 2 years ago has cost me 10k (my house has gone up 10k in that time).

My question is, if I am in the house for 5years and prices do come down next year say 10%, surely over the 5 year period prices can only be HIGHER than they are now. I just dont think waiting for a HPC that may never come is worth the financial risk and more importantly my marraige.

No doubt I will get slated by you all for joinging the growing list of debt slaves but Iv missed out once and i dont want to miss out again.....

on one hand you say you've delayed buying for 2 years and o the other you say you sold your house last month? that's rather confusing.

[19 year mortgage 8itch]

Yawn... did you see what the site is called? Go ahead and do it. Just remember to buy me a pint when you're a property millionaire. Tr...

[blind_canary]

Yawn... did you see what the site is called? Go ahead and do it. Just remember to buy me a pint when you're a property millionaire. Tr...

Sorry, I do not want a fight with anyone I looking for advice, I am as big a bear as anyone but I want to provide my wife and I with a nice home, thats all.

Im not buying a house to make a profit i am buying a house for somewhere to live! My only concern is buying at the wrong time and in a couple of years time having 20k of negative equity!

Sorry if my question does not make sense, I would like to know peoples opinions on whether my 170k house will be worth more in 5-10 years than it is now? ie Do you think I will end up with negative eqitity?

[stonethecrows]

Sorry, I do not want a fight with anyone I looking for advice, I am as big a bear as anyone but I want to provide my wife and I with a nice home, thats all.

Im not buying a house to make a profit i am buying a house for somewhere to live! My only concern is buying at the wrong time and in a couple of years time having 20k of negative equity!

Sorry if my question does not make sense, I would like to know peoples opinions on whether my 170k house will be worth more in 5-10 years than it is now? ie Do you think I will end up with negative eqitity?

My advice would be that you've got this far, would it hurt to wait til after Xmas to see how things pan out-then is traditionally a quieter time even in a busy market so vendors would welcome the attention and you wouldnt lose if a crash was 'postponed' again. Holding out a few months longer wouldnt actually lose you that much in real terms but could well save you a vast amount ie if the market does drop through the floor (as many are taking as a given now). Save what you would have spent in mortgage repayments and see where the market is headed then.

[Benedict]

Sorry, I do not want a fight with anyone I looking for advice, I am as big a bear as anyone but I want to provide my wife and I with a nice home, thats all.

Look at it this way, if the crash does come and you actually were right, would your wife appreciate you smugly telling her so?

[LittleBro]

IMO if you've already been on the housing market and you're looking at a place to live in, then now is as good a time as ever to buy.

I think timing is only really important if you're a BTL or FTB, buying a home should be done if you thikn you can afford it.

IMO, £950 a month is a snip for a place you call home and yes, I think it 10 years time, it will be worht more than it is today. 5 years time? I really have no idea.

I cant even RENT a nice one bed flat where I live for that, so onwards I go in a shared house.

[Lone_Twin]

Meh, you pays your money you takes your choice.

.

For my part I would not be buying now, and I think if you look in the right

places you will see all the signs of house prices coming down, but for proper asking price

falls of significant %s I think we will all be waiting a few more months.

.

The truth is that where I live (London) I can provide a better home for myself and my partner

renting than I could pay only on interest if I bought.

The only reason to buy would be if I seriously believed house prices were going to rocket, and

that sentiment is what has driven us to this precipice.

.

House prices against all measures wages, GDP etc... are at an historic high, well, well, well above the

late 80s crash.

Unless you believe that prices can go up indefinately or that they are only slightly over valued (less than 15%)

then I would say that buying is a very bad idea indeed.

.

I'm not qualified to give financial advice, please look for plenty of other sources but if that takes you

a few weeks I don't think you will have to look hard.

.

All the best.

.

ST

[blind_canary]

IMO if you've already been on the housing market and you're looking at a place to live in, then now is as good a time as ever to buy.

I think timing is only really important if you're a BTL or FTB, buying a home should be done if you thikn you can afford it.

IMO, £950 a month is a snip for a place you call home and yes, I think it 10 years time, it will be worht more than it is today. 5 years time? I really have no idea.

I cant even RENT a nice one bed flat where I live for that, so onwards I go in a shared house.

I cant believe you cant rent a 1 bedroom for 950, im guessing thats London.

950 is a bit of a stretch, but its a house we both really like so i think its worth sacrificing the odd xbox game here and there for a nice home.

I will just be really gutted if i did end up with negatve equity, as with most people on this site i think, i still beat myself up over the fact i did not buy before the boom, 4-5 years ago, and buying now at the WRONG time would only rub salt in my wounds!

[Lone_Twin]

IMO if you've already been on the housing market and you're looking at a place to live in, then now is as good a time as ever to buy.

I think timing is only really important if you're a BTL or FTB, buying a home should be done if you thikn you can afford it.

IMO, £950 a month is a snip for a place you call home and yes, I think it 10 years time, it will be worht more than it is today. 5 years time? I really have no idea.

I cant even RENT a nice one bed flat where I live for that, so onwards I go in a shared house.

Where on earth do you live?

I live in Clapham one of the areas in London which has really seen the HPI boom in full force.

I just left a lovely little one bedder in a gated mews with off road parking and a garden for £950pm

.

FYI I now live in a shared house while I build up some serious cash to buy with when the market

returns to a more "realistic" phase.

.

ST

[LittleBro]

I cant believe you cant rent a 1 bedroom for 950, im guessing thats London.

Correct, SW London.

[Topfishing]

I cant believe you cant rent a 1 bedroom for 950, im guessing thats London.

950 is a bit of a stretch, but its a house we both really like so i think its worth sacrificing the odd xbox game here and there for a nice home.

I will just be really gutted if i did end up with negatve equity, as with most people on this site i think, i still beat myself up over the fact i did not buy before the boom, 4-5 years ago, and buying now at the WRONG time would only rub salt in my wounds!

Sorry to say it, but I don't think you could possibly buy at a worse time!

[R K]

What I read from what you said is that YOU are a bear and have been for 3 years. Your WIFE is the one who wants to buy now, and I get the feeling you are looking for support for your argument.

Since no-one can predict tomorrow, it is enitrely up to you and your wife isn't it.

There are always people who buy at the top of any market, especially those who get tired of waiting for it to turn. This is often those with the least resolve or the least experience.

If you must buy now (but if you have looked at the graph on the home page then you're not seeing what I am seeing), why not make the seller a much lower offer. You will be close to neg equity from just a 12% fall in prices. If you are desperate to avoid neg equity then it doesn't give you much wiggle room if prices fall. If on the other hand, you don't care how much prices might fall, you plan to stay there for ever and can service the mortgage, then who cares. You get the house of your dreams and the "value" is meaningless.

Can't help with the marital issues though. Been there, done that, no woman will ever influence my financial decision making again.

[blind_canary]

Sorry to say it, but I don't think you could possibly buy at a worse time!

I fear you might be right.....

A crystal ball would be very handy about now

[stonethecrows]

Can't help with the marital issues though. Been there, done that, no woman will ever influence my financial decision making again.

Been there and done that n'all having married the world's biggest himbo! :angry:

[R K]

Been there and done that n'all having married the world's biggest himbo! :angry:

I used the term "woman" in a factual sense, not a derogatory sense, just to clear that up

I fear you might be right.....

A crystal ball would be very handy about now

Are you sure it is a crystal ball you need and not a pair?

[stonethecrows]

I used the term "woman" in a factual sense, not a derogatory sense, just to clear that up

Haha, good save

[It is different this time]

My question is, if I am in the house for 5years and prices do come down next year say 10%, surely over the 5 year period prices can only be HIGHER than they are now. I just dont think waiting for a HPC that may never come is worth the financial risk and more importantly my marraige.

Your question should be; 'Will prices come down 10% or 40%? if I thought 10% was the answer I would buy it today but I have more than enough reasons to believe, come crash, 10% will be like a starter menu!

I would say house prices should be your least worry if buying or not buying an overpriced asset risks your marriage. Good luck to you

[DabHand]

If you sold your house a month ago, where are you living now?

[Ignorant Steve]

Don't buy is my opinion

I think you're making this buying decision for the wrong reasons. Selling and moving into rented accomodation is fairly stressful if you've been a long time "owner". This, I think, is clouding your judgement.

I would rent for a period 6 months / 1 year. Keep an eye on the local market and if necessary act quickly in early Jan to buy if you feel you still want to own property.

Having said that if this house really is your dream home then financial considerations become slightly less important. So I can understand why you'd want to buy. We bought our dream home 18 months ago - I was assuming we'd "lose" up to 20% of the purchase price. If you never have to sell it's not a problem.

[Stuu]

Blind_Canary,

I too used to believe the bears on this board but eventually you have to look at their track record of predictions. Remember, the bears have been predicting a crash on this site since October 2003. And what has happened to average London property prices over that period? They've gone from £262k to £394k.

Also remember that the last 'crash' involved nominal average prices sliding by less than £10k over a period of several years. It is nominal prices which matter, not inflation adjusted prices. Inflation will eat away at your mortgage debt at the same rate as it does your property value so it can be safely ignored. That is why the graph on the front page of this site is so misleading.

Of course the bears always have a good reason why now, more than ever, prices are about to fall. They probably will fall eventually but there's a good chance they'll go up another 50% before the next 10% 'crash' comes.

Look at property supply v demand? Is the economy in trouble? Unemployment or inflation on the way up? Compare rental returns to other similar countries (eg Australia).

Look at the expert predictions on the front page of this site if you are still in doubt.

[SMAC67]

If you are buying to live, and not make money then as long as you can afford the payments [plus a little extra or the possibility of increased rates] then you should buy. When the market crashes you will probably be in negative equity for a while but since you are buying to live then it shouldn't matter what your house is worth. Of course this assumes no major lifestyle changes, for example the rampant unemployment that will be part of the crash could prove interesting. You can always hand in the keys and walk away if it really does go wrong.