Ftb Pulling Back From The Brink

[David]

Don't know if anybody is interested but thought it would cheer people to know that I am another potential FTB who has woken up to the risks of buying in the current market. GF and I have been looking for a place in Canterbury and have recently had an offer accepted that is a 60% increase on what the current vendors paid for it just a couple of years ago. Having said that it is the best place available with current prices and we both really love the house (which obviously makes things difficult!).

We have a decent - to my eyes - 10% deposit and no other debts or silly spending habits. We both have good jobs and can cover the mortgage payments and could continue to do so comfortably if rates went up three maybe four percent. So why are we going to pull out of the deal?

Well I wouldn't want to give you folks here all the credit. I appreciate that this forum is riddled with people with understandable vested interests who quite rightly would welcome a price correction if not an all out crash so I take your comments with a pinch of salt. What has concerned me is the increasingly bearish outlook of major media outlets. Coupled with a local market that is stagnating at best and internet sources where local prices can be tracked so accurately and rapidly there is really only one way for prices to go and once it starts I can see it all happening quite quickly.

Having worked with the figures and produced piles of 'fascinating' spreadsheets the results are quite clear. Even at the top end of predictions - a stagnation or 1-2% annual increase - renting comes out on top in the short-medium term. It really seems a bit of a no brainer when the risk of major falls seems so great.

I'm big enough to accept that I missed out on the housing boom but I might be a little more annoyed if I were to become a two times loser through buying now. The warning signs are growing all the time and if we with a combined income of £70k are thinking this then I really don't think we'll have too long to wait for the rest of the country to come round.

[bubbleturbo]

Hi,

Good post.

As you say, it is a "no-brainer".

There are only so many "greatest fools" and a lot of FTB's like you and me are coming round to the opinion that there is no rush and now could be a very bad time to buy.

Unless you want to be a slave to the system's for a very long time, paying the fat cats monthly fuel bill for the Bentley.

[FernandoMorientes]

Don't know if anybody is interested but thought it would cheer people to know that I am another potential FTB who has woken up to the risks of buying in the current market.  GF and I have been looking for a place in Canterbury and have recently had an offer accepted that is a 60% increase on what the current vendors paid for it just a couple of years ago.  Having said that it is the best place available with current prices and we both really love the house (which obviously makes things difficult!).

We have a decent - to my eyes - 10% deposit and no other debts or silly spending habits.  We both have good jobs and can cover the mortgage payments and could continue to do so comfortably if rates went up three maybe four percent.  So why are we going to pull out of the deal?

Well I wouldn't want to give you folks here all the credit.  I appreciate that this forum is riddled with people with understandable vested interests who quite rightly would welcome a price correction if not an all out crash so I take your comments with a pinch of salt.  What has concerned me is the increasingly bearish outlook of major media outlets.  Coupled with a local market that is stagnating at best and internet sources where local prices can be tracked so accurately and rapidly there is really only one way for prices to go and once it starts I can see it all happening quite quickly.

Having worked with the figures and produced piles of 'fascinating' spreadsheets the results are quite clear.  Even at the top end of predictions - a stagnation or 1-2% annual increase - renting comes out on top in the short-medium term.  It really seems a bit of a no brainer when the risk of major falls seems so great.

I'm big enough to accept that I missed out on the housing boom but I might be a little more annoyed if I were to become a two times loser through buying now.  The warning signs are growing all the time and if we with a combined income of £70k are thinking this then I really don't think we'll have too long to wait for the rest of the country to come round.

<{POST_SNAPBACK}>

Well done David.....now you can join the VIs (myself included) on this site hoping for a nice big HP correction

[patientFTB]

I appreciate that this forum is riddled with people with understandable vested interests who quite rightly would welcome a price correction if not an all out crash so I take your comments with a pinch of salt. 

<{POST_SNAPBACK}>

Excellent. Apply your cynism even handedly to bulls and bears and you won't go far wrong.

One way or another we are all VIs.

[munimula]

What has concerned me is the increasingly bearish outlook of major media outlets.

to become a two times loser through buying now.

<{POST_SNAPBACK}>

Two points you make I like. The first that the media is now turning increasingly bearish and this will start to turn the views of the majority which is what is needed to turn the herd around and start them running the other way.

Secondly your point about losing out twice by buying now - you are totally right, as FTBs we did miss out on the boom so we sure as hell should miss out on the bust!

[miche]

I wish there were more people like you that actually realise whats going on. You seem to have a good understanding of the markets.

Keep saving and get the best interest rates for your deposit. You have made a wise choice not to buy - thinking of the future and not the present.

[Guest Working Class Lad]

Don't know if anybody is interested but thought it would cheer people to know that I am another potential FTB who has woken up to the risks of buying in the current market.  GF and I have been looking for a place in Canterbury and have recently had an offer accepted that is a 60% increase on what the current vendors paid for it just a couple of years ago.  Having said that it is the best place available with current prices and we both really love the house (which obviously makes things difficult!).

We have a decent - to my eyes - 10% deposit and no other debts or silly spending habits.  We both have good jobs and can cover the mortgage payments and could continue to do so comfortably if rates went up three maybe four percent.  So why are we going to pull out of the deal?

Well I wouldn't want to give you folks here all the credit.  I appreciate that this forum is riddled with people with understandable vested interests who quite rightly would welcome a price correction if not an all out crash so I take your comments with a pinch of salt.  What has concerned me is the increasingly bearish outlook of major media outlets.  Coupled with a local market that is stagnating at best and internet sources where local prices can be tracked so accurately and rapidly there is really only one way for prices to go and once it starts I can see it all happening quite quickly.

Having worked with the figures and produced piles of 'fascinating' spreadsheets the results are quite clear.  Even at the top end of predictions - a stagnation or 1-2% annual increase - renting comes out on top in the short-medium term.  It really seems a bit of a no brainer when the risk of major falls seems so great.

I'm big enough to accept that I missed out on the housing boom but I might be a little more annoyed if I were to become a two times loser through buying now.  The warning signs are growing all the time and if we with a combined income of £70k are thinking this then I really don't think we'll have too long to wait for the rest of the country to come round.

<{POST_SNAPBACK}>

Hi

Good post glad you have saved yourself from the pain that is coming.

Are you going to vote NEW LABOUR ??

[David]

WCL - I'll be voting Green 'cos I'm funny that way. Have always voted for Labour in the past though. Don't think I'll be doing that again for a while.

[right_freds_dead]

well done david. im in the same boat. im super keen to buy, but im biting my lip. i simply dont want to get cheated by 50% and i wont do it.

i see lots of houses i could afford right now, but i always think.

if i wait 6 more months i can have that house for 1/2 price or double the house for the same.

only an utter fool would buy right now.

[Killer Bunny]

I've mentioned my investment study group I belong to before here. ALso, the inv dir of a fair-sized firm of stockbrokers who has just STR'd.

Quote last night from him (he's been in invs for 20+ yrs) 'I've never seen a bubble correct in a minor way.'

Couldn't have put it better meself.

[bearly holding up]

well done david. im in the same boat. im super keen to buy, but im biting my lip. i simply dont want to get cheated by 50% and i wont do it.

i see lots of houses i could afford right now, but i always think.

if i wait 6 more months i can have that house for 1/2 price or double the house for the same.

only an utter fool would buy right now.

<{POST_SNAPBACK}>

Ican't imagine prices will fall by 50% in 6 months-unless we have complete economic meltdown.

[DonnieDarker]

I'm big enough to accept that I missed out on the housing boom but I might be a little more annoyed if I were to become a two times loser through buying now. 

<{POST_SNAPBACK}>

A superb mantra. I'll repeat this to myself whenever I feel down about not owning anywhere.

[Topher Bear]

Well done! do the sums and, as you say, its a no brainer. now is NOT the time to buy, even if you believe the best forecasts and consider the possibility that they may actually go down!

I am a bit surprised at the figures you came out with. I've done similar calculations in the past and came to a figure of about 0.5% falls per month as the neutral point. So I was wondering if you give a brief rundown of what you included in your calcs and how you did it? I didn't include any inflationary adjustments, which may just make the difference.

Glad to welcome another stats fan to the site :-)

Topher Bear

[David]

I am a bit surprised at the figures you came out with. I've done similar calculations in the past and came to a figure of about 0.5% falls per month as the neutral point.

Topher, I think there are too many variables here for a "break even" point to be the same for everyone. You have to stick your finger in the air on things such as inflation, interest rates etc. etc. and most importantly the time period you're looking at. If you're certain you're going to stay in the same place for five years then you can maybe afford to be more bullish ... others may disagree with this!

As a starting point I used the MSN Rent or Buy Calculator. Not sure if people have an opinion about this calculator. It seems fairly kosher though I should add that it doesn't allow you to enter negative house price growth

[Badlad1967]

Hi everyone,

Been sniffing around for a while and thought I'd better post something before everyone gets suspicious

I've been looking around the Herne Bay area (just down the road from David in Canterbury) for about a year now and have noticed that the market has all but ground to a halt. A local EA recently committed suicide due to the state of the market!!! (a tad drastic I must admit!)

In brief - I guess I am be classified as a FTB in the UK (used to live and own a flat in the USA) and I simply refuse to pay these bloody stupid prices. I have been tempted a number of times, but luckily the voice of reason keeps telling me "what goes up must come down..." (and I'm not talking about Jordan's knickers here!)

But I can't help myself making the odd call to an EA and winding them up. I have been monitoring a new development just down the coast in Ramsgate and chat quite often to the selling agent. 32 units so far released and 11 "reserved". Asked the EA why these had been reserved for the past 6 months and no one had yet exchanged. She told me that there had been a problem with "sorting out the leasehold... but it's all OK now!" Got a bit suspicious and after chatting about the development for a few more minutes I asked how many people were ready to exchange NOW... A slight embarassed pause and she said.... wait for it...... "3"

These flats/ houses were released last July. Flying off the shelves innit!

She also told me that there's been lots of interest and I need to get in an offer quickly so as not to be dissappointed. I really don't know what medication she's on, but next time I call I might ask is she's willing to share some.

Sorry for the waffle everyone - I *really* enjoy reading this site so please keep on postin'!

Cheers

B.L.

[Topher Bear]

Hi everyone,

Been sniffing around for a while and thought I'd better post something before everyone gets suspicious 

I've been looking around the Herne Bay area (just down the road from David in Canterbury) for about a year now and have noticed that the market has all but ground to a halt.  A local EA recently committed suicide due to the state of the market!!!  (a tad drastic I must admit!)

<{POST_SNAPBACK}>

ahh!, Herne Bay...nostalgia. I lived there for a year as a student (109 Pier Avenue), nice place in the summer along the cliffs there.

so there is a little Canterbury area enclave of HPC is there?

TB

[Badlad1967]

Well talk about a world the size of a pin head TB! At least you got let out after a year for good behaviour

Yes it looks as though a little Canterbury area enclave is growing quite nicely here. I will actively try and recruit more!

Time for a quick anecdote... Had a chat with a new young lass at work the other week. She's just 20 and some EA had told her that prices were about to double in Ramsgate because of the new high speed rail link to London which should be finished in 2 years (we'll see!). She was actually considering getting a mortgage on some ridiculous multiple so she wouldn't get "left behind." I told her that during the last HPC the Channel Tunnel Link didn't do too much to stop HP's in Ashford going down the loo..... and that if this EA was so confident he would give her a guarantee in writing.

Bless her - she went back and asked him (go girl!!!). He actually got quite shirty.... Silly w@nker... PRICELESS!

BL