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longisland

Another First Time Buyer Writes.......

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Hey all

Been here a few months and wanted to share my thoughts and views on house prices. Can't say I'm an expert on house prices, but then again, I doubt any of us have a crystal ball that's shinier then anyone else!

Anyway, amidst all the doom and gloom on here I though I would write a contrary and perhaps optimistic post on why I have just bought a property.

Now, before you all start feeling sorry for me I have been following property prices for a year, and feel that the current debate has been slightly polarised with some very broad brush strokes.

Incase your wondering, my house was bought in Norwich (I work in London). What were my main drivers:-

a) Cost of buying has reached the point where for me, it become cheaper to buy then rent. If interest rates continue to drop, I see the differential widening further which made the stimulus to buy now even greater.

B) The property I bought was on the market for less then 2 weeks. That is not a typo - 2 weeks! In that time, it had 2 offers - one fractionally below asking price and my own. What does that tell us - that first time buyers are still active and are looking to get on the property ladder - albiet at the right price for the right type of property.

c) Location, location, location! Ok, I'll be the first to admit, property in Norwich is depressed right now due to a reasonably large overhang of trendy yuppy riverside flats. And yet, as with all things, its not merely a question of finding a cheap property. This property was located on one specific road that we had been looking to purchase on for over a year. Infact we would probably have paid above asking price if it had gone to a bidding war.

d) Lack of decent supply. In some respect, it made bugger all difference to us that Riverside prices in Norwich had dropped 10%-15% last year as we never had any intention to buy in this area anyway. Where we did find suitable properties at inflated prices, the sellers refused to negotiate on price and generally speaking removed the properties from the market. Where people were in chains, they simply ended up renting the properties out (although I would add I would have negotiated as Norwich is now awash with rental properties).

So what does this all means. If you bought a yuppie flat in an area of substantial over-supply in the last 12 months then your sitting on a 10%-15% loss paper loss and even more if you bought looking to rent.

If your selling a good quality property at a realistic price then you will find buyers.

Admittedly, finding a good mortgage these days is becoming more of an issue, and to some extent, subprime is negating the effects of cheaper interest rates, but they can be found if your willing to do some hunting around. For example, First Direct offer a 2 yr fixed mortgage at 4.75%.

Do I worry about prices falling further - absolutely. BUT, I had reached a point where I felt that prices were cheap enough and interest rates were low enough to outweigh any future falls in property.

Cheers - Mike

Edited by longisland

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Good luck to you, if it was right for you at the time then great. For most, they want financial security (at least to a better degree).

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If interest rates rise then its a different picture, but I just cant see that happening. Commodity prices are rising, but I see that feeding through to lower consumer demand, which will ultimately feed through to unemployment. I see unemployment, corporate solvencies and personal bankruptcies all rising through the year, which will a) depress the effects of higher input / commodity costs and B) keeping downward pressure on interest rates.

I think its come down to the following question for Central Banks - do we end up having a degree of inflation for limited growth, or no inflation with no growth. Quite simply, no Central Bank in its right mind wants to end up like Japan, and end up governing a deflationary economy as it did in the 80s / 90s.

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I see unemployment, corporate solvencies and personal bankruptcies all rising through the year, which will a) depress the effects of higher input / commodity costs and B) keeping downward pressure on interest rates.

Yep and it will also see house prices drop like a stone.

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Long Island, Congratulations on your new house. I hope you will accept that posting your good news on HPC.co.uk will result in a few negative reponses.

I have a few concerns. Firstly, why if you have watched this forum for a few months, why have you never engaged in any conversations or asked any of the many wise people for advice.

What on earth attracted you to HPC.co.uk in the first place.

These forums are great for the ability to reply to posts.

In my honest oppinion, you are either a Troll or a complete do-nut. I suspect that you are the latter and will live to regret your decision.

Reminds me of someone who has been watching adverts for the dangers of drink driving and like a big fool you have had your 10 pints, got in the motor.

We can`t wait for the CRASH :o

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Hey - I have no problem with healthy debate. Life would be boring if everyone agreed wouldnt it?

If I am wrong, will the world end? Not really. I'll simply enjoy living in a beautiful house which I hope to bring up a family in. Isnt that the whole reason we all decided to buy a house in the first place?

I have no issue with people taking a contrarian view, but to derive pleasure from people losing money on property is frankly bizarre. You can't wait for a crash? Is that because you can't afford to buy at present, or for other reasons?

lol like the analogy about drinking. As it happens, I've already watched properties fall 10% to 15% and have taken the view that for the right property, they may / may not fall much further. Of course, if your stuck in the wrong type of property where there are no buyers, you are in trouble and I absolutely sympathise with people in that situation.

As for posting on here - I am something on a contrarian and thought a different perspective would add to the debate on here.

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Is it me, but are nearly all the new members (who have started a debate) pro house rises, (VI's me thinks, trying to keep there dream alive)

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tolduso - I dont actually expect prices to rise. I was pointing out that for me, based on my own circumstances, it made more sense for me to buy.

I think as a whole, the market is still moving down, but I dont think it will be as universal as people suspect.

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Good luck to you, assuming you're not a troll.

I wouldn't fancy commuting from Norwich to London every day though.... :(

It takes 3hrs to get from norwich to london and 3hrs to get back, So if you worked a 9hr day plus 6hrs travel thats 15hrs that leaves 8hrs to eat and sleep and have a social life, ????????? mad?

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Agree, not the shortest of commutes, but I can work on the train and am able to take off most Fridays (or come to think of it any other day when Anglia's finest has a twig on the line)!

The actual numbers of 2hrs each way - so Im going to spend 2 hrs less in the office each day which net net means my working day will be the same as it is now. (Although to be honest, I wouldnt not have moved to Norwich if I wasnt self employed and could vary my working hours!)

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I have no issue with people taking a contrarian view, but to derive pleasure from people losing money on property is frankly bizarre. You can't wait for a crash? Is that because you can't afford to buy at present, or for other reasons?

As for posting on here - I am something on a contrarian and thought a different perspective would add to the debate on here.

I STR last August at the peak after paying off my mortgage and I have no debt. The point I am trying to make and many others try to make, many, many time to people like you is.

Lots of us on this forum feel very strongly that the whole market is going tank (Lots more than 10-15%). My wording about "can`t wait for a crash" is maybe a tad selfish and a bit sensationalist.

I do truly believe that anyone buying now is a fool. That is my oppinion and I stick by it. I also welcome healthy debate.

I really did feel/felt, and even more so now that the only way to enter 2008 is debt free. I want to upgrade houses in a different area in the future for my family.

I take no pleasure from people losing money on a crash except the BTL`ers and EA `s etc

After lurking and posting on this site for a while I have watched and contributed to many debates and I have learned so much from many people who can express themselves far better than I ever could.

There are many posters on this site that just can not afford to do what you have just done.

There are many that did exactly what you have done and felt the same way you feel now just before the last big crash and maybe if you lurked a little more and really listened to some of there tragic stories your view may be slightly different and possibly less smug.

I am very fortunate and do not struggle and have my own reasons to visit HPC.co.uk but after a while on here I realised how and why HPI is crippliing many good people.

I reserve the right to call you and others doing the same, Do-nuts and I thought my analogy was quite good.

Nothing personal..

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As it happens, my fiancee wanted to buy last year, but I explained at great length that I felt property prices were over priced and ended up finding this site to justify my position to her for not buying then!

I dont mean to come across as being smug and apologise if that is the case.

I also agree that I am not your typical house buyer, but then again, I am moving from West Sussex to a place where I consider property to be far more reasonably priced, so I have had to change my lifestyle to find a place I consider affordable.

I agree that the government / house companies need to find a more appropriate way for typical FTB's to get on the property ladder based on typical incomes. Property builders will be aware of shifting mechanics in the market place and are starting to focus on more appropriately priced properties / key workers etc.

Ultimately however, the only way to solve property in the UK is too substantially increase supply, and that unfortunately is not something that is ever going to happen due to vested interests.

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I dont mean to come across as being smug and apologise if that is the case.

Trust me on this one, Mike; you don't come across as smug.....

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Agree, not the shortest of commutes, but I can work on the train and am able to take off most Fridays (or come to think of it any other day when Anglia's finest has a twig on the line)!

The actual numbers of 2hrs each way - so Im going to spend 2 hrs less in the office each day which net net means my working day will be the same as it is now. (Although to be honest, I wouldnt not have moved to Norwich if I wasnt self employed and could vary my working hours!)

Do you know this for a fact or are those figures printed in the time table? Do you have actual experience of using this line daily, how will working on the train be when you have to stand up most of the way (might be fine on the way in, would imagine it wouldn't be so great on the way back).

I moved out of London to Kent to an area where the trains took an hour.... yeah right. Two things, they are always late and this sort of service only runs once or twice an hour, often the trains get cancelled. It's all well and good when there is a twig on the line on the way in not so great when that twig drops on the line during the day and you can't get home again.

The other thing is how far are you from the stations at each end, where I live I was about a mile and half, not really walk able and the buses stopped at 6pm.

Not trying to be negative :lol: but I have been there and done that, ruinned my life for 3 years and drove the wife and I nuts.

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Do you know this for a fact or are those figures printed in the time table? Do you have actual experience of using this line daily, how will working on the train be when you have to stand up most of the way (might be fine on the way in, would imagine it wouldn't be so great on the way back).

I moved out of London to Kent to an area where the trains took an hour.... yeah right. Two things, they are always late and this sort of service only runs once or twice an hour, often the trains get cancelled. It's all well and good when there is a twig on the line on the way in not so great when that twig drops on the line during the day and you can't get home again.

The other thing is how far are you from the stations at each end, where I live I was about a mile and half, not really walk able and the buses stopped at 6pm.

Not trying to be negative :lol: but I have been there and done that, ruinned my life for 3 years and drove the wife and I nuts.

Leave Mikey boy alone. The man's an un-smug genius for buying a house (just after the peak of a bubble) in Holland when his job is in London.

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gilf - well aware that the east anglian line is about as reliable as a politician's promise. Made sure property was within distance of station (ie 5 mins).

I already commute about 3hrs per day so its something Im already used 2 (and its something you do get used too for those who wonder how we all do it).

We're going to give it a go for a year and if its not working, we're off to Brighton. And if house prices do crash, believe they will fall proportionately faster in Brighton then in Norwich.

Paddles - I know I'll be ok if property prices continue to fall. So no need to worry about me :-)

Edited by longisland

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gilf - well aware that the east anglian line is about as reliable as a politician's promise. Made sure property was within distance of station (ie 5 mins).

I already commute about 3hrs per day so its something Im already used 2 (and its something you do get used too for those who wonder how we all do it).

We're going to give it a go for a year and if its not working, we're off to Brighton. And if house prices do crash, believe they will fall proportionately faster in Brighton then in Norwich.

Paddles - I know I'll be ok if property prices continue to fall. So no need to worry about me :-)

Based on what?

God, I love these folk! They buy a house and then log on to HPC to tell everyone about it, for whatever reason christ only knows. And the funny thing is, we all read the posts and think to ourselves, "oh dear", but they still think they are the new Warren Buffet.

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Paddles

You clearly have a point of view - which I have no issue with. This is a site devoted to house prices crashing so its fair to expect people will be somewhat biased.

Never have I said buy now as house prices are going to rise, I am going to be right, your going to be wrong.

I merely wanted to offer a reasoned argument as too why I felt now was the right time to buy based on my own circumstances. I have read many arguments on here, some very reasonable, other plainly personal, that take an opposite view. It would perhaps do you credit to accept that people may take a different view from your own.

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Paddles

You clearly have a point of view - which I have no issue with. This is a site devoted to house prices crashing so its fair to expect people will be somewhat biased.

Never have I said buy now as house prices are going to rise, I am going to be right, your going to be wrong.

I merely wanted to offer a reasoned argument as too why I felt now was the right time to buy based on my own circumstances. I have read many arguments on here, some very reasonable, other plainly personal, that take an opposite view. It would perhaps do you credit to accept that people may take a different view from your own.

No reasoned arguments from Paddles/Cipriani and those of their stamp - just quick one liners, which in their jaded boredom they think passes for wit. Check that guy out (Paddles I mean) he posts from morning to night - he needs to get out a bit in my honest view. Take no notice - anyone who doesn't take the orthodox line is flamed, abused, roistered so what does it matter - it bores the sh1t out of me to tell the truth! - Ron

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Based on what?

God, I love these folk! They buy a house and then log on to HPC to tell everyone about it, for whatever reason christ only knows. And the funny thing is, we all read the posts and think to ourselves, "oh dear", but they still think they are the new Warren Buffet.

You see I would have expected this place to be reliant on anecdotals so as not to have to rely on the stats and the media who are so often touted as vested interests (who isn't!). It's the internet my man, who can believe anyone?

I guess the moral is, troll or not, one is no better just by flapping your hands in your ears shouting "ner ner nernerner".

:lol:

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Guest An Bearin Bui
Paddles

You clearly have a point of view - which I have no issue with. This is a site devoted to house prices crashing so its fair to expect people will be somewhat biased.

Never have I said buy now as house prices are going to rise, I am going to be right, your going to be wrong.

I merely wanted to offer a reasoned argument as too why I felt now was the right time to buy based on my own circumstances. I have read many arguments on here, some very reasonable, other plainly personal, that take an opposite view. It would perhaps do you credit to accept that people may take a different view from your own.

Nobody disagrees that people have a personal choice in buying and will buy as and when it suits their personal circumstances - but if it's just a personal choice that suits your individual circumstances, why come on a forum like this to look for approval or debate? It's my personal choice to keep a flat bought in 2001 and let it out (in another country) while renting here and saving / investing about 50% of our monthly post-tax income to build a warchest for the coming recession. That choice suits our (including OH here) personal circumstances. I wouldn't go on www.housepricesonlyevergoupandrentingisdeadmoney.com to share this with people as - like I said - it's just my choice so why would this affect anyone else's point of view?

I'm not being hostile as anyone can post anything they want obviously but I genuinely just don't get what response you expect from posters here. :unsure: There are almost daily posts now from people asking "should I buy or rent?" and "I bought because I wanted to - leave me alone, horrible HPC property crashers!" and they always get the same invariable bored response of - "you're mad but it's your funeral"

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We're going to give it a go for a year and if its not working, we're off to Brighton. And if house prices do crash, believe they will fall proportionately faster in Brighton then in Norwich.

Paddles - I know I'll be ok if property prices continue to fall. So no need to worry about me :-)

Please tell us the secret of being OK if prices fall? Lets say they crash in Brighton by 20% and in Norwich by 10%, how are you going to convince the bank to let you off the 10% in value you would owe them if you sell to cash in on Brighton?

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Ultimately however, the only way to solve property in the UK is too substantially increase supply, and that unfortunately is not something that is ever going to happen due to vested interests.

Have you seen how many properties are up for sale, there is no problem with supply it's the price.

You keep on building and the problem is only gonna get worse, God almighty some people just haven't been paying attention.

loz

Edited by LOZ007

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  • 297 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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