Tuesday, February 6, 2007

FTBs Shouldn’t Jump In

FIRST-TIME BUYERS SHOULD SAVE AND WAIT

LOWER rents and slowing property price rises are making things easier for first-time buyers - as long as you don't buy.A survey by the Abbey found would-be buyers say they are prepared to give up holidays and drinking or even live with their parents to afford their first home. But my advice is: Get a life.Simply save sensibly towards a deposit and you should get one without going to extremes.

Posted by jason @ 06:57 AM (412 views)
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15 thoughts on “FTBs Shouldn’t Jump In

  • Pretty obvious really. I think if you can afford it you should still buy now but it does seem stupid to stretch yourself so excessively rather than stay at home and save. Of course, if I had adult kids living in my house I would get fed up sooner or later.

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  • “The hope is that a crash can be avoided this time as prices slow – allowing pay packets to catch up. ”

    Wow I should expect a few 20% yoy pay rises then before I “catch up”!

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  • “Homes were last this expensive in the 1980s when low interest rates fuelled a similar boom which ended in tears as prices crashed and many homes were repossessed. Few expect a similar slump now”

    Why do they keep saying this, why will prices be come “affordable” without a slump???

    Could someone please help me out here.

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  • “The hope is that a crash can be avoided this time as prices slow – allowing pay packets to catch up. ”

    “Few expect a similar slump now.”

    The US has had a housing crash and for the UK its only a matter of time. You’re right geed, employers would have to collectively decide to award 20 years worth of salary increases next year in order for salaries to catch up with house prices.

    I wonder who’s being unrealistic now?

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  • george monsoon says:

    “The hope is that a crash can be avoided this time as prices slow – allowing pay packets to catch up.”

    Long wait for me then.. I retire in only 30 years!!

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  • hang on guys, we need to see some serious increases in unemployment figures before there’s a crash.

    agreed, they’re over priced and we’re looking at a bubble. but prices wont come down unless people are forced to sell. this wont be caused by BTL dumping property alone and i can imagine some remaining bullish despite a downward trend in prices.

    also, I can imagine areas in the country ‘cough’london having high rental prices because so many of the BTLers have bought recently. I know they all cannot do it but some of them will do their best to increase rent to cover ever growing mortgages costs.

    realisticly speaking we should have been in a downward slope right now. but dodgy MPC choices, laxing of lending rules on mortgages and fudging of government figures means we’re two years into maintaining this myth of being a country of wealthy land owners.

    shame no-one has a graph showing rate of increase in property prices against rate of increase in mortgage money.

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  • inflation is eating my savings says:

    Looks like the powers that be are urging caution. The question is- is this a) the subtle manipulation of the masses to take the heat out of the economy (like Mervyn King’s little mots about house prices seeming strangely high) or is it b) pragmatism to protect the masses knowing what is ahead or c) a standard tool for reducing expansion of the money supply or d) some VI at the Mirror who wants you to invest in something other than property (like some of the posters on this site…….or in fact this site itself…….)

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  • it’s not a complete about face, but is it the start of a change in sentiment within the rags?

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  • dohousescrashinthewoods says:

    >> Wow I should expect a few 20% yoy pay rises then before I “catch up”!

    That’ll be the inflation genie, here to grant three wishes 😉

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  • Why do newspapers say things will become more “affordable” without a crash, how does that work?

    And prices keep on rising so surely this won’t happen and it will just be the haves and the have nots.

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  • dohousescrashinthewoods says:

    David20040_0, isn’t it about the rate of rise – to avoid a crash, earnings have to rise faster than prices?

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  • Don’t forget tighter lending criteria – as soon as prices falter, lenders will be less likely to lend to those who are changing just to get a cheap deal. Those in a weak position will be exposed and find themselves paying the SVR, thus speeding their eventual and inevitable collapse.

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  • C'mon Correction says:

    Sam – I don’t think unemployment has to rise much more in order for there to be a crash. In fact it is only one factor that will contribute to a downturn in prices.

    There were many different factors that produced the boom and likewise many different factors will create the correction. The main factor i believe is easy credit (regardless of interest rates), if credit starts to tightening then there will be a crash regardless of any other factor.

    £200k average house, mortgage lenders tighten and won’t risk more than £150k average lend – that’ll be a 25% correction then (even then prices will still be above trend !).

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  • It is simply not possible for things to become more affordable without a crash or something just like it.

    Either prices go down or wages go up. That is the only way.

    Prices go down – sounds like a crash.

    Wages go up = inflation = higher interest rates = crash.

    They have well and truly fugged it this time.

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  • I think you are all forgetting a valuable weapon when talking about a possible HPC – ESTATE AGENTS

    I know RB has had a post going on about Right Move and property flooding the market but I believe, looking at my area that a lot of this is people selling with multiple agencies and why are they doing this? Because people can’t sell there properties for the price the EA advises. EA’s don’t want to go out of business and will have to move from quality to quantity to get the salaries they have been used to. How do they do this? Get people to sell cheaper, selling more properties and getting their cut.

    EA’s pushed the price up and will have to bring it down to ensure they keep the same standard of living.

    Or perhaps I’m just living on planet Zorg?

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