would you buy a property now , or wait?

Badger0-0

Distinguished Member
Good question and one I'm thinking about.
Now I'm no Financial advisor or economist, but the stupid house price inflation over the last few years can only lead to a major crash, IMO.
People simply cannot afford the mortgage costs, especially if they're at the bottom of the ladder.
Given the high risk of the economy collapsing next year and the credit problem people generally are having, I've decided it's a no for me.
Another thing to bear in mind, is the fact that the government want to build loads of houses and here it's a supply and demand thing.

I really can see things going tits up and it's only a matter of time, IMO.

The sub-prime market collapse is a good example which has been cleverly underplayed, IMO.
Major banks were in trouble there :eek:
Look at the billions that were used to prop up the system :eek::eek:

Things have to change, big style, IMO.

But enough of the rant :D

All this is based on my instinct and years of watching what goes on.
And not much to back it up with.
 

John Simon

Well-known Member
I'm taking the family darn sarth to London tomorrow (on the cheap), the place I'm staying at has just been sold for 900 million - sadly i'll be looking for a new place to stopover after this weekend.

If the developers are still buying up land and are prepared to pay well over the odds then there may be some mileage in it yet - but is London an exception?

In the end you pays your money & take your chances, if the market dropped by 5% you could probably live with it and ride it out untill the market rose. If the market rose by 5% you may not be able to buy the property you want.

Nobody knows.
 

shahedz

Distinguished Member
All very good points, the US sub prime market has scared the hell out of me too, i was thinking on a £250k property even a 10% correction would be only £25k, it's the biggest investment hence i'm so scared,

any other input?

How big was the correction in the early 90s?( or late 80s)
 

Badger0-0

Distinguished Member
I believe the correction was nearer 6% then, based on my dodgy memory.
Overall, I guess bricks and mortar is the way to go, long term.
They never lose over long periods.

Me, I'm going to pump some dough into the rising economies, because I love the rollercoaster effect :rolleyes:
 

Badger0-0

Distinguished Member
I'd say that's a foregone conclusion :)

But as I said, I'm no expert and it's all a guessing game.

"Do you feel lucky, punk?" springs to mind :D

Hopefully, people in the know will pipe up :smashin:
 

wombar

Active Member
Personally I think there's going to be a slow correction over the next few years as the interest rates go up slowly, and people who are in it for the profit bail out in droves. With another rate rise probably coming before Xmas there are a lot of twitchy BTL'ers out there who are already jumping ship outside of London and I think it's slowly imploding back towards the capital.

But like everyone else has said, there are no guarantees, just best guesses. Mortgages are becoming silly with FTB priced out of the market and some seriously substandard "executive" flats that only take 3/4 size furniture. Thanks but I'll pass on the £200K broom closet. This glut of properties that no one wants is going to catch a lot of people out and personally, I think we're in for some tough times when these people come to sell and realise they're either stuck in negative equity or just plain can't sell.

If it were me, I'd be inclined to steer clear unless you're in it for the long run (i.e. 20-25 years) in which case unless we have some MAJOR catastrophe in this country, the chances are you'll have made some money by 2035.

Of course, I could be completely wrong and house prices could continue to spiral out of control. However, I don't see this happening as the money is quickly running out and mortgage lenders are starting to tighten the purse strings.
 

Badger0-0

Distinguished Member
I recall it being around 30% depending on the region.

I don't recall it being that high, but Damm :eek:

I do remember a friend chucking the keys to his house at the bank manager and saying "sue me" :(
 

Knyght_byte

Distinguished Member
dont worry about the housing market overall, you need to learn about the area the property is in that your considering buying......

is it being redeveloped, whats the political history, economic growth from a business POV (specifically have any supermarkets opened up big stores lately, thats a massive indicator of potential area growth), immigration history (large makeup of foreign people will dictate likely financial state, mostly asian = good money, middle eastern = good money, african = low income, eastern european = middle income.....this is on the assumption that indiginous population is mostly being replaced á la Southall, Brent, etc).....

then work out likely age of buildings, older well built properties more likely to retain value over cheap mostly pre-fab type maisonettes.....also check water table for area due to moral panic over flooding.......
 

Badger0-0

Distinguished Member
:)

I have a real bad memory for facts and figures sometimes.
It's my biggest weakness.
But when it suits, I have an excellent memory.

I guess you have made all the losses back and then some?
 

Badger0-0

Distinguished Member
I'd say that was exceptional, what happened there? :confused:
 

benji_m

Active Member
Might be that prices stagnate whilst inflation continues, over 5 years that could be a 15% real terms fall?
 

domtheone

Distinguished Member
Might be that prices stagnate whilst inflation continues, over 5 years that could be a 15% real terms fall?

Perhaps so, maybe even longer.

Have to sort out a few issues first. Supply and demand. Seemingly unrelenting population growth.

I've given up hope of buying soon. Think a correction/crash has to happen but it feels that that's been the thought for a number of years so and it just hasn't happened.

Depsite the issues over the pond. Inflationary pressures are practically everywhere else throughtout the world with rates going up all over the place.

Still think it's possible that rates have some way to go. If that cannot instigate a well needed correction, then all hope is lost.
 

Razor

Member
I am looking to buy another place or two at the moment. I dont think its ever a bad time to buy if your doing a long term investment. If it was my cash i would stick to London just because demand always outstrips supply. Hot areas in London are Shepards bush (large new shopping centre) and Wandsworth (everywhere around it is expensive).

I think we will be starting to see a few reposesions coming on to the market very soon so a few bargains may pop up at auction. There are also some very good mortgage deals out there to be had on the buy to let market, I have currently been offered one which is a 2 year tracker with no tie in and based at .75% under the base rate. The mortgage costs £2000 to arrange but the rate is superb.

Some people are saying the market has peaked, but those same people said the same last year and it has risen a fair in London. Expect the ripple effect to start to kick in over the next few years.

As for a price crash, never say never but the demand is way to high for that especially in central london. This will only happen if prices start rising silly amounts like 25%+ year on year as that sort of increase is hard to sustain. The Bank of England may up the interest rate by another point over the next year but any more and they risk mass bankruptcy which isnt what they want.

:)
 

shahedz

Distinguished Member
Razor, long time no see, , the place i was looking at was in Southgate, which is a nice part of North London, as i am going to rent it out, the rent pretty much covers the mortgage, but even if the interest rates increased by a few % i would be able to cover the excess,

I am really sceptical as there are so many opposing views, but I am not looking to make a quick buck as I intend to live in the flat in the future,

so stuck in between a rock and a hard place here, not in a huges rush so i may just tread carefully and wait for a bargain:smashin:
 

Razor

Member
Razor, long time no see, , the place i was looking at was in Southgate, which is a nice part of North London, as i am going to rent it out, the rent pretty much covers the mortgage, but even if the interest rates increased by a few % i would be able to cover the excess,

I am really sceptical as there are so many opposing views, but I am not looking to make a quick buck as I intend to live in the flat in the future,

so stuck in between a rock and a hard place here, not in a huges rush so i may just tread carefully and wait for a bargain:smashin:

Shahedz - Hi mate :hiya:

If you intend to keep it for a while I would buy it if its at a good price and location. You could always split it up for sharers. This way you will raise your yield on the property from 6% to as much as 10-12%.

If its a 2 bed flat then turn the lounge into a bedroom and rent the flat out as 1 room per person with shared bathroom and kitchen. This way you will always get rent from the property even if 1 tenant isnt there. You can rent these rooms out very easily and no estate agent is needed which will save you 8-10%. All you need to do is place an add in the local papers. :)
 

Yandros

Well-known Member
that is terrifying, what did you do ? did you sell out? or just ride the hard time through

I held on to it until it has recovered most of the value (took 7 years!). With help from parents I managed to move before then though, and the flat was rented out.

Our current house was bought in 1999 for £125, now worth circa £300K, so yeah I've won in the long term.

As someone said, if we get a crash, it'll be uneven. From bitter experience, new build studio/1 bed flats thrown up on brownfield sites will be at the ground zero.

If anyone want to know what happens when your property goes into negativ equity - it's a barrel load of fun :mad: The building society starts sending you 'helpful' letters suggesting repayment plans to clear the negative part - in other words, as far as they are concerned you now have an unsecured loan, and they want their money back!
 
Just say there is a crash sometime, wouldnt the fact that people cannot afford to sell make things just as difficult? Surely it would be years before the market returned to anything like normal. I'm currently selling my house as me and her are splitting up, I'm wondering if renting is my best option.
 

Razor

Member
I'm wondering if renting is my best option.



I wouldnt its just dead money and you also need some where to live.

If it crashes you just dont sell. You will still need to live some where so its not money down the drain. If it doesnt crash it will just be more harder for you to find an affordable place to live as the prices will keep on rising. Always have a foot in the market.

Recent interest rates has cooled the market a fair bit which is good in terms of preventing a crash.
 

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