Buying a property next year

CLAWS

CLAWS

CLAWS

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Joined
13 Jun 2005
Posts
1,416
Location
West Midlands
Morning folks :)

The wife and I are looking to get a property in Birmingham (or surrounding areas) sometime next year (2009) once we have enough of a deposit saved up.

Ive been listening to the whole debate about price drops and Im wondering - since estate agents around here are currently advertising small price drops on some decent properties - will the drops eventually gain more momentum and become more significant? Further to this, how long do you guys reckon this would go on for?

Sorry about the silly question but this would be the first time I am buying a property and I dont want to get in at the wrong time i.e. buying a property that keeps on declining in value (if this is possible).

Apologies if my logic is very poor on this, hence why I am asking :o
 
Falls are usually chased to the bottom, just like they are to the top.

The idea that there will be a small blip down before things resume 'normal service' is pretty wishful thinking.

Since you are at least planning things, which is better than most people who run blindly into these things do, then what i'd seriously consider doing is monitoring prices in your area over a period of 12 months, then come to your own conclusions about where things are heading.

Get the 'property bee' plugin for firefox, which keeps a track of all the properties you browse on www.rightmove.co.uk and displays below the listing what has changed with the price/description.

I started monitoring houses around me in the bracknell area about 2 weeks ago, and ive already noticed price drops of 5-15k coming off 200-300 grand houses within days of them being listed, for about 10% of the properties listed on there.
 
I still say that a price crash is still wishful thinking for those waiting to get onto the property ladder.
So there has been a slight drop in house prices over the past few months.
If it was going to crash then the fall would be a lot greater than it has been.

Speak to any of the major estate agents and nobody feels there is going to be a crash.
In fact most are expecting prices to stay around where they are for a little while and then once again probably start to increase once more.

There is only one way that we will see a price crash that certain people keep on saying will happen (there are at least 3 people on these very forums who have been telling us about a price crash happening "next month" for the past 2.5+ years).
If it happens it will be a symptom of something a lot bigger and not a direct action.
If the country's economy goes south then yes - we may well see a house price crash.
However at the same time we would be seeing mass unemployment and a UK recession and if that were to happen buying a house would probably be something at the very bottom of your list of things to do - behind looking for a new job and attempting to feed your family and pay the bills!
 
Funnily enough i walked into a tailors yesterday and asked if now was the right time to buy a new suit, or to wait for the sales...... The tailor assured me that NOW would be the right time to buy a suit.

Strangely enough, the very same day i was in a BMW dealership and asked if it was right to buy a BMW M3 now, or to buy a second hand one in a few years. He sat me down and told me on no uncertain terms that only idiots buy second hand cars and that the best thing to do was to get a new car ordered TODAY, and not to wait a moment more.

;)
 
CLAWS said:
Morning folks :)

The wife and I are looking to get a property in Birmingham (or surrounding areas) sometime next year (2009) once we have enough of a deposit saved up.

Ive been listening to the whole debate about price drops and Im wondering - since estate agents around here are currently advertising small price drops on some decent properties - will the drops eventually gain more momentum and become more significant? Further to this, how long do you guys reckon this would go on for?

Sorry about the silly question but this would be the first time I am buying a property and I dont want to get in at the wrong time i.e. buying a property that keeps on declining in value (if this is possible).

Apologies if my logic is very poor on this, hence why I am asking :o
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The worst thing you could do imo would be to buy a flat, keep with a house and you cant really go wrong.

again, im sticking with my thoughts of the other thread saying there wont be much of a change in the near future with prices. but again if enough people think it then it will happen!

if they are already advertising price drops in your area then i can only imagine that, either the agents are finding it difficult to sell property around there, or that they are well over stocked!

either way its hard to comment on the birmingham area, but thats my view. im not going to say much more because no doubt 'The Mad Rapper' will arrive and start chucking around his abusive comments at me again lol
 
stoofa said:
I still say that a price crash is still wishful thinking for those waiting to get onto the property ladder.
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Anyone thinking that obviously doesn't remember the last price crash in the '90s and the reasons for it ...
 
No-one knows what's going to happen. It could either flatten out or start gaining momentum and drop like a stone just like in the early 90's. In 95/96 it was impossible to sell a property unless you almost gave it away (relatively speaking of course!)

Similar thing happened in the late 70's but it was masked by high inflation.

Think about this... if property is dropping in price then only the best will sell. Once the buy-to-let crowd start selling then 2 bed flats are going to be tough to get rid of.
 
I dunno how anyone can be positive about the short to medium term, when there isnt a single day that goes by without the mention of difficult economic times, the credit crunch, inflation, oil etc etc.

You must either have nerves of steel, ignorant or know something everyone else doesnt to consider taking out massive loans right now!
 
brid said:
I dunno how anyone can be positive about the short to medium term, when there isnt a single day that goes by without the mention of difficult economic times, the credit crunch, inflation, oil etc etc.

You must either have nerves of steel, ignorant or know something everyone else doesnt to consider taking out massive loans right now!
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The fact that, over time, property has always been a solid investment?
 
TheDean said:
The fact that, over time, property has always been a solid investment?
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thats bang on, they aint looking at buying to sell within a few years. chances are they will be there 10years + therefore whatever happens in that time the market should have flipped around in that time
 
I think we've been in this argument before - and without wanting to get embroiled into a 'will they or wont they' discussion, theres an economic reality to someone who buys now, experiences a fall, then see's the value recover in 5-10 years time..... How do you cover the shortfall if you become a forced seller, or your circumstances change?

The 'batten down the hatches' mentality that people talk of, seems to generally only make sense to people who have NEVER experienced negative equity in their life, or is happy to guarantee that they will NOT leave their home for the next 10 odd years and have the means to finance it if circumstances change.

Negative equity is a very bad situation to be in.
 
If you buy a property for £200k, it drops to £150k and then recovers to £250k in 10 years that may sound fine. But wouldn't it be better to wait until it drops to £150k before buying?

Personally I think they will drop further, but it's a gamble either way. You could wait and they go back up for all anyone knows (unlikely though)
 
Hades said:
If you buy a property for £200k, it drops to £150k and then recovers to £250k in 10 years that may sound fine. But wouldn't it be better to wait until it drops to £150k before buying?

Personally I think they will drop further, but it's a gamble either way. You could wait and they go back up for all anyone knows (unlikely though)
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but you would be waiting a hell of along time before it drops that much. i cant see that happen, not even close at the moment.

like you said its always a gamble
 
IMO there is going to be a small drop, a 200k house may drop to 185-190, this is mainly due to banks making it harder to lend money from at the moment. They are looking for investors with at least a 10% deposit, in the last 2 weeks i have put silly offers in for two houses, both have been rejected, but if there still there in a months time ill offer less, if they need to sell they will.
 
brid said:
Funnily enough i walked into a tailors yesterday and asked if now was the right time to buy a new suit, or to wait for the sales...... The tailor assured me that NOW would be the right time to buy a suit.

;)
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Funnily enough I was outside the same tailors shop. There has been this guy outside for years who can't afford one of the suits so what he does is stand outside the shop saying "The prices in here are going to crash soon!" in the hope that they will. Since he's been standing outside there I've earnt enough money to buy about 5 more new suits. :)
 
if you're buying somewhere to invest, i wouldnt
if you're buying somewhere to live and it's feasible you could ride out any major crash you should be ok providing your financially sound
you could maybe wait until they drop further and buy cheaper
i can personally see a long period of stagnation, because of the difficulty in obtaining credit and the general fear of the housing market at the moment, this in itself will cause a decline but i dont think it will crash out, just a gradual decline/plateau for a good while and then it will get back on track
it largely depends on what happens in the financial world and how much harder mortgages are going to be to get

it's a ridiculously complicated system even without the external factors like inability to get credit. take buy to lets, massive upsurge of buy to let investors buying new build flats and cheap properties -> massive increase in the amount of rental properties on the market -> massive increase in the amount of unoccupied rental properties -> buy to let investors who depend on rental income to keep that property have no rental income and flats start getting repossessed
 
Definitely wont be going for a flat as I dont want to get trapped if thats the right terminology to use.

As advised by one of you guys earlier, Ill definitely be monitoring the nearby areas over the next 12 months. Ideally we're looking to move into Harborne. Properties are quite expensive up there at the moment, but the property pages have shown some "small" price drops in that area.

We're saving up quite a bit and we've got a decent amount accrued already. I dont want to jump in with that though. Since we're living with the olds at the moment, both of us can each contribute roughly half of our monthly wages towards a deposit. Looking to get a sizeable amount together for a large desposit and a large contingency fund.
 
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