House prices..

AcidHell2 said:
I can't see it. If the prices fell by even 20%. The demand would be huge and the prices will rise again.
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Agreed.

Whichever way you choose to look at it, demand still heavily outstrips supply, which is conducive to long-term growth. I think that this will be a short-lived trough, brought about mainly by an unstable world economy. I take onboard the point about demand being less relevant than access to credit, but this again is a short-term issue.

... Note that this is coming from a prospective first-time buyer who would just LOVE to see prices drop 20 or 30%. I just don't realistically see it happening.
 
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Council just announced they're building a new estate of 50 homes opposite a newly finished private road. Prices there fell 20% overnight, the amusing thing is the council is spending £120,000 on each new house, which is more than most of the private ones probably cost! Not bad for a free house for some druggie.
 
Kami said:
Council just announced they're building a new estate of 50 homes opposite a newly finished private road. Prices there fell 20% overnight, the amusing thing is the council is spending £120,000 on each new house, which is more than most of the private ones probably cost! Not bad for a free house for some druggie.
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But thats just the same as any market.
 
Wicksta said:
You could say exactly the same of the doom mongerers, over the last 5 or more years while they have been predicting an imminent and devastating crash they were all rubbishing the newspapers.
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LOL, you can taste the bitterness in your reply. Any body who is less than optimistic that prices will carry on climbing forever and ever beyond wage inflation has to be branded "doom mongerers".

Lets get the facts straight a great many people that want prices to fall are not after a quick buck like the speculators, just somewhere to live.
 
I would say it was a good investment without a seconds hesitation mate. Longer you stay there the better it'll get. Property will always be in demand, you may have to pick a prime moment to sell, but I doubt you could ever lose money on it.
 
leaskovski said:
So the question that is on everyones lips. Am I mad to buy a 2 bedroom house in Reading for £195k when I have a £120k deposit? (relocated)
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Define mad? I'm as certain as I am about anything that a 2 bed house in reading bought in May 2008 for £195k will lose at least £10k over the next 12 months and I wouldn't be surprised to see it lose £20k. When you also consider the transaction costs, stamp duty and of critical importance the lost interest on your deposit it would be a terrible thing to do from a financial point of view.

Of course there are other considerations other than the financial so I'd only say you would be mad if you bought it without factoring in substantial loses.

Kami said:
I would say it was a good investment without a seconds hesitation mate.
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Incredible - you actually think property prices will increase from today, in real terms, beating other investment vehicles, to make property a "good investment"? Now that's mad.
 
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Third Opinion said:
LOL, you can taste the bitterness in your reply. Any body who is less than optimistic that prices will carry on climbing forever and ever beyond wage inflation has to be branded "doom mongerers".

Lets get the facts straight a great many people that want prices to fall are not after a quick buck like the speculators, just somewhere to live.
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Why should I be bitter? I've already made my money (well my missus made most by buying a place in 1997) and have a lovely house thank you very much :). I'm not interested in getting another house so what happens to prices doesn't bother me, I just find the doom mongerers here quite funny.

I was just making a point.
 
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Third Opinion said:
LOL, you can taste the bitterness in your reply. Any body who is less than optimistic that prices will carry on climbing forever and ever beyond wage inflation has to be branded "doom mongerers".

Lets get the facts straight a great many people that want prices to fall are not after a quick buck like the speculators, just somewhere to live.
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Why does everyone who doesn't think a large crash is going to happen or desireable have to believe in endless price rises as an alternative?

I certainly haven't ever said houses will rise indefinitely or anything of the sort.

And you're still missing the fact that if prices drop because demand drops due to credit availability, most people wanting to buy somewhere to live will still be out of luck... If they were able to buy, prices wouldn't be dropping that hard, after all
 
platypus said:
Crash or no crash, ftb's are screwed,
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Exactly, and with that in mind, not wishing for a crash is better overall than hoping there will be one. A crash is not going to benefit first time buyers, or suddenly make houses dramatically more accessible than they are now, so a stagnation or mild drop is far preferable to the rest of us.
 
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clv101 said:
Define mad? I'm as certain as I am about anything that a 2 bed house in reading bought in May 2008 for £195k will lose at least £10k over the next 12 months and I wouldn't be surprised to see it lose £20k. When you also consider the transaction costs, stamp duty and of critical importance the lost interest on your deposit it would be a terrible thing to do from a financial point of view.

Of course there are other considerations other than the financial so I'd only say you would be mad if you bought it without factoring in substantial loses.
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Well its not as if I am going to move anywhere in the next 5 years. I do accept that it is going to drop in value. I thing is that the mortgage is going to be less than my rent + storage costs that I am paying at the moment.

I hate renting
 
Dolph said:
Exactly, and with that in mind, not wishing for a crash is better overall than hoping there will be one. A crash is not going to benefit first time buyers, or suddenly make houses dramatically more accessible than they are now, so a stagnation or mild drop is far preferable to the rest of us.
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And given the knock on effects a housing crash would have on the country, it's preferable to ftb's as well.
 
leaskovski said:
mortgage is going to be less than my rent + storage costs
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Really?

So you have £120k in the bank, looking to by a £195k house, say stamp duty and fees come to £4k, leaving you with a £79k mortgage. At 25 year repayment at 5.5% would be £490 repayment or £360 interest only. However that's not even half the story. You currently have £120k invested which should be earning you at least 5% return or £500 a month (after tax you might only be seeing £300 of this, but then you should have it invested in something smarter than 5% - income tax).

So total monthly costs are £360 (interest on mortgage) + £500 (lost earnings on investment) = £860.

Now I'm certain you can rent better than a £195k 2 bed house in Reading for £860. I'm renting a £220k place for significantly less.

This calculation does not include maintenance costs associated with owning.
 
platypus said:
And given the knock on effects a housing crash would have on the country, it's preferable to ftb's as well.
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Which is why I don't understand the opposition to measures taken to try and stabilise and improve the market from those who desire a crash... It really doesn't make any sense to me.
 
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