Is it a Good time to buy a Property?

footman said:
Couldn't this "stagnation" also be viewed as stability?
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things do seem to be evening out a bit. seeing as the banks are now willing to lend, it would indicate that things have plateau'ed.

i personally don't think the markets will dip dramatically, and that things will gradually rise again. having spent the last 3 months looking at flats and houses, and watching them getting snapped up for near enough asking price i'd guess that purchasing confidence has risen along with the buy-to-let market.
 
clv101 said:
This is the key point. At 5.5% I'd say forget it. You've already said you'd have to spend £5-6k doing it up, that means first year return is actually only 1.6% (though you may be able to recover most/all of that £5-6k if/when you sell). Other costs include insurance, solicitor fees etc... not to mention all the hours of time and hassle involved buying and renting a place out.

With that yield it doesn't make sense unless you are counting on capital appreciation - given the state of the economy now and over the course of this parliament you'd be a brave man to count on house prices going up. If they did, and you managed to sell at a decent profit, there's a good chance capital gains tax could take a lot of profit away again.
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The intial all risks yield is still about 5% taking into account the 5-6k cost to do it up, putting £5k aside to complete the transaction and assuming 2% managmemt costs to get a letting agent to look after it for you.

Personally I think the only way to do it properly is to decide how long you want your money to be tied up for and analyse it over a number of years using an equivalent yield and a more accurate growth rate against other investments over the same period.

Trouble is everyone is guessing at the moment about how the property market will be over the next few years. The Royal Institution of Chartered Surveyors are optimistic but other people on here are quoting studies that say otherwise and it remains to be seen who is actually correct.
 
If you have to ask ocuk for help and advise then I wouldn't bother, dont forget people dont want to "rent" big homes, personally just keep the cash, whats the point in putting it into a house that will no doubt bring stress and plenty of work, from possible damage and potential repairs.

toshj said:
things do seem to be evening out a bit. seeing as the banks are now willing to lend, it would indicate that things have plateau'ed.

i personally don't think the markets will dip dramatically, and that things will gradually rise again. having spent the last 3 months looking at flats and houses, and watching them getting snapped up for near enough asking price i'd guess that purchasing confidence has risen along with the buy-to-let market.
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But jobs cuts are still happening and loads more to come from public sector, this will have an affect on the housing market and mortgage repayments and put us back to debt not being repaid and homes being repossed .
 
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cheets64 said:
But jobs cuts are still happening and loads more to come from public sector, this will have an affect on the housing market and mortgage repayments and put us back to debt not being repaid and homes being repossed .
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very true, however a great deal of housing prices within London have a tendency to correlate with London salaries (apart from in times of market crash). Banking salaries have recently gone up quite dramatically in the last 12 months, and therefore have "evened out" the housing market somewhat. As banks are incredibly unlikely to decrease these base salaries, it would indicate that things won't change too much. If there was a dip again, i doubt it would be as severe as the past one.
 
My fiance and I just bought our first house (3 bed terrace) at £79,000 which is quite cheap for over here. We're just hoping the area is as nice as everyone has said it is! With our budget we couldn't be too picky but we fell in love with the house instantly and it needs very little done to it. Moving in next week so will soon see!
 
The Mad Rapper said:
It could be, but that's not the view I'd take. It's an artificial pause which won't last.
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Mr Rapper, were you having a bad day yesterday?

I seem to actually find you being sensible today.

for reasons which will become apparant, the current cost of housing is completely impractical for the UK.

I believe the current low interest rates and mortgage rescue packages are primarily in place to allow the banks to recapitalise following the subprime money vapourising.

Once this has happened, the govt need banks to lend money to businesses not housing, I don't know how they will achieve this but this will be their goal.

Either by design or by chance, the reduction in housing allowance is set to have a large impact on the housing market. It will reduce the viability of many BTL businesses. In London for instance a family can have 2k a week to live in a very nice house as long as they can prove they are entitled to it. This will reduce to 400 and then 360.

This combined with public sector man power reduction and possible interest rate rises will bring a lot of BTLs back on the market.

In the bigger picture, I cannot see the collapse of the dollar, however the americans owe 12trillion dollars rising at 200bn a month. Presumably they will have to cut 1trn a year just to get sensible.

this link shows a few numbers:eek:

http://www.usdebtclock.org/
 
Stretch said:
I agree with you Scam. Unfortunately after being in your position for a number of years I finally managed to buy my own place at 29 (about a year ago). Now I just don't care, and it's in my interest to keep prices high and lucky for me price rises in Cambridge are back to double figures.

Therein lays the problem. My advice to you is take out an irresponsibly large mortgage you just can't afford in order to get on the housing ladder.

Oh wait....
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Out of interest, where abouts in Cambridge did you buy?
 
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