long term (10 years) yes, but they can go down short term
Im calling it.....
- Thread starter Dr House
- Start date
long term (10 years) yes, but they can go down short term
I thought housing prices couldn't keep going up about 5 years ago but at some point you have to make a choice. Get on the bandwagon or deal with the fact that you are throwing money down the drain every month.
Our flat has gone up from £225k to ~£310k in a little over 2 years and our mortgage is about half what we would be paying if we rented the place. Even if the markets crash they would have to wipe a lot off the value of our property to make it a bad investment. If we were paying rent we would have spent about £30k in the past 2 years. Instead we have cleared about £13k from the mortgage.
Rental prices being so high is part of the reason house prices can be so high.
Our flat has gone up from £225k to ~£310k in a little over 2 years and our mortgage is about half what we would be paying if we rented the place. Even if the markets crash they would have to wipe a lot off the value of our property to make it a bad investment. If we were paying rent we would have spent about £30k in the past 2 years. Instead we have cleared about £13k from the mortgage.
Rental prices being so high is part of the reason house prices can be so high.
I have just had a offer accepted on a 1 bed flat in medway for 168k. Finding it hard to come to terms with having to pay that sort of money for the amount of space I am getting. You can get cheaper ones 120-140 but they have no parking/converted house or just old buildings in terrible areas. A 2 bed flat in the same building just sold for £200k~.
A house in a decent area around here you are looking £250k min to get anything and that's with out having to fight anyone else for it. Yeh you can get a 2/3 bed terraced for less then 200k but they are not roads I would ever live on.
Some of the places I have looked at have increased in value by stupid amounts. Houses that sold 3/4 years ago for 150k~ have sold last year for more then double that. They cant all of had extensions etc. done to them.
Compare what I am looking at to what my cousins could get 10 years ago is depressing.
Edit: And as fez said my mortgage will be around 360~ if I go for a 30 years one. Rent would be 700-800 for the same place, why I don't want to rent anywhere.
A house in a decent area around here you are looking £250k min to get anything and that's with out having to fight anyone else for it. Yeh you can get a 2/3 bed terraced for less then 200k but they are not roads I would ever live on.
Some of the places I have looked at have increased in value by stupid amounts. Houses that sold 3/4 years ago for 150k~ have sold last year for more then double that. They cant all of had extensions etc. done to them.
Compare what I am looking at to what my cousins could get 10 years ago is depressing.
Edit: And as fez said my mortgage will be around 360~ if I go for a 30 years one. Rent would be 700-800 for the same place, why I don't want to rent anywhere.
Same going on here in Hampshire. It's going to be impossible to buy somewhere bigger if I ever want to move and stay in the same town. Bought in 2013 for £250k, now identical houses are selling for £350k. I wish it hadn't though, my kids will never afford to live here and I can't afford to move somewhere bigger and stay local.
I've always thought that was the other way around, rents are being set so high because house prices are just going up, when in reality, unless you are buying a new BTL the house price increase shouldn't have an effect on rent?
Especially since interest rates have gone down and are so low for the last 8 years
It is something I havent done myself due to the risk involved in it, but one issue with property going up at such a rate is that some people remortgage on the new value to to free up cash (to reinvest or god knows what). They keep their leverage high and if they are a landlord they pass on that cost to the tenants.
I am in a position where it would take the market to crash/correct (whatever you want to call it) and wipe out about 50 to 60% of my properties' value for me to lose money on them if I sold.
With the population only going one way though, and the lack of new housing......supply and demand and all that jazz.
I am in a position where it would take the market to crash/correct (whatever you want to call it) and wipe out about 50 to 60% of my properties' value for me to lose money on them if I sold.
With the population only going one way though, and the lack of new housing......supply and demand and all that jazz.
I was walking through Berlin with a friend, very central area, and she mentioned how much some apartments there cost to rent. She thought it was very high, my jaw was on the floor at how cheap they were.
Only minor point in the UK favour is that renting in Germany is pretty cut-throat with multiple applicants touring the place at the same time and then race to get it. But I don't know if that's common or just what I saw on that one occasion. Anyway, renting in the UK is horrendous. I'm sure it pushes puts more pressure on people to want to buy, though on the other hand it makes it a Hell of a lot harder to save up that deposit.
Soldato
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I'm not sure you're going to see any 'crash' at all in London. A slow down maybe but nothing that would have any rapid or substantial impact on the home counties or the rest of the country.
A sudden and significant downturn in London property prices would require either people to have less money available, from either rocketing interest rates or a drastic economic downturn affecting earnings & employment, or for demand to drop. I don't see Brexit affecting either enough to have an impact. Housing supply is still lagging behind demand and personal & mortgage debt is so high that interest rates will have to remain low to prevent crippling the economy.
Even if London prices stall, couples with flats there still can't afford to buy houses or large garden flats in London when they have a family, so they move to the home counties. They've got equity from 5 or so years in the London property market and that cash transfers to the home counties' markets, keeping them buoyant.
A sudden and significant downturn in London property prices would require either people to have less money available, from either rocketing interest rates or a drastic economic downturn affecting earnings & employment, or for demand to drop. I don't see Brexit affecting either enough to have an impact. Housing supply is still lagging behind demand and personal & mortgage debt is so high that interest rates will have to remain low to prevent crippling the economy.
Even if London prices stall, couples with flats there still can't afford to buy houses or large garden flats in London when they have a family, so they move to the home counties. They've got equity from 5 or so years in the London property market and that cash transfers to the home counties' markets, keeping them buoyant.
Berlin has (or had after speaking to my mum about it last year) a shortage on properties so yes it's quite cut throat. also comparing rent prices like for like isn't the right idea. salary structure is different in germany than the uk.
Yes but precisely why prices outside London would drop if London did because that money would no longer be there.
Ultimately it's in the interest of property magnates to see another housing price bust, because they don't make any money when prices stagnate. So what could happen is prices dip and investors rush to exit the market, causing a flood of supply/loss of confidence and it snowballs from there.
WOW! Even taking into account CGT and expenses thats going to be close to or more than the annual average wage in profit over that period.
Nobody owns because it was so difficult to get a mortgage in the past, and the interest rates were terrible (I owned a flat for a few years in Munich in the 2000s). Now that has changed more and more Germans are buying.
http://www.reuters.com/article/us-germany-economy-property-idUSKCN0XL0LG
Only a few weeks ago I met up with a friend in Munich and he was just buying his first place in Augsburg, he's around 40. He said he was fed up of living in a white walled wooden laminate floored identikit rental property (all rental properties are like this) and wanted to bring his family up in their own home where they can do what they want.
I gather Berlin is somewhat unique and far cheaper than the real of Berlin anyway, for whatever reason.
Meanwhile, no joke, my colleague bought a house 3 years ago for £230k and has put it in the market... just now he said he was having offers in the £380ks... £50k over asking price
That is astonishing. Somewhat glad I bought in the same area... no way could I buy now and I'm 'established middle class' and had help.
Caporegime
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That's the exact issue here. People in London sell their houses for a fortune and move out and have so much money they can put in silly offers over the asking price to make sure they get their 'dream home' and don't get gazumped.
It pushes everything up
Incidentally my rent hasn't gone up for 4 years...
It pushes everything up
Incidentally my rent hasn't gone up for 4 years...
Soldato
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myself and my wife are looking to buy our first home right now. We've been looking now for around 6 weeks and have found nothing that has potential, needs work for the right price etc (Southampton). We've managed to save up a lot over a few years, tightening our belts, not living lavishly, no holidays and the result is £47k all to go down as a deposit. We are now living with inlaws temporarily which is super depressing, whilst we try and find our first home. We need to find a place fast as I'm not getting any younger, we want to start a family etc. It's not great at the moment, feel like a bit of a failure and all that.
We've had a £210k mortgage agreed at just under 3% so we are looking around the 240-250k mark for a property. But what that gets you down here is either a right dump in the middle of chaville, or a pokey little 2 bed with no gardens, no potential to expand the property etc. It's very depressing it really is. Just don't know what to do at the moment.
We've had a £210k mortgage agreed at just under 3% so we are looking around the 240-250k mark for a property. But what that gets you down here is either a right dump in the middle of chaville, or a pokey little 2 bed with no gardens, no potential to expand the property etc. It's very depressing it really is. Just don't know what to do at the moment.
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I'm not sure specifically where you are looking, but a quick search on Rightmove shows a lot of different properties available in the Southampton area for the budget you've listed, many properties are 3-bed with gardens etc. You aren't looking for your "forever" home, just somewhere to get started. You don't have any kids yet, move to a different area of the city later on for better schools if nescessary.
e.g. http://www.rightmove.co.uk/property-for-sale/property-64476812.html or http://www.rightmove.co.uk/property-for-sale/property-63854942.html
£250k is more than enough for a property with two salaries in Southampton for a starter home.