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House prices bottoming? 9-Oct-08 12:21 PM

Anyone care to suggest when I should buy a house?

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Male
NA

Re: House prices bottoming? 9-Oct-08 12:39 PM

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(23 Ratings)

Male

Re: House prices bottoming? 9-Oct-08 02:22 PM

Philip

I think you have hit the nail on the head with the 3 times salary. House prices have spun out of control for years and this is now pay back.

If lenders had stuck to the old ways of doing things I doubt we would have been in such a difficult position. Ok the USA have made matters worse but I think our exposure would have been less if we had stuck to the old ways of doing things.

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(18 Ratings)

Male

Re: House prices bottoming? 19-Nov-08 04:26 PM

hi gaven this is pay back time for greedy estate agents there the ones to blame www.needamoneytree,com davidbooth2000@aol.com

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Re: House prices bottoming? 21-Nov-08 05:20 PM

It may be the greedy estate agents who are blamed, but the real reason for the over pricing of houses is house buyers. I bought all myu houses under the old rules and it was 2 and a half time earnings that was used in all cases. However the present abismal government allowed interest rates to be rock bottom since 1997 and so those of us whjo had high interest rates and were unable to save are now expected to sell the one thing that has made money ion the last 11 years for nothing. So along with our pensions being raided by this government we are now being ripped off by house buyers, who think we should give them the house and enough money to change it to suit them.

I thjink that it is time that reality came to the house buyers and they stopped thinking like the celebrities who front house buying programs.

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(9 Ratings)

Re: House prices bottoming? 23-Nov-08 07:15 PM

Greedy estate agents.... I don't think so. I owned 3 branches of an estate agents and when the house prices started to rise, I tried to make the sellers agree to the full asking price. However, if they chose to accept an offer above the asking price AFTER they had accepted an offer off a buyer at the full asking price, I had NO LEGAL way to make them stick to it. Learn the rules relating to estate agents before blaming us.

Kind regards

Elaine

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(6 Ratings)

Re: House prices bottoming? 16-Oct-08 01:15 PM

I think that's just wishful thinking.

Markets never revert to their original type once they have evolved/matured. The housing market is not what it was and it will never be the same again.

Apart from anything else, thousands of properties have come off the market and have gone to buy-to-let landlords, many holding a long-term view about their investment. The fact that the number of new houses coming onto the market will be greatly reduced for some time because developments have been put on hold across the country is also going to put housing at a premium in the medium term.

I expect prices to recover within 2-3 years with slower growth following this.

Sentiment : Hold

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(28 Ratings)

36/Male
London

Re: House prices bottoming? 16-Oct-08 01:46 PM

If you can predict what markets will do next then you have got a pretty good crystal ball.
They could go into free fall or bounce back in 3 months, who can tell. And interestingly the boom and bust of the last cycle has just been repeated, so saying that wont happen is crazy.
Buy when you can afford and you think they cant get much cheaper. You may be right you may be wrong!
Markets arent logical, but remember, if it looks to good too be true, it probably is.

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(6 Ratings)

Re: House prices bottoming? 24-Nov-08 11:18 AM

i think what you say is naive to say the least.

Property in this country will fall at least 50% of peak value! at this level they will still be a higher multiple of the current mean wage. Buy-to-lets are in trouble in general due to the number of interest only mortgages and migrant workers are leaving in droves due to unemployment and the weak pound over the euro. we are heading for depression in the UK/US with the rest of the world suffering too.

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(9 Ratings)

30/Male

Re: House prices bottoming? 16-Dec-08 09:26 PM

think you spot on mate.the underlying factors of a strong market are all still there,its just banks are not lendingand when they do it will all bounce back,

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(4 Ratings)

Re: House prices bottoming? 16-Dec-08 10:39 PM

You could not be more wrong. You only need to look at the economic data to see that the current housing market needs to fall a minimum of another 20% to even be close to sustainable levels. The auction market is discounted by over 45% to last years levels and the general housing market historically follows within about 5-10%. Average UK house prices will find support at around £138,000.

Sentiment : Strong Sell

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(2 Ratings)

Re: House prices bottoming? 17-Dec-08 10:00 AM

Hi Steve, it is refreshing to hear that others are aware of the reality of this. I think many feel that the reduced interest rate will 'kick-start' the housing market. Models from historic housing data going back 40 years have demonstrated there is no direct correlation between interest rates and house prices. In fact, there have been periods of time when house prices fall, in line with reducing interest rates. As we all know, this recent unsustainable surge was in part due to speculation on excessive gearing i.e. those borrowing as much as possible just to increase exposure to property market. There is definately a direct correlation between house prices and household incomes. With increasing unemployment, a move into a deflationary period, those who believe household incomes will increase are clearly incorrect. I think there is going to be an incredible buying opportunity in the UK housing market and as such had sold my properties at the beginning of this year and am now sitting on cash awaiting that time, but it will not be before 2010. Good luck to all.

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Re: House prices bottoming? 19-Dec-08 10:30 PM

Is this bottoming? Currently looking at a property which in Jun 06 was purchased for £50k, which was in average condition for renting. Since then the house has been left vacant and has been totally stripped of copper and kitchen. Not currently mortgagable.
Work to renovate would be £30k.
It is on market for £70k which I believe is way to high. Rental potential is £500pm.
Would be very interested in you thoughts on what price you would expect to pay for property.

Sentiment : Strong Sell

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Re: House prices bottoming? 19-Dec-08 11:01 PM

House prices have fallen about 12 15% in 2008 but before that they went up a lot. Seems a little over priced.

Seems alright to me if you got it for 60 grand spent maybe 20 doing it up and got 500 a month rent.

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36/Male

Re: House prices bottoming? 30-Dec-08 01:54 PM

Mr E Man, I do not agree with BTL, however, if you check out the LR report today - http://www1.landregistry.gov.uk/assets/l...

you will see that it states prices are back to Feb 2006 levels. The property, you are looking at, is obviously well over priced. Today's price should be no more like £40,000 if it has been gutted, perhaps even £30,000. However, not knowing the area or the property these prices are generalisations.

Oh, and the bottom, 50% falls (minimum).

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42/Female

Re: House prices bottoming? 4-Jan-09 07:41 PM

At last some one who is making sense of the current situation with house prices. Too much negativity coming from all you predicting more crashes bad time to buy glad i havnt a house buy to lets are dead in the water what a load of poo get real and for those who say its estate agents fault well go away and chat about some thing that you know more about.

Fact my money is in property and im glad it is

my returns are good and i have recently bought a great bargain which in the long term i will make money out of as well as give myself a job for the next 12 months when i renovate it

Mark this in your note books

There will never be better time to borrow money than now and the next three months ok hard to get but if the deals good enough then you will find it

i live in jersey and we have been hit a little as well may be not as bad as the uk but still any one who bought in late 07 through to may 08 is most likely sitting on negative equity and are counting the losses on todays valuation so yes its bad for them but could be worse imagine having all your money in some of the corporations that have gone down the pan i bet you you would sooner have property then.

Get real best place to put your money ,in your house ,if you havnt one then buy one if you have a few make the most of the low interest rates and pay off as much as you can in other words if your on tracker rate then the money you are now saving on interest keep ploughing it off the mortgage your long term savings will be far greater than you may realize

Be sure of this 2009 / 10 has some great oppurtunities for the property investor come 2012 you will want to take me out for a drink

Most of all dont panic if in doubt hold

Sentiment : Buy

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(5 Ratings)

Re: House prices bottoming? 19-Nov-08 04:23 PM

Philip is right, I am in the business and my company have factored in, and are focusing on, the average house price becoming two and a half times average salary. I do appreciate that `averages` are a bit vague but we are expecting an overall decrease in the housing market `value` of 41%. We expect things to slowly improve in 2010 to 2012.

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(2 Ratings)

Re: House prices bottoming? 23-Nov-08 12:11 PM

by the end of 2009 prices will have fallen by another 15 - 25 % as i believe we are only at the start of this ecomonmic crises, which has been fuelled by greedy individuals looking for a lifestyle well beyond their means..I have been saying this will happen for for over 3 years and no one believed me...hence selling then and keeping cash....The UK like the US is driven by credit....when will people learn that loans, mortages etc have to be paid back and hosues have gone up but how much have they paid in interest on their loan / mortgage.....we shoudl try and take a leaf out of our grandparents and only buy what we can afford..hence now teh car industry collapsing.....so if you are in a position like me my advice is to enjoy teh next 12 months then pick up a bargain.

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(13 Ratings)

Re: House prices bottoming? 23-Nov-08 12:40 PM

Another prediction by another 'expert'. Just what everyone wanted. funny how all the glass half empty brigade are walking around with big smiley faces at the moment. I'm staying happy in my house (which is on the market), that may be falling in value, despite all the sanctimonious doom mongers who are enjoying other peoples misery. When it sells it sells and I will get on with my life without moaning or preaching to others.

Sentiment : Buy

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(3 Ratings)

Male

Re: House prices bottoming? 24-Nov-08 10:22 AM

Im not an expert just saw this coming...I went to SW Florida 3 yrs ago and property had quaddraupled and everything was on credit...I used to say 'how do people afford it' - new cars etc ...its teh same here some people have been suing their property to fund their lifestyle or use for their pension...my point was property cannot keep rising hence selling......Ive made big losses on teh stock market over the years so ive suffered..all i woudl say is NOW IS A GREAT TIME TO BUY SHARES AND PRPERTY..this is what rich people are doing - warren buffett and people like him....

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(4 Ratings)

Re: House prices bottoming? 25-Nov-08 05:34 PM

Property in the UK always increases over the time so anytime is a good time to buy a home.
When you make this an investment as opposed to a home then you can be unlucky depending on when you sell.

House prices will stabilise now and if the banks start lending again to first time buyers we can oince again see the economy bucking the world trend as the building trade gets back to work.

This alongside infrastructure projects can ensure a large piece of the economy, actually the biggest outside finance will get back on track.
Finance will also start to recover midway through 2009 and I expect a quick return of finance houses back in profit with good returns around mid 2010.

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Re: House prices bottoming? 25-Nov-08 01:08 PM

all this talk of price bottoming is quite funny no one knows but a house can only go so low as not a lot of people have equity! It depends on many things like supply and demand and if houses fall another x amount there will be fewer houses to buy which will start the rise in price !!!! the housin market in the north has started to pick up .. So it subjective to where you live but with no stamp duty and interest rate falling now would be a good time as if houses fall as the press as predicted most people with sense will take their home off the market!!!!!! just a thought as we've all seen this before only this time interest rate are not high!! and there are lot of bargins for people that want a home but unforunately for those whom wish for investment ie by to sell maybe it not as good as you had it...

Sentiment : Buy

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(2 Ratings)

44/Female
todmorden

Re: House prices bottoming? 25-Nov-08 05:14 PM

Sarah, see you are still trying to talk the prices up, you just can't help yourselves you lot can you? supply & demand? well i used to say that a while back myself, i think it's now Demand & supply, agents will be closing all over the country now, i personally think it's a good thing. they were over paid for doing nothing. print a few details, show up late for viewings, drink coffee all day, take back handers, get rid of them, there are too many of you, Bye Bye, Marco

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47/Male
london,

Re: House prices bottoming? 23-Nov-08 02:03 PM

One of the best pieces of advice I was ever given was "rich people know rich people, poor people know bank managers." Seems a lot to take in but simply it means that if you want to borrow money the best people to borrow from are people you know and have the money and will let you borrow for free or in return. The last resort should be a bank.

In my case I put up 60,000 for my first house and borrowed the other 40 from an uncle. When the time came to move home. I sold the house with a considerable profit which I split 60/40 with him. He was happy as he got a better return than any bank I was happy as I borrowed money stress free and made a profit to put towards my next house.

So choose people debt not bank debt.

Sentiment : Hold

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(2 Ratings)

Male

Re: House prices bottoming? 23-Nov-08 08:25 PM

IMHO the time to buy a house is when nobody else wants one! This will be when reality hits the market and average price is 3 times average salary.
Seems miles away at the moment but those days are going to return. Anyone who thinks otherwise is simply shooting the messenger.

ABSOLUTLY PERFECT!
Now the credit tap has been switched off, all the fowk who pushed the prices up are at there 'Panic stations', well i wish them no luck at all and can't wait for the sensible prices to come back.

its the goverments fault for not making the banks be more responsible lenders, and all the gready 'must have now peolpes fault for legging themselves up. Only value something you want at what you value it at, not what some idiot of an estate agent values something at because they are working on a percentage. My gosh the house prices only ever got to where they were at because the silly gready banks were willing to lend, not because property was worth the silly prices. it should be law to have at least a 20 to 30% deposit that would go some way to help sort the mess out.

Happy days, roll on a couple of years i'm saving up for a nice .5 million (retail 07 prices) place for 250k and i think it could happen at auction soon. if you up to your neck in it don't blame anyone exept yourself.

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Re: House prices bottoming? 9-Oct-08 12:47 PM

Buying houses is like buying anything. If you want it, think the price is fair and can afford it then by all means go ahead and buy. However, I wouldn’t be banking on any price increases in the next 4 years or so. It all depends on your motives for buying. I am currently renting as I think that if I wait a year or so I’ll save more than I’ve paid in rent.

This obsession with a house gaining or loosing money is just a dream of a get rich quick scheme. If you buy a new car on finance you are in negative equity immediately, and no one expects to sell their car in a year or two and make a killing, yet people still buy them, even if for some renting one would be cheaper.

So it’s up to you.

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31/Male

Re: House prices bottoming? 9-Oct-08 12:48 PM

Certainly not yet unless the price is 30% below asking.

Could be long cold winter and recession is just starting. Car sales only started serious decline last month and that is usually one of first signs.

Wait and see I think.

We build luxury houses in Surrey and even that market is down 10% and falling

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(10 Ratings)

Male

Re: House prices bottoming? 9-Oct-08 12:53 PM

when ownership is equal to or cheaper than renting..

Back of fag packet example.....

200k House.

Rent at current yields (5% gross) = 10k or 833pcm

Ownership:
40k deposit - loss of interest at 5% = 2000 pa
160k Loan - interest charged @ 6% = 9600 pa.

Yearly cost = 11600 or 966pcm.

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Re: House prices bottoming? 9-Oct-08 01:15 PM

probably worth paying off some capital on that too so add on a nice round couple of grand for the year

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Male

Re: House prices bottoming? 9-Oct-08 01:18 PM

sorry its slightly worse than that...

because renting you would be receiving the interest thereby being a further 2k better off.

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Re: House prices bottoming? 9-Oct-08 01:55 PM

Apples. Sounds like you should be working for one of the banks! You are double counting the income on the £40k savings ...

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Re: House prices bottoming? 9-Oct-08 02:04 PM

Commodity.
no i'm not the example was either or.. not both...

so you've either got 40k in the bak OR you are missing out on 40k in the bank.

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Re: House prices bottoming? 9-Oct-08 02:11 PM

Apples. You are double counting. Take another look ...

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Re: House prices bottoming? 9-Oct-08 02:23 PM

I agree as well JDR you are double counting.

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34/Male
NA

Re: House prices bottoming? 9-Oct-08 02:29 PM

Double Counting...

show the math then.

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Re: House prices bottoming? 9-Oct-08 02:36 PM

Apples. It doesn't need maths. Either it is in the bank earning your £2k per year or it is somewhere else earning you nothing. The difference is £2k.

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Re: House prices bottoming? 9-Oct-08 06:57 PM

Dead right. The recent bubble became so large because less than astute buyers figured the cost of ownership would be reduced by an endless series of 15% annual rises in the values of their "investments". And now it's possible that would-be buyers are holding off in the expectation of an endless series of 30% annual falls. One of the wonders of human nature: draw a line graph, and most people will extend it ad infinitum.

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Re: House prices bottoming? 16-Oct-08 05:28 PM

james264007, series of 30% falls can hardly be endless...taking your pessimism a little too far?

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Female

Re: House prices bottoming? 4-Nov-08 07:40 PM

Actually yes it can. You can see a 30% yearly decrease ad infinitum in theory. Think about it. It's like repeatedly cutting a piece of paper in half.

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34/Male

Re: House prices bottoming? 9-Oct-08 08:08 PM

You are quite right about when it's cheaper than renting. I'm just about to buy at the bottom end of the market.... a flat that I love, private garden £100 per month cheaper than renting and its been refurbished

Sentiment : Buy

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55/Female

Re: House prices bottoming? 10-Oct-08 01:37 AM

Good for you, I hope it goes well as I'm sure ot will.

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Female

Re: House prices bottoming? 12-Nov-08 01:08 AM

what everyone seems to forget you buy a house to live in and as long as you can afford it and you borrow within your means it is still better than renting.It is only people wanting to become landlords and make money that has caused a lot of the problems

Sentiment : Hold

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(2 Ratings)

Male

Re: House prices bottoming? 12-Nov-08 02:00 AM

Bill S,

The point is that it's not better to own than rent currently. Look at the numbers.

Ian,

You paint a black picture, which unfortunately I can't disagree with. I wish I could!

Roz. L,

You should be ashamed. Trying to take Declans' clothes, are you?

Great thread, everyone.

(hope that didn't sound patronising)

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Re: House prices bottoming? 13-Nov-08 10:18 AM

Arthur s I agree that at the moment it could be advantagous to sell your house if you can get a buyer and rent one but a house is a long term investment and you reason you buy it is because you want to live in it.also now the base rate is falling mortgages should become more affordable

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Re: House prices bottoming? 16-Oct-08 05:21 PM

apples, that eqation is missing a crucial element in the ownership section - and that is what the house price is doing. In reasonably good times the house price is climbing say 5% a year. That in itself is 10k a year equity gain. When it was booming, this was 20% a year (40k equity gain annually in your example). Now its -15% (15k loss). My point is that this completely changes the results of your equation. But if added, than fair enough you could use the formula.
This is however purely investment part of the reasoning and if its also your home, there is usually more far more in play, particularly if you have kids school age.

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Female

Re: House prices bottoming? 16-Oct-08 05:31 PM

sorry should have been 30k loss - but you get my point

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Female

Re: House prices bottoming? 9-Oct-08 01:14 PM

5 years from now when you have 50-70% price drop

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Male
NA

Re: House prices bottoming? 9-Oct-08 01:22 PM

not until 2010 houses have another 30-40% to come off yet our economy is in crisis and it is not going to recover any time soon

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Female

Re: House prices bottoming? 9-Oct-08 01:41 PM

The price of houses has not yet reached the bottom so wait. I think nobody knows how far prices will fall or for how long, informed estimates are 25% top to bottom, Reasons being that for 2 years at least the only people selling will be those who have to and property developers, who will use increasingly imagionative ways of selling new houses, but expect prices to continue to fall until at least the end of 2009 and then the fall to slow.

50% I think is too high as buyers will return very rapidly at that level of drop and prices will rise very quickly. There will be regional variations depending on the market locally. The decision to when to buy depends on you own cir$%^&tances, whether you can raise a mortgage and how good the house/location is. Very good houses always sell in the end, the rubbish is cheap to buy and very difficult to sell at any price in most markets

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52/Male

Re: House prices bottoming? 9-Oct-08 07:38 PM

Looking at research expect prices to fall from top to bottom in 2 years and 3 years of flat house prices followed by 10 years of boom(this would be the 3 measured event).

In london average house prices are 8 times average earnings (for London not all UK) prices will rise again when this figure reaches 4 times average earining when prices take off again to 8 times over a 10 year period. That's how the cycles seem to go

Sentiment : Hold

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52/Male

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