How far will Sheffield house prices drop?

[espadrille 10]

Ive no idea when the market will bottom out and when I am saying wait I am thinking at least 6 months and maybe a year. For anyone renting at the mo it is v. unlikely they will lose out on cash by waiting and for anyone not renting they will almost certainly not lose out.

 

As Cyclone has pointed out most people are buying a house to live in, not to make money on, and my following calcs are based on this:

 

You can get a decent (no major refurb needed) 2/3 bed terrace in Crookes for around £130,000 at the mo and id guess renting one would be around £500 p/m. By waiting 6 months to buy you will have lost out (having not bought now) if the price has dropped by LESS than £3000. That is a drop (in 6 months) of 2.3%! The figures will be different for other areas but roughly the same as current prices will be more/less but rent will be more/less depending on location.

 

You are essentially saying prices will not drop by 2.3% in 6 months (and then not drop at a rate of more than 2.3% every 6 months at any time afterwards) otherwise your advice to buy now makes no financial sense whatsoever! Is this roughly your prediction on house price falls then?

Well Cyclone has a completely different way of looking at things to me as all the people that I know have got on the ladder to make money.In this country it is well known that people treat their home as an investment aswell as to live in.

It isnt at all like that in Switzerland and other parts of Europe where they do just buy a home to live in.

 

The point that has been missed is that if you buy a house that is a project, without doubt you will make money on it even though you pay for the cost of renovation.If you spend £20k doing a small terrace up and pay 90K for it like you can get at auction then you are looking at a potential profit margin of at least £15 k .Of course if you have no DIY skills at all and have to pay tradesmens prices then you will pay more than that for renovation.

 

My mortgage is less than the cost of a rented house in Crookes, a lot less so I just cant see how paying rent to a landlord when you get absolutely nothing back in return makes sense.

I am neither needing to buy or sell at the moment so it is irrelevant to me what the prices are at.When I do decide to sell, I will just get on with it as whatever I buy after that will be lower anyway.

 

So..

Get a house that needs some work on nand put some time and effort in to doing it how you want.

Buy a house in an area which will always be a popular area, such as Crookes or better if you can get it.

It is much better to buy a smaller house in a better area than a large one in a rough area unless of course you have a big family!

Remember he who hesitates is lost..

[Cyclone 10]

Well Cyclone has a completely different way of looking at things to me as all the people that I know have got on the ladder to make money.In this country it is well known that people treat their home as an investment aswell as to live in.

I don't know anyone who's got a house as an investment (okay, one person who got into the landlord business 15 years ago).

Everyone else I know that has bought has done so to live in.

And as an investment, houses have only been really lucractive in the last decade, most home owners have had their houses for much longer than that.

It isnt at all like that in Switzerland and other parts of Europe where they do just buy a home to live in.

I'm not sure how you can argue that it isn't the case here, apart from the buy 2 let landlords of the last few years who are all now dying on their feet.

 

The point that has been missed is that if you buy a house that is a project, without doubt you will make money on it even though you pay for the cost of renovation.If you spend £20k doing a small terrace up and pay 90K for it like you can get at auction then you are looking at a potential profit margin of at least £15 k .Of course if you have no DIY skills at all and have to pay tradesmens prices then you will pay more than that for renovation.

Yes, that's true, or at least was true until Aug 2007. If you do it now you'll be lucky to make money. There's a reason "location, location, location" isn't being shot anymore.

 

My mortgage is less than the cost of a rented house in Crookes, a lot less so I just cant see how paying rent to a landlord when you get absolutely nothing back in return makes sense.

Presumably because you didn't take it out last week.

If you look on the market for a mortgage today for the value that you'd need to buy in crookes it will cost you as much if not more than renting.

And your asset will continue to depreciate for some time, my guess, another year.

I am neither needing to buy or sell at the moment so it is irrelevant to me what the prices are at.When I do decide to sell, I will just get on with it as whatever I buy after that will be lower anyway.

 

So..

Get a house that needs some work on nand put some time and effort in to doing it how you want.

Only valid advice if you want a project, not a home.

Buy a house in an area which will always be a popular area, such as Crookes or better if you can get it.

Buy a house in an area you want to live in.

It is much better to buy a smaller house in a better area than a large one in a rough area unless of course you have a big family!

Remember he who hesitates is lost..

And fools rush in.

[banjodeano 31]

I appreciate that you'd like to stop the decline in the housing market, ideally with other peoples money.

But now is not as good a time as any is it. Prices are still falling at something like £500 a week, so next week is a better time than now, and the week after better than that.

Trying to talk it up won't alter the fact that anyone who's got an ounce of sense will only buy right now if they are forced to do so.

 

 

Not entirly true, if you see an house that you want, at the location you want, and at the price you want, then why wait? the property may not be there next month.

I have property to sell, i also have a bottom line that will not be crossed, so if the downturn continues, it will be a case of just waiting, but if potential buyers were watching my property and waiting to buy, then the wait would be futile. also it may not be there next month. if i saw a house i wanted and was happy with the price then i personally would buy.

An ideal house does not come along very often.

Am i talking up the market? probably!! but i honestly beleve we have almost talked ourselves into a recession.

[ukdobby 223]

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Not entirly true, if you see an house that you want, at the location you want, and at the price you want, then why wait? the property may not be there next month.

I have property to sell, i also have a bottom line that will not be crossed, so if the downturn continues, it will be a case of just waiting, but if potential buyers were watching my property and waiting to buy, then the wait would be futile. also it may not be there next month. if i saw a house i wanted and was happy with the price then i personally would buy.

An ideal house does not come along very often.

Am i talking up the market? probably!! but i honestly beleve we have almost talked ourselves into a recession.

 

100% correcto,if we all wanted to save money no one would buy except for the sales,if you want something you buy,for anyone who can wait and guess correctly the bottom of the market would be a miracle,if they can please let me know.If you want you buy end of story.

[Dimitri 11 10]

so I just cant see how paying rent to a landlord when you get absolutely nothing back in return makes sense.

 

Do you disagree with my figures a few posts up then or not? If you agree with my figures then you can see what you get in return (savings of thousands upon thousands of pounds). If you disagree you must think the market is going to fall by around 2.3% or less in the coming 6 months. It has to be one or the other.

 

I am neither needing to buy or sell at the moment so it is irrelevant to me what the prices are at.

 

Where prices are at is entirely relevant to this thread as you said that buying now was a good idea.

 

So..

Get a house that needs some work on nand put some time and effort in to doing it how you want.

 

If you can get a house (needs DIY or doesn't) for around 30-40% off Aug 07 peak price then I would say it's a good deal. If you pay for a house that needs DIY that is only 10% off Aug 07 peak price you may have to wait a long long time to make a profit on it. Waiting to get a better deal still applies to houses that need DIY as these prices will fall as well.

 

Anyway back to the original point about buying now as you said nothing about getting a DIY house and simply said it is better to buy now. Most people want houses that don't need major work so are you saying these people should buy now at around -10% off the Aug 07 peak or wait?

 

Remember he who hesitates is lost..

 

There are exceptions to every rule............... like buying a house in November 2008 unless you get a big big discount:)

[Dimitri 11 10]

Not entirly true, if you see an house that you want, at the location you want, and at the price you want, then why wait? the property may not be there next month.

 

It's the risk you have to take but in reality most people want to live in a particular area (or even a few particularly adjoining areas) and not a particular house. True people will see a house they really like but when weighed up against potential savings of thousands of pounds most will take the latter.

 

I have property to sell, i also have a bottom line that will not be crossed,

 

Presuming that your line isn't that low just wait for somebody who has a line lower than yours. Not everyone is going to wait and wait until the market turns around and people are going to accept lower offers.

 

if i saw a house i wanted and was happy with the price then i personally would buy.

 

I would too but the price would have to be substantially lower than most on the market at the moment. People are looking at where they think prices will go and most are thinking down a long way. They are therefore not wanting to buy an asset now for x price when they can get it cheaper later down the line.

 

An ideal house does not come along very often.

 

Depends how picky you are. As I said already most people would rather pay less and save money as long as the house was in the area they wanted.

[Dimitri 11 10]

100% correcto,if we all wanted to save money no one would buy except for the sales,.

 

Buying a house isn't the same as buying a new jumper or some aftershave though. The savings could directly affect quality of life for the next 25 years

for a lot of people.

 

if you want something you buy,for anyone who can wait and guess correctly the bottom of the market would be a miracle,if they can please let me know.

 

I can guess that prices will be lower in 6 months or a year and so you will save a lot of money by holding out for that long.

 

Your basically saying buy now because you can't predict the bottom of the market but you don't have to predict the bottom of the market to save money. You have to predict the bottom of the market to save the MOST money.

 

If you want you buy end of story.

 

If you want to buy at the current prices you are going to lose money - end of story.

[espadrille 10]

I don't know anyone who's got a house as an investment (okay, one person who got into the landlord business 15 years ago).

Everyone else I know that has bought has done so to live in.

And as an investment, houses have only been really lucractive in the last decade, most home owners have had their houses for much longer than that.

I'm not sure how you can argue that it isn't the case here, apart from the buy 2 let landlords of the last few years who are all now dying on their feet.

Yes, that's true, or at least was true until Aug 2007. If you do it now you'll be lucky to make money. There's a reason "location, location, location" isn't being shot anymore.

week.Presumably because you didn't take it out last week

If you look on the market for a mortgage today for the value that you'd need to buy in crookes it will cost you as much if not more than renting.

And your asset will continue to depreciate for some time, my guess, another year.

Only valid advice if you want a project, not a home.

Buy a house in an area you want to live in.

And fools rush in.

I am currently remortgaging and as I said the mortgage is substantially lower than the cost of renting a house in Crookes.You say that if you buy now you will be lucky to make money but over a period of say 5 years you will of course make money.

 

The way that this economy operates is on boom and bust so over the last 25 years that I have been a homeowner there has been a steady rise (yes up and down I know) in the value of peoples houses.

So if no one buys a house as an investment, why dont we all live in rented then??

The British have a love affair with home ownership .An Englismans home is his castle so to speak.

 

So ,what I would really do if I it was just my decision would be to go the next auction and purchase a house at a great price for renovation and spend money on it , keep it for a couple of years and sell it, but keep the one I have. It is a win win situation.It is the best position second only to having money in cash IMO.

 

Cash in an account may get you 6/7 % return at the moment, but then take in to account the hundreds of pounds a year that you will be paying in dead money for renting...say at least £6,600 of dead money to a landlord when you could have been paying off some of the mortgage.

Investment at the moment in property wont at the moment get a return but over a longer period , you will easily win.

[espadrille 10]

Buying a house isn't the same as buying a new jumper or some aftershave though. The savings could directly affect quality of life for the next 25 years

for a lot of people.

 

 

 

I can guess that prices will be lower in 6 months or a year and so you will save a lot of money by holding out for that long.

 

Your basically saying buy now because you can't predict the bottom of the market but you don't have to predict the bottom of the market to save money. You have to predict the bottom of the market to save the MOST money.

 

 

 

If you want to buy at the current prices you are going to lose money - end of story.

Dimitri. I think that you are really trying to convince yourself of this.There are many differing opinions and we shall have to agree to disagree on this,but if you are renting, work out what you will pay and loose over the period that you deliberate for and ask why it wouldnt be better paying a mortgage off?

[espadrille 10]

What doesnt seem to have been mentioned in this thread is that there are some out there who are unaffected by the recession.People who are well of and can afford to buy cash. Some people on our Rd did that and have renovated it over the last few months adding value.

If borrowing isnt a problem and people can get a mortgae then they will of course buy at the moment.This thread only looks at the doom and gloom and the worse case scenarios with people not being able to get mortgages.

Barclays Bank leant out more borrowing this financial year than it did last year.That came from the one of the advisers at Barclays Bank, so someone is getting money and will use it to purchase houses.

The mortgage deals that are out there are good ones .the cheapest at about 4.89% so with that in mind people are going to buy and demand will increase in Sheffield, but that is just my'positive' opinion.

[ukdobby 223]

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I can guess that prices will be lower in 6 months or a year and so you will save a lot of money by holding out for that long.

 

 

 

 

]Thats the problem,you can guess,life aint all about guessing,thats pot luck,no one can say what prices will do over the next 12 months,I sold a house just last week and got what I put it on for because the guy wanted it.

[Cyclone 10]

I am currently remortgaging and as I said the mortgage is substantially lower than the cost of renting a house in Crookes.You say that if you buy now you will be lucky to make money but over a period of say 5 years you will of course make money.

There are plenty of periods in recent history when that advice would be wrong. If it were that easy to predict then you'd be an expert economist.

 

The way that this economy operates is on boom and bust so over the last 25 years that I have been a homeowner there has been a steady rise (yes up and down I know) in the value of peoples houses.

So if no one buys a house as an investment, why dont we all live in rented then??

Owning one house that is worth more than it was in 1975 (for example) is not an investment, not unless you can sell up and go to live in a caravan. The appreciation of an asset that you require until you die is completely irrelevant.

Until the late 70's we did rent more often, the tories changed that and home ownership became an aspirational thing, it's only got worse since then.

The British have a love affair with home ownership .An Englismans home is his castle so to speak.

 

So ,what I would really do if I it was just my decision would be to go the next auction and purchase a house at a great price for renovation and spend money on it , keep it for a couple of years and sell it, but keep the one I have. It is a win win situation.It is the best position second only to having money in cash IMO.

Go, do it, let us know how much money you loose. Trying to make money on a rising market when it's actually falling isn't going to work.

Making money on renovation is possible, but it's not a hobby.

 

Cash in an account may get you 6/7 % return at the moment, but then take in to account the hundreds of pounds a year that you will be paying in dead money for renting...say at least £6,600 of dead money to a landlord when you could have been paying off some of the mortgage.

Investment at the moment in property wont at the moment get a return but over a longer period , you will easily win.

Nothing dead about rent, no more dead than interest anyway.

You'll be extremely lucky to get 6 or 7 % though, that's not where the saving comes from, the saving comes from the price of the house you might buy falling by £500 every month you wait.