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Is this the right or wrong time to buy a house?

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These falls could be nominal or real terms, as it amounts to the same thing.

 

I definitely disagree on this point. The rest is well argued and I don't have time to make a well argued response to it.

But a fall in real terms leaves people with negative equity. A fall in nominal terms does not. It could be that the technical description of a crash is as you say (or it might not), but the majority of people with no background in economics will mean a fall in real terms leaving people with negative equity when they talk about a crash. Correction through stagnation is not the same as a crash, IMO.

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I don't know how to tell you this rustyfunk, but you're being too scientific about it.

 

You're also using criteria that are based on a completely different market to the one that we experience today. House price inflation is sustainable over the long term because the market is so adaptable, right down to a day to day level. It is the highest value market fragmentation that exists with most people buying for long term investment rather than short term gain. The headline 'profits' that you read are irrelevant because that's not most peoples story.

 

People don't move house and lose money, they stay put. If the entire economy collapses then you may have the beginnings of a point, but the economy is stable and the tools learned over the last 15 years, and the measures put in place by Thatcher and Major are the reasons for it.

 

Despite Mr Browns best efforts, the UK economy is like an oil tanker - high value, slow moving and difficult to change direction - for good OR bad.

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I don't know how to tell you this rustyfunk, but you're being too scientific about it.

 

You're also using criteria that are based on a completely different market to the one that we experience today. House price inflation is sustainable over the long term because the market is so adaptable, right down to a day to day level. It is the highest value market fragmentation that exists with most people buying for long term investment rather than short term gain. The headline 'profits' that you read are irrelevant because that's not most peoples story.

 

People don't move house and lose money, they stay put. If the entire economy collapses then you may have the beginnings of a point, but the economy is stable and the tools learned over the last 15 years, and the measures put in place by Thatcher and Major are the reasons for it.

 

Despite Mr Browns best efforts, the UK economy is like an oil tanker - high value, slow moving and difficult to change direction - for good OR bad.

 

Strangely, i both agree and disagree with this...

 

I dont see how the market today is any different from previous ones tbh... and if house price stability is sustainable over the long term, what about the short term?

 

Now, dont get me wrong, im pretty sure that within the next 15 years house prices will be back up to similar levels as now, but in the meantime they are almost sure to fall (in relation to earnings). The long term investment issue is debateable - it just depends on when in the cycle you bought, and can you ride out the hard times. If id have bought in the last year, my mortage repayments on 95K would be £560 pm over 25 years at 5%. an increase in irs of 1% would up this payment by £60 per month, which would be just shy of 1/2 my take home - a ridiculous % of income to spend on a mortgage

 

The rub lies within how much of a hit you can afford to take in the short to medium term, but there are many folk maxed out on the mortgage, and imo wont be able to keep repayments up. As i mentioned above repos are up to long term highs

 

http://newsimg.bbc.co.uk/media/images/40950000/gif/_40950222_mortgage_reposses2_gra203.gif

 

I cant agree that the economy is stable though, in my eyes its far from it...

 

The bit i really do agree with, is the oil tanker analogy, the difference between our views IMO, is that i reckon its just about turned round...

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Sheffield house prices in certain areas now are greater than parts of the South-East of England. Good case to start making an exodus maybe....the exodus to the North in the 70's and 80's was all related to cheap housing, now its going the other way. 10 years ago if I wanted to sell and buy a house the same size and environment in Kent, I would have needed loads of extra cash....now, I will make a PROFIT.....been checking out prices all weekend.

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rather contradictory, about what you'd expect from something anyone can edit.

 

followed by decreases (also known as a house price crash or a market correction) that can result in many owners holding negative equity

Historically due to inflation, prices do not fall in nominal terms, rather they stay "flat" for a period of 3-5 years.

 

mutually exlusive those two things...

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rather contradictory, about what you'd expect from something anyone can edit.

 

 

 

 

mutually exlusive those two things...

 

I take the point about being able to edit it - i didnt realise (doofus!)

 

However, and although i think i know what you are getting at, the two are not strictly mutually exclusive, as either way the cost of a house in relation to earnings falls, and for me 'correction' is just as bullish-a-way as possible of saying 'crash'.

 

But then we're on to just arguing the toss over semantics...

 

For me, the bottom line about the future affordability (or not) of houses, is not strictly about iminent 'negative equity' or 'stagflation', or any other outcome other than the relative cost in comparison to wages - which is currently at an unsustainably high ratio, and if either neg equity, or this flat period with higher inflation occur, then houses will become more affordable one way or t'other.

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Yeah, I think we are broadly in agreement, it's just the wording we're quibbling over.

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About 18 months ago I wrote a thread offering my opinion about the housing market. My view at the time was that with the newspaper headlines and the bank of England scare stories, and a very slow market that had leveled off, it was then a good time to buy and have no compitition and that prices would level off not fall 20-30%.

At that time many forum members said I was a fool and that they had read in the "Papers" that property would drop 20-30% and that they believed all the rubbish put out by the media and that I must have a screw loose.

As it turned out my opinion was correct and people who bought at this time did indeed have the upper hand and with everyone worried, there was little compitition.

Now in the last 6 months I have seen many house prices raised between 15- 20% and yet I've only just seen the first media report this week using the word, BOOM.

Many vendors are holding on until Autumn or Spring but buyers have been buying all summer long causing a shortage of stock. Sheffield agents now report the busiest summer ever and this I as I have experienced is stoking up the bidding wars.

My personal opinion is that it is now NOT a good time to buy and I really do think that everyone is bieng played hard by the agents as they know they now have the upper hand. I've been cheated and gazzumped recently while trying to buy a family home. I think that the agents are making hay at the moment and I would seriousley think before stoking up the prices with bidding wars.

The best thing to do is just put in an initial offer around the asking price or below. Then wait til final offers. What is happening now is that people are bidding the prices up 10% and then l bidding more on finals. This needent happen, just register your interest with an initial sensible bid first.

I'ts not a good time at the moment to buy and I do now personally think

things are going to tail off soon so I'm going to wait.

 

p.s. These are my opinions for info and should not be taken as reliable info inbuying a home. I just think its nice to say what you're experiencing and stop the agents from controlling us. Cheers.

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If you need to buy a house now then I don't see a problem with that. Sheff is still cheaper than a lot of areas so I don't see prices falling yet (if ever). They'll probably just stagnate or go up in line with wages. I don't foresee things will get dramatically easier for FTBs.

 

In terms of the horrible Sheffield system of sealed bids and the 'phoney war' of meaningless bidding-up prior to this, I think more people are realising this is nonsense and a game they don't have to play. Don't get obsessed with particular houses or areas and offer the price you're prepared to pay.

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If you need to buy a house now then I don't see a problem with that. Sheff is still cheaper than a lot of areas so I don't see prices falling yet (if ever). They'll probably just stagnate or go up in line with wages. I don't foresee things will get dramatically easier for FTBs.

 

In terms of the horrible Sheffield system of sealed bids and the 'phoney war' of meaningless bidding-up prior to this, I think more people are realising this is nonsense and a game they don't have to play. Don't get obsessed with particular houses or areas and offer the price you're prepared to pay.

 

Yes...especially because interest rates are on the way up and people mortgaged to the hilt will be in trouble before too long...

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i would disagree with the original poster. i've been trying to move within sheffield for around a year now, and during that year have seen dozens of houses, obviously all within a similar price band and spec. because we're happy with our current house and are only interested in moving some time in the next 4 years (catchment area and new baby), we've not become too embroiled in anything, but i've been keeping a really close eye on how much things cost, and i can honestly say that in the last month or two, house prices (or maybe jsut the competition for houses that we're looking at has slumped as it's too late for the next school year) are pretty stable, and even dropping slightly over what I would expect judging on experience over the last year.

 

obviously i'm not analysing any statistics, but i really think that the sorts out houses we're looking at - 3/4 bed semis with garages and gardens in s10/11/17, between 200-250k - are currently on a price 'plateau', although i wouldn't want to predict what will happen over the next few months, unless the interest rate goes up again, which it is widely predicted to do in the next 2 months.

 

nb the original poster is expressing a general trend, i'm just looking at a very narrow band of properties - it's perfectly possible that we're both right.:)

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