Property experts - Is now the time to buy?(40 Posts)
Ok, I know that nobody has a crystal ball, but is it sensible to buy now? We sold our house 3 months ago for its market value, ie, we marketed it at just slighly above what it was valued at, then accepted a slighly lower price. We didn't market it at 2007 prices expecting to get a sale. We are now renting and have a sizeable deposit, which will allow us to put approx 30 - 40 % down (obviously depending on how much we buy for). We are most certainly looking for a property that is being sold for today's prices and thats where we've met lots of problems. There are numerous properties on the market that have been there for several months. They are most certainly on at 2007 prices and EAs have even told us they are overpriced. Vendors will not even consider lowering their price. We have finally found one property that we like. These vendors have actually slightly lowered their price and we believe its on the market for a reasonable value. We know what it was bought for 2 years ago and the vendors will are actually only accepting 5K less (which does not reflect the nationwide drop), BUT, they have done alot of work on it, including new boiler, windows, bathroom and basically renovated the large garden, so its difficult to make a direct comparison. The property is also in a desirable area where property does tend to hold its prices.
We like the property, can just about stretch to the price and as I've said before, feel it is reasonably priced (although certainly not a bargain). I think in any other climate, I would put in an offer, but to some extent, with the obvious economic situation, also feel that I should in fact be getting a bargain. The problem is, that vendors seem less flexible than ever about accepting lower prices. Its also affecting the amount of properties on the market, as many people are trying to sell for x amount, not getting it, then just taking it off the market. We are renting from friends so have no pressure to buy, but I am keen to get back on the ladder having always owned property. I'm not quite sure what I'm asking (!) but just wanted unbiased opinions from others. Would we now be crazy to buy?
I think prices will go down further in the next year but, yes, that could well affect people's willingness to sell and could staunch the supply of "good" houses. I would tend to be fatalistic with this one: perhaps wait until the summer doldrums and then offer low.
We are renting at the moment and now have to find another house to rent for just 6 months as there is a distinct lack of appropriate houses (within budget) for us in the area. I cant see how with a real lack of mortgages available and the threat of so many businesses going to the wall that prices can do anything other than fall a bit further. I hate renting but would hate to tie my money up in a house I dont like more.
Thanks for your replies.
Luckily Jampot, we're renting from people we know so we are not tied into a 6 month contract. I think the problem I have, is that prices in certain areas of the market are just not dropping (or selling for that matter!). We are looking to buy what I would say is the mid range of the market. Terraced 3 bedroomed houses at the peak would fetch about 130 to 140 K in the peak, and are now selling for anything from 90 to 120 K, reflecting the drop (and they ARE selling very quickly). Houses that we are looking at, which which sold for 200 - 220 K a couple of years ago, are STILL up for that now, and there is just absolutely noone budging. Every so often, 1 of these houses WIll sell, and I'm convinced that vendors who obviously don't have to sell, will hang on in there. Things haven't changed for about a year, and, like I said earlier, some vendors are taking their homes off the market. I guess I just can't see an end to all this. I am wondering whether any falls in this particular area will take so long and not actually fall a great deal, hence whether I would actually lose out if I bought now. Wonder if this pattern has emerged anywhere else?
No I would save and wait at least another 12 months.
If it was me, I would buy. I can't stand all the what-iffing and second-guessing that goes on. A house should be a home, a place to live, not an investment opportunity. If you like it and can afford it, and intend staying there for a few years, then what's the problem? Does it really matter if in a year's time it is 'worth' slightly less than now?
they have to come down because the housing market is ridiculously over-inflated.
OTOH I would definitely use your position as chain-free buyers to get a good deal now
tailor, I can relate to a point...we are about to exchange contracts on our house, which we have sold at a fair price (23% down on peak, at a guess). The situation in our area is much the same, prices often still high, not much coming on, etc. If anything, its got worse (as a potential buyer) in the last couple of weeks, as the season hits its peak.
BUT all the research we have done points to prices dropping some more, and quite possibly more than is predicted.
Its soo hard not to panic, but we're moving into a rental and holding firm - we only need one house, we will be no-chain cash buyers so in a good position, and this is the most expensive time of year to be buying in any market.
That said, if we saw a house we loved - as maybe you have - and could afford it, reasonably comfortably, we would probably buy it. Because at the end of the day, when the time feels right is very personal - and when a house feels like your future home is also very personal.
Good luck deciding
See this graph?
Note the 'Return to normal' label. The shape of every spring bounce in every house price crash. Last crash there was a spring bounce every year, before the falls continued - for years. This crash has barely begun, IMO. No crystal ball needed, just look at history!
Not that it would always be stupid to buy at such a time... but it sounds more like you are worried the market is about to shoot off again, rather than worried your life is being ruined by renting. If the former, I'd wait if I were you. If renting is making you miserable, then life is too short and you should buy and then just avoid all property price news for the next 10 years.
I think you are buying a home and its value in relation to the market is relative anyway. The only time you need to be conscious of moving prices is if you are buying as an investment or you are getting out of the property market (moving abroad for example). Otherwise, it doesn't really matter? We have sold our house at a low price and "lost" a considerable amount. However, I look at it this way - we are also buying at a low and it doesn't matter as long as we have a home we are happy with and we are not planning on moving again for some years. I personally don't care what my house is worth when I'm living in it, as long as I can afford the mortgage!
btw we have bought in a similar situation to you - vendors won't budge, very little on the market etc. We have just gone for it for all of the reasons above. Its a home we are buying after all.
My personal opinion is no now is not the time to buy for the reasons others have said but that doesn't mean that now is not the time for you to buy that house IYSWIM.
I suspect you wont get truely unbiased opinions most people have an interest one way or another and if they don't they probably wont read the thread!
I think it is worth taking into consideration the amount of money that person has spent doing up that property so it doesn't matter what they bought it for. It could have been overpriced, it doesn't matter. What matters is what do you want to pay for it?
We have gutted our house from top to bottom, not to make a profit but to make a home. It takes not only money but time to have windows installed/have new boiler fitted etc.
If someone was to see what I bought this house for they would question why I am about to put it on the market for X more money because it is taken at face value.
I am even compiling a photo album to show exactly how dire this house was with its dated knotty orange pine fire place with its nooks and crannies for the ornaments, the pink bathroom with the peeling wallpaper, the caramel en-suite with its gold taps and bright pink carpet, the gaudy wallpaper in every room and the wood clad archway from the lounge.
Now that the information has become available we are all obsessed with looking at what friends someone bought their property for especially if it is on the market.
I am like beanstalk, I see a house as a possible home, as long as we can afford the mortgage then I don't really care if I paid a bit more than someone else thinks its worth.
I have in the past bought a <shock horror> brand new car!!! It started falling in value the second I got behind the wheel. Did it take any of the good feelings away? No.
Go for it, living in rented long term sucks unless the house it beautiful
very much depends on location and the type of property you are buying. sorry to be vague but i just dont think you can make sweeping generalisations about the property market.
Completel agree Fizzy. We have just moved house. The price was a little below the market value, as they didn't budge much, but we LOVE the house. It feels like a home, everyone that visits loves it. It probablyy isn't "worth" what we paid for it, but we don't care as we intend to stay here for years
I'm also in the process of buying, and I'm also beset by worries about whether I'm buying at too high a price. Stupid really because it's the only house I've seen that I've liked in this small village in the last year and a half, and I'd have no mortgage, but actual income is a bit of an issue (I work part time and I'm on my own with the 2 dc's) so it would be nice to have more of a buffer in the bank than I'd be left with if I buy now. In fact I'm convinced prices will go down, and possibly quite a long way, but I've gone so far down this process now that I just feel bad about pulling out. Wish I hadn't offered for it really. That's a stupid reason to buy a house, I know, but there you go.
Thanks mumsnut .
Actually I disagree with most of you that it really 'doesn't matter' how much you buy your home for, unless you are an investor or speculator. I have been tracking the price of a house near us that started off over £500k 18 months ago and is now £355k. There is a big difference between mortgage payments on a £355k house and a £500k one. If you buy at the top of the market and adore your house, but can't afford to do anything else, then I think that would matter, to me at least.
jimmy - yes you are absolutely right, but I was working on the assumption that you buy a house within your budget to start with!
I think my response was really aimed at those who are hung up on the price of the house regardless. As far as I am concerned, if you find a house that you like/love, is within budget and makes sense then now is no worse a time than any other. Prices are not at a peak, they are most probably not at an all time low either, but if you are planning to stay there for some time then it all evens out over the years.
If you are in a position where you don't have to move, then maybe you might want to gamble on prices dropping. But as OP and I have found, the problem is lack of available housing stock, people are staying put because of fear of redundancy and the like. So it doesn't matter what prices are doing if there is little available to buy. And this will only get worse over the next year or two, and may cause prices to stabilize.
Wait until October and get it even cheaper.Or until Feb and get it for a song!But if it is a dream forever house and you can afford it with ease it is might tempting to get out of rented
Ta, I like my name too but have just started series 5 and am a bit shocked at his behaviour so might have to change
Re lack of available housing stock, see I think it will get better. People used to talk about pent-up demand but I reckon there is a lot of pent-up supply right now. A lot of people really want to move but were going to 'wait it out' until prices were back up. Now it is becoming clearer that is going to happen in more like 10 years than 2, I suspect we'll see a lot more coming onto the market later in the year. People don't like to hold out for ever, especially if they want to move area.
I haven't got as far as series 5 yet so no spoilers please
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