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Original poster

House prices up or down?

60 replies

questionname · 05/11/2006 23:15

OK I've name changed for this sorry.
Having a really bad time trying to buy somewhere to live, soaring prices (by my maths recent buy to letters are loosing money) very little available and problems with what is. Have had several places under offer this year and vendors keep pulling out 'cos they can't find (?afford) the next place and we don't know what to do. We can't move to cheaper area right now (various reasons) so that's out. I know none of you have a crystal ball but would value some opinions, are prices going to keep soaring? Should we just get interest only mortgage? (no big wage rises in the offing!)or is everyone feeling the pinch? do you reckon prices might fall? How many interest rate/council tax/fuel rises will it take? Any estate agents out there who know the answer?

OP posts:

TheBlonde · 05/11/2006 23:24

depends where you are...
in London I'd say they are going to keep going up as demand will continue to exceed supply

I'm not an estate agent btw

southeastastra · 05/11/2006 23:36

not an estate agent either but due to go down, down, down,,,

Original poster

questionname · 06/11/2006 07:58

oh yeah forgot to say we are in an expensive part of London (but not K and C)

OP posts:

hulababy · 06/11/2006 08:13

They have slowed a bit here, but no signs of actually going down yet.

noddyholder · 06/11/2006 08:45

I think they are still rising but not at the silly rates they have been.

justaphase · 06/11/2006 09:05

we are in a similar situation and have been looking for over a year. And prices keep going up and up and up. We don't know what to do, I think we have been priced out now.

I think they will keep going up for at least the next year - with city bonuses and all - but will crash at some point.

It is all in the timing.... aghhhhhhhhh

NomDePlume · 06/11/2006 09:32

House prices here are on the up again. There was a plateau last year but they have rising steadily since about April, when we sold our last house.

TBH, I think it is a HUGE risk to sit and wait for the market to nose-dive. The longer you wait, the wider the gap between what you can afford and what things actually cost.

NomDePlume · 06/11/2006 09:32

(I'm not in London)

NomDePlume · 06/11/2006 09:47

and for what it's worth, people have been predicting a crash in the market for years (3 or 4, possibly longer?) and it still hasn't happened. Meanwhile, all those people who bought when the crash was first predicted now have a significant amount of equity in their homes.

That's not to say that I am naive enough to think that the market will never crash, but looking at recent history, those who have put off from buying have been burned, houses are even less affordable for them than they were 3 years ago making it almost impossible to get on the ladder.

FWIW, I do think the Buy-To-Let market is going tits up. It certainly is where I live. EVERYBODY got into it, having heard it was a good way to make a buck or two and now the market is flooded with wannabe landlords and there aren;t enough renters to go around !

NomDePlume · 06/11/2006 09:50

Also don't forget that London is a micro-market of its own. Very often National house-price drops are not reflected by the London market

Original poster

questionname · 06/11/2006 21:19

So I make that 3 up 2 down and one on the fence! It's very curious like justaphase says city bonuses but then I can't believe that everyone in the city with a fat bonus wants what we want whenever I read the papers it's all champagne/plasma screens ie spent on lifestyle rather than invested in B to L family houses. Yet someone is using a seemingly never ending supply of money to buy all the houses. N de P you talk a lot of sense but didn't London drop in the last price crash? I'm also under the impression that a lot of equity has been released for 4 wheel drives/laminate floors/skiing trips/school fees but that may just be wishful thinking on my part! I was looking at nethouse prices or whatever it's called and I reckon one landlord who bought earlier this year is loosing 200 pounds a month on his "hobby" and I havn't factored in any of his costs. I'm curious Blonde (was going to call you TB but decided it sounded a bit too much like the PM!)as to where you see it all ending? Presumably you are now in the place you wish to be in for ever or your wages are also going up by 20% a year? DO you really think the great British public is ready for a complete change in the way it thinks/what it aspires to? (An Englishmans home is his castle and all that) I would certainly hope that my dds would be able to buy somewhere when they leave home but how? I would never be able to give them the huge sums they would need for a deposit. Are we all going to have 40 year mortgages? We're feeling even more bleak about it tonight and have decided to calculate whether we would be better off if I gave up work instead! Thanks for your thoughts everyone and sorry for the long post.

OP posts:

TheBlonde · 07/11/2006 09:30

They have been talking for years about prices falling - no sign of a general fall yet

Although interest rates are up and IVAs are also up so some people are not managing

City bonuses will keep the London market up til April - even if you don't get a huge one, a 15k bonus will make a difference to those looking to buy

I don't think the market can rise forever and I try not to think about the state of the UK when my child(ren) reach adulthood!

We will probably move house in the next 18-24 mths but the affordability of the next place is a big issue

Do you intend to stay in London long term?

Blu · 07/11/2006 11:50

OUr estate agent reckons there will be a short mini-drop either before or after the introduction of sellers packs - I forget which. Before I think, on the grounds that everyone will be scrambling to sell before they have to go to all the hassle!!

NomDePlume · 07/11/2006 11:55

Haven't HIP's been scrapped or certainly minimised ?

The thought of the market that my kids will be FTB's in is a frightening one. I saw a headline on Yahoo news yesterday saying that by 2024 the average cost of a starter home will be £1m . The only way I can see my children getting on the ladder (unless they win the lottery or all become very financially sucessful early on) is by DH and I releasing some of the equity in our home to provide the children with an adequate deposit.

NomDePlume · 07/11/2006 11:58

There is likely to be a mini-drop in the market IF HIP's are introduced because the market will be flooded with sellers wanting to move before the additional costs of HIP's are launched.

Gobbledispook · 07/11/2006 12:00

Agree totally with NDP and here there are no drops prices - still rising but certainly much, much slower than several years ago.

justaphase · 07/11/2006 12:01

I am not talking about people with £10m bonuses, we are not looking at this price range anyway.

A post-graduate starting in the city will get somethin like £30K, 5 yrs into the job the range is very wide but probably averages closer to £100K in this market. There are a lot of people on this level and this is the stage in one's life when you want a nice 3-bedroom family house.

Carmenere · 07/11/2006 12:01

But if our parents had known that a house would have cost us almost a quarter of a million pounds when we were born they would have been shocked. It is just life. My mum always says that a house is worth what it costs when you need to buy one.

I just had a look at the latest HIP info and they are due to be introduced in June of next year. They make sense to me and I don't see why they will affect the housing market.

jampots · 07/11/2006 12:02

well fingers crossed the market will remain good and steady until I sell my house and then crash so I can buy a good house in teh area I want

Carmenere · 07/11/2006 12:04

Why will they cost so much? It is just standard information that you should have already and possibly some searches. Cost a couple of hundred quid at most I would imagine.

justaphase · 07/11/2006 12:09

I may be wrong but I think seller's packs will noyt be compulsory

NomDePlume · 07/11/2006 12:11

Carmere, when HIP's were being talked about it was suggested that they would cost the AVERAGE seller £600 - £1000. Not only is that a lot of money, but it also doesn't do anything majorly helpful - the survey included in the HIP will NOT be accepted by mortgage lenders so your buyer will still have to shell out the x hundred pounds to have their own done.

Carmenere · 07/11/2006 12:15

Yes but that was the home condition report that has pretty much been dropped now. The new HIP is just an info pack for the buyer and won't cost anything like that much I wouldn't think.

UCM · 07/11/2006 12:37

I am surprised that the interest rate didn't go up last Thursday (forgive me if it did). But I am expecting some hikes between now & April next year.

The housing boom is unsustainable and with more people entering IVA's. It's not if, it's when IMO. I genuinely would rent at the moment, if I hadn't bought a property as there are so many rental props around that you can negotiate a fab deal if you shop around.

Original poster

questionname · 07/11/2006 16:08

Blu you've made my day!
The Blonde at this rate we'll be on the next boat to Australia! I work in part of the public sector where 5% pay cuts are being put forward for next year and unemployment is a very real possibility. A 15K bonus would be lovely but what we have been looking at is going up by over 3x my take home pay in the last year (and I earn more than 15K) so even that amount is a relative drop in the ocean most of it would go to Gordon!
I too think all the teeth have been taken out of sellers packs, in general I think they would have been a good idea ie vendors would only bother paying for one if they were serious about moving and in theory they would need to get planning permission for all their "illegal" extensions before they started but the survey would have been useless if not accepted by lendor and therefore a rediculous waste of time and money on everyone's part!
UCM I think the interest rate is due to go up on Thursday and possibly again in Feb.
I was thinking a lot of people were getting into a tight spot, shared mortgages/enhanced multiples/interest only/loosing money on their (new) buy to lets etc and hoping that would help. It's clear that people looking to move out of what we want are struggling to move up (they have often had more kids and therefore more school/nursery fees/mothers dropping their hours etc.) I did some interesting sums involving (guessed) 2002 fixed rates and prices and rates available now for 2006 prices added an extra child etc etc and it was very interesting to say the least (I do accept a lot of this is worse in London).
Thankyou all for your views. Please keep them coming.

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