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Original poster

The housing market......What do YOU think is going to happen over next 5ish years?

42 replies

SlightlyMadShockwave · 30/08/2007 13:46

...and based on that if you know you need a bigger house within 5-10yrs would you upgrade now or wait?

My answer:
I hope the market is going to dip at least a little (but loosing hope)....I keep waiting to upgrade until it dips...but now I am worried that the more we put it off the more we will have to pay for upgrade and more likely that we can't afford it.

OP posts:
essbeehindyou · 30/08/2007 13:57

Message withdrawn

Original poster
SlightlyMadShockwave · 30/08/2007 14:04

Thats the thing. I want to upgrade from 3 bed to 4 bed and add a dining room, utility room and downstairs loo to what we already have. But that is going to cost about £100K more on the mortgage - which, whilst we could stretch to the limit ourselves to afford I really don't want to.

If we wait 5 years when DD3 is at school and earnings potential has gone up and the housing market keeps going up we definately won't be able to afford extra increase IYSWIM

but a friend recently commented that it has to be done in smaller steps - which kind of makes sense.....maybe we should look at a bigger 3 bed with the diner, WC & utility now and go for the 4 bed in a few years...but if the market is going to dip then we can wait and go straight for the 4 bed IYSWIM.......

what to do?!?!?!?

OP posts:
essbeehindyou · 30/08/2007 14:05

Message withdrawn

Original poster
SlightlyMadShockwave · 30/08/2007 14:06

Mind you a friend is adding a double garage (from single) and family room downstairs at a price tag of £100K....which I think is daft.

OP posts:
Hurlyburly · 30/08/2007 14:07

Oh you can't second guess the housing market. My suggestion would be to move now. Even if the market dips it will move on up eventually.

Original poster
SlightlyMadShockwave · 30/08/2007 14:07

We would like to stay on teh estate we are on, and there isn't tahat much scope to extend most of them - typical 1990's estate.

OP posts:
Original poster
SlightlyMadShockwave · 30/08/2007 14:09

And I do rather like our house and location....so wouldn't want to move to a slightly bigger, inferior in other aspects house as a stepping stone in case we never get the 4 bed we really want...

OP posts:
hanaflower · 30/08/2007 14:13

This reply has been deleted

Message withdrawn at poster's request.

Original poster
SlightlyMadShockwave · 30/08/2007 14:16

The fixed price mortagages look OK - apart from the huge penalties for redemption, which does put me off...but then we might just be able to stretch ourselves for a couple of years in a 4 bed [ponders], knowing the interest rate isn't going to double....

OP posts:
Cloudhopper · 30/08/2007 14:17

I agree with the person who said you can't second guess it.

I have made that mistake and probably missed my only chance to buy a house.

fizzylemonade · 30/08/2007 18:44

The fixed mortgage thing comes down to 2 thoughts, either you wish to beat the market or you just want to know what you are going to be paying for X number of years. If the fixed period could tide you over until your earnings rise and DD3 is in school then it is worth a thought.

You can also weigh up the cost of moving twice and the stress compared to moving just once.

If the market dips it means you will not achieve as much for your house though.

Me, I'd do it because lots of my parents friends have said that in hindsight they now wished they had gone for bigger houses. I think the market will dip and that prices will remain there for a while. I don't think it will crash and I'm a born pessimist

BigGitDad · 30/08/2007 23:36

Abit of an odd one this in my opinion. The housing market in order to crash will need either interest rates to rise dramatically (currently unlikely as we are in a low inflation econmic enviroment) or unemployment to rise dramatically (again unlikely as we are seem to be fairly stable economically). Additionally due to immigration and changing lifestyles (ie the rise of single parent families needing own homes, buy to let investors looking to increase their property portfolio etc) there is now a higher demand for the same number of houses. This has driven house prices up over the last decade or so.
As such I think houses are now or will be soon unaffordable for a lot of people and so the price rises will slow down. I do not really see a slight dip unless something happens which supresses the housing market.
In my opinion I'd buy now as I don't think much will change.
Lastly I also agree with the MNetter who said to not second guess the housing market

sunshineandshowers · 30/08/2007 23:48

BigGitDad - American Housing market is in full crash mode, and has been for 18 months plus. It has happened with low interest rates and low unemployment and high immigration. See here www.bloomberg.com/apps/news?pid=20601087&sid=ayNLF3HPK24Q&refer=home

Don't believe it can't and won't happen here.

Twinklemegan · 30/08/2007 23:51

I'm convinced the housing market is going to crash soon, or a least have a big dip. Our house is on the market because we're moving and we'll be renting for a while. I am desperate for the house to sell quickly so we can get our money out and put it somewhere that feels safer.

I have no sound reasons for this, just a gut feeling I guess.

Twinklemegan · 30/08/2007 23:52

Duh, that sounded stupid. Obviously we're moving lol. I meant because we're moving away for work - does that make more sense?

UCM · 30/08/2007 23:57

I recently fixed our mortgage for 10 years. I need to know. Some friends of ours whose DP makes the decisions, did a tracker. They are paying more now, we are not.

I am not a financial adviser although I used to be. I would not, for one minute invest in the uk property market as a first time buyer. For remortgages, it's different. people do move up and if you are spending more than normal, then hell do it. Can you guarantee that your income will be that in 1 years time. Think on. I know so many people who are going to struggle over the next few months because their fixed interest ends.

Gordon Brown has just told all of the state workers not to expect pay rises because he wants to keep inflation down blah blah.

Food is going up gradually. You all need to tighten your belts because I believe that we are about to see some sort of meltdown, not a crash but a meltdown.

UCM · 30/08/2007 23:58

Sorry I contradicted myself there.

Original poster
SlightlyMadShockwave · 30/08/2007 23:59

We got onto market when it was v low....so we do have lots of equity...but not sure about tripling mortgage. Not sure about not moving up either....

OP posts:
BigGitDad · 31/08/2007 00:04

Sunshine, the housing market crashed on the back of some very dodgy sub prime lending on 100% or more of the value of the houses. Interest rates did rise but are still historically low even now. The US lenders gambled very badly and they are suffering the consequences. Over here lending to people on poor credit does take place but at much lower loan to house values, as such there is less risk for the mortgage lenders involved since they have the equity on people's houses to fall on.

BigGitDad · 31/08/2007 00:08

UCM, you can only make the call about interest rates after ten years when you can compare over the term since in two years or whenever time the rates may have changed.

Tinker · 31/08/2007 00:12

Agree with BGD. Especially after just reading his profile and see he's listed The Skids as a fave band

drosophila · 31/08/2007 00:28

The one thing I know about housing is that nobody knows anything. I exaggerate. 4 years ago we were buying moving from a 1 bed flat to a bigger flat. One thing led to another and we ended up with a house. At the time there was a lot of talk of the market crashing and I remember an article in the press about a bank manager who was so sure the crash was coming he went into rented accommodation.

Coincidentally we were in rented accommodation between selling and buying so we could have followed in his footsteps but we thought that at the end of the day we wanted a home and wanted it now.

Wonder how that guy feels now? Our house has increased in value by about 40% in that time.

sunshineandshowers · 31/08/2007 08:37

You are living in cloud cuckoo land if you think the UK does not have a subprime problem. Did you know subprime is anyone with a mega mortgage (more than 3x income)? I know many people that have these? Did you know subprime is interest only?

Did you know that our average house price is DOUBLE that of the US, and our average wage is lower? It's gonna get messy. The "subprime" problem in the US has only recently emerged (and is being used as a scapegoat - lets blame the stupid poor people), after 18 months of falls. The same will happen here. When people realise the ATM machine / house has dried up the subprime mess will all come out. Then everyone will say, "How did this happen?", "This must never happen again!" Just like they did in the early 90's.

noddyholder · 31/08/2007 08:41

Prices are already falling in some places.We are moving into rented this weekend having sold ours.A lot of the houses we considered buying have come down in price and agents have been hassling us!Even the house we have sold wouldn't get the asking price now as banks have toghtened up a bit on lending I would say wait at least til next year for a bargain

sunshineandshowers · 31/08/2007 09:12

Here is a good example from one of the UK's biggest lenders on low loan to value mortgages...

"together is different to a normal mortgage. It works by combining your secured mortgage with an unsecured loan at a single interest rate with one combined monthly payment. This combination can be worth up to 125% of your home?s value."

www.northernrock.co.uk/mortgages/together.asp

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