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

[SlightlyMadShockwave]

...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.

BGD, I do agree with you. When I said I need to know, I should have added that I need to know what I am paying. I am lousy these days at gambling

there's no way I would live my life for what may or may not happen in 5 years.

do what you think it best for your family now and que sera, sera.

Sunshine, where do your get your definition of sub prime from? Prime mortgages are those sold through the main high street banks to people with good credit records. Sub prime is a specialist area lending to people who have poor credit records. As I said, in the US they lent over 100% to these people, over here you cannot do that. You can only have a 125% mortgage if you have a very good credit record. I agree with you to an extent in that there are always risks involved in lending money, but compared to the US our economic situation is very different. They were in a recession 4-5 years ago we weren't. Our interest rates have been higher than their's over the last five or so years and we have not had as many increases in interest rates as they have. Lastly their economy has not been as well managed as that of the UK's.

I'm afraid I think the UK market is totally overcooked and that it will correct by at least 20%, perhaps as much as 30% sometime in the next 5 years. The professional buy to letters are already getting out and anyone going into buy to let here is asking for a scalping. It has been estimated that 20% of the UK mortgage market can be classified as sub prime.....

Interest rates will rise again to 6% and bear in mind that a large proportion of the 2005 vintage mortgages come off fixed rate next autumn. These people are going to see a sharp increase in their borrowing costs and a great deal are on interest only deals...these people have not got a snowballs chance in hell of ever repaying the principal - all they are doing is renting from the bank and taking a bet on the property market. Ok, so rates have already gone up, but bear in mind it is an accepted economic truth that the impact of rate rises takes 18 months to see in the real economy....we are only just starting to see the impact of the first rate rises.

Just because prices have been on an uptrend for the last 10 years does not mean that they will continue so. Look at the chart of long term house prices - we are way over the median line. There have always been corrections and crashes, late 70's, early 80's, late 80's/early 90's.....is it different this time? No, although everyone will try and tell you it is. It was exactly teh same during the dot com book in the late 90's as investors lost total touch with reality and bought tech stocks at crazy prices, because "it's different this time",.....it wasn't.

Look at the number of houses for sale outside of the likes of cities such as London, Edinburgh and Aberdeen (oil boom influencing things there)which are markets i know, and you can see that supply is increasing rapdily. Alot of houses are having their asking prices reduced.....don't believe it? Look on
www.propertysnake.co.uk
all you need now is for a bit of people to start panicing and we''ll have a crash.

my advice would be to save the money every month that yuou were going to put into a mortgage and wait.....

We are about to move as we live on the coast, well a five minute walk and it is downhill and people locally are just starting to grumble about rising sea levels so I want to be out before the panic sets in!

Houses are still rising here but it has slowed down both in terms of how fast prices are rising and in the length of time it takes to sell.

Yes Hannaflower - I'm a massive bear of UK property. Conversley, am quite bullish on France and Germany.

Sorry to rant i DO have a bit of a tendency to get up on my soapbox on this subject.....

Well I wouldn't get too excited about Germany. I own a house in Germany and its value has declined considerably over the 10 or so years I have owned it. (by the way, it isn't an investment it is for my elderly mum)

I think we have decided to stay put for 6-12m whilst we complete a couple of loans which will free up monthly income to further our borrowing potential. I don't think things will change dramatically in 6m, and it may allow a bit more clarity in the market esp. wrt to thr Ammerican problems of the last few weeks.

That sounds like a good plan.

FWIW we have been pondering exactly the same issue for a couple of years now. After watching the housing market like a hawk for all that time the only conclusion I have come to is that I know nothing. Markets don't work on logic, they work on sentiment.

Good luck with the home move.

I think this is possibly the worst time to buy property because we're at the peak of the housing boom. If you want to buy but don't have to I'd give it 2-3 years because I think the economy will slow up and we will see a lot of negative equity. I think prices will dip by about 10%-15%. If you buy now and it does dip to that extent that could mean your house will cost you about £50k over the lifetime of a mortgage.

I'm with hurlyburly that you can't second guess the market and I, personally, would just keep on moving.

I don't think it's gonna crash anyway!

it wont crash. it may slow. it may go so slow it hardly moves in some areas ...but it won't crash.

in my unedumicated opinion

Oh Rosemary, how fabulous to see you!!!

How is your sweetheart? And the raunchy geriatrics next door?

Hi there MM-ers
I think there is some very good advice on this thread!
I've got a little bit into debt, but have a fair bit of equity on my flat and have been toying with idea of selling it, clearing debts but still having a chunk left for future deposit. Only thought of selling as worried about potential crash, but from posts on here and everything i've been reading (like mad) lately think a slowdown is most likely, and hopefully no crash!
Best wishes