Is it really doom and gloom?

[xmyboys]

We are looking to buy, about an hour or so from London.
Are we mad?
Should we wait and see what happens.
Happy to rent and ride it out.
What are your thoughts?

we are renting and saving and waiting for prices to fall, they have started to but I am not near London. I'm in no rush to be honest, I would hate to buy now then find in 2 years be in negative equity, but then we are in a very secure rental which is good value at the moment.

If you're near London, buy as soon as you can afford it - it's a different market from the rest of the country.

Green... Does this include the commuter belt

I've been trying to sell my new build in very good condition commuter belt home counties house since March & I'm still trying! I don't see any upsurge in house prices, the market is painfully cautious. I've dropped the price twice. Only had one offer & that fell through because their chain collapsed. I don't think prices are going up in the near future - so I wouldn't rush xmyboys. If you are renting, then you are in a really strong position as a "no chain" buyer.

I would say yes - if it's an established commuter route.

London property prices have always fallen in line with the rest of the country. This time they are currently being supported largely by overseas investors; problem is, the more a housing market resembles any other investor-driven commodity market, the more prone it is to market swings e.g. if London stops being seen as a 'safe haven', sterling strengthens or a better investment opportunity presents (remember prices have dropped substantially in plenty of other countries, and in fact in certain other parts of the UK) and the money starts to flood back out then who knows how much they could fall.

By the way averages can be misleading when looking at London (or indeed the South East) - prices have risen slightly over the past year on average but very specific areas - 'superprime' areas mainly - have risen a lot, masking falls in quite a few other areas.

the trouble is you could buy now, then when they finally put up interest rates, prices will probably fall and then where will you be. Huge mortgage, rates rising, house prices falling. No-one knows how much or when, but is it worth the risk. You said yourself you are happy to rent and wait - yes you will spend a few K a year renting, but if you buy now and prices do tumble you could be losing many more K every year as prices tumble and rates rise.

If it is a house to live in and not an investment then I don't see what problem falling prices will be? Unless you are planning on selling again in the next 5-10 yrs it is unlikely to affect you although if, like Fergoose you find a good deal on a decent rental house then it could be worth it in the short term whilst the present lot continue to destroy the economy

I've watched the value of my house go 'down' in real terms since we bought a year ago but rather that than paying out a lot more every month to rent.

If you're moving a fair distance, I would rent first....as much as anything else it is so hard to get a good idea about areas etc without living nearby or in the area.

You can start looking at houses, get a better feel for the local market etc. If you find somewhere perfect at the right price then buy....if not, then stick with renting for a while.

If you buy a house you might not be paying out money to rent but you are either paying out money on interest payments, or if you are buying outright, tying up capital that would otherwise be getting you a return. It costs you money either way.

xmyboys - do you mean an hour by car or by train?

I agree with pootle - if you're moving to an area you don't know rent first to get a feel.

I don't think its possible to give advice generally as to whether its a good time to buy or not. Whatever happens overall to the market, it will vary by area. Some areas have been unaffected by the current slump, some devastated, and everything in between. So you need to look specifically at your area of choice. You then need to choose carefully within that market based on your long term plans and knowledge of the area.

I would rent before you buy. Not because I have any predictions about the housing market but only because I think you'll get a much better feel for an area and where your want to live and what's happening in the market on a local level.

As Akandra says, there are huge variations in what's happening in the property market.