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Original poster

Buying now with potential house price crash (BoE)

117 replies

BoEbrexit · 05/08/2018 10:11

I'm reposting this from the Brexit forum, because I just got answers there about prices falling by 90%, or denials that anything will change at all. I hope this is ok. (I don't know all the etiquette here).

Anyway, I'm a FTB and just saw the BoE stuff about being prepared for property price drop by up to 33% and massive interest rate rises. (I've searched and searched, and I can't actually find any proper projections of what effect No Deal would have no house prices.)

I already knew that now is not the best time to buy, but I'm moving to a new area, and I might not be able to get a mortgage in a year or two due to work situation. I may move after four years or so, and was prepared for the fact I might sell at the same price, or even up to 10% less...but one third less would be pretty destroying ! I'm unlikely to go into negative equity proper because of my large deposit, but I don't want to lose all of that when I sell.

My parents don't seen phased, saying I could just rent out and move into rented if prices go down, like they did in the nineties. Because my job means moving around a lot, it maybe some years before I permanently settle somewhere and want to buy forever home.

I think I'd wait, but I have this issue with potentially not being about to get a mortgage later. (I have a fixed term contract on top of my normal work starting soon, and my normal work isn't enough to get a mortgage.)

But still, is it crazy to buy now?

OP posts:
FabulousSophie · 05/08/2018 13:24

Yazoop The article argues that those who want house prices to fall are now in a politically stronger position than those who want them to rise. If the Tories want to stay in power, they will have to switch sides to pleasing the powerful part of the electorate that wants prices to fall.

HeyDelRey · 05/08/2018 13:30

The BoE have said they don't expect interest rates to rise above 3% until the far future. I wouldn't worry. People have been predicting large falls for ages but it hasn't happened, as people see housing as a safe investment. I think long term stagnation is more likely, so prices fall a bit in real terms compared to inflation.

Yazoop · 05/08/2018 13:32

I'm not sure I agree with the basis of that article for the reasons I have suggested.... and many more besides. A gradual cooling of the market maybe desirable, but significant reductions would lead to widespread repossessions and a stagnant supply (so no side "wins"). Over 60% of households are owner occupied in the U.K. And many non owners would also be impacted by a significant crash (inheritance etc as well as overall damage to the economy)

Bluntness100 · 05/08/2018 13:33

"If the Conservatives want to see off Corbyn they will have to stop trying to please everyone and shamelessly take the side of those who want house prices to fall

There's no need to see off Corbyn, he's done that to himself

And as much more of the population own homes than don't, then the majority don't want prices to fall, for obvious reasons.

LyndaSnell · 05/08/2018 13:34

I'm reposting this from the Brexit forum, because I just got answers there about prices falling by 90%, or denials that anything will change at all

Rubbish! I've just been reading that thread and you got lots of well- informed and considered replies.

Yazoop · 05/08/2018 13:35

I should say, I can't read the full article as behind a paywall. But if it is saying that a gradual cool down is what is wanted, that makes sense. A significant and quick reduction does not. A gradual cool down doesn't really impact OP's decision in my opinion.

SarahDoY · 05/08/2018 13:36

In your situation I agree it is a good time for you.

I would hold off unnecessary renovations for now.

FabulousSophie · 05/08/2018 13:37

Bluntness100
The Conservatives are more scared of Labour than you are, and if they want to fight off Labour, they are calculating that they will need to help the younger generation, by giving them the lower house prices that they demand.

EmeraldVillage · 05/08/2018 13:39

The Bank of England stress test is meant to be a severe economic downturn and the point is to ensure the late banks have enough capital for a realistic worst case. If they thought the scenario as laid out on their website was actually likely to occur then the stress test would be a great deal more severe.

As to whether you should buy now I don’t know. Maybe if you don’t you would avoid a drop. But the flip side is there a risk that you hold back as I have seen people do and then found prices have risen on them.

If you think you’ll move after 4 years then I would also work out the friction costs of moving - stamp duty, legal fees, survey etc as you should take that into account.

Original poster
BoEbrexit · 05/08/2018 14:11

@Lynda

Ok, I didn't mean to complain - got some useful replies, but it deviated into a conversation about whether prices will drop by 90%, whether or not there will be a transition period, and comments about project fear - I didn't want to get into a Brexit convo.

Anyway thanks for all the replies, they have been very useful. I think I'm going to go ahead and buy now. I wouldn't buy again until I had a permanent job, I think that would likely be around at least 6 years from now, which is a long time renting with a small child.

@sarah good point about the renovations.

@Sophie, I think these "demands" for lower prices are concentrated in London and parts of the South. I don't think the conservatives are going to engineer a nationwide house price crash to please young people in these particular areas. And prices in these areas are deflating well on their own as people simply can't afford them. I don't think Corbyn's attraction is a (non-existent) pledge to bring down house prices.

OP posts:
Original poster
BoEbrexit · 05/08/2018 14:14

And the demands for housing is for new builds to be genuinely affordable, and more social housing. Its not "to bring down house prices".

OP posts:
FabulousSophie · 05/08/2018 15:16

BoEbrexit

I'm only repeating what the Telegraph journalist is reporting today. There seems to be a big change in the zeitgeist.
Perhaps he would appreciate you writing to him with your opinion that his article is wrong about the Conservatives' calculation that they would be able to fight off Corbyn more effectively if they switched to supporting lower house prices.

RedNed · 05/08/2018 16:11

Sophie you don't have to be a smart arse to everyone who disagrees with you Hmm

You're a prolific poster of doom and gloom and instead of doing what I think you want to (inform people) you're alienating other posters and coming across a bit bat shit.

Cool your jets and be a little less agumentaive. There's good reason not to buy in certain areas but in other areas there's not.

We just sold in London with a 75% increase in 7 years. Would I recommend buying there now to a poster, no way! But I think OP should in her position.

FabulousSophie · 05/08/2018 16:18

RedNed
I did not write the article, I am just repeating what the Telegraph is publishing today. Although people may think they are attacking me, they are actually attacking the Telegraph journalist.

Yazoop · 05/08/2018 16:26

When you talk about people "attacking" you / the Telegraph journalist, they have actually just raised points to suggest that the premise of the article (or at least how you describe it) is pretty flawed.

Points you have failed to address and have just reverted to the "but it is in the Telegraph" line.

FabulousSophie · 05/08/2018 16:26

RedNed
I know that MNers on this board would rather have negative news about house prices censored. However, I believe that negative news about the housing market should not be censored. I will continue to post news stories here that I find interesting, even if other MNers would like them censored, or they ignored them.

FabulousSophie · 05/08/2018 16:28

RedNed
They should direct their hard-held criticism at the Telegraph journalist who wrote the story, not the person who posts the story.

RedNed · 05/08/2018 16:29

You dont know that at all Sophie and it's one thing to post a link to an article but unless you wrote it, you're taking it very personally how people are reacting.

I was on your Countrywide thread - you were acting crackers on there Confused

No one's saying censor your views, but don't act gleeful, you come across as not nice and no one likes an arsehole.

batshitbetty · 05/08/2018 16:33

@FabulousSophie at it again? That is a piece suggesting the Government should look at it, not that they are!

Seriously love, you appear to be on a one woman mission to spread panic, as you repeatedly post ludicrous misinformation about house prices plummeting. Everyone can see what you are doing and it's really quite pathetic

ThroughThickAndThin01 · 05/08/2018 16:36

No doctoring to administer today Sophie? 😂

batshitbetty · 05/08/2018 16:39

And before you say 'but it's in the telegraph', the link is interesting but your 'It looks like the government is going to start trying actively to bring down house prices. I would hold off until you know more.' is the misinformation, nowhere does the article say that

FabulousSophie · 05/08/2018 16:43

RedNed
You know as well as I do that MNers on this board hate people who have a negative outlook on housing market, and who say so. MNers here will use all means in their armoury to shout them down, ridicule them, discredit them, isolate them, silence them, and drive them out if they do not shut up, because dissenting voices threaten strongly held vested interests. This board is packed full of pro-house-price-inflation vested interests, and loads of covert EAs, who want to push the status quo. It is an echo chamber that does not like dissenting voices, which is in fact the story social media as a whole, twitter etc.

FabulousSophie · 05/08/2018 16:48

I rest my case, having just read what is written above to try to shut me up. However, I am not going shut up. I will continue posting news stories that you do not like about the health of the housing market.

sunshinesupermum · 05/08/2018 16:50

If you are unsure about whether you will be eligible for a mortgage in the future I'd go for it no especially if rates are starting to rise. As your parents have said you can always rent your home out if you move for work.

glintandglide · 05/08/2018 16:51

Fabulous Sophie is a tourists from that bat shit house price crash forum.

As the PP said above, I think people are misunderstanding what a stress test is.