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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:
Sofabitch · 05/08/2018 18:14

We have just bought. If it crashes so be it. Can't live life on a maybe. We plan to stay put for at least the next 5-10 years so not really a big deal for us. Fixed the mortgage for 5 years a 1.79% so I'm not to worried.

They also predicted this in 2002. It didn't happen

FabulousSophie · 05/08/2018 18:15

Bluntness Windsor peaked last year, and has been following the same course as Fulham, only delayed. Places like Winchester peaked this year, and have been following the same course, only delayed.

SleepingInYourFlowerbed · 05/08/2018 18:17

Seems you missed the peak there Sophie...

"Prices for “prime” residential properties fell 4.6 per cent there last year, according to Savills, the estate agent, and are down more than 14 per cent from their September 2014 peak. "

www.ft.com/content/5fe506a4-fd15-11e7-9b32-d7d59aace167

FabulousSophie · 05/08/2018 18:20

Sofabitch Yes, but I think it is wrong to try to lure FTBers into the market at today's prices, when there is a distinct chance they will lose their deposits if they need to sell within a few years. And nobody knows when they may need to sell.

FabulousSophie · 05/08/2018 18:23

SleepingWithTheEnemy
I said prime central London peaked in 2014. Fulham is the notch under prime central London, and it peaked a year later.

SleepingInYourFlowerbed · 05/08/2018 18:26

The article is about Fulham Sophie...

SleepingInYourFlowerbed · 05/08/2018 18:30

Heres another saying the same. I know you like an article to quote

www.google.co.uk/amp/s/amp.theguardian.com/money/2018/jan/02/london-house-prices-south-and-west-see-some-of-biggest-drops

FabulousSophie · 05/08/2018 18:30

I can't open it SleepingWithTheEnemy. I have read that according to the Land Registry prices there peaked in the third quarter of 2015. There was a mini-bust in 2014, followed by a very short and final mini-boom, which I managed to catch, before it all then went pear shaped.

FabulousSophie · 05/08/2018 18:34

SleepingWithTheEnemy
They are all quoting Savill's figures. I have seen the Land Registry data which shows that 2014 bust, followed by a final mini boom in mid 2015.

glintandglide · 05/08/2018 18:34

It’s hardly pear shaped. It’s simply stagnated. No crash in any of the areas you’ve mentioned- 4 years on people are still living there and minding their own businesss arent they?

FabulousSophie · 05/08/2018 18:39

glintandglide
Flats in my old block are now on the market for 20% less than I sold for. And they are still not selling. I figure they would probably shift for another £50K less, which would be about 25% down from what I got. I would call that more than just a stagnation.

SleepingInYourFlowerbed · 05/08/2018 18:41

Why are you so obsessed with house prices Sophie? Genuinely interested.

FabulousSophie · 05/08/2018 18:42

glintandglide
Friends of mine, who owned a house in Fulham, put it on the market for £2.2 million in 2015. They turned down a first offer of £2.1, but eventually accepted the next best offer of £1.85 million. Houses in that street are now lucky to get as much as £1.6 million.

FabulousSophie · 05/08/2018 18:44

SleepingWithTheEnemy I want to buy, but I do not want to experience the heavy falls I have seen happening since I sold.

Alexalee · 05/08/2018 18:51

So you are a doctor who sold a 1m flat in Fulham right at the peak Sophie? Congratulations you must have made some significant gains. Are you looking to buy in a new area?

glintandglide · 05/08/2018 18:52

It doesn’t really matter what individual people have done does it? There could be all sorts of circumstances around that. Conversely the flat I sold in SW1 in 2013 has increased by around £100-150k now. Absolutely nothing like the increases in 4 years we saw at other times but there is not 1 2 bed flat on right move for less than we sold at. Not 1.

glintandglide · 05/08/2018 18:53

No Alex she’s too scared she might lose some of that £1m. Although ironically she only made it because of the property market Hmm

FabulousSophie · 05/08/2018 18:56

Alexalee
Yes, I am looking to buy in another area. I would like to build, so it is not just the cost of the land, it is the building costs too. The easiest way to build in the countryside is to buy somewhere to demolish, although it makes it more expensive.

jemihap · 05/08/2018 19:07

Even if I had a crystal ball and I knew for sure that there was not going to be a crash I still wouldn't buy right now... regardless of budget or size of house required the entire local market appears to be made up of overpriced dross and dregs.

Original poster
BoEbrexit · 05/08/2018 19:12

Its a town in the Midlands. As I said, prices have steadily gone up 20% in the last 10 years. Seems pretty stable to me looking at the house price data - no busts or booms.

OP posts:
FabulousSophie · 05/08/2018 19:14

jemihap

the entire local market appears to be made up of overpriced dross and dregs

That is exactly how I feel.

Original poster
BoEbrexit · 05/08/2018 19:15

My budget is around 100K so its not like I'm gna lose 300 grand

OP posts:
SleepingInYourFlowerbed · 05/08/2018 19:19

Sophie - you sold at peak (apparently) and haven't bought again and you're desperate for prices to 'crash' so you can cash in even further with your millions. Delightful Hmm

OP - the market is stagnant where I live in the South. A few months ago properties were only the market a few weeks but now I'd say 70% as a rough guestimate have been on for 3 months or more. It's all overpriced though. It looks like there will be a decrease around here but as prices have almost doubled since we bought in 2013, it's a different situation to where you are. I understand being nervous at the moment. I'm not sure what I would do as a FTB now

FabulousSophie · 05/08/2018 19:19

BoEbrexit
Would you be very upset at losing £20K? I suppose it depends how upset you would be if prices fall in your town. Maybe you don't mind, and you know you will not need to sell again in a hurry.

wowfudge · 05/08/2018 19:21

I don't get the preoccupation with when will prices fall. No one can predict it and they're unlikely to plummet because the housing market is a key part of the economy. If you want to live somewhere and not spend your money on rent and you can afford it, then why not buy? It's usually a long term thing if you are going to live there and as for what might happen when, well it's how long is a piece of string. Savings aren't getting much in terms of interest and interest rates for mortgages are low at the moment. If you want to build then surely you get the satisfaction of building what you want and enjoying living there?