Property experts - am I mad to be considering stretching ourselves and moving at the moment?

[ellehcim]

Saw a few things on tv with the whole Northern Rock thing which made me think we shouldn't move but we're having the 'stay where we are and be forced to shell out school fees because the secondary school is rubbish -v- move to catchment for best state school but pay an extra £100k for house similar to ours' dilemma. We'd be stretching ourselves if we moved. Happy to Scrimp and save for a few years but not if the crash is about to happen!

Any views?

southutsire.... thank you!!! x

noddy....... i dont have a wig to keep on for a start!! I wasnt being funny at all, so sorry if it came across that way, but to be honest, estate agents get a lot of grief and we arent all bad.....honestly!!

I totally understand where you are coming from regarding the interest rates last time. the thing is, i personally dont think there will be a big crash like the early 90's but i could be wrong.......nobody can see into the future and know for sure! People have been predicting a crash since 2000!!

I personally hope prices do come down a bit as i really do feel for a lot of people who cant get on the market or who take out 30/35yr mortgages to get on the ladder.

I am fortunate in knowing that i have a 10yr fixed rate mortgage and when that is up in 8.5yrs time my mortgage will be paid off so interest rates dont and wont affect me.

If there is a crash then it will affect me both ways..... negative is it will obviously affect the amount of commission i get per sale..... but on the plus side, if they did crash big style then we could afford to easily buy a house as an investment for when prices go up again!

LM didn't say you didn't (and I know you did)just said I only hear EA saying prices only ever go up One thing is I just don't see how prices can only go down a little bit. Happy to be advised on this but once prices start falling why is anyone going to buy? after all it will take an economic 'change' to get them to fall (needn't just be interest rates)so that will affect those priced out as well and when you believe you can buy it cheaper next week why buy this week? Hence a little fall leading to a crash, can't see stability either too many people believe that your house should go up by 30% a year, too many BTLers, and in low interest rate environment will take my working lifetime to make houses affordable if they just go sideways. (I also fundamentally don't believe the average person is prepared to work a lifetime with no prospect of owning a house!)

1dilemma... the thing is, house prices drop a bit and people do buy because they dont want to take the chance that they may go up again instead of coming down. In fact prices have stabalised last couple of weeks and loads of people have been buying incase they go up again!

I cant speak for all areas of the country, but i work in herts and we have had an absolutely bumper month for sales and it has been one of our best months of the whole year!

Also, so many people have believed prices will drop "next week" that people have been selling since 2000 and been in rented and are regretting it big time. Unfortunately i cant predict what will happen!! I personally dont think there will be a big crash like in the early 90's BUT i could well be very wrong....only time will tell!!

oct-dec are always the quiet 3 months of the year so it will be difficult to see which way things go until next spring i think.

If you want to move now then do it. I would rather be strapped for cash and settled in my dream home than in a house that I don't want to live in and strapped for cash because I have to save for my dream home.

I am going to do the same thing next year. If we have to go interest only for a couple of years then so be it. I just want to be settled and for my son to go to a good school (and so I can have more babies )

i think you should get on with it-

you are trying to buy in a desirable area - that wont change - prices arent going to drop suddenly in an area that is desirable - your risk is that they may drop in YOUR area - why not put yours on the market and see what you get?

LM they are doing that now because
a) prices havn't dropped
b) there has been no economic change yet to make the market change in fact I'm sure a lot of people are reassured by GB stepping in to pump more of our taxes in to keeping an overinflated property market thus. We have a miracle economy remember
I can't interpret your 'sales' statement since I don't know whether you are talking about offers/completed sales or what I also don't know how many of these have been at dropped prices/under asking price or 100,000 pounds over asking with sealed bids!!

1dilemma.....

the thing is, despite all the speculation regarding a crash, it hasnt made people come to a halt and wait for that, thats what i meant by still buying now! I personally think it will take something very drastic to make people stop buying/ market crashing.

Interest rates going up is an economic change in the market as it reflects how much buyers monthly payments are going to be!

properties sold this month havnt completed yet as its too quick.......its normally 12wks although if no chain involved can be as quick as 4wks. Although now completed they are going well...... having said that people do pull out and chains do collape, that happens whatever the climate!

None have gone for sealed bids or over the asking price!!! To be honest, most have gone for between 1-5k under the asking price but that is pretty standard to be honest. Nothing has gone for majorly under the asking price, or been reduced.

It has made people wait, LM... it's made me wait for a start! And according to mortgage approval figures for last month it's not just me. I've still been viewing houses, though, albeit with no intention of buying at the moment. Just keeping an eye on what's not selling where, price drops etc, continuing to get to know the area for when I do take the plunge (doubtful till at least next summer now).

The Bank of England and Gordon Brown can't do a whole lot to stop this from happening now. Lenders are taking matters into their own hands, so any base rate decreases are not going to have much effect. It looks like spring is going to be huge for repossessions etc. Much as I would like to see prices come down I do fear it is going to be really horrible, especially for those who have been loaned insane multiples of their salary with a bad credit history. If you look at some of the financial advice websites there more and more shocking stories of mortgage mis-selling and people struggling to pay a montly rate more than double what they were paying a year ago. In a crash of course people who don't need to sell will just sit tight. But there are always plenty of people who don't have a choice.

I don't mean to imply that I disbelieve your busy week in the office, just that all the forward indicators now are pointing in one direction.

southutshire..... i dont doubt there are people who are waiting, but we have had the best month ever so christ knows what is going on to be honest with you, as people dont seem to be waiting where i live! we did have 1 quiet week after the northern rock thing and then it went mental with people buying. we have sold to 4 1st time buyers this week, and they are the ones we expected to hold back to be honest.

although im sure we do also get a lot of people viewing who dont intend to buy right now which is very annoying to be honest....nothing personal towards you, but we can only do so many viewings in a day and its annoying when we cant fit in genuine people because people who dont have any intention of buying yet are looking! having said that, before i became an estate agent i did the same so im not having a go at all!

I do think you are right regarding people being reposessed in the spring as there are a lot of people coming to the end of their fixed mortgage rate and may be unable to afford interest rates.

oct, nov & dec are generally the 3 quiet months of the year in estate agency anyway so i dont think we will know what is going to be the outcome until the spring.

Prices are well out of control in my opinion. I mean, my parents could afford to buy a house in their 20's, have children and live on 1 wage. Now very few can afford to do that. My husband and i both have good jobs and no children and spent a lot of money on the house/mortgage.

Personally i hope prices do come down because its bloody ridiculous at how much of our salary we all have to spend on a mortgage.

I am sure EAs would be annoyed if they knew I was waiting, but I don't think there's anything wrong with me viewing houses nevertheless (I know you didn't say I was!). All part of getting to know the area and my viewings are as important as anyone else's - no way am I going to rush this decision. It's the FTBs who are stretching themselves now and making rash decisions who are the most vulnerable. Have to say that in my area EAs seem to be happy to have something to do! They are calling me all through the week and on Saturdays, which I thought was supposed to be a busy day.

IMO some people don't really understand the credit crunch issue - they think that NR had a bank run and now it's stopped so everything's OK, hence buying out of fear that house prices will continue to run away from them, not discouraged by EAs of course. I find it interesting that Gordon Brown is considering calling an election while he's ahead in the polls. Surely you would think he'd like a little more time to make his mark and actually DO something... but he knows what's coming.

southutshire....... i agree that if you are moving to a new area then you will need to get to know the area.Wow at estate agents ringing you on a saturday........ i dont have time for lunch half the time on a saturday let alone anything else although having said that, it will start to quieten down now we are in october and the run up to winter.

I have to say,i dont agree with estate agents who pressurise or try and persuade people to make a decision to buy a house that isnt right for them. I dont do that but i work for the towns number 1 agent so have a reputation to keep up

When 1st time buyers ask me my opinion on the market and what will happen i tell them my honest opinion...... that i dont think there will be a crash BUT that i could be wrong, and that i do think prices will come down a bit over the next few months but they still seem to want to buy NOW !!

I still dont think there will be a crash but will hold my hands up and eat my words if there is

Good luck southutshire, and i hope you manage to get yourself a bargain!

i agree with littleminx - prices here continue to rise and the good ones go straight away - there is stills shortage of good houses in the south east so demand outstrips supply

good luck ellecim

thanks LM!

Demand is a funny thing in the housing market, newgirl - when supply goes up, demand also tends to go up (see recent Buy-to-Let craze). If there was a real shortage of supply, rental yields would not be averaging less than 5% - there is no getting away from that. It's not like X-boxes at Christmas, where you just can't find one. I suspect the whole 'housing shortage' issue will quietly be forgotten by springtime.

i dont understand the rental market at all - all i know is that all my mates (and others Im sure!) want to buy on the same three roads in our town and as a result three bed semis cost more there than anywhere else in the town and sell within a week - the prices have gone up by 200K in five years - i wish it wasnt the case!

newgirl curious about your 'shortage' comment not sure that holds up when robustly analysed!
Loads for sale round here, new things on every week you'd need to be nuts to pay nearly 50% more than last year though (IMHO)

LM not ignoring you honest
What I ment is yes interest rates are on the way up but most people are on fixed rates so full effect not felt until rate runs out. Last crash almost no one was on fixed rates so effects more instant.
If people think now is a struggle wait until interest rate effect is felt plus fuel escalator plus food price increases due to weather etc etc. BOE has allready said house prices too high, but are prooving resistant to efforts to drop them banks recognising that interest rates can't be relied on to moderate the market etc etc

tricky isnt it - i think it does depend on your local area

in our town i have seen some properties stay on the market for months and then drop the prices drastically - BUT when they went on we were all shocked at what they were asking - it didnt seem to reflect the local area, so, those families probably think the market is slowing down - we all think they were wishful thinking and were never going to get that price

the properties in great roads near the good schools and station continue to sell here quickly, and over the asking price and get bids on them, but the ones on the housing estate (quite smart one) that require driving to the station arent selling so quickly

Thing is, people talk about desirable areas being unaffected in a crash... but it just doesn't happen like that. Yes people might be prepared to pay, say, £50k more to be near a good school etc. but if the neighbouring areas have dropped in price the good areas get dragged down too - people are still only prepared to pay the £50k more than what they can get down the road, not £150k more.

Only the spring will tell...

1dilemma........... yes i totally agree regarding interest rates......... i think there will be a lot of people due off them in the spring which will be a nightmare for those people I am just bloody relieved we have a 10yr fixed rate as we couldnt really afford to come off a fixed rate and go onto variable with the rates what they are now ....... having said that in early 90's interest rates got as high as 15%.....now that really was a bloody nightmare

Newgirl......... the properties that were on 6 months that then fell drastically were probably either majorly overpriced by an agent in 1st place, or the vendor insisted it was worth that ... we have properties that are STUCK, but thats because the vendors insist its worth more than we tell them and want it marketed for loads more than its worth

Southutshire.......totally agree......desirable areas will come down too..... if prices in an area drop, they all will, simple as that!!
Also agree about the spring.......Oct, Nov, Dec and Jan are the quiet months of the year in estate agency so difficult to see changed until the spring i think. I also think spring is when lots of people are due off fixed rates

lm - definitely - two houses i know of the owners chose their prices! one was probably tricky to price as unique - the other was in a row of terraces

def wishful thinking by the owners

front page of evening standard today - house prices continue to soar!

I do love the Evening Standard. Why let the facts get in the way? Hmm, funny, look at who their main advertisers are...

Check out the headlines from just before 'last time'. Deja vu, anyone?

www.housepricecrash.co.uk/wiki/1989_Newspaper_Headlines

I really dont know what to make of all this.......October is normally a really quiet month but the last 3 days have been totally bloody manic........ i didnt even get chance to get lunch till gone 3pm today Tomorrow is equally as busy, in fact i am starting at 9.30 tomorrow as i got so many viewings. to be honest i cant see a crash happening whilst people are buying at the rate they are

Sorry littleminx but you do have rather a vested interest in implying that the market won't crash don't you ???

I would never ever stretch myself to buy anything, because I wouldn't risk the roof over our heads, just too big a gamble at the moment in my opinion.