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Property/DIY

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Original poster

Your market predictions for the next 5 years...

28 replies

MrsBadger · 15/02/2008 16:57

We're moving house (hurrah!)

The only question is whether we should:

A) sell the current house (agent has a buyer very interested even though it's not on the market yet, may be willing to pay a premium to stop it going on the open market).
Bottom line: we make a sure £10k.

b) borrow some money from FIL, keep the current house, let it out for 5years then sell up and give him his money back with interest.
We gamble on the property market rising more than 1%pa and possibly make up to £20k.

It's the old bird in hand vs bush debate.
Mortgages etc are sorted if we want them (fixed rate for 5y on both houses), it is purely if we want to let or not.
I know the market may fall within 2-3yrs but will it steady itself and/or bounce back in 5?

Your thoughts and opinions please...

OP posts:

needahand · 15/02/2008 16:59

I wouldn't think so. I think we are at the top of the wave at the moment

luminarphrases · 15/02/2008 17:13

my estate agent brother has said that over the last couple of months, the houses that he always thought were overpriced aren't selling, but the houses which were priced accurately, advertised appropriately and marketed in the correct way have held their value or even slightly increased (i.e. those sellers who were reasonable were fine, those who had location, location, location dreams have been sorely disappointed)

but what that means for you, i don't know! sorry

Twiglett · 15/02/2008 17:15

I think in 5 years time prices might be much as they are right now to be honest

how long have you owned the house to have made 10K though?

alfiesbabe · 15/02/2008 17:19

I'm with Twiglett - I think in 5 years time there wont be a great difference. There may be a dip in the short term but then it'll even out again.

Original poster

MrsBadger · 15/02/2008 17:57

Twig, we've only been here 4yrs, but we got it at a knockdown price and have done lots of work to it, so where once it was the worst house on the street it's now in the top of its bracket, iyswim.

We were quite surprised by the valuations too!

OP posts:

Original poster

MrsBadger · 15/02/2008 17:59

(actually the difference between the price we bought at in 2004 and the highest valuation was £64k which is just ridiculous)

OP posts:

Twiglett · 15/02/2008 18:15

not so ridiculous .. don't dare tell you how much our house has increased in the last 6 years .. including the recent downturn .. it's just silly

I think that 10K increase is rather low (unless you are accounting for money spent too) .. but still rather low over 4 years .. so are you sure that's accurate

Twiglett · 15/02/2008 18:16

64K actually sounds a lot more realistic for the last 4 years tbh

Original poster

MrsBadger · 15/02/2008 18:19

sorry, the £10k was the premium-above-market-value we reckon we'd get from this keen buyer

ie the profit scheme A would make vs scheme B (cause in B we'd sell the house anyway but on the open market)

OP posts:

Twiglett · 15/02/2008 18:19

this calculator is very interesting actually .. Nationwide house price calculator

you can put in cost of house and when you bought it, area and it gives you a current valuation

Twiglett · 15/02/2008 18:20

'rough' valuation

Original poster

MrsBadger · 15/02/2008 18:21

but we only paid £181 for the house to start with!

OP posts:

Twiglett · 15/02/2008 18:21

oh ok .. so rather than making 10K .. you'd make the increase in valuation PLUS 10K and you're wondering if that 10K is enough to offset the potential increase over the next 5 years

personally I'd sell

Twiglett · 15/02/2008 18:22

well our house has increased by 105% in value since we bought in 2001

do the calculator for yours

that's the mad ol' housing market over the last few years

noddyholder · 15/02/2008 18:24

Same as today.About 30% down by 2010 and then a steady rise again

piratecat · 15/02/2008 18:27

we had a flat in south east london, bought for £50k in 1997, worth £170 k now apparently, .

we sold in 2001 tho!!

Original poster

MrsBadger · 16/02/2008 10:41

any more for any more?

OP posts:

lalalonglegs · 16/02/2008 11:26

Take the money and run. Renting for five years when all predictions are that market will at best stagnate for foreseeable future is unwise. You will also have to pay out for wear and tear, repairs, agency fees and cover any voids. Not really worth it if you want to sell in shortish term.

edam · 16/02/2008 11:34

Blimey. Just googled our very first flat, which we bought for £66k in 1990. One bedroom, on very busy main road in West London. Is now £320k, same as our current home - a three bed house in a 'desirable' commuter town.

ZippiBabes · 16/02/2008 11:47

sell it for sure if you have a buying that sounds like a win win

ZippiBabes · 16/02/2008 11:47

if you have a buyer that is not buying

noddyholder · 16/02/2008 11:52

Our last flat was bougth in spring 2006 for 215 and sold last summer for 350. there was another directly opposite us and a lot nicer actually also 350 and is now 275!

Shout · 17/02/2008 23:05

Sell.If you have a buyer.Take the cash now invest even at 5% and then buy property in 5 years and you will likley have made more money that way.

People will hold off selling for as long as they can as they don't want to 'lose the equity they have gained over the last 10 yrs'. However the baby boomer generation is going to start retireing soon, a significant number will be forced to sell to release capital to contribute to their pension, if there aren't enough buyers with cash then the market could slide for quite a few years.

alfiesbabe · 17/02/2008 23:22

Actually that's a good point Shout. I'm astounded by the people I know who havent made adequate pension provision, so there could well be a lot of forced sales as a result

southutsire · 18/02/2008 10:42

I think the market will take a lot longer than 5 years to get back up to where it is now. If you look at the last crash it was 6 years before it even hit the bottom, let alone start coming up again.

Most sellers are still unwilling to drop their asking prices much at the moment because they are so used to the inceases of the last 10 years, and are expecting the traditional 'spring bounce'. However if you look at the latest figures these optimistically priced houses are just not selling - stock has been going up and up, and time on the market is up, mortgage approvals at their lowest since the last crash. I think you will start to see some of the proper drops in the summer once people realise things are different now. There is simply not the credit (or the opportunities for self-certification fraud) around to sustain anywhere near current prices.

My bet: newbuilds and 1-bed flats at least 40% down, large family homes more like 20% down.

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