Crystal ball readers with good practical advice needed here

[critterjitter]

OK. I am at the end of my tether with the shall I rent and/or when should I buy scenario (we're doing neither at the moment - long story).

I know it doesn't make sense to buy at the moment. However, having viewed the umpteenth dump to rent tonight, I am losing hope - pet rats, filthy, full of decrepit furniture. And all this for £1150 per month. However, this house was in a fantastic area, which led to DD and I walking round the streets looking at other houses. Which then led to DD asking "Why can't we live somewhere like that?" (pointing at very nice houses on sale for approx £340-50k).

I'm in a good position with a large deposit from the sale of a previous house, and might be able to borrow a bit more from a family member (who has offered). However, the idea that the house of my dreams could halve in value over the next few years gives me cold sweats, particularly as I would have to repay the family member and really scrimp and save.

My problem is that I keep thinking, rationally, that surely everyone who is currently in rented accommodation (having sold at the peak) will be queuing up to buy all this cheap housing in 1/2/3 years time, so surely its going to be very tough to buy anything then too? Similarly, how many home owners are going to sit tight, ride it out and choose not to sell their house at a low level - so what will availability be like?

I can remember the housing crash in the early '90's and looking for a house then. If I remember, there wasn't an awful lot around then for sale (bar a few repossessions which were being auctioned). Which makes me think that most homeowners do just sit tight and wait for the market to recover.

What do people think? And what is my dream house (currently on at £340-50k) going to be on at in 1/2/3 years time?

Sorry to go on!

Whereabouts are you looking Critter? We moved from north west to Wilts, sold our house and are renting. V. happy at the mo. - didn't end up renting our usual style of house (period property). Because of logistics have ended up renting a modern flat-pack house on an estate. Have to say has been a very positive experience not least because it gave us a chance to throw things up in the air and live differently - may not choose to buy in our immediate vicinity but the very fact of doing something different has been very good for us. Makes you think about what your priorities and choices are; have your thoughts changed about what you want/need etc..Think a main factor in deciding how long/deep any price fall is likely to get will be influenced by availability of credit. Don't think that this is likely to be helped by general economic climate. I am waiting til last quarter before making any decisions. Have seen a house we like, think it is way over-priced but do not feel that current situation enables me to make any sensible offer - too many economic aspects seem to be in flux imo. Currently living where we do would never stretch myself again - it's a lovely feeling of freedom to be living within our means easily. Having moved out of a bigger/nicer house do not feel it has worsened our lives in any way - moneyweek website has some interesting stuff and housepricecrash if you're that way inclined (tho they have a heck of an axe to grind imo). Good luck

Why does it matter what the house will be on at in 1/2/3 years? Is this a short-term move you are looking at?

South East/ London.

I know what you mean about that feeling of freedom, however having been without my own home (owning one) since last summer, I am beginning to feel a bit rootless.

up, up, up!

come and rent my flat in croydon!!

The pragmatic way to look at it is that if it is the house of your dreams and you intend to stay there for a long time then what the market does over the next 2-5 years is inconsequential BUT it would kill me to pay over the odds and see price dive in short term especially because you never know, you may have to move.

There must be reasonable places to rent - lettings agents are the same as selling agents and during a boom (and there is a rental boom as no one wants to buy) they will try to get rid of their rubbish properties on new clients. Be persistent - with cash in the bank, you could offer to pay six months up front if they find you a really decent place. I would definitely keep renting until at least Christmas when we all should have a better idea what is happening with the market.

I am renting since last august too and miss having my own place BUT I am seeing more and more houses dropping or sticking and I have pulled out of one property as i just felt it was the wrong house and i had rushed and was paying too much out of desperation.(and i had negotiated a huge discount).I am renting somewhere pretty dire and it is 1k a month but while prices are falling by more we are staying here until we get a bargain again.I think prices will be down 15% by xmas and a further 10% next yr.According to the economist the market will bottom in 2011 and take at least until 2017 to reach last summers prices again.I have decided that if i can negotiaite enough to cover about a 20% fall i will buy before xmas.If you could get the house for what it may be worth next year (280)then go for it. BTW I have been developing and moving for years and all the people i know doing similar have sold up and are renting so feel fairly confident that prices will keep falling

Thanks everyone. The idea of my dream house coming down by 30% or 50% actually puts it within my reach. But isn't everyone else (sitting waiting in rented) going to be thinking the same? Do I have a chance?

I don't think there are that many waiting in rented and tbh mortgages are not that easy to get even at lower house prices.Banks are stillm wanting bigger deposits lower multiples and better credit ratings.When prices finally bottom out there will still be enough and many people never buy.

In my area, the rental market is absolutely booming at the moment. As soon as a place comes on the market, its immediately snapped up. Rental agents now put forward multiple offers to the landlords (in the same way that they do (or did!) with house purchases!)

All the agents tell me its people who would have normally bought, sitting it out.

So do you think it would be worth negotiating a 20% reduction on a current asking price? My only concern would be if there was a massive house price crash - I keep hearing about 50%.

That is the wory critter.I negotiated 27% off but then saw others coming on at similar prices and realised it was probably going to be a much sharper fall than anyone xpected.I want a home by the end of the year ideally so i know i will have a house which will fall a bit further but thats the cost of wanting a home.If rentals were better and we didn't have plans which we need to be settled for i would wait until at least 2010