Need answers so I can decide if we should sell ,, please help

[HarmOkne]

I have some questions I need answering

1. Are prices likely to return to 2006 prices by 2013?

1. Are rental prices likely to rise dramatically in the next 5 years or so

1. How much would the total cost of moving be roughly on a £170,000 house

1. Are the banks likely to start offering fixed rate deals to those with low equity in the near future

Would appreciate any advice on these questions

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i have no idea about the first two questions

1. You need to factor in stamp duty on your house purchase (1%), estate agent fees (1 - 2 %), removal costs (£3 - 700), solictors ((around £500), plus things like postal redirection from old address etc

1. no idea

Thanks Ruby. We would be selling to rent so house duty not an issue, we have a HIPP already.

I thought it cost a lot more than that TBH

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1. Who knows, suspect it will depends whereabouts in the country you live.

2. Who knows - it will depend on a lot of factors but suspect not (although someone made the point that if mortgages are capped at 3x salary that will force a lot of people into rented meaning more demand therefore higher rents).

3. At the moment, no stamp duty (but that, theoretically ends in the autumn); about £500 on conveyancing if you are selling; c. £350 on a HIP if you are selling; 1-2% commission to estate agency if you are selling; £500+ to removals company; six weeks' rental bond plus one month's rent up front; signing on fees for new house (whatever agency can get away with).

4. Unlikely in my opinion.

1. depends on location location location
2. ditto
3. as above, althougth i reckon you could negotiate on conveyancing and estate agency commission, but not much in it.
4. doubt it, 10% absolute minimum i reckon

We cant even fix with 10% equity, when do you think the banks will start offering fixed deals tothose with 10% equity

No one can answer those questions with any certainty atm.i think things are nowhere near as bad as they will get in teh next 2-3 years.I think all prices sales and rentals will fall.Unless you have a huge deposit it will be difficult to get a good deal.

The problem is Harm that everyone suspects that prices will keep falling. Banks lend on houses knowing that their money is safe because, if the mortgager defaults, the lender can sell the house and recoup the loan. But, if the borrower only has 10% equity and the price fall by, say, 20% (not saying that they will, just an example), then the bank is in trouble because the value of the asset they have loaned against is worth less than the actual loan.

So, when will banks start lending more freely to people with small deposits/low equity? When they are convinced that the downturn is over and that their money will be protected by prices no longer declining. When will that happen? I don't know.

Has no one any idea when the downturn will end?

There are fixed rate deals around for people who need to borrow 90 or 95% LTV, but the rates are very uncompetitive so you'd almost certainly be better off on the SVR at the end of your current deal.

My personal feeling is that the recession will end some time next year but that house prices will remain stagnant for another few years after that. I personally don't think they will return to 2006 levels until later than 2013.

BUT - the trouble is nobody knows, even the head economists at city firms can only guess!

Blimey very difficult to say.
Banks I would suggest will be very cautious over the next 3 -5 years until they start all this nonsense all over again and learn nothing.
Rents I'd expect to drop rather than rise.

Nobody has any idea of when the downturn will end however all this has been cause by simply withdrawing credit, imagine what will happen when unemployment kicks in, pensioners who planned to retire suddenly find there isn't enough money in their funds and start flooding the market with houses that are too big for them, combined with the fact that 20 year olds will leave uni with 5 years of debt to clear before they can start saving for a deposit.
My prediction is that we have only just begun and this has at least 5-7 years to play out yet.

1. Are prices likely to return to 2006 prices by 2013?

I have no idea.

1. Are rental prices likely to rise dramatically in the next 5 years or so

I think they are more likely to drop. Although yes, demand is likely to go up so will supply. It's impossible to quantify exactly how much each will be.

1. How much would the total cost of moving be roughly on a £170,000 house

Already answered

1. Are the banks likely to start offering fixed rate deals to those with low equity in the near future

As someone said, when they feel confident that prices are not going to drop so investment is safe.

The thing is about this whole downturn that economics is not a science. What we are seeing currently is completely unprecedented so no-one in the world has the answers. Economists can only really guess.

Assuming you are on a repayment mortgage you will pay off some capital in that time? If you are renting then the money is completely dead though?

Renting would not be dead money if you can get out of the market now sell at 2006 prices and then buy back in at 2002 prices, by us houses rose 78% between 2002 and 2007 so renting and waiting would be a very wise decision but it is of course a gamble. And you're assuming anybody will buy your house which of course they may not.

Ba careful selling to put your money in savings hoping for a further fall in prices. It would not be impossible for our currency to go the same way as Iceland's did and then your savings will be worth nada.

At least when you own a house it will usually hold its value relative to other houses no matter what happens to the economy.

I'm sorry but that is rubbish, just because every other house price falls too doesn't mean your money is any safer.
When you are paying a mortgage 50% more than the houses value then what you have lost is the opportunity to trade up or invest, yes you can pay off the capital but you're going to be kicking yourself when others have a house twice the size for the same mortgage each month.
For what it's worth I do think hyper inflation is a risk but history would suggest that is a very small period before it's brought back under control and as house prices wouldn't be rising worse case senario you'd buy a house with a 20% cash deposit.
However personally i think you've left it a bit later to catch that life boat although this spring may well be your last chance for a while so worth a shot maybe.

I do think its either sell by May or forget it for years and be happy where you are.I am going to put my house on in April for 4 weeks and thats it If it doesn't sell i will stay put

Its not rubbish Sorrento. If you own an asset then you have something to show for your money if hyper-inflation hits. If you just had savings then you have nothing to show for it.

FWIW we have just sold our house. There is so little on the market in our area of London that the day we went on the market we started getting offers. We ended up agreeing on a price that was 5% higher than one we had agreed to sell at in November (but we then decided to pull out of). So if you want to sell at the moment don't beleive those that say it is impossible (although it will depend where you live).

1. Very unlikely. Nobody really knows. 10 years or so more likely.
2. They'll fall, if anything. Demand will increase, but supply will exceed this.
3. As Rubyslippers said (although I think more for moving costs). Always costs more than you think - you need a contingency fund.
4. Not in the near future.

How is a house an asset ? Until you actually physically hand over the last payment to the bank and own it then it's a liability, when inflation kicks in what do you think happens to interest rates ?

You know what Sorrento? I am ill and very grumpy today so I am going to say this and be shot down.

Everytime I come onto a property price thread I am shocked by your lack of manners, extreme aggression and absolute certainty that what you are doing in the market is right. I resent it. People are sharing views and advice and you come across as if you are shouting at a bunch of idiots. I don't mean to sink to your level but for God's sake woman, please try and be less condescending.

you are selling noddy? is this the house you bought recently? Wondering if we should do the same but it means going back into rented which has its own problems.

Do you know what I am trying to educate people to look beyond the bull shit being spouted on the media and make some financial decisions with their heads not their hearts because I would hate for the same people will be back here in 2 years crying they can't afford to feed and clothe their children.

I am very to the point because frankly if you fluffy things up the message doesn't get through.

Am sorry you're not feeling well but go and have a lie down, discussing the state of the housing market will do nothing to help you feel better.

ruty it is that house.Inexplicably it has risen in value by quite a lot.this is a combination of how much we paid as cash buyers it was v low and the agent selling it was not local so i think he undervalued it a little.Also all the talk of schools in the press has created a little bounce here.If I can get my money out I will otherwise will stay put.Don't like the road though and don't need such a big house so we'll see what happens.Sorrento a house is not a liability if its your home and you love it.

Oh come off it noddy, it's the biggest single purchase most people ever make and people put more thought into buying a car or buggy in many cases.
In cold hard financial facts owning a house is a huge liability from day one and even when you sell it (or your children do when you are gone), you don't make a profit once you deduct interest, money lost from the deposit not being invested, maintance, stamp duty, removal costs.
Most people would be better off renting but the AST and the British mentality is so set in stone about owning, so fine make ownership work for you.