Interest rates held again at .5% .

Putting them up would destroy everything that has happened in th last 6 mths .

Recovery still not established yet ,but I for one, am happy where were at .!!!

Keep your chins up fellas .Think of where were going ,not where were at .

 

Interest rates still at their lowest point in history?

I blame this Government for that!!

 

Dude, I never said prices were going up. I'm saying that they are not going down in my area at this moment in time, that's all.

By the time this house sells, it will be for a price that is 25%+ above a similar house sold for in 2005. So maybe not as high as the very peak in 2006/2007 but very very close.

I wish it wasn't this way. I'm holding off on purchasing property as an investment because things are too uncertain. This however would be my own final family home rather than an investment so I'm going to have to go for it.

 

Dongler ,
property is still the way to go for investment .!!!

Currently there is a shortage of about a Million houses !!!!

This can only mean one thing .Prices will pick up again .Common sense tells you if there is a shortage of something ,its value rises due to demand .

Get on it .!!


Oh and house building is at its lowest since before the war .!!!!

 

Don't know about any of that but I'll tell you whats happened to us. This house went to sealed bids with 10 bids in total. 5 had somewhere to sell so they didn't stand a chance.

My offer (didn't need to sell) was 28% above the price that a very similar (but slightly smaller plot) sold for in 2005. It wasn't accepted, I wasn't even in second place. It'll take a few months for me to find out the actual price but I estimate 35-40% above the 2005 price.
I wasn't turned down for being in a bad position, I had letters from banks and solicitors confirming I could exchange in 21 days.

It was a 'prime' house in my area, ie a house that a family could live in for life and never want to move again (unless you won the lotto).

Just goes to show that a sought after house in a sought after area will always have people chasing it and willing to pay that bit extra to secure it

 

location location location

 

Those are the houses to buy ..... if you have to fight off a lot of other people than you are buying the right house. I've learned the hard way NOT to buy a house no-one else seems interested in!

Prices falling at the moment, what's to concensus of opinion?

 

Well seeing as how I''ll probably be buying soon, they'll drop like a stone

Steve

 

Nick Robinson has just said on the news that there is a rumour that stamp duty will be scrapped on sales up to £250k in tomorrows budget. That should get the market moving! all set for a bigger crash in the 4th quarter!

Steve

 

Ah ,but Inflation is coming under control ,so they may well leave Interest Rates at this lowwww level for some time to come .This is bound to get people out there buying .

And dont forget we are due to have a "Scorching " summer ,so people feeling good will make them part with their cash on the family home .


:thumb :

 

CPI = BoE base rate * 7

Inflation under control?

They are propping the whole thing up to prevent repossessions. Nice idea if you have a mortage that is too big for you, but stagnates people moving, distorts the market and encourages people to mis-invest in an ongoing asset price bubble that hasn't been allowed to deflate. Why is there a huge disparity between the rates on existing and new borrowing? What are the unintended consequences?

Went for a drive by an interesting looking house at the weekend. The cost was 65 times the annual rent of our present house. The stamp duty alone would pay about 2 1/2 years of rent. The houses appear equally desirable to live in. Combine that with interest rates artificially low, what is the point in me buying?

Anyone compared price of US and UK housing recently? It is even more out of step than it was before.

 

But looking at the housing shortage in this country ,anyone owning a property or investing in property is buying into a commodity that is in increasing demand .
Gold ,Oil ,Diamonds ,are all in greater demand and hence the price of these rise just as Houses will ,it cant go any other way in my opinion .It doesnt really make any difference that people are feeling the pinch at the moment ,they still need to live somewhere ,whether renting or buying ,so property is still the place to put your money for longer term gain .

Now really is the time to buy .

 

Aren't people who push property always saying, " Now really is the time to buy?"

When is it not the time to buy?

 

We live in an area where the average house price is over 15 times the average salary. We'd been waiting a few years and house prices here have shifted very little. We've just bought a below average house on 2 above average incomes. I know we'll lose out in the short term, but will be happy if we can make a bit in five years time.

The thing that really gets me is looking at our new place my gut feeling is telling me that theres no way the bricks and mortar are worth what we paid for it. As above its location, location, location.

My question is what happens in 10-20 years time when the baby boomer occupants of larger houses die or want to downsize? Surely thats going to upset the apple cart.

 

As an investment its always the right time to buy .
That is if you buy it at the right price .
Investors have been buying all through the recent dip in prices ,and will continue buying ,because they buy with equity already built in and are prepared to hold onto them for the longer term .


I cant really see property dropping much further ,so now is the right time to buy for anyone looking to get on the ladder or indeed move up the ladder ,before the economy gets back into full swing .

Although I would hang on until after todays Budget to see if 1st time buyers can get away with paying no Stamp Duty on their first buy .!!!

 

Property prices on the up. Wages down/frozen/Govt bucking the market.

And this is going to end well is it?

And how many 1st time buyers do you know, who can afford a £250k property, even without stamp duty? I've just gone onto Fool.co.uk for a calc on a £250k property.

Applicant 1. Salary £26,000
Applicant 2. Salary £20,000 That's generous I'd say, £46k joint for a 1st time couple.
Deposit. £ 50k. Very generous but Mum and Dad have helped.
Monthly commitments £1000. Food, clothes, car running costs, entertainment etc.

Result?

A provider may offer to lend you between: £102,000 and £144,500.

 

Yes its not going to be easy .!!!!
I bought my first house in 1992 and that wasnt easy either .In fact when is it easy .Theres always reasons not to do things I guess, but looking long term its a good place to put your cash .And worth a bit of sacrifice in other areas .
You make the choice

 

On the face of it mortgage providers say lending is back to 3 times salary, but we were told 4 or 5 times is still considered reasonable! I guess this is a side effect of the government's lending quotas.

 

Buying shares between 1982 and 2000 was also a very good investment. Buying shares over many other periods has also been a good investment.

Does that mean I ignore the price:earnings ratio of shares now, and not consider many other factors about whether a share or a group of shares are worth to me what the present market prices them at?

Same to me applies to housing, it is a place to live, but that can be achieved by renting, in my situation most satisfactorily with more flexibility and a lot less hassle. If purchasing a house becomes attractive relative to renting, then it would also be a good investment.

I would far rather buy a house for £200k with interest rates at 15%, rather than buying for £400k with interest rates at 5%, even though the interest payments would be higher on the former. My main reasons for that are that if interest rates are high things are about as bad as they are likely to get, and a drop in interest rates from there is likely to ease the payment of the debt plus there is minimal capital to pay off, and this would likely be related to a boom in prices. Buying when prices are high, income from houses is low, and interest rates are at an all time low gives the opposite situation.

The margin between inflation and interest rates also affects my decision. I'd be quite happy to borrow at 15% if inflation was 13%.

I do not believe that houses are a good purchase at any time simply because the nominal price rocketed between the seventies and the noughties.

 

I do not believe that houses are a good purchase at any time simply because the nominal price rocketed between the seventies and the noughties.[/QUOTE]

There is no reason why this cycle wont repeat itself again either ,which is why I say its still one of the safest places to put your money .

You wont lose it overnight like you could with shares .

You also get to enjoy your investment if you choose to live in your investment .

Just be prepared to be in it for the long term if you dont get on the crest of the next rises .!

 

In the long term I agree, but not now, it seems folly to buy when prices are still above long term trend with respect to income, rental yield, and interest rates are at an all time low. The threats to house prices from here are far greater than the opportunities, and until it is unwound and the values return to fair value the growth potential will be limited.

I don't make decisions about buying a house based on some irrational fear of missing the crest of the next rises.

You're not really enjoying an investment if it is actually a debt against an overpriced asset that is vulnerable to another correction in price.

You may lose money overnight on shares, but at least you can sell them the next day (unless they are suspended or you've bought something with poor liquidity).

 

But this country is short of a Million homes and house building is at its lowest level since the world wars !!!

Surely this means property prices can only rise due too demand .Obviously we are having a bit of a correction at the moment due to the country being raped by the Banks (not you of course !!).

Once this settles ,then I see property rising steadily again .imho.

 

I love your posts njkmrs - always based on nothing but blind hope that the situation you are in turns out to be a financially successful one!

Labour is clearly doing everything it can to keep house prices high. They've flooded the country with immigrants to increase the population, influenced the BoE as much as they can to keep interest rates as low as possible (who chooses the BoE board members do you think?..), made it difficult to get planning for new home building and now stamp duty is scrapped in the hope they'll get a few more suckers in.

At the end of the day though you can't change the fundamentals. Prices can't remain this high in relation to average incomes. Interest rates are only going one way, and disposable incomes are just going to get squeezed even more. Sorry njkmrs...

 

Lol .Petem .
You,ve seen right through me ..!!!!!

 

No Stamp Duty for 1st Time Buyers up to £250k .... will this bump the market up?

Knocks my £million home search into the weeds though .... 5%!!! That's £50,000 for each £million!!

 

PSLewis in " I can do basic maths " shocker!

 

[QUOTE=njkmrs;9306361]But this country is short of a Million homes QUOTE]

If we're short by 1 million homes, where are all those poor homeless people living?

 

If we are so short of houses, why have rents stayed in line with wages but the prices of houses varied with the supply of credit?

 

[QUOTE=Gordo;9306841]

You will just have to trust me on this one .Obviously the population of this ever more appealing country is expanding ,beyond control and the new population are breeding like fun ,hence in about 10 years time you will see just how short of property we are in this country .I dont have the figures to hand but there are 1000,s of families now on council waiting lists ,waiting for a property .!! They are in bedsits ,hotels etc .

This is not sustainable and will lead to people on the streets .
Property is the new Gold .!!!!!!

 

How many empty houses are there? Families on council waiting lists are there for subsidised housing to rent, how do they affect property values in the owner occupier market?

People use the same arguments in every bubble, but house prices mainly vary with the availability of credit. If lending had been more responsible since 9/11 then house prices today would be lower and we would probably not have any of the present problems.

With irresponsible lending, people can borrow more to bid up the prices of assets. It is called boom and bust, and the only people that win are those that trade in and out at the right times. If you simply ride the whole thing it has little effect on you unless you're caught in the crossfire of the fallout.

Property has performed nothing like gold over the last five years.