ed the dead

Stupidly high - I earn reasonable money (for my age) as does my other half and we can't afford sod all in Surrey, looks like we are going to have to move out this area ( eastbourne looks favourite) so we can afford anything more than a studio....

XRS

Ed,

You'll find a nice crowd of people in Eastbourne, but presumably you wanted to live in Surrey because your work is there. Eastbourne is not a good commute by any stretch of the imagination.

ed the dead

<BLOCKQUOTE><font size="1" face="Verdana, Arial">quote:<HR>Originally posted by XRS:
<B>Ed,

You'll find a nice crowd of people in Eastbourne, but presumably you wanted to live in Surrey because your work is there. Eastbourne is not a good commute by any stretch of the imagination.[/quote]

Yeah, if all goes to plan I will be working shifts though so hopefully traffic shouldn't be too bad. The Soverign Harbour seems like a really nice place to live

Jay m A

iTrader: (2)

Trouble is in most parts of the SE I doubt they'll come down either. Even with the forthcoming recession (alledgedly) they might plateau at worst. Reason being that in previous housing booms of late the prices have risen sharply nationwide wheras this time round it is more a case of hotspots. If and when the recession hits house prices overall will decline, but there will be prime locations that will buck the trend.

BTW I'm not in the property game (yet ) so I could be talking out of my **** but hopefully not as a business venture is looming...

Justin

XRS

Ed,

When you look around the harbour, it might be as well to ask what flood prevention measures they've taken.

Then buy a top floor apartment.

Then stock up at Asda (just around the corner) and wait for the BIG waves.

GCollier

I know the feeling Ed. I used to live in Kingston-upon-Thames until last October. Despite having lots of equity in my flat which I bought there in 1996, could afford bu66er all there by way of a house with going into serious debt. Came very close to buying a house in Walton-on-Thames, but came to my senses before I spent all my equity, all my savings from 3 years contracting, and borrowed quarter of a million quid as well. That was for a semi too - madness, utter madness. I still shiver at the thought of the mess I'd be in now if I'd gone ahead with it.

Moved to North Herts instead, where the train journey into London is 5mins longer, but house prices are sane(r), and the whole living environment much nicer.

Cheers,

Gary.

MattN

ed,

know the feeling.

I'm currently renting and am looking to buy, on my own!

again, I earn a decent wage but everything is too damn expensive. Not helped when the seller of the flat I was buying decided not to sell and left me out of pocket back to square minus 1!!!!

A lot of people say prices will drop, but I think it's unlikely in some area's. Parts of hampshire have 14 prospective buyers for every porperty on the market. No chnace.

Might pack up and head for the west country!!!!

KF

Gary,
I am not trying to start an argument, but what did you mean by "came to my senses".
Why? The only reason you would have lost money would have been if the housing market was about to topple? Right?
If you could borrow £250K (you must be on a nice wage ) you would be leveraging that cash to increase your own net worth. Is it just that you think that the properties in the SE are going to dive?
Just curious... looking to move myself.
KF.

Dream Weaver

Ed

I lived in Woking for 8 weeks in Feb just gone whilst working there.

We had a great flat in the centre and they were allegedly selling them for £125k. Decent size as well with 2 bedrooms and nicely made.

Not the greatest town on earth but not bad.

DW

GCollier

KF,

I'm a software developer, primarily skilled in C++/OO/Unix/Oracle with smatterings of other stuff like Java/Perl etc. At the moment I'm a contractor in central London, and have been for 4 years, but my current contract ends in 10 days.

The last couple of years particularly have been very good, with earnings of well over £100K possible. However, times now look very lean, and my return to permanent work is probably being forced a little before I'd ideally like (I was thinking about it anyway, because contracting is not all a bed of roses, so it's not really a big deal).

I'm not sure £80K is particularly easy to achieve (though it is possible) as a going in salary at the sort of permanent jobs I'm looking at (mainly financial systems stuff in the city). Top wack for a senior developer appears to be a package of £60-70K (base+benefits+bonus), but naturally this should improve with time and seniority.

Cheers,

Gary.

KF

Cheers Gary,
Sort of assumed as much. Financial is difficult to get into without experience, so I had ruled it out. Cheers anyway,
(sorry to hijack the thread, guys).

Robski,
Isn't it an issue of confidence? If the market is growing people are willing to take on more debt, and spend the money. If they perceive there is going to be a slowdown, they batton down the hatches? Confidence can be high and low in a growing market (as this thread proves).

Cheers
KF.

GavinP

Robski's point about interest rates is very well-made - but please bear in mind that rates are also manipulated to try to stave off a recession.....

Think about Japan who have interest rates of less than 1% at the moment.....

I'm not particularly comfortable at playing "the prophet of doom" but I would hate to think of people up to their ears in negative equity. It took several friends of mine years to recover and caused a lot of heartache the last time the property market crashed.

Please think *VERY* carefully before buying a house in the current climate.

Thanks

Gavin

jon hill

i'm trying to sell at the moment, and getting nowhere - anyone up for a two bed flat in wapping ?

Anyway - things to remember; fixed rate morgages make a huge difference - your house may cost 40% more than it did x number of years ago. But if you're fixed at ~5.5 % for 5 years the real cost to you will be less than when rates were up at + 10 %

Also, one of the reasons prices seem so high is that they fell so far before. So, perhaps they are nearing their true levels (we bought our flat two years ago for the same price it went for in 1988 - it had been steadily rising when we bought it)

Finally - after you've put money into your pension and your ISA where does it go next ? Property is still capital gains free (with plenty of caveats) and stamp duty, which tends to be used to off set the captial gain benifits is still low by international standards (france is 8 or 9 %).

Jon

ed the dead

I agree that property is a relatively good investment.... but not if prices are such that you can't even get a foot on the ladder!

I think that a price fall is bound to happen, the world wide economy is in a mess at the moment (look at Japan & America), Britain is slowing down too! Price's are so high that people just can't afford to get on the ladder!

p1 media

eek!

You should come down here to sunny Kent, house prices are great, amazing what you can buy for so little, bought my farm house over a year ago and its already worth 35% more than i paid for it...... although the commute to London is a nightmare !!!

BarryK

Well, as they say, there's nothing new under the sun.

Approx 15 years ago we bought a flat in South Croydon, 18 months later we sold it for £18,000 more than we paid for it. BUT for our 51 grand we could buy a poky 3 bed semi in Redhill at best, so incurring commuting costs too as we worked in Croydon.

Stuff was going up by a grand a month, who the hell can save to keep up with that? Particularly if you haven't already got property.

Oh, I should have mentioned we decided to pull the plug and move even further North than Hertfordshire! We bought a big 3 bed semi with gardens views countryside etc. for what we had originally bough the flat for!

But do I miss Greater London?



[This message has been edited by BarryK (edited 01 August 2001).]

DavidBrown

<BLOCKQUOTE><font size="1" face="Verdana, Arial">quote:<HR>Originally posted by GCollier:
<B> I didn't like the thought that I REQUIRED an £80K+ job for the next 20 years just to pay the mortgage[/quote]

Getting that first step on the ladder is the tricky bit. Bear in mind that (subject to consistent interest rates) your repayments per month are steady (i.e go down in real terms), even though your salary should increase with inflation over 20 yrs. AND you're gaining equity. (My house cost £250,000 5 yrs ago, and is now worth £450,000 .. it's gained far more value than I've spent on it)

My parents mortgage was something like £10 a month nr the end of their term.

Thing <B>will</B> get easier as time goes on..

Plus, if we have a spate of inflation soon your repayments will look puny.

Also, no-one in their right mind would want to retire in such an expensive place.. so when you come to leave the rat-race you'll have a shed load of cash to free up when you buy a house in a cheaper place.

[This message has been edited by DavidBrown (edited 01 August 2001).]

GavinP

I am a bit surprised about people talking about an "alleged recession" - how much of a hint do you need ?

People are being made redundant in Tech companies - not just manufacturing/ship building etc and the U.S. economy is on the floor.

It is more a question of when not if.

Buying a property at the moment is madness IMHO - renting somewhere for six months / year could end up saving you tens of thousands.

I have no particular axe to grind - my house has doubled in value since I bought it and I would be quite happy if it stayed there - but I am realistic.

Thanks

Gavin

GCollier

David,

I guess a lot of it comes down to personal outlook and other factors. For what they're worth, these are a few of my motives...

A lot of people seem to have forgotten the early 90's, and most people you talk to now seem to think that house prices can only go up, as well as up. Gains have been impressive over the past few years (my own flat almost doubled in value), but when you see good guys in excellent jobs having to borrow 4x or more just to get into some $hithole, I wonder how long things can go on for.

Another factor for me is that I work in quite a volatile industry (IT). The last few years have been VERY good indeed, but things look like being a lot leaner for the foreseeable future. I didn't particularly want to gamble on things continuing to be very good for the next 20 years, and am now glad I didn't. One of my friends who thought these days of plenty would never end and salaries would forever spiral upwards, is now thinking of selling his big expensive house, because he NEEDS £80K to cover his costs.

As I said, I dislike being in debt, and the thought of HAVING to work, potentially doing stuff I dislike just to cover costs, I find very depressing. Having a mortgage which isn't so big, and enough in the bank to allow me to say "fvck it" and walk away from something I hate is a nice feeling.

I think the main factor though was that once I started looking in areas that people discounted because (on a map), "they're too far out of town, out in the sticks", the decision became a no-brainer. I find it particularly amusing that for the same price as my 4 bed detached with room for 4 cars on the drive, a friend of mine has just bought a 2 bed terraced with on-street parking (if he can find it), close to where I used to live in Kingston. At least he can console himself in the fact that he can be at our regular central London pub 10mins quicker

Cheers,

Gary.

KF

Gary,
Fair enough, I totally understand your rationale.
I live my life in debt, and am not terribly bothered by it (hell, I drive an Impreza ).
You say you are a software engineer (ditto), could you just drop a few hints about what you do. I am looking for work and 80K sounds like a salary I could live with!
KF.

robski

very good point re devaluation of the real cost of your mortgage, this can be guaranteed with a fixed rate loan.
My new one is 5.89% for 15 years.

What I want more than anything is a few years of high inflation.

Another point to consider is that there is a positive correlation between interest rates and house prices in that low rates do influence prices to go up and vice versa.

What you dont want to do however is buy when prices are high, and be paying high interest rates after a few years, on a mortgage thats higher than the value of the property, so if your going to borrow a lot when prices are high, make sure its fixed rate.

One other thing I dont understand, but there is a lot of evidence of is that when prices are high, more people move, so the market has more houses available. When prices are high (nad generally rates high), a lot of people dont seem to move, which reduces supply, and means you have less scope for pushing exchanges etc.

robski

GCollier

KF,

Basically I took a long hard look at what I was getting - at the end of the day, it was an (admittedly VERY nice) 3 bedroom semi detached house. After I'd had the necessary repairs done as listed on my survey, it would have ended up costing me the thick end of £400K. Doesn't sound much when you say it quickly does it.

Sure, the banks were very eager to lend me £250K, more if I wanted it, but it was a lot of fish to commit myself to paying back. I dislike being in any form of debt, and to take on such a large amount meant I was taking a gamble that I could remain in highly paid IT work, and/or interest rates would remain low for a long time. I didn't like the thought that I REQUIRED an £80K+ job for the next 20 years just to pay the mortgage.

After backing out of that house, had a much broader look around, and found that if I ignored the "herd mentality" to live in the congested areas close to London, I could get something much nicer and much cheaper. I probably live 3 times as far from work now, yet my journey time has increased by 5 minutes and the train service is much better, but for some people it just seems an impossible psychological barrier to cross.

You mention leveraging the mortgage to increase my own worth. However, I don't tend to look on houses as a form of investment. If my house goes up in value, nice, but I neither expect it to, buy it with that in mind, or care if it does. To me, it's a place I want to enjoy living in, simple as that.

Do I see property prices tumbling? Hmmmm, I'm not sure. All the financial colums say unlikely, but it's difficult to see how things can go on rising the way they are in the face of global economic slowdown, which may turn into a recession.

Cheers,

Gary.

KF

ed the dead,
You have my sympathies, the prices being too high for first time buyers is a bummer.
However, I can't see why you say it is bound to happen. Everything I read says, "slowdown, but not fall". What are you reading?
KF.

ScoobyDoo555

I'm already on the ladder, however, I'm in the process of moving to a nicer area (Birmingham area to Herefordshire)....

My problem is that on top of these rising house prices, to buy the equivalent of what I've got now, I'd have to look at doubling the price.....

Yes, it's a seller's market, but if you're selling and buying, it's a nightmare!!!

Contemplating the same thing - renting for 6 months and watching the market.....


Dan

GCollier

KF,

If you have sound technical skills which are in demand, having financial experience is not a 100% necessity. Sure, you probably wouldn't get a contract on a front-office trading system with no business knowledge, but there are still a lot of other opportunites open to techies who know their stuff. Take a look at

polarbearit

I'm already on the ladder too, but would say whilst I don't expect the majourity of house prices to fall substantially, I'm sure that waiting 6 months wouldn't be a bad idea, you may as well see how the market pans out, because I don't think they'll be big rises in that time...

Another thing worth considering is this, I bought my house 1 year, it need work doing and the seller had emigrated to Germany. The house was priced to sell and she had been let down by a chain in this country and needed to get the money for a place she had bought in Germany.

After much negotiation they took £12k less that the (already reasonable) asking price making the house about £25k less than valuation. Anyway £5k now spent on the important things (kitchen, bathroom, roof and rendering) and the house is worth about £55k more than I got it for (on a bad day!).

This profit is meaningless as a similar house would cost the same anyway, but next time I buy I will speak to agents and find out about buyers who have been let down and need to move quickly or better still build my own house /renovate a shell, got to be careful not to spend too much on such jobs though, but as an example a friend of mine recently sold his self built house in the NW for £200k, 5 years previously It cost him £70k to build and he is pricing a similar project now at around £85k, again for a house which would be immediately worth £200k. It can't be too hard, he's in IT really

Getting the house cheap really meant that I got a 4 bed place when I could only really afford a 2 bed place, hopefully it also means that I can avoid too much chance of negative equity.

Good luck with your purchases

Jon

ed the dead

<BLOCKQUOTE><font size="1" face="Verdana, Arial">quote:<HR>Originally posted by KF:
<B>ed the dead,
You have my sympathies, the prices being too high for first time buyers is a bummer.
However, I can't see why you say it is bound to happen. Everything I read says, "slowdown, but not fall". What are you reading?
KF.[/quote]

Just a personal opinion really, based on what I have heard from people in the property business and looking at the state of the economy in general.... I could be wrong, it has been known

Mossman

After living in and being born in Winchester, Hants I now live in Beverley, 20 mins from Hull. Not the most glamorous of areas, but having just bought an immaculate 3 bedroom semi with huge drive, lovely area and a 33ft by 14ft garage for BUG&ER all, I am more and more of the opinion that the quality of life, read not getting murdered on house prices, is vastly better in certain areas of the country!

Good luck to everyone!
Mossman

mattstant

Speaking as someone who works in the property business(no flaming please i am not an estate agent)the factors that affected the boom and negative equity of the early 90s are simply not in place so it is highly unlikely that there will be a drop in prices.

Having said that the recent increase in prices do partly reflect the down turn in the stock market investors were looking for the next quick fix and property was it
low interest rates, relatively low prices and high rent meant good returns but things will slow down now rental is no longer covering the higher prices (ie bigger mortgages)investors have to pay

Judging by most of the replies in this post the pips have obviosly been squeezed to much to the point where first time buyers can no longer afford to buy and the nock on effect will hit the rest of the market

I remember in 98/90 when there was a serious melt down thanks to everybodies fat(now thin)freind Nigel ****ing Lawson and stupid people taking out mortgages that were in excess of 100% and effectively gambling with there own houses not to mention the absolute greed and subsequent callousness of some of the building societies who now lo and behold refuse to grant 100% mortgages

Yes we made a mint for about 6 months but it was impossible to build fast enough to satisfy demand and all we got were wide boys from down south trying to cash in then selling on (had to laugh when one got his fingers burnt and came in to late and lost nearly 20 grand).

The following 10 years were not so funny for us in the trade either we survived because we could a)see it coming and b)had sensibly not chucked all our eggs in one basket

Always remember though that property investment beats the stock market hands down over any 10 year period you care to mention (including the early 90s)

robski

Well I can only see it getting worse again, with mortgage rates dropping AGAIN, its going to push prices again IMHO

WORSE though, ive seen a few people interviewed who are over the moon at the prospect of having an extra £9 in their pocket a month, now if its going to significantly alter you life to have £9 a month wtf is going to happen if rates rise significantly, like to 10% or so, how are these people going to manage!?

robski