House Market Continued...

[Moonhead]

This is a follow u to my previous house market question, and again its opinions I want. Sorry if these type of questions are annoying, but your replys really do help :) At the moment we rent a lovely, but too small now, house in a beautiful village in a gorgeous location, but it is costing us a small fortune in "dead money" every month, and as I said is now beginning to feel very cramped. We have been house hunting for about 6 months now, and have come to realise we wont be able to afford to buy in our area, or other nice villages around. So my question is, should we stick it out, for god knows how long, until we can afford the location we want, or should we take a step back almost, and compromise on the location, for a new house on an estate in the suburbs? The location is no where near as nice, but the actual houses are lovely. I know that's not really an answerable question, but again, opinions would be appreciated. Thank you :)

[rekstout]

Do not hold you hopes out for a price crash for the forseeable future - even with interest rates rising again today(?) they are still people with more money than sense to keeprural prices high. Personally I dnot feel that it is worth it to struggle with a small house one can barely afford just because of the location. Better to compromise and be comfortable - financially and physically.

My suggestions for cheaper rural locatiosn woud be self-build/renovation or buying off-plan from a developer. Smaller developers can be struggling to finance a build without selling off plan and if you can find one then you may get a modest bargain. Asa country bumpkin I can say that country life looks good on paper but it can be a pain and more expensive - no broadband, limited delivery services, bigger bills, less security, lack of mains sewage and gas, having to drive everywhere, too much lawn to mow etc.

Unless you are very lucky then house prices are going to rising faster than you incme is so I would suggest that one comprimises for now and buy on a new estate - you can always sell up if a opportunity presents itself in the near future and you should have no problem shifting a new-build house on a new estate.

[Miss Zippy]

Agree with Rekstout. In my opinion (I'm no economics or property expert but through work I have access to lots of these sorts of brains to pick) there is not going to be a price crash, though there will be a slowing of price rises. Every month you put off buying, you are missing out on building up some equity and benefitting from a rise in property rise. You are far better off buying now in a location that is less desirable to you so you can build up some equity which might enable to have a better chance of buying a property in your preferred area in a few years' time. Consider buying a property that you can add value to; something that needs some work doing to it which you can do yourselves or get done cheaply. A couple I know bought and modernised a modest terrace (while living there) and sold it 10 months later for �70k more than they paid - some of that increase was probably attributable to price rises anyway but it meant they could go on to buy in the area they wanted.

[BenDToy]

Agree with both previous replies. If the house you are going to buy is a bit of a compromise (but isn't it always?) then the priority should be on ease of re-selling. Don't buy anything quirky, unusual or "with character". Estate location, good schools etc. My last house was a "stop gap" and we stayed 10 years! Every month you wait, the further away your ideal house gets. Get on the ladder.

[WoWo]

Simple advice : If you can afford to buy do so, if you can't or it will be a struggle don't.
More complicated advice : I think anybody looking at buying a house now is mad. I certainly wouldn't buy a house in a less than desirable area as this will be the most affected if there is a crash. I've just sold my house and I'm about to start renting.
I don't have a crystal ball, but my money is (literally) on a market slow down and a reduction in prices in the mid term (depends what you call a crash).

Have a check here www.housepricecrash.co.uk for more discussion.

[WoWo]

This is just meant to put in a different side, but to counter Miss Zippy's statement of "Every month you put off buying, you are missing out on building up some equity", the higher price you pay the bigger your chance of negative equity and future financial ruin.

[rimsky]

I can't believe how irresponsible some of this advice is. House prices\have dropped (crashed) in the past ant there's no reason why they wont drop again. Encouraging people to buy now rather than miss out is the worst possible example of feeding an obvious house price bubble, in line with the South Sea Bubble and the technology shares boom of the late 90's

[Miss Zippy]

Rimsky - if you read the question properly, Moonhead is asking for opinions, not advice, and that is what she has been given! None of us are experts and even the experts get it wrong anyway, so you have to research and make up your own mind based on the level of risk you are willing to accept.

[ali_alic]

get back into that housing market. My boyfriend and I own 3 houses and 1 of them is due to be rented out for far more than the mortgage. It was a buy-to-do-up house and will end up by making 36K in 4 months when its finally done. This way you could keep the village location.

[smudge]

It's always best to start at the very bottom & work your way up the property ladder. We were very apprehensive when taking on a mortgage, but went on to buy our first home in 1977 for �10,600. We sold that in 1983 for �25,000 & bought the one we still live in for �36,000, which is now worth �230,000. It was worth it in the end, especially now we've just finished paying for it! Whatever you do, don't try to live beyond your means, as that will only bring misery to you & yours. Sorry if I sound like an old Mother hen, but just trying to help.

[BenDToy]

Amused to see the statement that "the higher price you pay the bigger your chance of negative equity and future financial ruin". While perhaps true (but not necessarily) it may well be the best reason to buy now and not wait. And, people have been predicting a house price crash since 2001. They may be right now but..."

[WoWo]

BenDToy: I made that statement as a direct contrast to a previous post. The fact people have been predicting a crash for some time in my mind would suggest its more likely rather than less. But its all opinions. My adive is simply if you can afford to then buy, if you can't then don't, I'd say that now if the market goes up and if the market goes down.

[BenDToy]

Fair comment WoWo. Can't argue with your key point.

[secretspirit]

If you do decide to buy I'd make sure you get a fixed rate mortgage because on a �70k loan my payments have gone up by �70pm on a tracker rate.