And the answer was? Should you overpay or not?
Personally I'm in for the long run til the kids finish school at least (18yrs) so not worrying about price fluctuations. In the current market then, does one just say "sod iit, lets go and by a 60" telly instead?
Is there a UK housing bubble? yes and no
Property values should not been seen as something that will always go up in price as this will/has create(d) an aura that is a good speculative investment this creates a bubble.
On the other hand there has been a cronic undersupply of housing over the last 30 years in recent times there have only been 1 year(2005) in which we have built enough houses for our population demands. This undersupply against high demand has also put an inflationary pressure on housing prices.
So housing prices over the last couple of decades have been part supply and demand and part speculation (bubble).
If people didn't see them as speculative investments and we built enough house for population demands then, no prices should not increase that much.
"sod iit, lets go and by a 60" telly instead?
Worked for me
If I'd rented my last house instead of buying it I'd have been far better off, and I wouldn't have had to spens so long dealing with estate agents and solicitors. House buying is not always a win situation.
Lots of intresting view
Equity does not mean you have made any money, unless you sell up or you are a developer. For the average home owner it just means they have a better chance of trading up (from
But if you have the equity then trading up is cheapest if market prices fall.
Since 1983, average house prices in the UK have been 4x average earnings with considerable variations across regions. At their peak, they reached 5.9x and their low just over 3x. They are currently 4.5x. Despite very low interest rates, mortgage costs v income (affordability) is still well of its lows albeit a long way from its highs and more in favour that price/earnings.
The trouble is that young have been hit hardest buy the current crash. So that must be affecting first time buyers. It feels to me like prices have to come down further
ampthill - Member
It feels to me like prices have to come down further
And if interest rates were allowed to return to their normalised levels, prices would come down further. Instead we have more smoke and mirrors and traps for the unwary.
Well having just spent another week in Detroit where you can buy a house for $1 - although whether you would want to live there is another matter - house prices are never guaranteed to go up.
However in the UK taking the long term view (20-30yrs), just with normal (wage) inflation and the number of households increasing and plus little new house building, then house prices almost certainly will go up. The issue is that there are plenty of fluctuations in the short term and we may have a correction if interest rates go up and the government stops trying to manipulate the housing market.
BTW I remember my father 30yrs ago complaining how unaffordable houses were and then having them suffer with 12% inflation. Houses have never been that affordable in many areas.
Prices rises all depend on where you are and the local supply / demand. Buy somewhere with high demand and it's almost a one way bet e.g. I paid £91k for mine in '97, today it would sell for £450k without any problem. Although it's all rather academic as you still need somewhere to live.
[quote=footflaps ]Prices rises all depend on where you are and the local supply / demand. Buy somewhere with high demand and it's almost a one way bet e.g. I paid £91k for mine in '97, today it would sell for £450k without any problem. Although it's all rather academic as you still need somewhere to live.
Note the popular area may change, crystal balls may be required 🙂
And if interest rates were allowed to return to their normalised levels, prices would come down further. Instead we have more smoke and mirrors and traps for the unwary.
Which is why I'm hoping to
A) hope the low rates stay for another 18 months so I can fix again ate low rate
B) pay shit loads off so if / when I do re negotiate and the prices are high I have less capital to generate interest.
Kryton - I think he was referring to overpaying price wise when buying the house.
Prices are based on ability to pay which in the UK is based on ability to borrow. A long period of monetary easing should lead to reflation, inflation and rising interest rates which will cut ability to borrow leading to prices falling relative to the rest of the economy. Sometimes low interest rates and printing money don't reflate an economy though (see Japan over the last 25 years) prices will then remain high despite slow economic conditions.
Like any other volatile market (if the market in your area is volatile), wait for a price fall then buy when the price rises above the long term moving average. You'll have missed market bottom but are unlikely to have bought on a blip in a long-term down trend.
I've lived in rented accommodation when I felt prices were likely to fall, been proved right and
Bought a place in 1995 for £45k, and under-sold it last year for £150k.
Bought something last year for £156k which was £1k more than the previous owner paid for it seven years ago.
I'm hoping it'll only go up in value when I come to sell it in a few years time.
But as long as it keeps the rain off, I don't really care.
