Reply to: Good reasons to buy property NOW !

[Money Money Money]

All sounds good to me. Can someone give me a nudge when they are at rock bottom. Thanks

[sasguru]

Is that a country-wide prediction?

On average, yes. Unless we have the Japanese experience in which case the bottom will be around 2018.

[oracleslave]

However there is usually an element of over correction so expect the bottom at around 50% sometime in late 2010.

Is that a country-wide prediction?

[snaw]

You ruined your otherwise good argument with that phrase. No property in the UK anywhere is worth the asking price as things are. If you got something off after 40% had already been removed from the asking price then that would have counted as a genuine bargain.
Forget 20% as a fall, that is being optimistic. My working assumption is that a 40% fall will happen. That will bring prices in line with their long run average. However there is usually an element of over correction so expect the bottom at around 50% sometime in late 2010.

I do get it believe it or not. It is also a concern, that does have me hesitating. I don't think it's a massive bargain, but I'm pretty sure I'm getting it a reasonably good price cause the developer is bricking it since he's just finished his development at the worst time. We went in at a really cheeky offer on the offchance ... like I say a smaller place went off plan for about 5% more than we're offering.

Anyway, primary reason is family - unfortunately I can't put my daughter on hold for a couple of years till the market bottoms out.

[Moscow Mule]

... To rent a similar house in my area would cost me about a grand more a month than my mortgage will be ...

That's the opposite of our area at the moment. To buy the house we're living in now would cost us about £1500 a month more in mortgage than we pay in rent.

[sasguru]

WHS

Thing is, every area is different. I'm taking a 'punt', on an area I know, with multiple good transport links, which is trending above national average which didn't gain spectacularly, nor looks like falling spectacularly cause I need the extra space for my family, for a price that's below what I think it's worth even now cause the developer has a bunch of properties on his hands which he's suddenly very worried about.

I'm not a complete idiot, despite what the housing 'experts' on this board may say. And worse case I've a large chunk of cash aside and no intention of selling the house in the near or even distant future. To rent a similar house in my area would cost me about a grand more a month than my mortgage will be (Taking the closing costs and deposit out of the equation).

You ruined your otherwise good argument with that phrase. No property in the UK anywhere is worth the asking price as things are. If you got something off after 40% had already been removed from the asking price then that would have counted as a genuine bargain.
Forget 20% as a fall, that is being optimistic. My working assumption is that a 40% fall will happen. That will bring prices in line with their long run average. However there is usually an element of over correction so expect the bottom at around 50% sometime in late 2010.

[Xenophon]

Never fails to amuse me how much people worry and fret about house prices.

[snaw]

My punt is that prices will drop by 25-35% of late 07 early 08 prices over the next 3 years. Probably bottom out in 2011 followed by a slow but steady increase.

In London, over the same period, I expect an average 5-15% drop over the same period. Some areas in London will just plateau for the next 2-3 years.

p.s. IANAFT

WHS

Thing is, every area is different. I'm taking a 'punt', on an area I know, with multiple good transport links, which is trending above national average which didn't gain spectacularly, nor looks like falling spectacularly cause I need the extra space for my family, for a price that's below what I think it's worth even now cause the developer has a bunch of properties on his hands which he's suddenly very worried about.

I'm not a complete idiot, despite what the housing 'experts' on this board may say. And worse case I've a large chunk of cash aside and no intention of selling the house in the near or even distant future. To rent a similar house in my area would cost me about a grand more a month than my mortgage will be (Taking the closing costs and deposit out of the equation).

[snaw]

You would have bought 2 years too soon, like wot you 'ave done.

Next time check with me before making a financial commitment in a market you don't understand.

Are you always this patronising?

[Cheshire Cat]

My punt is that prices will drop by 25-35% of late 07 early 08 prices over the next 3 years. Probably bottom out in 2011 followed by a slow but steady increase.

In London, over the same period, I expect an average 5-15% drop over the same period. Some areas in London will just plateau for the next 2-3 years.

p.s. IANAFT

[shoes]

Really?

Thanks for that info, no idea what I would have done without it

You would have bought 2 years too soon, like wot you 'ave done.

Next time check with me before making a financial commitment in a market you don't understand.

[Bagpuss]

My gut feeling says 20%-30% drop from peak given the impending world recession. We have a generation of consumers who have never experienced economic pessimism. They have participated in the unsustainable optimism that the boom required. Why all of a sudden will these people start to behave differently from the herd as the herd becomes pessimistic? They won't, as soon as gloom sets in, expectations will fall, jobs will go, spending will fall,house prices will fall,further. What we are seeing now is the turning point of expectations from bull to bear.

Human behaviour never changes

[Pickle2]

35-40% of current prices? Come off it.

No, you come off it. House prices are at least this overvalued. Just choose any long term indicator you like. The traditional one is house prices to average earnings.

A 40% drop would make that 250k studio above the chippy in zone 2 worth 150k. Much more sensible given avaerage salaries, dont you think?

[Bagpuss]

At the peak each brick in my house was worth £500, at this rate, the bricks will fall to the price of bricks

[DimPrawn]

House prices: Market sliding faster than in the 1990s recession

http://www.guardian.co.uk/business/2...et.houseprices

House prices are falling at a faster rate than during the recession of the early 1990s, according to data released by Halifax today.

Britain's biggest mortgage lender said prices fell by 2.4% in May, wiping almost £5,000 off the value of the average house.

The decline follows a 1.3% drop in April and a shock 2.5% drop in March - the biggest monthly decline since 1992 - and means prices have fallen by around 6.5% in the past three months.

"The pace of decline is now far worse than the early 1990s. Other housing guides are similarly grim," said Michael Saunders of Citigroup, adding that the decline over the past quarter was the worst since the Halifax index began, in 1983.

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