Reply to: First time buyer - tracker or fixed rate?

[DimPrawn]

http://news.bbc.co.uk/1/hi/business/7967715.stm

House prices are falling even faster than before in England and Wales, according to the Land Registry.

Prices dropped by another 2% in February, pushing the annual rate of decline from 15.1% to 16.5%.

It means the average property is now worth £153,862, down by £30,361 in the past year, and back to the level last seen in September 2004.

Prices have now fallen for 18 months in a row, dragged down by the impact of the recession and the mortgage drought.

The Land Registry's figures confirm the downward trend indicated by other surveys, such as those from the Halifax and the Nationwide.

Hand-in-hand with the fall in prices has gone a slump in sales.

This week the HM Revenue & Customs (HMRC) published figures showing that property sales in the UK hit a new low.

There were just 42,000 completed transactions in February, only slightly higher than in January but half the level seen a year ago.

[Iron Condor]

Why not buy now? It will be a few months until we're ready to go.

£What I'm really looking for is some pros and cons of tracker vs fixed rate mortgages

Thanks

House prices are set to fall atleast another 15% and possibly more.

Thats 40K on a 250K house.

And you are more concerned about losing a few thousand a year if you make the wrong decision by going Fixed or Tracker.

But to answer your question, i dont see the BOE base rate going much higher than 5% over the next 10 years. There is too much debt around. Increasing rates to that level is enough to tame inflation. 5% these days has the same effect on the ecomony as 10% rates had 15 years ago.

So i am sticking to my tracker mortgage.

[FSM with Cheddar]

Rates will not be rising much for the next year if at all, and could remain very low for two years

Exactly, so there is no point staying on a variable rate. And when rates start going up, you won't be able to get such a competitive fixed rate (or any at all).

[Cyberman]

Current Offset tracker with First Direct is 2.89%(tracks at 2.39% over base rate) with 799 quid arrangement fee or you can fix for two years at 2.99% with arrangement and booking fee of 898 quid reverting to SVR(currently 3.69%).

Rates will not be rising much for the next year if at all, and could remain very low for two years, so I would not fix if I were you. I would recommend looking at a fix once rates start to rise.

[DimPrawn]

Where's the poll?

Didn't do one. Got too much flak from cretinous people who needed me to help them choose the correct option.

[sasguru]

Nationwide House Price Index for March should be out any day now.

Where's the poll?

[DimPrawn]

Nationwide House Price Index for March should be out any day now.

[sasguru]

No idea - I try to stay away from those kinds of conversations, no one really knows what's going to happen. .

Data analysis exists for a reason - to avoid people's silly opinions.
Look at house price patterns in the last recession and factor in that this recession is probably a lot worse.
If you're patient you can have your dream flat in Richmond etc for a lot less in a couple of years.
Of course I may be wrong but I don't think so.

[DimPrawn]

Yeah why listen to me? Why not purchase a property now and watch it fall in value by 20% over the next year? It'll be a bit of a laff innit?

Thing is sasguru, you buy a nice car and it loses 20% but you still buy it, use it and enjoy it.

I mean, food is a waste of money isn't it? You buy it and it turns to tulip. What a waste!

[Jog On]

Depends how far you tink the market has left to go down.

Compared to this time 2 years ago the market is great value. In two years time it could be a lot different.

Saying that if you want a house to call your own and you know you will be staying put for more than a couple of years, go for it. Owning your own home is about more than just the money.

This is more of a driving force behind the decision to start the ball rolling- and the £80k windfall.

What do you think Sherlock? Do you reckon we've hit bottom yet?

No idea - I try to stay away from those kinds of conversations, no one really knows what's going to happen. Ideally we'd like to be in a nice 2 bed house/flat in our chosen area (Richmond/Twickenham/Petersham/Ham) by the summer.

[Bagpuss]

.

One said they'd rather burn the place down than ever drop the price from the peak.

Someone's having an expensive Bonfire night!


IMHO the boom was already too high by 04. So unless it goes below those values I'm not buying.

[sasguru]

If you can wait I'd wait, this might not even be the start of the real depression, but if you really want to buy, then buy. Not everything in life has to have Mr Logic (sasguru) approval.

Yeah why listen to me? Why not purchase a property now and watch it fall in value by 20% over the next year? It'll be a bit of a laff innit?

[DimPrawn]

On that note however - is now not a good time to get very good value for money when buying a property?

Depends what you pay for the property doesn't it?

At auction you might be able to pickup something very cheaply on the other hand at the higher end of the market I'm finding the vendors very reluctant to discount the price, even as a cash buyer.

One said they'd rather burn the place down than ever drop the price from the peak.

If you can wait I'd wait, this might not even be the start of the real depression, but if you really want to buy, then buy. Not everything in life has to have Mr Logic (sasguru) approval.

[sasguru]

On that note however - is now not a good time to get very good value for money when buying a property?

What do you think Sherlock? Do you reckon we've hit bottom yet?

[DaveB]

TBH we'd still be looking to buy even if the bubble hadn't burst as we're sick of renting.

I'm really just after some pros and cons of tracker vs fixed rate mortgages, not whether it's a good time to buy or not.

On that note however - is now not a good time to get very good value for money when buying a property?

Depends how far you tink the market has left to go down.

Compared to this time 2 years ago the market is great value. In two years time it could be a lot different.

Saying that if you want a house to call your own and you know you will be staying put for more than a couple of years, go for it. Owning your own home is about more than just the money.