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just got through the paperwork for the house i am trying to buy, in 9 years the price has increased by the grand sum of -£8k.
just made me think, you always get the impression it is a one way bet, you'll never loose if you buy a house.
Lost 10% despite spending nearly that much on improvements
Ha.... just lost 20k on house bought in 2005......mind you at least its gone!
My house was once valued at 138k. Now, if i ply the estate agent with gin i can get 100k.
You might have noticed the big worldwide financial crash, and the overinflated housing market previous to that.
To be honest house prices should have fallen further, the housing market is still unaffordable.
Thinking about it....if we'd paid the full price it'll been more like 50k 😕
I've made about £100k was more but as houses prices don't just go up it's dropped a bit.
Ours has just got back to the price we paid in 2006.
Cheers,
Jamie
and the point of this is?
If you over pay , then you will lose long term.
A house is only worth what you can sell it for ... not what you think it is worth
Increasing house prices do not make everyone wealthier...
MSP, well aware of that, but 9 years takes to before the crash, and actually before the prices got silly.
I am buying it as a place to live, security not having to pay rent etc, so it is not as though you loose. As i said just made me think, all the property porn shows and mags etc. extolling the virtues of investing all your money in BTL, houses etc.
and yes houses are still over priced but in whose interest would a correction be? and do those people matter?
sadly the young don't matter, and they can't offer directorships with cushy perks.
9 years takes to before the crash, and actually before the prices got silly.
9 years before the crash or 9 years ago?
The crash was in 2008, although it doesn't seem that long ago.
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 the banks view).
[i]My house was once valued at 138k. Now, if i ply the estate agent with gin i can get 100k.[/i]
Ditto but if we could get 100k for our house we'd probably accept the offer.
On the upside we've just bought a house for well under 200k that was probably valued at 250k at one point.
I`m glad I bought mine in 2003 all I want to do now is get the ex out as she is 6 months behind with the mortgage which still has my name on it
On the upside we've just bought a house for well under 200k that was probably valued at 250k at one point.
Unfortunately that means nothing. You got a house at the price someone was willing pay.
Zoopla will tell you what it has been bought over the years.
As the population constantly increases, house prices are likely to continue to rise in the long term...
Bought my first house in 1990, paid £36k for it, £6k of which was my own hard saved money. I was only 21 at the time. It was the house or a second hand MR2.
Sold the house in 1995 for £30k. Always knew it should have been the MR2.......
I'm sure I wasn't the only one caught in that crash. Which makes me wonder what kind of ****wits were running the banks/economy in the 15 years since to not know that there is a fairly predictable cycle to all this and that it would happen again at some point.
As the population constantly increases, house prices are likely to continue to rise in the long term.
Not unless earnings go up.
Sold the house in 1995 for £30k.
Just before the last boom, unlucky.
just made me think, you always get the impression it is a one way bet, you'll never loose if you buy a house.
No it does not, and never has.
I found out selling a house -£44k after 4 months full time working on it. 🙁
They'll always be bubbles and those bubbles will always burst, in the long term (30 years +) I'm happy to believe in property being a sound pension option. In the meantime we're still paying a mortgage at a rate we fixed in 2006 for 8 years. Probably not our best move in hindsight...
Cheers,
Jamie
Msp. You are aware that 13-9 is less than 8 right?
Not too sure how local prices (Bath) have continued to rise at the rate they have, and it seems to have affected all local villages as well. Still utterly unaffordable.
Just before the last boom, unlucky
Oh I made up for it with the next one, and then relocated from Sussex to the Midlands in 2000 before it all went mental again 😆
Just out of curiosity, what areas are the houses that have lost money.
Ours went up and was bought in 2005
Phew!
We've just had our house valued at 3 times what we paid for it - in 1992.
I brought my flat at the end of 2007. Haven't sold it yet, but when I do, I'm expecting to sell it for 33k less than I brought it for. Luckily got promoted at work and have got myself out of negative equity.
Still, epic fail.
Live and learn don't you 😀
matt_outandabout - Member
-£44k after 4 months full time working on it.
You lost 44 thousand of the queen's English pounds in 4 months? Bugger me, not one for playing the long game then!
Cheers,
Jamie
I was looking forward to a series of home improvement shows where instead of the usual "investor" fannies doing everything wrong but still making money because of the property bubble, they'd end up living in a bin.
Ewan - Member
... sell it for 33k less than I brought it for.
[i]Loosing[/i] £33k on a [i]flat[/i]? You could probably buy half a terrace row for that in that there grim north 😆
Cheers,
Jamie
Prices do NOT always go up. But you need to be of a certain age in the UK to remember the early 90's when we last had a serious price crash (not excusing 2008 but it doesn;t seem to have been that bad).
The Economist reckons prices are still c 30% overvalued against rents and wages and if interest rates weren't being held silly low then we would have seen more of a correction in recent years.
Personally whilst I like capitalism and free markets more than the alternatives, I'm not sure a market is really the best way to ensure people have somewhere to live securely, given current circumstances... if few people can afford a house then the market's not working
Drac - Moderator
Zoopla will tell you what it has been bought over the years.
Be careful trusting Zoopla; its normally wrong especially their "valuation" prices. They get their sold data from weird sources (not always LR) and its manipulated frequently. Mouseprice is far better (just create a free account).
[quote=brooess ]
Personally whilst I like capitalism and free markets more than the alternatives, I'm not sure a market is really the best way to ensure people have somewhere to live securely, given current circumstances... if few people can afford a house then the market's not working
The market would work a lot better if we weren't handing taxpayers money over to private landlords.
If you over pay , then you will lose long term.
Is this true? I'm busy saving for overpayment on the basis that:
A) we can finish our mortgage earlier
B) it lowers the monthly payments, so if either of us are forced to a lower income it makes life more affordable.
Should I be spending my cash on enjoying life instead?
Over pay on yourofferfor the house i presume
1986 Bought £21k
1987 Sold £30k
1988 Bought £30k
1988 Sold £40k
1989 Bought £47.5k - went down, before going back up
1997 Sold £52k
2000 Bought £150k
2012 Sold £250k - had been as high as £290k in mid 2008
Not too bad, on paper - but still see a house as somewhere to live.
In the long run they do, but in the short run they don't!
[quote=Ho hum ]In the long run they do, but in the short run they don't!
and how long the long run is no one knows...
If house prices out run pay rises then it won't end well. As a few have pointed out affordability isn't there currently and the prospect of tieing up a huge amount of money in a house with uncertain prospects is putting plenty off.
The other factor is that your house is only worth something when there is someone willing to actually give you money for it.
As a controversial point of view a period of zero growth or falls would probably be a good thing long term to reset the market back to somewhere affordable and sensible. On the other hand with less jobs for life and greater mobility then home ownership might not be the best for some people as you wipe out your cash each time you move with fees & taxes or end up with a chain of rental properties.
just got through the paperwork for the house i am trying to buy, in 9 years the price has increased by the grand sum of -£8k.
And how much would they have made if they'd invested their deposit and rented?
Could be worse, you could be my neighbours...
Bought house for 380K, last house identical to theirs sold for 133K.
I bought mine earlier and it's a better configuration but I've lost about 80-100k if I could sell. Luckily I'm not in negative equity and I'm looking at it as a home to live in (although 10k a year rent isn't too bad a way of looking at it either).
"Bought house for 380K, last house identical to theirs sold for 133K."
was it a new build ?
rents where we are at are more than mortgages on similar properties - unless your happy to live in areas where your likely to find your doors and windows stolen in the night.
The supply of houses affecting prices is a misnomer, it's the availability of cheap credit that controls house prices. There will always be an under supply of desireable housing which people will pay as much as they can get their hands on for , regardless of their ability to repay. The current reduction in values reflects the clamp down on and cost of credit.
What you can afford is always down to a multiple of your income, what you can borrow. In the good old days it was around 3.5 times your income, so the houses associated with your cost that. When the bankswere lending 6 or7times your income you'd still end up in the same of property, just pay alot morefor it. The banks won, every else lost. Then bubble burst and the banks won again as we bailed them out rather than let them go under as we should have done. The cycle will therefore repeat in a few years.
FWIW we were verylucky (and it was mainly luck), we bought in 2001 off plan in an unpopular location for £97k, house is now worth around £180. Prices didn't overheat in quite the same way as we don't have a fantastically desireable postcode. We also limited our borrowing to 3.5 times my salary at the time even though we could have borrowed much more.
It's all a bit pot based on when you need to move, just don't expect the banks or politicians to give a stuff about making the market work for society in the long run as that would require a lot of short term pain. Average houseprices are still well above 3.5 times average income.
There is no asset that "always goes up in value", so why should housing be any different? The price of housing is affected by many variables and like anything else price can deviate from value for considerable periods of time. It doesn't really follow to argue that the market isn't working therefore markets are the wrong way to allocate housing. Much better IMO to remove the obstacles to markets FROM working and failing to equate price with value correctly. Unfortunately, once again we have a government that thinks it knows better and has decided to prevent this from happening.
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. So it's like the horses...the key is not only to pick the right horse/house but to do so when the odds/price is in your favour. With earnings likely to remain depressed for some time, it seems unlikely IMO that price to earnings ratios will expand to make you money from a house purchase and hard to see rates going much lower. So we are still not (IMO) at the point where the odds are stacked in favour of the owner making money. That is unless you live in certain lucky pockets and an an oligarch knocks on your door with a suitcase of cash.
Usually when people start telling you how much money they have made on their houses that's a good indicator that prices are just about to fall.
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.