Buying a house (and renting)

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OrangeRKN
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PostRe: Buying a house (and renting)
by OrangeRKN » Tue Oct 09, 2018 12:58 pm

pjbetman wrote:They're are obviously concerns over house prices dropping, which would send people into negative equity possibly


I often wonder why a price freeze wouldn't work better - don't crash the market, but maintain current price houses for a long while until wages catch up. No one loses money on their house, but there is also much less incentive for investors to snap them all up.

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PostRe: Buying a house (and renting)
by Moggy » Tue Oct 09, 2018 1:13 pm

OrangeRKN wrote:
pjbetman wrote:They're are obviously concerns over house prices dropping, which would send people into negative equity possibly


I often wonder why a price freeze wouldn't work better - don't crash the market, but maintain current price houses for a long while until wages catch up. No one loses money on their house, but there is also much less incentive for investors to snap them all up.


With wage growth pretty much non-existent, we’d be waiting 250 years for wages to catch up.

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PostRe: Buying a house (and renting)
by Jenuall » Tue Oct 09, 2018 1:14 pm

We've accepted an offer on our house! Got pretty much what we were asking for it as well which is nice. :toot:

Now just need to get our next move lined up and start dealing with all the conveyancing and general organisation which is required when selling, buying and moving to a new place. Looks like it is going to be absorbing a lot of my free time over the next few months! :dread:

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PostRe: Buying a house (and renting)
by OrangeRKN » Tue Oct 09, 2018 1:26 pm

Moggy wrote:
OrangeRKN wrote:
pjbetman wrote:They're are obviously concerns over house prices dropping, which would send people into negative equity possibly


I often wonder why a price freeze wouldn't work better - don't crash the market, but maintain current price houses for a long while until wages catch up. No one loses money on their house, but there is also much less incentive for investors to snap them all up.


With wage growth pretty much non-existent, we’d be waiting 250 years for wages to catch up.


Yeah sure, although there are parts of the country where house prices are more reasonable where it wouldn't take quite so long, and the hope would be wage growth would improve too.

At the very least you'd prevent a continued massive inflation in house prices.

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PostRe: Buying a house (and renting)
by Oblomov Boblomov » Tue Oct 09, 2018 1:52 pm

OrangeRKN wrote:
Moggy wrote:
OrangeRKN wrote:
pjbetman wrote:They're are obviously concerns over house prices dropping, which would send people into negative equity possibly


I often wonder why a price freeze wouldn't work better - don't crash the market, but maintain current price houses for a long while until wages catch up. No one loses money on their house, but there is also much less incentive for investors to snap them all up.


With wage growth pretty much non-existent, we’d be waiting 250 years for wages to catch up.


Yeah sure, although there are parts of the country where house prices are more reasonable where it wouldn't take quite so long, and the hope would be wage growth would improve too.

At the very least you'd prevent a continued massive inflation in house prices.

How do you freeze house prices? How do you set them in the first place in order to freeze them?

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PostRe: Buying a house (and renting)
by OrangeRKN » Tue Oct 09, 2018 1:57 pm

I have absolutely no idea :P

You could maybe freeze them at the last price they sold for. You'd get some massively fluctuating prices depending on when houses were last sold, but it would prevent anyone losing money.

In reality you'd have to do some much more complex adjustments I imagine.

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PostRe: Buying a house (and renting)
by pjbetman » Tue Oct 09, 2018 6:06 pm

OrangeRKN wrote:
pjbetman wrote:They're are obviously concerns over house prices dropping, which would send people into negative equity possibly


I often wonder why a price freeze wouldn't work better - don't crash the market, but maintain current price houses for a long while until wages catch up. No one loses money on their house, but there is also much less incentive for investors to snap them all up.


I think weve seen a price freeze anyway, haven't we (apart from London, probably?)? My house hasn't increased in value since 2005

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PostRe: Buying a house (and renting)
by Jenuall » Tue Oct 09, 2018 6:22 pm

pjbetman wrote:
OrangeRKN wrote:
pjbetman wrote:They're are obviously concerns over house prices dropping, which would send people into negative equity possibly


I often wonder why a price freeze wouldn't work better - don't crash the market, but maintain current price houses for a long while until wages catch up. No one loses money on their house, but there is also much less incentive for investors to snap them all up.


I think weve seen a price freeze anyway, haven't we (apart from London, probably?)? My house hasn't increased in value since 2005


If only. There was a general levelling off around 07-10 but for the most part prices have still been steadily rising for years. Not at quite the ridiculous rate there were in the decade before but it's still a big deal.

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PostRe: Buying a house (and renting)
by shadow202 » Tue Oct 09, 2018 7:07 pm

You should all move to Northern Ireland, pretty much everywhere outside of Belfast is affordable housing

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PostRe: Buying a house (and renting)
by Moggy » Tue Oct 09, 2018 7:10 pm

pjbetman wrote:
OrangeRKN wrote:
pjbetman wrote:They're are obviously concerns over house prices dropping, which would send people into negative equity possibly


I often wonder why a price freeze wouldn't work better - don't crash the market, but maintain current price houses for a long while until wages catch up. No one loses money on their house, but there is also much less incentive for investors to snap them all up.


I think weve seen a price freeze anyway, haven't we (apart from London, probably?)? My house hasn't increased in value since 2005


It depends on the area of the country, but prices have increased massively in Bristol. It means I’ve probably made a huge profit on my flat (if the banana spliting landlords don’t take it) but I’m still priced out of homes in or around this city.

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PostRe: Buying a house (and renting)
by OrangeRKN » Wed Oct 10, 2018 9:29 am

pjbetman wrote:I think weve seen a price freeze anyway, haven't we (apart from London, probably?)? My house hasn't increased in value since 2005


Reading prices have rocketed up over the last few years

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PostRe: Buying a house (and renting)
by Jenuall » Wed Oct 10, 2018 11:02 am

OrangeRKN wrote:
pjbetman wrote:I think weve seen a price freeze anyway, haven't we (apart from London, probably?)? My house hasn't increased in value since 2005


Reading prices have rocketed up over the last few years

Yeah, pretty much everywhere is still seeing reasonable growth in house prices, the UK average is back to impossible to manage levels of increase:

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And whilst things are admittedly less steep in some regions, even in the North East the average house is still setting you back £15k more than it did 10 years ago:

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PostRe: Buying a house (and renting)
by pjbetman » Wed Oct 10, 2018 12:14 pm

Jenuall wrote:
OrangeRKN wrote:
pjbetman wrote:I think weve seen a price freeze anyway, haven't we (apart from London, probably?)? My house hasn't increased in value since 2005


Reading prices have rocketed up over the last few years

Yeah, pretty much everywhere is still seeing reasonable growth in house prices, the UK average is back to impossible to manage levels of increase:

Image

And whilst things are admittedly less steep in some regions, even in the North East the average house is still setting you back £15k more than it did 10 years ago:

Image



Interesting stuff. I'm not sure where the North west is on there though (EDIT: oh yes, it's just right behind the red line). My house went from £30k in 2001 to £120-125k in 2005 and hasn't moved since (I just spoke to a local estate agent just now and they sold a house about 5 doors from me for £121k this week). You'd think that at that house value, you'd see more interest as it's very affordable (4x average wage is about 4x28 = 112k).

In the north we've seen one or two regions just about increasing since 2007 peak, and one or two with a 20-25% increase in the same time. That's not a great increase in 10-11 years, about 2% per year. Obviously London and other southern areas have seen large growth, 25-50%.

I'd be interested to see the national average wage charts for similar time periods.

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PostRe: Buying a house (and renting)
by BID0 » Wed Oct 10, 2018 12:24 pm

I can really see myself renting my house out in Essex and then renting a place in the NW and then hopefully living off of the difference in rent :datass:

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PostRe: Buying a house (and renting)
by pjbetman » Wed Oct 10, 2018 12:26 pm

This is an interesting chart showing house prices since 1952.

https://www.google.co.uk/url?sa=t&rct=j ... uaKLk6YytK

It shows houses doubling in price approx. every 10 years roughly.

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PostRe: Buying a house (and renting)
by pjbetman » Wed Oct 10, 2018 12:28 pm

BID0 wrote:I can really see myself renting my house out in Essex and then renting a place in the NW and then hopefully living off of the difference in rent :datass:


Definitely a wise strategy. Although, if you were able to fund a second house in the south, and rent your 1st property out, you'd be seeing the benefits of greater house price increases in both properties.

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PostRe: Buying a house (and renting)
by Squinty » Wed Oct 10, 2018 12:35 pm

Got a tap and power supply put into my back garden.

Fence is still held together by ratchet straps :lol:

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PostRe: Buying a house (and renting)
by Jenuall » Wed Oct 10, 2018 12:45 pm

pjbetman wrote:This is an interesting chart showing house prices since 1952.

https://www.google.co.uk/url?sa=t&rct=j ... uaKLk6YytK

It shows houses doubling in price approx. every 10 years roughly.


Interesting, do those figures account for inflation? I'm surprised at the suggestion that the rate of growth would be that consistent - in the 90s there was a real slump where prices were either stagnant or dropped in many cases, but fast forward to the early 00's it was not uncommon for a house to increase in price by 20+% in a single year for example!

Basically the housing market is a nightmare for most people, but super easy to take advantage of if you are mega rich - like everything really. :cry:

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PostRe: Buying a house (and renting)
by BID0 » Wed Oct 10, 2018 1:00 pm

pjbetman wrote:
BID0 wrote:I can really see myself renting my house out in Essex and then renting a place in the NW and then hopefully living off of the difference in rent :datass:


Definitely a wise strategy. Although, if you were able to fund a second house in the south, and rent your 1st property out, you'd be seeing the benefits of greater house price increases in both properties.

Yeh for sure. That was my original plan, however would require taking out a mortgage and that would mean I'm tied down to my full time job again. I have a hobby that earns me some money so I'd like to do that full time instead of working evenings and weekends. I'm just waiting to see what happens with Brexit before I make a final decision and leave the safety net of my full time work :slol:

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PostRe: Buying a house (and renting)
by Moggy » Wed Oct 10, 2018 1:08 pm

I bought my 2 bed flat in 2011 for £87k. It was listed for £100k but we were still in the slump following the recession and I knew the company that owned it was desperate to sell. It was also in a run down area, basically nothing but rough pubs, brothels, take aways and a few gay bars. It is a very convenient location though, literally just minutes away on foot from the main shopping area and 10 minutes at most from the city centre.

Since then the area has gentrified, we have a theatre, independent bakery, renovated pubs and bars and everything just looks nicer.

A few of the flats on the same row as me have been up for sale recently. A one bed went for £150k, a two bed went for £189k and another one bed has just been listed for £150k.

As my mortgage is below £70k now, it looks like I might easily have £100k to put down on a house when we come to move. That’s a lot (a lot!!!) of money to have made in 7 years. Astonishing really

I am not saying the above to brag, but just as an example of how much house prices can increase in a short space of time. I feel dreadful for people just starting out now, £87k was doable for me, £189k would be impossible, especially with the way wages have stalled over the last 10 years.


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