...or perhaps not buying a house after all

[ciphergoth]

...at least for a while.

Met up with babysimon at BU last night. He made a *very* persuasive case that now is not a good time to buy. Various folk made the opposite case, but his was backed up with detailed quantative historical data. I'm sore about it, but I'm convinced. It's sad but at least it means I'll be able to get a rather better property for the same money when the crash comes.

Just spoke to an investment advisor, who said if I was only investing for a year or so and then hoping to buy property, I should put my deposit in bonds. I'll also of course put the maximum I can into an ISA. It'll keep 'till I need it.

So I guess I'm looking to rent once again... but we're not in a hurry.

Comments

PS ...

[autopope.livejournal.com]

The four horsemen of Nigel Lawson's Apocalypse in 1989 were:

* Lots of buyers lying in order to mortgage themselves to the max

* A prolonged period of house price inflation (driven by enthusiastic buyers coming on the market for the first time, expecting to make a killing)

* Interest rates going up sharply after a long period of gentle decline

* Home-owners at full stretch going into default on their payments, combined with new buyers being unable to enter the market, causing prices to stall and then fall (reposessed houses go cheap), leading to more people going into negative equity and handing the keys back, causing more houses to come on the market for knock-down prices, leading to ...

Does this picture sound familiar? It's fifteen years since the last time in the barrel; I reckon we're about ready for another session.

Re: PS ...

[sqferryman.livejournal.com]

The only thing missing this time round is a financial pundit saying that there are going to be two types of people in the future, those who are living of the wealth in their homes and all the rest who didn't buy in time. Well look how accurate that turned out to be.

Don't forget that this time round the crash will probably be a lot harder. Any mortgage lender with a reposessed property on their books will dump it as quickly as possible to avoid the glut that happened last time round. And the buy-to-let punters are barely making any return on capital at the moment from rents. If prices go south and returns follow them then a lot of these properties will end up on the market at the same time.

Like the autopope, I'm staying where I am and hoping that the bust washes over me. Buying know looks like suicidal insanity.