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Author Topic: Buying property now  (Read 9953 times)
mystical_goat


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« on: Wednesday, December 12, 2018, 00:04:01 »

Is it the worst timing?!

I've been saving for about a decade and can finally afford something but that's come at the same time as all this Brexit uncertainty and a seemingly inevitable downturn in the economy and property prices to follow.

Found a nice place and was going to start with an offer 15% below asking. But a first mortgage is scary enough, especially in this financial climate, and I don't want to act at the wrong time before a big crash. I'm currently living at home so would prefer to move out asap now that I am able. Could rent for a bit but hate chucking money away for someone else's mortgage.
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4D


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« Reply #1 on: Wednesday, December 12, 2018, 00:38:12 »

Always difficult to predict, can't see house prices plummeting when net migration is always at least 250k a year, so demand is always high. Interest rates are about as low as they will be, you'll have to not stretch yourself with that in mind.
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RobertT


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« Reply #2 on: Wednesday, December 12, 2018, 01:46:31 »

Can you afford it?
Could you afford it with higher interest rates?
Does it provide you with a better life than renting? (not just financial, but how you'd feel)

If yes, buy the thing.  If no, you'll never be ready regardless of market conditions.  The only reason a potential market crash should be of any concern is if this was an investment decision.  Nobody loses their house in a crash, they lose them when they can't afford the cost of a mortgage (so left no room for interest rate variations, or lost their job) - but then you'd be in the same boat if renting, usually.

The fact that housing tends to go up in value is a nice bonus, see at as much.
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Nomoreheroes
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« Reply #3 on: Wednesday, December 12, 2018, 07:19:16 »

Look at how often the place has sold in the past and for what price.
Compare the current price with recent sales in the area.
Check that you can afford it.
Reach a conclusion from there.
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« Reply #4 on: Wednesday, December 12, 2018, 07:20:43 »

Have got a right to buy ISA for first time buyers? Gov gives you 25% on top of your deposit (up to £12k deposit). But there is talk that this will end in November 2019.

Renting is not chucking money away; it is having a roof over your head.

Don't you pay rent "at home"?

How old are you (physically not mentally)?

Moving away from "home" will give you more "private time" ;-)

Fuck off Poxford!
« Last Edit: Wednesday, December 12, 2018, 07:22:30 by Combe Up » Logged
4D


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« Reply #5 on: Wednesday, December 12, 2018, 07:27:23 »

Renting gives you a roof over your head but returns nothing, at least buying is an investment. My mortgage payments are cheaper than renting the equivalent house too, by quite a bit.
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The Artist Formerly Known as Audrey


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« Reply #6 on: Wednesday, December 12, 2018, 07:38:25 »

Buy now! Buy now!

I know of a lovely house in Wroughton for sale - Iíll throw in a STFC season ticket, too.

Anything to escape this wretched Brexit bollocks - death by a thousand cunts
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pauld


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« Reply #7 on: Wednesday, December 12, 2018, 08:48:23 »

Renting gives you a roof over your head but returns nothing, at least buying is an investment.
No it's not. It's your home, and you should look at it like that. Your point that mortgage is usually cheaper than rent is salient, but for me Rob's 3 key questions sum it up very well:
Can you afford it?
Could you afford it with higher interest rates?
Does it provide you with a better life than renting? (not just financial, but how you'd feel)

If yes, buy the thing.  If no, you'll never be ready regardless of market conditions.
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4D


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« Reply #8 on: Wednesday, December 12, 2018, 09:19:57 »

Technically it's not, it belongs to the landlord but I'm not talking of it as a home, just the financial side. I can answer yes to Rob's points.
You have to look long term too, a mortgage can be paid off by the time retirement comes along.
« Last Edit: Wednesday, December 12, 2018, 09:25:07 by 4D » Logged
mystical_goat


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« Reply #9 on: Wednesday, December 12, 2018, 09:45:16 »

Can you afford it?
Could you afford it with higher interest rates?
Did a bit of budgeting last night and the mortgage repayments would use a little more than a third of my wage and after all bills and other costs (food, phone, car, broadband etc.) I'd have about £600 per month left. That should give me enough headroom on an interest rate rise I think? Are there not fixed rate mortgages that would negate this risk, or do they not give these out when interest rates are so consistently low?

Look at how often the place has sold in the past and for what price.
Compare the current price with recent sales in the area.
Check that you can afford it.
Reach a conclusion from there.

I found the attached image which is for the property I'm looking at. She (foreign investor looking to get out of UK asap) bought it for £189k in 2016, listed it at £225k in April, reduced to £219k in July, then £199k in October. Bigger ones (2 beds) in the same block are going for proportionately more.

Have got a right to buy ISA for first time buyers? Gov gives you 25% on top of your deposit (up to £12k deposit). But there is talk that this will end in November 2019.

Renting is not chucking money away; it is having a roof over your head.

Don't you pay rent "at home"?

How old are you (physically not mentally)?

Moving away from "home" will give you more "private time" ;-)

Fuck off Poxford!

I do have the Help to Buy ISA. It's not new build so I can't do the shared equity loan part of help to buy but the ISA is decent. My Dad and I 'agreed' that the quickest way for me to move out was to not pay rent - I've been helping out in other ways. I'm 33.


* IMG_9541.PNG (89.99 KB, 640x1136 - viewed 139 times.)
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mystical_goat


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« Reply #10 on: Wednesday, December 12, 2018, 09:46:01 »

Thanks folks, some good things to think about already.
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Panda Paws
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« Reply #11 on: Wednesday, December 12, 2018, 09:50:41 »

Thanks folks, some good things to think about already.

That price history suggests its a pretty good deal, but I think Rob hit the nail on the head. For almost all first time buyers, it's a home, not an investment so if you can afford it now, protect against risk and it improves your life then go for it.

We're in a very similar boat - will be buying our first place early next year and have no idea what to expect from the market. Down here (Essex/London border) it seems everyone is trying to get their money out of the market, so heaps of properties and definitely a buyers market.

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4D


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« Reply #12 on: Wednesday, December 12, 2018, 10:00:09 »

You can fix a mortgage rate for varying periods of time, the longer the term the higher the rate. Are you comparing lenders? Santander have some good rates, you could also look into their 123 current account. Might be worth looking at 2 beds, at least you could rent a room if times got tough.
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Tails


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« Reply #13 on: Wednesday, December 12, 2018, 10:01:09 »

Is it the worst timing?!

I've been saving for about a decade and can finally afford something but that's come at the same time as all this Brexit uncertainty and a seemingly inevitable downturn in the economy and property prices to follow.

Found a nice place and was going to start with an offer 15% below asking. But a first mortgage is scary enough, especially in this financial climate, and I don't want to act at the wrong time before a big crash. I'm currently living at home so would prefer to move out asap now that I am able. Could rent for a bit but hate chucking money away for someone else's mortgage.

The market is slow right now and prices are dropping. After Brexit is anyones guess... But renting is dead money so it's definitely something you should look into.

I had an offer accepted a few weeks back and got the mortgage offer through yesterday. We got the house for less than it was worth two years ago due to the market conditions at the moment.

We looked into Help to Buy for ages and the more we investigated the more we realised we'd probably lose quite a lot of money. I had my heart set on doing HTB but after investigating, I think we've actually done a lot better buying a slightly older house. Certainly got a lot more for our money.

Have you done the affordability check? A friend of mine is a mortgage advisor and after I thought I'd have no chance of buying anything, actually sitting down and figuring it out I realised we could get something decent (and this is in Reading where prices are ridiculous).  If you need a hand with anything feel free to PM me as I've been going through this whole process for months.
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Ardiles


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« Reply #14 on: Wednesday, December 12, 2018, 10:04:44 »

First & foremost, a house is a home.  Itís somewhere to live and build your life from.  And thatís why I canít stand the term 'property' in this context.  Estate agents started using it decades ago, and everyone else seems to have followedÖto the point you now hear people openly talking about their 'property'.  All very depressing.

But focusing on the financials, it is the biggest investment youíll ever make - so understand the nervousness.  But you have to view it in the long run.  Whether prices shift up or down in the next 24 months is of very little consequence.  If you are going to focus on the financial aspect of the purchase, Iíd be more concerned with where prices might be in 2030 or 2035.  If you agree (as most people do) that population pressure is likely to lead to sustained increase in demand over the longer term, itís not unreasonable to assume that your financial investment shoud hold its value well over that term - regardless of what it does in the next few years.

Anecdotally, Iíve heard plenty of tales of would be home buyers holding out for the next crash - only to see it fail to materialise and then watch prices spiral up out of reach.  If you want to move and you can move, Iíd move.
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