Altrincham/hale/halebarns

[19 year mortgage 8itch]

As a BTL? Your post isn't clear on what comparison you are trying to draw?

As a BTL, the rent (assuming they got that much, which is questionable) would be about 3.8% p.a. "gross". But that would be taxed, so yields the same situation as having the money sat in bonds at 4%.

And the downsides of BTL:

1. We don't know how much it rented out for - the price was probably haggled down.

2. With the state of the economy, the rental price achievable may drop in the coming years.

3. IRs are unlikely to stay at current levels for the next 25 years.

4. Need to factor in maintenance, voids, agency fees, etc. The yield is likely to be much lower when all is said and done.

5. Get a bad tenant, and things can turn very ugly and expensive very quickly. (I know, as I have several mates with BTL stories that would make you weep - think 6 months+ and several court orders to remove tenants who claim they have nowhere to live, all the while whilst receiving no rental income; oh, and the house is trashed by the time you get it back, costing thousands to put right before you can re-let it.)

6. We need to factor in the hassle factor of simply running a BTL.

7. In Bonds, you'd have £310k returning a positive yield going forwards for as many years as you like. £310k invested in that property is likely to return a sizable loss over the next few years, IMHO.

Or alternatively, did you mean keeping your £310k and then simply having to generate the rent for the place instead? That is, rent it, and not purchase it as a BTL?

Well, if you were retired (or had no other income), the 4% you'd get in Bonds would be largely untaxed (8k TFA, etc.) And, of course, you wouldn't have to deal with the same negatives I mentioned above (especially house price depreciation and maintenance costs), so the renting option stills seems the far safer approach, IMHO. And, of course, you'd have the comfort of knowing you still had £310k in the bank. I know which situation I'd rather be in.

Maybe Bruce Banner has taken out the rental.

[R K]

As a BTL? Your post isn't clear on what comparison you are trying to draw?

snip

I didn't mention BTL. That's Irrelevant.

I was pointing out that the gross rental yield (inverse of asset price) is c. 3.9% Since it has let fairly quickly I'm assuming that rent (or close to it) is market tested.

My point then is that the asking price (inverse of market tested yield) doesn't look unreasonable based on current and forward looking market yields.

In other words, faced with a choice of renting it or buying it with £310,000 one would need to generate a real (inflation adjusted) net yield of c. 4.0% on your money in the long run just to pay the rent. Thus the decision to rent it or buy it starts to look marginal, at best.

Taking a more extreme view, if the rent were the same c. £12k pa. and the asking price were £150k (halved). Then the rental yield would be c. 8% and it would be a clear no-brainer to buy it. My point is that it's marginal, in fact leaning towards buy rather than rent.

Your comparison or repayment mortgage payments v rents is a red herring since of course with a 25 yr mtge you're buying the asset over the term. With rent you're not. So you'd need to add the net present value of the cost of buying the asset onto your rent to equate the two.

[19 year mortgage 8itch]

I didn't mention BTL. That's Irrelevant.

I was pointing out that the gross rental yield (inverse of asset price) is c. 3.9% Since it has let fairly quickly I'm assuming that rent (or close to it) is market tested.

My point then is that the asking price (inverse of market tested yield) doesn't look unreasonable based on current and forward looking market yields.

In other words, faced with a choice of renting it or buying it with £310,000 one would need to generate a real (inflation adjusted) net yield of c. 4.0% on your money in the long run just to pay the rent. Thus the decision to rent it or buy it starts to look marginal, at best.

Taking a more extreme view, if the rent were the same c. £12k pa. and the asking price were £150k (halved). Then the rental yield would be c. 8% and it would be a clear no-brainer to buy it. My point is that it's marginal, in fact leaning towards buy rather than rent.

Your comparison or repayment mortgage payments v rents is a red herring since of course with a 25 yr mtge you're buying the asset over the term. With rent you're not. So you'd need to add the net present value of the cost of buying the asset onto your rent to equate the two.

Yield is probably higher as clearly it isn't worth the £310k it hasn't sold for and agreed, rent probably is realistic.

[R K]

Yield is probably higher as clearly it isn't worth the £310k it hasn't sold for and agreed, rent probably is realistic.

That's the conclusion I came to as well.

Just noticed this 2 bed cottage just around the corner from that one on Church Brow which has been in the process of being updated for a while and has apparently let straight away at an asking of £1250pm. Can't see it offered for sale so perhaps it hasn't been. Those suffer from being right on a very narrow road which is on the bus route too which (in my opinion) is a -ve, although it's one-way, and even closer to the pub!

http://www.rightmove.co.uk/property-to-rent/property-38983961.html

Edited September 26, 2012 by Red Knight

[Nomadd]

I didn't mention BTL. That's Irrelevant.

Which was why I gave it and an alternative - and mentioned your post was so terse as to be unclear. So in other words, in the context of your post, it was completely relevant.

Since it has let fairly quickly I'm assuming that rent (or close to it) is market tested.

We simply don't know.

In other words, faced with a choice of renting it or buying it with £310,000 one would need to generate a real (inflation adjusted) net yield of c. 4.0% on your money in the long run just to pay the rent. Thus the decision to rent it or buy it starts to look marginal, at best.

No, it looks marginal only if you consider that house to be priced at good value. I do not. You may. And, as listed, the purchaser needs to factor in all the other costs of ownership and depreciation. That, to me, makes it far less 'marginal.'

Taking a more extreme view, if the rent were the same c. £12k pa. and the asking price were £150k (halved). Then the rental yield would be c. 8% and it would be a clear no-brainer to buy it.

Agree. And who knows, that's eventually where it's price may settle.

My point is that it's marginal, in fact leaning towards buy rather than rent.

Disagree - once all costs are taken into account.

And as I said, don't forget the security of having £310k sat in the bank.

Your comparison or repayment mortgage payments v rents is a red herring since of course with a 25 yr mtge you're buying the asset over the term. With rent you're not. So you'd need to add the net present value of the cost of buying the asset onto your rent to equate the two.

But you'd also need to add all the costs of purchase if you were purchasing. Plus any depreciation you believed the house was going to suffer.

I know of too many people who purchased in the last few years who are now in negative equity, and sitting on homes which are rapidly declining in value. And who knows how long that will continue and where it will end?

Nope, from where I'm sitting, renting that place and having the security of £310k in the bank sounds a much better option. Still, if you feel differently, go for it.

[19 year mortgage 8itch]

That's the conclusion I came to as well.

Just noticed this 2 bed cottage just around the corner from that one on Church Brow which has been in the process of being updated for a while and has apparently let straight away at an asking of £1250pm. Can't see it offered for sale so perhaps it hasn't been. Those suffer from being right on a very narrow road which is on the bus route too which (in my opinion) is a -ve, although it's one-way, and even closer to the pub!

http://www.rightmove.co.uk/property-to-rent/property-38983961.html

I would be less sure about an asking price offer at £1250 for there.

will keep an eye out for it in 6/12 months when it is inevitabley re-let

[R K]

Which was why I gave it and an alternative - and mentioned your post was so terse as to be unclear. So in other words, in the context of your post, it was completely relevant.

We simply don't know.

No, it looks marginal only if you consider that house to be priced at good value. I do not. You may. And, as listed, the purchaser needs to factor in all the other costs of ownership and depreciation. That, to me, makes it far less 'marginal.'

Agree. And who knows, that's eventually where it's price may settle.

Disagree - once all costs are taken into account.

And as I said, don't forget the security of having £310k sat in the bank.

But you'd also need to add all the costs of purchase if you were purchasing. Plus any depreciation you believed the house was going to suffer.

I know of too many people who purchased in the last few years who are now in negative equity, and sitting on homes which are rapidly declining in value. And who knows how long that will continue and where it will end?

Nope, from where I'm sitting, renting that place and having the security of £310k in the bank sounds a much better option. Still, if you feel differently, go for it.

It's let (unless the agents are lying for some reason which seems odd). It seems likely the rental is close to asking but it's perfectly possible they've agreed 1p per month. Of course that's not knowable if you want to be pedantic.

'Value' has nothing to do with a personal view. Implied yield is a fact. Market real net yields are an observable fact.

Security of £310,000 in bank is a side issue. The point is you need to generate c. 4% REAL NET YIELD on it to pay the rent all things being equal.

My (brief) point was the simple maths of it. Not sure why you took issue with the maths of it. There's nothing to debate.

Personal views and personal circumstances have little bearing on that I'm afraid.

Edited September 26, 2012 by Red Knight

[Democorruptcy]

Well, if you were retired (or had no other income), the 4% you'd get in Bonds would be largely untaxed (8k TFA, etc.) And, of course, you wouldn't have to deal with the same negatives I mentioned above (especially house price depreciation and maintenance costs), so the renting option stills seems the far safer approach, IMHO. And, of course, you'd have the comfort of knowing you still had £310k in the bank. I know which situation I'd rather be in.

If it's financial reasons whether you buy or rent the £310k house you are having a large bet.

To achieve the £11,940 rent a 40% taxpayer needs 6.4% on the £310k or a 20% taxpayer needs 4.8% (excluding tax free ISAs, etc)

Without looking at physically gambling the £310k pot which could result in a profit or loss. If we just look at "safe" money in the bank using say 3% gross the 40% taxpayer is gambling £6.3k per year (rent minus interest after tax) the 20% taxpayer is gambling £4.5k per year. You can beat 3% on a longer term so although rates could fall it seems a reasonable worst case figure.

So if you think that house price will fall, the upside is £31k per 10% drop and that percentage gives the 40% taxpayer 5 years, or the 20% taxpayer 7 years for the bet. to be right. The worst case scenario is house prices rise because then it turns out you have gambled more. HPI of 10% over 5 years renting doubles the bet to £12.6k or £9k a year.

Tax rules/interest rates/rent could obviously all change. £310k at above figures covers 49 years rent for a 40% taxpayer or 69 years rent for a 20% taxpayer, rather than just looking at 26 years rent (310,000 / 11,940). I'm currently a renter more for the flexibility it gives, rather than fancying a bet on house prices.

[Nomadd]

If it's financial reasons whether you buy or rent the £310k house you are having a large bet.

To achieve the £11,940 rent a 40% taxpayer needs 6.4% on the £310k or a 20% taxpayer needs 4.8% (excluding tax free ISAs, etc)

Without looking at physically gambling the £310k pot which could result in a profit or loss. If we just look at "safe" money in the bank using say 3% gross the 40% taxpayer is gambling £6.3k per year (rent minus interest after tax) the 20% taxpayer is gambling £4.5k per year. You can beat 3% on a longer term so although rates could fall it seems a reasonable worst case figure.

So if you think that house price will fall, the upside is £31k per 10% drop and that percentage gives the 40% taxpayer 5 years, or the 20% taxpayer 7 years for the bet. to be right. The worst case scenario is house prices rise because then it turns out you have gambled more. HPI of 10% over 5 years renting doubles the bet to £12.6k or £9k a year.

Tax rules/interest rates/rent could obviously all change. £310k at above figures covers 49 years rent for a 40% taxpayer or 69 years rent for a 20% taxpayer, rather than just looking at 26 years rent (310,000 / 11,940). I'm currently a renter more for the flexibility it gives, rather than fancying a bet on house prices.

Well put.

My personal view of that house, in that location, if purchased for £310k now, is that it would leave you looking pretty foolish over the next few years. But, as you rightly state, it's always a gamble. Still, looking at the relatively high cost of housing, and the frail state of the economy, I think this type of house will get hit harder than many others. The same money spent on a different house could reverse that thinking for me - especially something that is a more traditional "family" home with 3 beds and a garden for the kids. Still likely to get hit (we are seeing that already), but I feel much less so.

I too am a renter for the flexibility more than anything else these days. But that doesn't mean I'd jump at something that represents poor value in my eyes. That house, to me at least, would only even remotely start to make sense at some £100k off where it currently stands. Is that unrealistic going forwards? Who knows. I guess we all have our sense of "fair value" when it comes to housing, and for now at least, I'm happy to rent whilst I watch the market slowly trend back to towards that value.

[united4ever]

Can I ask what you think of this one?

http://www.rightmove.co.uk/property-for-sale/property-37790762.html?backListLink=%2Fproperty-for-sale%2Fmap.html%3FlocationIdentifier%3DUSERDEFINEDAREA%5E%7B%22id%22%3A918833%7D%23_includeSSTC%3Don%26auction%3Dfalse%26includeSSTC%3Dtrue%26locationIdentifier%3DUSERDEFINEDAREA%255E%257B%2522id%2522%253A918833%257D%26maxPrice%3D230000%26minBedrooms%3D3%26minPrice%3D210000%26previousSearchLocation%3DUntitled%2520(Drawn%2520Area)%26radius%3D0.0%26searchLocation%3DUntitled%2520(Drawn%2520Area)%26searchType%3DSALE%26useLocationIdentifier%3Dfalse%26box%3D-2.35893%2C-2.32992%2C53.38988%2C53.40352%26popupPropertyId%3D37790762%26mapType%3DMap&fromMap=true

Is an offer of 215 good value. I know it says sold STC

[howarden]

...

But you'd also need to add all the costs of purchase if you were purchasing. Plus any depreciation you believed the house was going to suffer.

...

You know the government, via an independent entity, is advising people on the rent versus buy using a calculator that takes zero costs into account other than the mortgage?

You've seen the adverts on TV for 'Ma'

https://www.moneyadviceservice.org.uk/

They have a rent or buy page on there

https://www.moneyadviceservice.org.uk/en/articles/should-you-rent-or-buy

It links to a calculator hosted on the website of a small Independent Financial Advisor firm in County Durham

http://www.greengem.co.uk/Rent_V_Buy/rent_v_buy.php

Pretty shocking to be honest that something this amateur would be included in such a high profile resource.

[Nomadd]

Pretty shocking to be honest that something this amateur would be included in such a high profile resource.

Completely agree. Fools are easily led.

But...

The truth is that most people still need a Bank in order to get the capital together to buy a house. Once they do approach a Bank, they will be in for a rude awakening. Banks now factor in all the appropriate costs and the applicants true ability to repay. It's become pretty clear to the Banks that most people simply cannot afford to buy at current prices; the low volumes and falling house prices are a testament to that. The fact that most Banks will only offer a good deals at present if you are prepared to put 40-60% of your cash into a property shows what they really think about current pricing levels.

EDIT: Anyway, isn't this the same government that has Kirstie as an advisor?

Edited September 26, 2012 by Nomadd

[manchester50]

http://www.rightmove.co.uk/property-for-sale/property-24324381.html

"Substantially extended by our clients in recent times what started out life as a medium sized three bedroomed semi detached house has now metamorphosed into a ....<three bedroomed semi detached house>"

[Venger]

Pretty shocking to be honest that something this amateur would be included in such a high profile resource.

When the previous government and its machinations used a paper by some student, including all the spelling mistakes, and other flaky resources, as their own intelligence in their dossier to justify Iraq invasion - nothing surprises me in government/BoE desperation to suck as many people into overpaying to support house prices.

Even the final few, with the market now creaking, not caring of the outcomes ahead for the final round of younger buyers. That said I always believe it's the buyer's responsibility no matter what. Each individuals responsibility to process market information, and that's a lot, to determine what makes good value and what does not. Too many of them still think can't go wrong with property, if I could just get the financing others now are struggling to get.

[Nomadd]

http://www.rightmove.co.uk/property-for-sale/property-24324381.html

"Substantially extended by our clients in recent times what started out life as a medium sized three bedroomed semi detached house has now metamorphosed into a ....<three bedroomed semi detached house>"

And priced above what the last detached house on the road sold for.

[inhale]

Hello, Just stumbled across this forum when searching for info on Hale. I'm considering making an offer on this property, I wonder if any of you familiar with area can give me an pro's / con's on that particluar bit of Hale?

http://www.rightmove.co.uk/property-for-sale/property-34136023.html

thanks in advance....

Peter.

[The Knimbies who say No]

Hello, Just stumbled across this forum when searching for info on Hale. I'm considering making an offer on this property, I wonder if any of you familiar with area can give me an pro's / con's on that particluar bit of Hale?

http://www.rightmove.co.uk/property-for-sale/property-34136023.html

thanks in advance....

Peter.

No idea about the area, other posters will no doubt fill you in, but you are presumably aware that the house in question sold fairly recently for substantially less than the current asking?:

15 Avon Road, Hale, Altrincham, Greater Manchester WA15 0LB

08 Jun 2009 £225,000

04 Apr 2003 £200,000

17 Mar 2000 £195,000

01 Oct 1999 £185,000

Besides, seems like offers have been received on this since May (12th May- £336k, retracted on 14th May, offer of £353 on 24th June, £360k on 21st July, down to present £355k early this month)- are you desperate to get into a bidding war for a repo at 50% more than it sold for three years ago, with little seeming been done in the meantime?

Edited September 28, 2012 by cheeznbreed

[19 year mortgage 8itch]

No idea about the area, other posters will no doubt fill you in, but you are presumably aware that the house in question sold fairly recently for substantially less than the current asking?:

15 Avon Road, Hale, Altrincham, Greater Manchester WA15 0LB

08 Jun 2009 £225,000

04 Apr 2003 £200,000

17 Mar 2000 £195,000

01 Oct 1999 £185,000

Besides, seems like offers have been received on this since May (12th May- £336k, retracted on 14th May, offer of £353 on 24th June, £360k on 21st July, down to present £355k early this month)- are you desperate to get into a bidding war for a repo at 50% more than it sold for three years ago, with little seeming been done in the meantime?

Cheeze,

those sold prices look well iffy. If you take the 1999 and 2000 prices as a base, the 2003 price should be over £300k given the sort of HPI seen in the area - 2001 to 2002 looks manic in the local stats.

It is puzzling

[The Knimbies who say No]

Cheeze,

those sold prices look well iffy. If you take the 1999 and 2000 prices as a base, the 2003 price should be over £300k given the sort of HPI seen in the area - 2001 to 2002 looks manic in the local stats.

It is puzzling

Fair dos, it stuck out like a sore thumb to me, but that's where my lack of local knowledge hampers me- it's not unusual to see other areas of the country back to 2003 pricing.

Still, even with dodgy prices in the early years of the century, I wonder what happened in 2009?

[R K]

If it's financial reasons whether you buy or rent the £310k house you are having a large bet.

To achieve the £11,940 rent a 40% taxpayer needs 6.4% on the £310k or a 20% taxpayer needs 4.8% (excluding tax free ISAs, etc)

Without looking at physically gambling the £310k pot which could result in a profit or loss. If we just look at "safe" money in the bank using say 3% gross the 40% taxpayer is gambling £6.3k per year (rent minus interest after tax) the 20% taxpayer is gambling £4.5k per year. You can beat 3% on a longer term so although rates could fall it seems a reasonable worst case figure.

So if you think that house price will fall, the upside is £31k per 10% drop and that percentage gives the 40% taxpayer 5 years, or the 20% taxpayer 7 years for the bet. to be right. The worst case scenario is house prices rise because then it turns out you have gambled more. HPI of 10% over 5 years renting doubles the bet to £12.6k or £9k a year.

Tax rules/interest rates/rent could obviously all change. £310k at above figures covers 49 years rent for a 40% taxpayer or 69 years rent for a 20% taxpayer, rather than just looking at 26 years rent (310,000 / 11,940). I'm currently a renter more for the flexibility it gives, rather than fancying a bet on house prices.

Correct.

Which means it's not possible. Unless you can point me in the direction of 6.4% and 3.8% net risk free returns.

It's not a question of 'gambling' then. It's a question of having to subsidise one's own rental payments just as a BTLer who can't generate sufficient rental income has to subsidise their mortgage payments.

In other words, in this specific example the implied yield means that it makes more sense to buy the house with the £310k.

If this becomes a pattern then it's an important indicator for local markets in this price range, because it's essentially telling us that rental yields may be rising to the point where buying now makes sense. So it's well worth keeping an eye on how this relationship moves.

Which is the original point I was making, before so rudely interrupted.

Edit: Democorruptcy - you have assumed that since the rent is subsidised your £310k remains intact. If you assume this subsidy comes from the cash pot itself (for a fair comparison) then of course the £310k is diminishing in value and the yield it generates along with it. So even if house prices fell as per your example your pot falls with it. If prices rise of course you're doubly screwed. Yes? No ?

Edited September 28, 2012 by Red Knight

[Democorruptcy]

Correct.

Which means it's not possible. Unless you can point me in the direction of 6.4% and 3.8% net risk free returns.

It's not a question of 'gambling' then. It's a question of having to subsidise one's own rental payments just as a BTLer who can't generate sufficient rental income has to subsidise their mortgage payments.

In other words, in this specific example the implied yield means that it makes more sense to buy the house with the £310k.

If this becomes a pattern then it's an important indicator for local markets in this price range, because it's essentially telling us that rental yields may be rising to the point where buying now makes sense. So it's well worth keeping an eye on how this relationship moves.

Which is the original point I was making, before so rudely interrupted.

Edit: Democorruptcy - you have assumed that since the rent is subsidised your £310k remains intact. If you assume this subsidy comes from the cash pot itself (for a fair comparison) then of course the £310k is diminishing in value and the yield it generates along with it. So even if house prices fell as per your example your pot falls with it. If prices rise of course you're doubly screwed. Yes? No ?

It is a question of gambling if you aren't buying a house hoping that prices will fall. That was the whole point of my post after Nomad mentioned money in the bank was "safer"

I know what you mean about the £6.3k or £4.5k cost should really be knocked off your £310k pot after year one so the next year you would get even less interest on a reduced £303.7k or £305.5k. That means the odds are stacked more against you. For people who don't gamble with their pot, relying on just cash in the bank at current rates it shows how bad these low rates are. Of course each person's position is different re cash pot and interest rates. We made an offer on a house last year but pulled out. If I look at how much interest that money has earned me since we sold in 2008 when rates were better, compared to the rent we have paid I'm ahead on paper. Have I made a "profit"? Who knows because I haven't bought a house so don't know how much it might cost. Making a profit was never our motivation, we sold to try other places and at the moment I'm just glad I didn't buy for personal reasons.

Can the UK defy the price drops in such as Ireland etc? It's a gamble.

[19 year mortgage 8itch]

BF it will seem hard just now but it was the FTB keeping out of the market that helped crash NI prices over 54%. Now most house purchases are by FTBs - and they are not getting millstones round their neck at the same time. Houses that would have cost 180k in 2006/7 are now selling at 75K - 90K.

Keep saving for your deposit and you will be surer of a loan when the time comes.

<<<hugz>>> but I think you're wasting your time doccyboy. I'm only just starting to see some selling prices at or below their previous 2006/2007/2008 prices. Taken 5ish years to get only this far, God knows how much longer for anything substantial. It feels like the delusion will even outlive the mania of central London.

[Nomadd]

BF it will seem hard just now but it was the FTB keeping out of the market that helped crash NI prices over 54%. Now most house purchases are by FTBs - and they are not getting millstones round their neck at the same time. Houses that would have cost 180k in 2006/7 are now selling at 75K - 90K.

Keep saving for your deposit and you will be surer of a loan when the time comes.

+1

Although I don't think we'll see such large falls in the areas being discussed here - prime locations within a major UK mainland City. The building boom that went on in N.I. and Spain, for example, just simply didn't happen here.

And RK put on ignore, as requested.

[R K]

It is a question of gambling if you aren't buying a house hoping that prices will fall. That was the whole point of my post after Nomad mentioned money in the bank was "safer"

I know what you mean about the £6.3k or £4.5k cost should really be knocked off your £310k pot after year one so the next year you would get even less interest on a reduced £303.7k or £305.5k. That means the odds are stacked more against you. For people who don't gamble with their pot, relying on just cash in the bank at current rates it shows how bad these low rates are. Of course each person's position is different re cash pot and interest rates. We made an offer on a house last year but pulled out. If I look at how much interest that money has earned me since we sold in 2008 when rates were better, compared to the rent we have paid I'm ahead on paper. Have I made a "profit"? Who knows because I haven't bought a house so don't know how much it might cost. Making a profit was never our motivation, we sold to try other places and at the moment I'm just glad I didn't buy for personal reasons.

Can the UK defy the price drops in such as Ireland etc? It's a gamble.

Indeed.

My original point was STR cash pot v yield it generates for that house. In which case it works out at a marginal 'buy' rather than 'rent' on those numbers. If it sold at say 7% below asking (I think that's still the national average?? but not sure if it's different here), that would be around £290k which makes it increasingly less marginal.

Other houses and/or mortgage LTVs will skew that in different ways of course. It seems to be indicative of some rents starting to push the implied yield up (in this area), which starts to alter the rent v buy argument during this period of financial repression. Which of course is its primary purpose.

It's also one of the advantages of being a cash buyer in a depressed market where credit is tight.

[Nomadd]

Too true. Heard this a couple of times 'Some first time buyers have substantially beaten your offer'. My offers weren't even derisory. 207k on 230k . I hope you're right but with a 4 year old and a wife wanting a bigger place, I'm starting to get grief. Although she is still on-side - just!

I concede where I live is la la land, but I'd have been happy if it had at least had constant pricing, but it's gone maybe 20% the other way!!

What drives me is that the asset I buy, must have a resale value of something near what I paid, and with plans to grow the family I am walking away from silly deals as it would cripple us for life, metaphorically.

What's so different about the mainland? Surely the mainland bubble is the same as NI's, but yours has burst nicely and ours stays afloat.

bf - this is something myself and Venger have discussed. In that price bracket, in a better part of South Manchester, things are pretty tight. I'm sure there will be a downward adjustment - if you are prepared to hang on long enough - but is it worth it for just £10-20k or so? Only you can know that. The slide down to say £200k or lower (Venger discussed sub £150k, but I don't think we'll see those levels) might take a few more years. My replies to Venger were basically along the line that in that price bracket, you will always come up against working couples with two reasonable NW salaries - a "normal" 3-4 times multiple makes those sale prices therefore "do-able" for many. And a little help from mum & dad (i.e. not parents donating mega-bucks to their offspring) simply strengthens that position.

Not sure if the £207k is the max you can afford or some physiological reasoning over what you consider 'fair value'? If it's the former, then I'd do as doccyboy suggests and keep saving, in the hope that prices will dip sooner rather than later. At the higher end of the market, prices are already sliding; how far that percolates down is anyone's guess, in all honesty. The options are simply patience or purchase.