Buy or ( wait ) Rent ?

[RobertLaurel]

Hi

Im due to move back to NI in next few months , sold up in Scotland and am returning home ( just me and my young daughter ) with £180,000  to use wishly for our future .

This is the question , what is the best move , im 52 ( working ) and want to get this right !! .

In my head im thinking rent / wait - interest rates are bound to start rising soon , hence effecting the market ( better time to buy ) ,, or

buy a small property cash , rent out and use rent from this to fund a mortgage for another home we would use ?  ,,  or

or maybe buy a few buy-to-lets with minumim deposits ?

 

Its an open question , and a bit of a mine field , but any advice is welcome

 

Thank you

 

[nornironsi]

Honestly, buy now. Get yourself a home you are happy to live in - forget about the price situation, in my opinion the prices here are unlikely to move very much at all in the next few years.

[carrick01]

welcome back to NI.

Probably the wrong forum to ask about buy to let.

If you knew where you wanted to live in NI -  buy now (imho).  Assuming that £180k would cover it - less hassle.

Not sure where you want to live - rent a house and check if you like the area and if it suits your needs. Then buy a house in the area after a year.  Dont think prices will go up much but dont think they will down either.

Buy to let a cheaper property and use the money to pay the mortgage on the house that you live could work but could also be so much hassle.  if it goes well great if not  do you have the time to deal with the issues.  House repairs, tenant issues, rates to pay, landlord registration,  unpaid rent, manage property yourself or via estate agent. Could also benefit for capital appreciation but few people was caught out thinking the same 10 years ago (properties in general).  If interest rates go up the value of buy to let would more affected than other properties (imho).

I didn't want a mortgage when I was in my 50s. I worked hard to achieve this (but I was also lucky). 

[2buyornot2buy]

I'll offer a different point of view. 

 

I'm seriously considering STRing soon. Sell the house I bought in 2013 and banking the crazy increase. I can see big drops coming post brexit. I'm going to look at the local market over the next few months. I might have missed the ideal time tbh. I'm seeing lots of inventory and a few sales falling through. It will be interesting to see transaction levels I'm the next NIRPPI report. 

[Sour Mash]

I've said it before on the main forum, but in Belfast at least the market looks pretty buoyant.  Lots of stuff coming on and seeming to shift pretty quickly.

It seemed to pick up around April/ May.  Previous years around this time, I've seen houses 'For Sale' for months on end.

Whether this is down to sensible pricing stimulating demand or is just another side effect of cheap and easy credit I can't say as I haven't been following pricing.

 

[2buyornot2buy]

17 minutes ago, Sour Mash said:

I've said it before on the main forum, but in Belfast at least the market looks pretty buoyant.  Lots of stuff coming on and seeming to shift pretty quickly.

It seemed to pick up around April/ May.  Previous years around this time, I've seen houses 'For Sale' for months on end.

Whether this is down to sensible pricing stimulating demand or is just another side effect of cheap and easy credit I can't say as I haven't been following pricing.

 

This isn't my experience in bt9. Not in the past 6 months anyway. Sale agreed are coming back on multiple times. 

 

Some silly stuff sitting on for months. 

 

If I sold up and banked the equity increase I could rent the house I'd be looking to buy for 8-10 years. 

Edited July 25, 2017 by 2buyornot2buy

[Thorn]

2 hours ago, 2buyornot2buy said:

This isn't my experience in bt9. Not in the past 6 months anyway. Sale agreed are coming back on multiple times. 

 

Some silly stuff sitting on for months. 

 

 

I'm seeing the same Bangor/North Down and reductions increasing after the houses have been sitting for ages. Low interest rates and payments seem to be allowing e.g. divorced couples to hold off for bigger prices than people are prepared to pay. Some holding out for a very long time so far. 

Zoopla lets you search by 'Most Reduced' for a particular area and you can check the listing history on each property as well to see the price drops. 

 

[2buyornot2buy]

Here's a prime example. Fallen through at least twice. Probably can't meet the valuation. 

https://www.propertynews.com/Property/Belfast/VEB80046-1-12252970/Rusheen/422977598/

 

 

 

[whome_yesyou]

Something is brewing. The MSM have been stoking up fear of a crash recently, albeit that is more towards the UK as a whole, but I suspect any struggles within the mainland will manifest itself over here too (we usually get hit hardest). Personally I feel we have shot right back to unsustainable levels the past few years, and we are now in a stagnating situation... was shocked to find the cost of houses in some areas. Also, there hasn't been much property coming into the market this year, probably due to brexit and economic uncertainty.

Like others have said, it depends on your circumstances. If you need to buy, then go for it. However I'm going to sit on the sidelines and keep my ear to the ground for a bit, just to see whether the ground is rumbling these coming months.

On an unrelated note - it's kind of sad how inactive this forum has become. It was a brilliant source of information on the local market/economy.

[Habeas Domus]

In NI it will all depend on what heppens with brexit, if you end up with border controls being introduced, which doesn't seem impossible given how chaotic the negotiations have been so far, then I cant see that being good for NI house prices.

Also I wonder if many people might move from NI to Ireland so they can get an EU passport?

[2buyornot2buy]

7 hours ago, Habeas Domus said:

In NI it will all depend on what heppens with brexit, if you end up with border controls being introduced, which doesn't seem impossible given how chaotic the negotiations have been so far, then I cant see that being good for NI house prices.

Also I wonder if many people might move from NI to Ireland so they can get an EU passport?

We have an automatic right to dual citizenship. Everyone born on the island, or with irish parents do. 

[nigooner]

8 hours ago, whome_yesyou said:

Something is brewing. The MSM have been stoking up fear of a crash recently, albeit that is more towards the UK as a whole, but I suspect any struggles within the mainland will manifest itself over here too (we usually get hit hardest). Personally I feel we have shot right back to unsustainable levels the past few years, and we are now in a stagnating situation... was shocked to find the cost of houses in some areas. Also, there hasn't been much property coming into the market this year, probably due to brexit and economic uncertainty.

Like others have said, it depends on your circumstances. If you need to buy, then go for it. However I'm going to sit on the sidelines and keep my ear to the ground for a bit, just to see whether the ground is rumbling these coming months.

On an unrelated note - it's kind of sad how inactive this forum has become. It was a brilliant source of information on the local market/economy.

Must depend where you're looking. New build detached houses in dundonald and Ards ar selling at about £170k. A couple on £25k each can afford this, and a couple on less can afford new build semis. I wouldn't consider a lending multiple of 3.5x joint income for a new build house unsustainable.

[yadayada]

13 hours ago, Habeas Domus said:

In NI it will all depend on what heppens with brexit, if you end up with border controls being introduced, which doesn't seem impossible given how chaotic the negotiations have been so far, then I cant see that being good for NI house prices.

Also I wonder if many people might move from NI to Ireland so they can get an EU passport?

No one.

Brexit  - anyone prepared to stick their neck out and say it's just not going to happen? I'd say there's a fair chance of it.

Edited July 27, 2017 by yadayada

[yadayada]

On 25/07/2017 at 11:30 AM, 2buyornot2buy said:

This isn't my experience in bt9. Not in the past 6 months anyway. Sale agreed are coming back on multiple times. 

 

Some silly stuff sitting on for months. 

 

If I sold up and banked the equity increase I could rent the house I'd be looking to buy for 8-10 years. 

What do you reckon your percentage gain to be in those 4 years?

[2buyornot2buy]

4 hours ago, yadayada said:

What do you reckon your percentage gain to be in those 4 years?

I'd say around 30%. 

[2buyornot2buy]

9 hours ago, nigooner said:

Must depend where you're looking. New build detached houses in dundonald and Ards ar selling at about £170k. A couple on £25k each can afford this, and a couple on less can afford new build semis. I wouldn't consider a lending multiple of 3.5x joint income for a new build house unsustainable.

3.5x joint isn't sustainable to me. Unless you're going to be childless. 2 kids in nursery wipes out once of those wages completely. Then it's 7 x single. 

I'd argue it's more sustainable for someone on say 80k joint buying a 300k house but 3.5x joint on 25k each isn't a figure I'd ever be comfortable with. In fact I'd like to think MMR stamped it out. It certainly would be difficult to remortgage if a child popped along. I can see people in that situation stuck with the same lender for the lifetime of the mortgage. 

 

[nigooner]

44 minutes ago, 2buyornot2buy said:

3.5x joint isn't sustainable to me. Unless you're going to be childless. 2 kids in nursery wipes out once of those wages completely. Then it's 7 x single. 

I'd argue it's more sustainable for someone on say 80k joint buying a 300k house but 3.5x joint on 25k each isn't a figure I'd ever be comfortable with. In fact I'd like to think MMR stamped it out. It certainly would be difficult to remortgage if a child popped along. I can see people in that situation stuck with the same lender for the lifetime of the mortgage. 

 

£165k house (above average house)

-£25k each leaves £20,281 a year after tax

-Mortgage for a £165k house, 85% ltv at 4.5% over 25 years costs £786 a month

-this leaves over £2,500 pcm for the couple, which gets you a new build 3 bed detached family home in a commuter down 20 mins from Belfast. 

 

NI Q1 2017 standardised house value is £124k, so an average house in NI with two people earning £25k gross

- £20,281a year each after tax

- mortgage for £124k house, 85% LTD at 4.5% over 25 years costs £592 pcm

- leaves c. £2,780 pcm for the couple

 

of course, interest rates will go up and other bills need paid and other factors etc etc, but I don't see 3.5x salary as unsustainable for an average couple on average salaries buying an average house and living an average life within their means (if £25k is an average salary of course)

Edited July 27, 2017 by nigooner

[2buyornot2buy]

24 minutes ago, nigooner said:

£165k house (above average house)

-£25k each leaves £20,281 a year after tax

-Mortgage for a £165k house, 85% ltv at 4.5% over 25 years costs £786 a month

-this leaves over £2,500 pcm for the couple, which gets you a new build 3 bed detached family home in a commuter down 20 mins from Belfast. 

 

NI Q1 2017 standardised house value is £124k, so an average house in NI with two people earning £25k gross

- £20,281a year each after tax

- mortgage for £124k house, 85% LTD at 4.5% over 25 years costs £592 pcm

- leaves c. £2,780 pcm for the couple

 

of course, interest rates will go up and other bills need paid and other factors etc etc, but I don't see 3.5x salary as unsustainable for an average couple on average salaries buying an average house and living an average life within their means (if £25k is an average salary of course)

Couple of things here. 

Average salary of 25k. OK.  Let's take that. Private sector average is 5k less and public 5k more but we can go with 50% of the population make less that 25k 50% more. 

25k. I assume they need to pay a pension? I hope they do anyway. Let's take a super modest 4% employee contribution. They're in the 50th percentile so I'd also assume they went to university. Student loan maybe? 

That brings it below 19k a year after deductions. Or £1570 a month each. 

 

Is a 3 bed new build an average house for two people both working with a degree? I'd say it probably is. It'll have taken a while to save that 25k deposit plus SDLT and fees. 

So £3140 a month. Minus car costs. Chance are they work in Belfast.  20 miles away. 1 or 2 cars. Insurance. Tax. Rates. Mobiles. Save for a future baby. Maternity leave. Actually having a pension that's not 3k a year. Maintenance. 

Then childcare hits. 

It's tight. Very tight. 

 

 

 

 

 

[Thorn]

6 hours ago, yadayada said:

No one.

Brexit  - anyone prepared to stick their neck out and say it's just not going to happen? I'd say there's a fair chance of it.

Evidence so far that I have seen is that they made the South vote again when they voted against the Lisbon Treaty in 2008 in order to qualify for EU funding. So a second vote to fudge Brexit is more likely after a bit of "uncertainty". Although really hard to call - I agree-  because the MSM seems to be suddenly mentioning "uncertainty" a lot now and the main HPC forum is picking up flashing signals everywhere all of a sudden. I always hear the only thing that matters to win in the UK is the votes South of Watford - so it's their voices that would mainly matter in UK referenda. And anybody going over the border recently? No sign of any changes at all so far...

[Thorn]

(Meant Troika not EU)

And I think we need to recognise the effect the Boom in the South had up here with enthusiastic "Investors" buying up everything they could.

[nigooner]

2 hours ago, 2buyornot2buy said:

Couple of things here. 

Average salary of 25k. OK.  Let's take that. Private sector average is 5k less and public 5k more but we can go with 50% of the population make less that 25k 50% more. 

25k. I assume they need to pay a pension? I hope they do anyway. Let's take a super modest 4% employee contribution. They're in the 50th percentile so I'd also assume they went to university. Student loan maybe? 

That brings it below 19k a year after deductions. Or £1570 a month each. 

 

Is a 3 bed new build an average house for two people both working with a degree? I'd say it probably is. It'll have taken a while to save that 25k deposit plus SDLT and fees. 

So £3140 a month. Minus car costs. Chance are they work in Belfast.  20 miles away. 1 or 2 cars. Insurance. Tax. Rates. Mobiles. Save for a future baby. Maternity leave. Actually having a pension that's not 3k a year. Maintenance. 

Then childcare hits. 

It's tight. Very tight. 

 

 

 

 

 

What average house price would you think to be sustainable?

[whome_yesyou]

2 hours ago, nigooner said:

What average house price would you think to be sustainable?

I thought the multiples for joint is 2.5 x the combined gross salary, and 3 x the single salary.

So that £50k couple is looking at borrowing around £125k. However, with cheap money flowing through the system, that obviously isn't being adhered to by lenders (or anywhere close to it).

[2buyornot2buy]

9 hours ago, nigooner said:

What average house price would you think to be sustainable?

I don't think a 950 sq foot new build with a 20sq meter "garden" should be an average house. It's what builders have made as the average house. 

It's a bit like what we we've saw with food for the past 30 years. Look at chocolate bars. Size has gradually reduced and ingredients replaced with lower quality equivalents.I see the same thing happening with house. Much smaller footprint. But oh look, these are so energy efficient and have 8 toilets. 

 

In NI I'd see the average house being 3 × main earner and 1 times other earner. 

It's needed if you want to have kids and eat more than baked beans in your old age. I don't see the state pension being available in 40 years for anyone under 90. 

So around 100k. 

 

 

[Belfast Boy]

I have heard of a sale in Coleraine falling through. It was at the bottom of a chain too. So it's not just Belfast.

There is a lot of building going on along the North Coast. Reminds me of the last boom.

To the OP: you will have to weigh up capital gains vs capital losses vs renting.

[darkmarket]

13 hours ago, nigooner said:

£25k each leaves £20,281 a year after tax

I'm not clear where this £25k average salary comes from.

According to NISRA, the median salary for an employee in NI is £393 / wk or £20,436pa. The employment rate is 70%.