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Advice Needed - About To Purchase

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It would be greatly appreciated if any advice could be given as to whether I should proceed with a purchase of this house. My situation:

FTB

50% deposit on house purchase of 170K

Other investments of 25K as 'backup' in case of unemployment.

Both myself & partner in employment (average chances of redundancy).

House valued at 237,000 less than 1 year ago.

Current estimated value (average of Zoopla & Nationwide caluculator & my knowledge of area) = 188K-190K

Likely savings by purchasing this year rather than next (stamp duty, rent saved, mortgage deals etc..) = 9K

True value of property to me (170-9) = 161K.

Thus price reduction from approximate peak of 237 = 32%.

Very unlikely to ever be able to buy exactly at market bottom thus 32% guaranteed saving probably equates to a 35% fall. I anticipate prices to drop 40% thus potential 'maximum' losses are 5% = 8.5K.

Not neccessarily going to live in the house long terms (minimum 12 months, max 4 years) but would be happy to rent following that period.

Am 32 years old, and both myself and partner would like to buy as we have been renting for many years.

I was proceeding but have recently delayed after reading this forum!!!

What do ya think!!!

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You wouldn't be crazy to buy under those circumstances.

Personally I'm still holding out for lower troughs but your situation sounds better than many.

You have my permission ;)

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The only stumbling block I can see regarding buying this house from the figures you give is that you only plan to live there for 1-4 years. Rentals are coming down in line with house prices. If you plan to sell/rent in the near future you will probably lose money but hey, that's the gamble, you pays your money.....

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The only stubbling block is how to get from one side of the bridge to another.

The man to ask is a guy called Billy Goat.

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It would be greatly appreciated if any advice could be given as to whether I should proceed with a purchase of this house. My situation:

FTB

50% deposit on house purchase of 170K

Other investments of 25K as 'backup' in case of unemployment.

Both myself & partner in employment (average chances of redundancy).

House valued at 237,000 less than 1 year ago.

Current estimated value (average of Zoopla & Nationwide caluculator & my knowledge of area) = 188K-190K

Likely savings by purchasing this year rather than next (stamp duty, rent saved, mortgage deals etc..) = 9K

True value of property to me (170-9) = 161K.

Thus price reduction from approximate peak of 237 = 32%.

Very unlikely to ever be able to buy exactly at market bottom thus 32% guaranteed saving probably equates to a 35% fall. I anticipate prices to drop 40% thus potential 'maximum' losses are 5% = 8.5K.

Not neccessarily going to live in the house long terms (minimum 12 months, max 4 years) but would be happy to rent following that period.

Am 32 years old, and both myself and partner would like to buy as we have been renting for many years.

I was proceeding but have recently delayed after reading this forum!!!

What do ya think!!!

On the basis this is not a wind up, I would not be buying now! You might 'keep it 1 to 4 years', but you have the buying and selling costs. Maximum 'drop of 40% so your allowing a loss of 5%', that' not really correct is it. Prices can drop a further 10% - 20% or even 30%, and you will be able to put your offer in well below the asking price in a year or two just as you have done now.

Use your brain, read the potential bad news still to come out and think about buying around 2011 at the earliest. The second half of this year will show further falls, have patients were only 18 months into this global crash!

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It would be greatly appreciated if any advice could be given as to whether I should proceed with a purchase of this house. My situation:

FTB

50% deposit on house purchase of 170K

Other investments of 25K as 'backup' in case of unemployment.

Both myself & partner in employment (average chances of redundancy).

House valued at 237,000 less than 1 year ago.

Current estimated value (average of Zoopla & Nationwide caluculator & my knowledge of area) = 188K-190K

Likely savings by purchasing this year rather than next (stamp duty, rent saved, mortgage deals etc..) = 9K

True value of property to me (170-9) = 161K.

Thus price reduction from approximate peak of 237 = 32%.

Very unlikely to ever be able to buy exactly at market bottom thus 32% guaranteed saving probably equates to a 35% fall. I anticipate prices to drop 40% thus potential 'maximum' losses are 5% = 8.5K.

Not neccessarily going to live in the house long terms (minimum 12 months, max 4 years) but would be happy to rent following that period.

Am 32 years old, and both myself and partner would like to buy as we have been renting for many years.

I was proceeding but have recently delayed after reading this forum!!!

What do ya think!!!

Dude you are not alone, you have cash in the bank, a good job and are at the age to buy, go for it.

If you read the commnetns on this forum, you'll never do anything, just sit and watch everyone else get on eith their lives.

I'd put down just a 25% deposit, get the longest possbile repayment mortage. 40 years, the intention is to reduce the monthly cash flow but reinvest the savings in the stockmarket and pay off the mortage after 10 years.

Good luck.

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Not neccessarily going to live in the house long terms (minimum 12 months, max 4 years) but would be happy to rent following that period.

Your choice, but I wouldn't buy a house if there's a reasonable chance you're going to need to move in 12-24 months, and would be happy to rent thereafter.

You never know, house prices could easily go down another 30-50% in that timeframe and you lose most or all of your deposit. If you're going to live there, it doesn't matter too much, but if you're going to move it seems risky.

(I own a house, but I'm not selling it because I want to stay in the area, and have no expectation of moving.)

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Dude you are not alone, you have cash in the bank, a good job and are at the age to buy, go for it.

If you read the commnetns on this forum, you'll never do anything, just sit and watch everyone else get on eith their lives.

I'd put down just a 25% deposit, get the longest possbile repayment mortage. 40 years, the intention is to reduce the monthly cash flow but reinvest the savings in the stockmarket and pay off the mortage after 10 years.

Good luck.

Sorry, I disagree with you. Your ignoring the facts and issues here. I for one am not saying don't buy, I am saying don't buy yet! Buying and selling costs are not just lawyer fees etc. You said put some funds in the stock market and pay off the 40 year mortgage in 10 years, well that's easy then. So why not invest all his cash now and make a small fortune on the stock market and buy a bigger house n 2 to 3 years. The situation is highly volatile, now is not a good time to jump in. The market is still going down!

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Sorry, I disagree with you. Your ignoring the facts and issues here. I for one am not saying don't buy, I am saying don't buy yet! Buying and selling costs are not just lawyer fees etc. You said put some funds in the stock market and pay off the 40 year mortgage in 10 years, well that's easy then. So why not invest all his cash now and make a small fortune on the stock market and buy a bigger house n 2 to 3 years. The situation is highly volatile, now is not a good time to jump in. The market is still going down!

Thanks for the comments. It's my first post so apologies if 'translucent' but I thought it was a genuine question. I realise there is a lot of info, but it's not like you can identify me!!!

Buying costs are mostly absorbed (for one reason or another) and selling costs would be absorbed by employer (relocation) so I am not overly concerned about this.

I'm not sure about the stock market option, personally I think the safest bet if thnking about it in this regard is to plough all the money back into paying off the mortgage. The stock market is a risky place to put your entire future (particularly at the moment). I would be looking at a 10 year mortgage anyway.

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Thanks for the comments. It's my first post so apologies if 'translucent' but I thought it was a genuine question. I realise there is a lot of info, but it's not like you can identify me!!!

Buying costs are mostly absorbed (for one reason or another) and selling costs would be absorbed by employer (relocation) so I am not overly concerned about this.

I'm not sure about the stock market option, personally I think the safest bet if thnking about it in this regard is to plough all the money back into paying off the mortgage. The stock market is a risky place to put your entire future (particularly at the moment). I would be looking at a 10 year mortgage anyway.

Are the relocation expenses playing a significant part in your decision here. You don't want to lose that benefit and somehow the expenses are skewed towards buying? If so haggle hard (if you can) and get those relocation expenses anyway, the clue is in the name - relocation - you have to move whether you buy or rent, see if you can get a fixed offer regardless of which way you go. If you can do that those relocation expenses drop down into the savings pot for later (in you rent).

I think buying for the short term is a bad move, unless it is a total punt, you won't be living in the place and you pick it up from auction and punt it out straight away within a month or two. Everything that is going on in the economy now has nothing to do with the economy and everything to do with electioneering, bailing out the banks and putting some lipstick on an increasing ill pig.

Edited by OnlyMe

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It would be greatly appreciated if any advice could be given as to whether I should proceed with a purchase of this house. My situation:

FTB

50% deposit on house purchase of 170K

Other investments of 25K as 'backup' in case of unemployment.

Both myself & partner in employment (average chances of redundancy).

House valued at 237,000 less than 1 year ago.

Current estimated value (average of Zoopla & Nationwide caluculator & my knowledge of area) = 188K-190K

Likely savings by purchasing this year rather than next (stamp duty, rent saved, mortgage deals etc..) = 9K

True value of property to me (170-9) = 161K.

Thus price reduction from approximate peak of 237 = 32%.

Very unlikely to ever be able to buy exactly at market bottom thus 32% guaranteed saving probably equates to a 35% fall. I anticipate prices to drop 40% thus potential 'maximum' losses are 5% = 8.5K.

Not neccessarily going to live in the house long terms (minimum 12 months, max 4 years) but would be happy to rent following that period.

Am 32 years old, and both myself and partner would like to buy as we have been renting for many years.

I was proceeding but have recently delayed after reading this forum!!!

What do ya think!!!

I think anyone who acts on advice from an online forum needs ceritifying. You delayed after reading all the hot air hysteria on here? !!!!!! Every poster on here is an economical expert. A large proportion being graduates posting out from their unemployed rented bedrooms and a perfect example of a little knowledge is dangerous. They also cant get their heads round what the actual impact will be if rates go back to double figures. All they can see is that would be another opportunity to depress prices. They also persisitently believe that the general public are idiots (unlike them in their rented bedrooms) who annoyingly wont drop their prices by their own very clever calculations, and sell to them.

You have clearly done the sensible thing and covered the bases. Go with your own judgment, enjoy your purchase, or risk joining this lot on a 5 year 'arent I clever' forum. These idiots will be happy when they buy their 3 bed a £100k. And then spend 10 years scratching their heads wondering why its costs them more, than if theyd bought at £150k on the5% deals.

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Very unlikely to ever be able to buy exactly at market bottom thus 32% guaranteed saving probably equates to a 35% fall. I anticipate prices to drop 40% thus potential 'maximum' losses are 5% = 8.5K.
There is little likelihood, imo, of a market bottom of short duration. Look at the graph on the hpc home page, and you will see that the bottom of the last hpc lasted about 4 years, from about the start of 93 to about the end of 96. It is reasonable to expect a similar shape this bubble, but larger and probably lasting longer.

Also, I expect a peak to bottom fall of more that 40%, as do most on hpc, I think.

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There's an old saying: "if in doubt, do nowt" which I think is applicable to where you are now.

Keep researching until you can assure yourself of what to do and then back your own judgement.

Much better than relying on the judgement of others, I would say.

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It would be greatly appreciated if any advice could be given as to whether I should proceed with a purchase of this house. My situation:

FTB

50% deposit on house purchase of 170K

Other investments of 25K as 'backup' in case of unemployment.

Both myself & partner in employment (average chances of redundancy).

House valued at 237,000 less than 1 year ago.

Current estimated value (average of Zoopla & Nationwide caluculator & my knowledge of area) = 188K-190K

Likely savings by purchasing this year rather than next (stamp duty, rent saved, mortgage deals etc..) = 9K

True value of property to me (170-9) = 161K.

Thus price reduction from approximate peak of 237 = 32%.

Very unlikely to ever be able to buy exactly at market bottom thus 32% guaranteed saving probably equates to a 35% fall. I anticipate prices to drop 40% thus potential 'maximum' losses are 5% = 8.5K.

Not neccessarily going to live in the house long terms (minimum 12 months, max 4 years) but would be happy to rent following that period.

Am 32 years old, and both myself and partner would like to buy as we have been renting for many years.

I was proceeding but have recently delayed after reading this forum!!!

What do ya think!!!

Looks like a buy to me, if you can afford it. You're only going to have a 75k mortgage, which is easily manageable on one salary.

It also gives you the chance to get a fixed-rate mortgage at < 6% fixed for 10 years. In a year or 2's time the same house might be on for 160K, but if the pound has crashed further pushing up the cost of living, inflation and, according to all the pundits, interest rates are going to start flying up again.

This isn't going to be a simple crash like the early 90s... then it was clear when the buy indicators were showing, and you had a good 3 - 4 years to buy in the trough. But the early 90s weren't in the middle of the worst financial meltdown in history.

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You won't get many balanced replies here, though you have had some. I think there are pros and cons to not buying. Would say, if you are not looking to make money from your house ie you see your house as just that a house, then you could buy. Knowing that if the prices go down, it does not matter as you are in for the long haul. This has been somewhat scuppered thoug by your declaration that you will only stay in it for 4 years. The gamble therefore comes down to prices going down even more in those 4 years or not, if you don't mind , then buy.

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You won't get many balanced replies here, though you have had some. I think there are pros and cons to not buying. Would say, if you are not looking to make money from your house ie you see your house as just that a house, then you could buy. Knowing that if the prices go down, it does not matter as you are in for the long haul. This has been somewhat scuppered thoug by your declaration that you will only stay in it for 4 years. The gamble therefore comes down to prices going down even more in those 4 years or not, if you don't mind , then buy.

sorry, thought Id logged into should I buy or shouldnt I dot com.....

WTF has your decision to do with anons on the interweb.

FFS grow a pair and make your mind up.

My favourite colour is red....the colour of losses on capital purchases.

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I think anyone who acts on advice from an online forum needs ceritifying. You delayed after reading all the hot air hysteria on here?*blah*the bases. Go with your own judgment, enjoy your purchase, or risk joining this lot on a 5 year 'arent I clever' forum. These idiots will be happy when they buy their 3 bed a £100k. And then spend 10 years scratching their heads wondering why its costs them more, than if theyd bought at £150k on the5% deals.

What are you doing here then with 108 post's under your belt?

The OP could do a lot worse then reading the other forums on HPC. I tend to find a lot more practical post's on them

then the HPATE forum.

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I think anyone who acts on advice from an online forum needs ceritifying. You delayed after reading all the hot air hysteria on here? !!!!!! Every poster on here is an economical expert. A large proportion being graduates posting out from their unemployed rented bedrooms and a perfect example of a little knowledge is dangerous. They also cant get their heads round what the actual impact will be if rates go back to double figures. All they can see is that would be another opportunity to depress prices. They also persisitently believe that the general public are idiots (unlike them in their rented bedrooms) who annoyingly wont drop their prices by their own very clever calculations, and sell to them.

You have clearly done the sensible thing and covered the bases. Go with your own judgment, enjoy your purchase, or risk joining this lot on a 5 year 'arent I clever' forum. These idiots will be happy when they buy their 3 bed a £100k. And then spend 10 years scratching their heads wondering why its costs them more, than if theyd bought at £150k on the5% deals.

frack off then.

unless you want to hear whats going to be happening in the financial world. it was of course all unpredictable....except here of course.

Oh, I MUST buy otherwise I will roast in Hell. Thanks for the tip. Dick.

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I think anyone who acts on advice from an online forum needs ceritifying. You delayed after reading all the hot air hysteria on here? !!!!!! Every poster on here is an economical expert. A large proportion being graduates posting out from their unemployed rented bedrooms and a perfect example of a little knowledge is dangerous. They also cant get their heads round what the actual impact will be if rates go back to double figures. All they can see is that would be another opportunity to depress prices. They also persisitently believe that the general public are idiots (unlike them in their rented bedrooms) who annoyingly wont drop their prices by their own very clever calculations, and sell to them.

You have clearly done the sensible thing and covered the bases. Go with your own judgment, enjoy your purchase, or risk joining this lot on a 5 year 'arent I clever' forum. These idiots will be happy when they buy their 3 bed a £100k. And then spend 10 years scratching their heads wondering why its costs them more, than if theyd bought at £150k on the5% deals.

Is that you, Hamish?

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Their grasp of English is pretty good though :P

Is he right though, how many of you are renting out a bedroom in someone elses house? Honestly? I am curious to know.

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