Eye Of The Storm...

[hip_spasm]

Have been considering a purchase since July 2008, decided I was better off out of it and thought a crash imminent and here we are!

But got some circumstances which mean a purchase is going to be necessary sooner rather than later. Bun in the oven and demanding other half mean I may cave sooner that I'd have liked.

Ive been looking at a 2 bed house in South West Essex, nice estate.

Listed for 200k in July 2008, its was listed at 175k in January 09 and is still at that price.

She rejected today an offer at 167.5k.

I dont want to go higher ad I can only see the prices going down down down. But its the ONLY house for sale on the estate that interests us.

SHOULD I CAVE or wait?!

I fear my money in the bank becoming worth less than the paper its written on!

[Harry Monk]

What's so bad about carrying on renting and waiting for the end of the crash?

If it's £175,000 now, it will be £130,000 in 18 months time.

But it's your choice. How big a mortgage do you want?

[cashinmattress]

Have been considering a purchase since July 2008, decided I was better off out of it and thought a crash imminent and here we are!

But got some circumstances which mean a purchase is going to be necessary sooner rather than later. Bun in the oven and demanding other half mean I may cave sooner that I'd have liked.

Ive been looking at a 2 bed house in South West Essex, nice estate.

Listed for 200k in July 2008, its was listed at 175k in January 09 and is still at that price.

She rejected today an offer at 167.5k.

I dont want to go higher ad I can only see the prices going down down down. But its the ONLY house for sale on the estate that interests us.

SHOULD I CAVE or wait?!

I fear my money in the bank becoming worth less than the paper its written on!

Look man, you are a FTB, and by your tone I expect you are to be with child soon. Just find a decent place and rent, ride out the storm. You will have saved a bundle by the time this mess sorts itself out.

[buytoilet]

Have been considering a purchase since July 2008, decided I was better off out of it and thought a crash imminent and here we are!

But got some circumstances which mean a purchase is going to be necessary sooner rather than later. Bun in the oven and demanding other half mean I may cave sooner that I'd have liked.

Ive been looking at a 2 bed house in South West Essex, nice estate.

Listed for 200k in July 2008, its was listed at 175k in January 09 and is still at that price.

She rejected today an offer at 167.5k.

I dont want to go higher ad I can only see the prices going down down down. But its the ONLY house for sale on the estate that interests us.

SHOULD I CAVE or wait?!

I fear my money in the bank becoming worth less than the paper its written on!

Congratultions we have 2 under 2 living in rented no way are we going to jump now

Edited June 26, 2009 by buytoilet

[Number79]

What's so bad about carrying on renting and waiting for the end of the crash?

If it's £175,000 now, it will be £130,000 in 18 months time.

But it's your choice. How big a mortgage do you want?

+1

Renting also gives you a lot of freedom. Babes are expensive and assuming that your other half works then your income is about to almost half as your outgoings double. Keep the money in the bank as it may be a huge cussion that could save you if things don't all go according to plan. Commit yourself to a mortgage now and what happens if you get sick or injured or made redundant? Keep the money, rent for a while, keep the safety net and mobility and wait it out.

As soon as your little one is born you will be glad to have the cash and will instantly realise that there is far more to life, feck houses.

[Badger]

Have been considering a purchase since July 2008, decided I was better off out of it and thought a crash imminent and here we are!

But got some circumstances which mean a purchase is going to be necessary sooner rather than later. Bun in the oven and demanding other half mean I may cave sooner that I'd have liked.

Ive been looking at a 2 bed house in South West Essex, nice estate.

Listed for 200k in July 2008, its was listed at 175k in January 09 and is still at that price.

She rejected today an offer at 167.5k.

I dont want to go higher ad I can only see the prices going down down down. But its the ONLY house for sale on the estate that interests us.

SHOULD I CAVE or wait?!

I fear my money in the bank becoming worth less than the paper its written on!

Only you can answer this I'm afraid

[woody37]

It would be madness to buy now, just rent a similar property.

The short-mid term outlook is this:

Rising unemployment

Falling Wages

Rising interest rates

Rising tax

Rising crime

Falling rents

and.......FALLING HOUSE PRICES

-30% from here and a decade of going nowhere.

[NotAGuru]

Have been considering a purchase since July 2008, decided I was better off out of it and thought a crash imminent and here we are!

But got some circumstances which mean a purchase is going to be necessary sooner rather than later. Bun in the oven and demanding other half mean I may cave sooner that I'd have liked.

Ive been looking at a 2 bed house in South West Essex, nice estate.

Listed for 200k in July 2008, its was listed at 175k in January 09 and is still at that price.

She rejected today an offer at 167.5k.

I dont want to go higher ad I can only see the prices going down down down. But its the ONLY house for sale on the estate that interests us.

SHOULD I CAVE or wait?!

I fear my money in the bank becoming worth less than the paper its written on!

your life, your call.

For what it's worth, I was in the same situation you are now in 1990. I rented until September 1995 when my second child was due. I eventually bought a 3 bed semi (in need of a little tlc) in the London/Essex borders for just under £40,000.

Not saying that houses will become that affordable again, but a little patience should pay off.

[hip_spasm]

Redundancy wont affect me - my profession is guaranteed pretty much.

Sickness/Injury - the job will look after me.

Mortgage would be around £160k.

The main worry for me is that its pretty much accepted that interest rates will rise.

If the rates rise and the credit availability does not ease, I simply wont be able to afford to buy (unless house prices slide downward accordingly).

Its definitely a skill jumping ship at the "right" time.

[Harry Monk]

The main worry for me is that its pretty much accepted that interest rates will rise.

If the rates rise and the credit availability does not ease, I simply wont be able to afford to buy

What will happen if you do buy and interest rates rise? Could you still afford to pay the mortgage?

This is the type of thing you have to consider before purchasing. If you don't, you won't get much sympathy on here when you are about to be re-possessed.

[NotAGuru]

Redundancy wont affect me - my profession is guaranteed pretty much.

Sickness/Injury - the job will look after me.

Mortgage would be around £160k.

The main worry for me is that its pretty much accepted that interest rates will rise.

If the rates rise and the credit availability does not ease, I simply wont be able to afford to buy (unless house prices slide downward accordingly).

Its definitely a skill jumping ship at the "right" time.

A little bit of instinct perhaps, lots of luck certainly, but i don't think skill really comes into it. After all, what dictates whether prices go up or down it's outside your control. The goverment could put IRs up and crash the house market or carry on printing money with low IRs and cause massive inflation or something else altogether.

p.s. It's slightly worrying that you think your job is 100% secure. Things canchange very quickly (particularly if you work in the public sector)

[Harry Monk]

But its the ONLY house for sale on the estate that interests us.

Surely the whole point of an estate is that all of the houses are the same?

[Timm]

First off, you've saved around sixteen thousand pounds* for your family by holding off so far. Well done.

The standard criteria now apply:

Are you fixing the interest rate for at least five years? (preferably 10)?

Can you afford it on one salary (if you are both working), or 1.5 minimum wage (if only one of you is currently working and you have access to free childcare)?

Are you happy to live there forever?

Can you live with the fact that you will have an asset worth less than you paid for it for many years?

If the answer to all of the above is yes, then go ahead and make your missis happy.

If not, don't do it.

*£25k saved on price if bought at current asking price, less rent over intervening period guessed at £750pcm. Interest on the balance saved would mean that the actual saving is somewhat more than £16k.

[hip_spasm]

What will happen if you do buy and interest rates rise? Could you still afford to pay the mortgage?

This is the type of thing you have to consider before purchasing. If you don't, you won't get much sympathy on here when you are about to be re-possessed.

Looking at a 2 year fix. Rate I have been looking at 5.99%. Thats the lowest I can get it down to on a 90% LTV.

I can pay higher...but dont want to obviously.

Dpends how high we think rates will creep which is anybodys guess as far as I can see!

[middleway]

Redundancy wont affect me - my profession is guaranteed pretty much.

Sickness/Injury - the job will look after me.

Mortgage would be around £160k.

The main worry for me is that its pretty much accepted that interest rates will rise.

If the rates rise and the credit availability does not ease, I simply wont be able to afford to buy (unless house prices slide downward accordingly).

Its definitely a skill jumping ship at the "right" time.

If you can't afford it at higher rates then perhaps you can't afford it?

Call me old fashioned but when I first bought, apart from the 3 1/2 times verifiable income,

you were made aware thet you should be sure you could afford it if the 7.5% rate went to say

10% or even 12% you could still afford it (albiet with a fair bit of belt tightening)

If you, in your seemingly bullet proof job can't afford to buy at those kind of IR's

then neither will the next man and prices will end up falling till you can. Simple supply and demand (and I'm not talking the 'pent up' kind of demand the VI's harp on about,)

P.S babies aren't expensive, children are, but babies are definitely not (unless you spend a load of money on pointless

baby stuff (300 pound 'travel systems' designer clothes and the like)

You will probably save money initially as you never go out

[Harry Monk]

Looking at a 2 year fix.

And what about the other 23 years?

The bottom line is that it's your call. Personally, I wouldn't buy an estate house right now because they will be selling for far less in two or three years time.

[wren]

Buyers are needed to make the dead cat bounce.

[Timm]

First off, you've saved around sixteen thousand pounds* for your family by holding off so far. Well done.

The standard criteria now apply:

Are you fixing the interest rate for at least five years? (preferably 10)?

Can you afford it on one salary (if you are both working), or 1.5 minimum wage (if only one of you is currently working and you have access to free childcare)?

Are you happy to live there forever?

Can you live with the fact that you will have an asset worth less than you paid for it for many years?

If the answer to all of the above is yes, then go ahead and make your missis happy.

If not, don't do it. . .

Looking at a 2 year fix. Rate I have been looking at 5.99%. Thats the lowest I can get it down to on a 90% LTV.

I can pay higher...but dont want to obviously.

Dpends how high we think rates will creep which is anybodys guess as far as I can see!

One of the few things which I'm sure of is that rates will rise.

[libspero]

If you don't mind me saying it seems like you are on the point of making the purchase but with slight reservations have come looking for confirmation that you are doing the right thing.

As far as timing etc you make your own choices and I am certainly not going to try to sway you one way or the other. However, if you are serious then this is the biggest mistake I would focus on:

Ive been looking at a 2 bed house in South West Essex, nice estate.

Has been said here many times, but if you are looking don't set your heart on a single property. Look at several and make offers on all of them.

If the estate agent twigs that you are only interested in one property he will almost certainly recommend that the seller hold their price.. especially if he has also twigged that you can also afford more.

If you really want that house then the EA probably knows it.. I expect you'll end up waiting a long time or paying full asking (fine, if you're happy to do that). Why not look at a couple of other places instead of setting your heart on it?

[Guest An Bearin Bui]

First off, you've saved around sixteen thousand pounds* for your family by holding off so far. Well done.

*£25k saved on price if bought at current asking price, less rent over intervening period guessed at £750pcm. Interest on the balance saved would mean that the actual saving is somewhat more than £16k.

You could in fact count the whole £25k quite legitimately as with a mortgage of about 180k (which is what would have been needed to buy a year ago), the interest payments would be £750 or more anyway so the rent paid over 1 year isn't really money down the drain, something bulls tend to ignore.

Anyway, for the OP: who knows? For personal reasons, I would prefer to buy now but am about to get a pay-rise at work (possibly and very unusual in the current economy I know), OH is also going to be earning extra money through contract work and we're saving a packet at the moment every month. We could buy a moderate, 'does what it sez on the tin' type of house now with a 20% deposit but if I wait another year and keep saving with a higher income, we could buy a great house in a year's time with a mortgage on my income alone with the same money. So why buy now? I see no advantage apart from the superficial reason of being a homeowner before we start a family. I've decided I'm going to try and be strong and either hold off on procreation for another year or just ignore the social disdain and uncertainty and have a child while renting. The first child is the most expensive and the more cash you have in the bank the better. That's my two cents anyway...

[Number79]

Looking at a 2 year fix. Rate I have been looking at 5.99%. Thats the lowest I can get it down to on a 90% LTV.

I can pay higher...but dont want to obviously.

Dpends how high we think rates will creep which is anybodys guess as far as I can see!

lenders are already putting up their rates because they know what is coming.

look at this from the banks side, best you can get is 5.99% when boe rate is at 0,5%, best fix if for only 2 years.

borrowing 90%, what happens in 2 years time when rates have risen and the banks expect far worse? when the svr offered is outragous but you are in neg equity and don't have the option of moving to a different lender?

you know that houses are going to fall further don't you? borrowing 90% leaves you few options. Do you think that the place you are looking at won't fall by as much as the deposit you are putting down?

If you have even the suspicion that prices could fall by another 10% over the next 2 years then you have to walk away otherwise you are guarenteeing negative equity and putting yourself at the mercy of your lender in what will be very uncertain times.

[levoleurdefruits]

lenders are already putting up their rates because they know what is coming.

look at this from the banks side, best you can get is 5.99% when boe rate is at 0,5%, best fix if for only 2 years.

borrowing 90%, what happens in 2 years time when rates have risen and the banks expect far worse? when the svr offered is outragous but you are in neg equity and don't have the option of moving to a different lender?

you know that houses are going to fall further don't you? borrowing 90% leaves you few options. Do you think that the place you are looking at won't fall by as much as the deposit you are putting down?

If you have even the suspicion that prices could fall by another 10% over the next 2 years then you have to walk away otherwise you are guarenteeing negative equity and putting yourself at the mercy of your lender in what will be very uncertain times.

[Darkman]

Don't make me post the chicken pic.

[levoleurdefruits]

Bottom line, if you get it right long term you shouldn't lose & your family will thank you. Personally I believe inflation is very likely so if payments affordable & rate fixed for long enough should be a winner. It is not easy making these choices & you are right to ask around. Some points of caution:

1) A 2 year fix at 5.99% sounds too risky to me, as in 2 years time you could be nailed to the wall when the SVR is 8 or 10%. You will not have had time to build a contingency fund. In your position if buying I would fix for 5 or 10 years but only if secure in geographical location.

2) Also I would not buy a 2 bed house if starting a family, minimum of 3 bed and ideally 4. If you really cannot afford that yet then maybe I would wait a bit rather than move twice.

If you can get the right deal on a house that is fine, but in my experience not as important as getting the right type of house - ie. one which is adaptable to your needs over time. Also look for easy rentability should your circumstances change & you be temporarily unable to sell due to negative equity.

Good luck

[hip_spasm]

As a consequence of this thread I am now seriously looking for a rental property.

Not what I wanted but in all honesty it sounds the best option.

At the moment myself and the OH are saving £1k between us. Sometimes 1.5k with overtime.

Its sad that I have to rent but I think I've realised I must, must hold out unless I can get a 5 year fix, or find the perfect, perfect house. Further, I can probably find a rental house for 100 quid more than the 675 I pay to rent a flat now..

Posters on here having difficulty that bullet proof jobs exist - Police Service. Probably the closest you can come to guaranteed job security, regular pay rises, pension, etc etc.