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A Debate For Those Who Know...

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Ok this is my first topic so be gentle....

I bought a semi detatched ex council house in South Wales around 8 months ago for £72,000 on a lifetime tracker at a rate of 3.59% above base (10% deposit put down).

The house was an auction property which was in need of complete refurbishment which I have done and is now alsmost complete.

I have spent aprox £17k on this:

9k on two credit cards that were 0% APR for 9 months (soon to become around 15% each APR).

The rest from savings.

The property at present will market for an absolute minimum £130k based on sold house prices in the street and current homes for sale.

I live with my parents so this is my only home and I am in no rush to move out especially in the current climate.

So my options are to:

1) Sell up and make a decent profit, clearing the credit cards at tjhe same time

or

2) Get two of my friends to live in it with me and pay £250 each. This will easily cover my mortgage and combining it with my income I can easily pay at least £250 from each credit card per month.

I am very sceptical about house prices etc and would like some advice if anyone could help....

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By Jove, i think youve cracked it

A nice sensible home for around 90K.

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Ok this is my first topic so be gentle....

I bought a semi detatched ex council house in South Wales around 8 months ago for £72,000 on a lifetime tracker at a rate of 3.59% above base (10% deposit put down).

The house was an auction property which was in need of complete refurbishment which I have done and is now alsmost complete.

I have spent aprox £17k on this:

9k on two credit cards that were 0% APR for 9 months (soon to become around 15% each APR).

The rest from savings.

The property at present will market for an absolute minimum £130k based on sold house prices in the street and current homes for sale.

I live with my parents so this is my only home and I am in no rush to move out especially in the current climate.

So my options are to:

1) Sell up and make a decent profit, clearing the credit cards at tjhe same time

or

2) Get two of my friends to live in it with me and pay £250 each. This will easily cover my mortgage and combining it with my income I can easily pay at least £250 from each credit card per month.

I am very sceptical about house prices etc and would like some advice if anyone could help....

What happens when base rates revert to their long term average of 5% or 6%?

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Ok this is my first topic so be gentle....

I bought a semi detatched ex council house in South Wales around 8 months ago for £72,000 on a lifetime tracker at a rate of 3.59% above base (10% deposit put down).

The house was an auction property which was in need of complete refurbishment which I have done and is now alsmost complete.

I have spent aprox £17k on this:

9k on two credit cards that were 0% APR for 9 months (soon to become around 15% each APR).

The rest from savings.

The property at present will market for an absolute minimum £130k based on sold house prices in the street and current homes for sale.

I live with my parents so this is my only home and I am in no rush to move out especially in the current climate.

So my options are to:

1) Sell up and make a decent profit, clearing the credit cards at tjhe same time

or

2) Get two of my friends to live in it with me and pay £250 each. This will easily cover my mortgage and combining it with my income I can easily pay at least £250 from each credit card per month.

I am very sceptical about house prices etc and would like some advice if anyone could help....

I won't give any advice, but I will ask you some questions that might help you think about it.

How long would your friends have to rent from you in order for this to work?

How sure are you that your friends will be able to pay £250 and for how long -- how stable are their jobs? Might they need to move for work? Might they want to move out with a partner after a year or so?

How feasibly would it be to get other tenants?

What is the worst case scenario for either option? And what would you do in the event of such a situation?

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Ok this is my first topic so be gentle....

I bought a semi detatched ex council house in South Wales around 8 months ago for £72,000 on a lifetime tracker at a rate of 3.59% above base (10% deposit put down).

The house was an auction property which was in need of complete refurbishment which I have done and is now alsmost complete.

I have spent aprox £17k on this:

9k on two credit cards that were 0% APR for 9 months (soon to become around 15% each APR).

The rest from savings.

The property at present will market for an absolute minimum £130k based on sold house prices in the street and current homes for sale.

I live with my parents so this is my only home and I am in no rush to move out especially in the current climate.

So my options are to:

1) Sell up and make a decent profit, clearing the credit cards at tjhe same time

or

2) Get two of my friends to live in it with me and pay £250 each. This will easily cover my mortgage and combining it with my income I can easily pay at least £250 from each credit card per month.

I am very sceptical about house prices etc and would like some advice if anyone could help....

If what you say is true then you have < £65k mortgage on £130k house --> possibly scope to extend the mortgage in order to pay the cards off, if you choose to live in it.

Only consider this if you are 100% confident you won't re-fill the cards with debt! :) otherwise you'll just end up with a bigger mortgage and the same credit card balance.

As for the rest ... depends on whether you value the experience of living in the house with your friends MORE or LESS than the money you'd save by continuing to live with your parents while avoiding the impact of any coming house price falls. That's got to be a personal decision based on your circumstances and goals.

Would it be a good property to sit out hard times in ... big garden, sound construction, livable without a car, not on a rough estate?

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2) Get two of my friends to live in it with me and pay £250 each. This will easily cover my mortgage and combining it with my income I can easily pay at least £250 from each credit card per month.

This is clearly your best solution.

I would suggest you do the same with your other friends, parents and perhaps children if you have any that can pay rent. As an added bonus you can get them to do the refurbishment work themselves in exchange for not increasing their rent by more than 20% for the first 3 months.

There is nothing like a bit of exploitation of those close to you to advance your own interest.

Well done.

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Remortgage and raise the deposit for another house. You have the solid foundations of a Buy To Let empire.

Don't let the naysayers tell you any different!

Ha. Classic. This time in 5 years you'll be a multi millionaire! Either that or homeless and bankrupt. I'm leaning toward the latter.

You've taken advantage of a rally in falling Market. Personally I'd take sell and your profits as in your in no rush that money will be a good proportion of your first home to live in.

Edited by Pent Up

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You say you only bought this property 8 months ago. What was your plan when you bought it?

If you bought it as an investment, why not just sell it and take the profit?

If you bought it as a home, why are you now having second thoughts about living in it?

House prices are likely to go down in the next year or two, but equally you have plenty of equity as a buffer if it does all go wrong.

Only you know:

- how keen you are to move out vs live at home

- how safe your job is

- how well you trust and get on with your potential housemates

- your attitude to financial risk

So only you can make this decision.

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Ok this is my first topic so be gentle....

I bought a semi detatched ex council house in South Wales around 8 months ago for £72,000 on a lifetime tracker at a rate of 3.59% above base (10% deposit put down).

The house was an auction property which was in need of complete refurbishment which I have done and is now alsmost complete.

I have spent aprox £17k on this:

9k on two credit cards that were 0% APR for 9 months (soon to become around 15% each APR).

The rest from savings.

The property at present will market for an absolute minimum £130k based on sold house prices in the street and current homes for sale.

I live with my parents so this is my only home and I am in no rush to move out especially in the current climate.

So my options are to:

1) Sell up and make a decent profit, clearing the credit cards at tjhe same time

or

2) Get two of my friends to live in it with me and pay £250 each. This will easily cover my mortgage and combining it with my income I can easily pay at least £250 from each credit card per month.

I am very sceptical about house prices etc and would like some advice if anyone could help....

Some of the replies thus far have not been gentle, it seems.

OK: if you were in this for an investment than I would say you might have still got time to find a chump to stump up the extra cash to get you out of this situation with some profit. I will try to resist congratulating you on making the estate agents rich ... they will probably make a quicker buck then you (remember the effort you have spent on this and risk you have taken is greater than theirs).

If you were in this to put together a home for yourself to live in the ... ummm well done ... your home refurbishments are now done. Live in your new home and pay for it out of your salary every month like everyone else. How that/your salary balances against the credit card debt you have racked up I dunno. Perhaps there is space in the house for you & your friends ... so that your friends can pour their salary into your lifestyle choices of the future ... *shrug* ... ? Perhaps that is right & good because you have taken the risk and they haven't ... I dunno.

Either way: you will sweat if the rates rise.

Good luck.

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Some of the replies thus far have not been gentle, it seems.

The world is a harsh, cruel place.

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Ok this is my first topic so be gentle....

I bought a semi detatched ex council house in South Wales around 8 months ago for £72,000 on a lifetime tracker at a rate of 3.59% above base (10% deposit put down).

The house was an auction property which was in need of complete refurbishment which I have done and is now alsmost complete.

I have spent aprox £17k on this:

9k on two credit cards that were 0% APR for 9 months (soon to become around 15% each APR).

The rest from savings.

The property at present will market for an absolute minimum £130k based on sold house prices in the street and current homes for sale.

I live with my parents so this is my only home and I am in no rush to move out especially in the current climate.

So my options are to:

Move your friends in although be careful of the max tax-free rental limits (~£80pw?).

Payoff the credit cards asap.

Pay down the mortgage debt until you can get a better rate e.g. base + 2%.

VMR.

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Treat yourself to a shopping spree in New York after all that hard work, and a new BMW convertible to go with the new house?

Well that's what people have been doing?

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So you've got a good deal on the house, and you're willing to share it with friends at least for a while. Sounds pretty good.

The only problem is the expense of your credit cards. If it was me then I would move the credit card debts to a cheaper deal (e.g. another credit card or a bank loan) and start paying it off at the maximum you can afford from your friends' rents (don't forget to subtract tax). If you can pay the whole 500 quid into the loan you'll have paid it down to a manageable level before interest rates increase by too much. Then build up a buffer of cash for when rates do go back up. Don't forget though, your mates might not want to live there, or might move on quickly even if they do.

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Wow, first of all thanks to all your replies, never expected so much advice...

Moving on, in reply to the negative quote : I am not looking to make money out of my mates but they are desperate to move out and it would cost them a great deal more to go alone - Neither would hey get a home to the quality mine has been finished

Anyway, the property has parking for 3 cars at the front and a large garden to the rear in a nice area with good schools. Some of you have mentioned the idea of friends 'moving on' but I would be prepared by this point to have my partner move in with me.

With regards to credit cards, I used to work with them so credit card debt is a no-no - once the debt I have created to rennovate the house has been paid, they are snapped! I may in the meantime balance transfer to a lower rate if possible or my mother (hate to admit this) will pay the cards and I will pay her as much as possible each month.

I hate debt and my aim for the past 10 years since leaving school was to have a mortgage free home as quickly as possible. However, I am weary of rising rates and evidence would seem to be pointing at a negative correction so I may be better to sell up now and sit on the profit.

On a final note, I work for the local authority on a salary of £26k so I am in dark as to how safe my job is......

Does any of this change your views??

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remortgage for the new value paying off the credit cards.. and then rent the rooms...

Can you expand on this.... What would be the benefit from doing so?

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The golden rule here is that one's mortgage should be around 3.5x the highest earner's income per household.

3.5x your income is 91k. You paid 72k with a saved deposit of 10k resulting in a mortgage of 62k. You spent 17k on the reno on cards.

My opinion is that you should add 17k to your mortgage bringing it up to 79k and get rid of your cards (especially because you have already stated that you rae disciplined enough to tear up your cards once you have paid them off). Your mortgage will still only be 3.04x your income.

As Bloo said at the beginning of the thread, you have found a house at a price that is reasonable relative to your income and accumulated savings. Life is always risky but hanging on to the house given your circumstances seems to be massively less risky than the position of the majority of your age cohort.

The only other opinion that I would express is that it would be a good idea to be patient when you feel the need to get a larger house because of kids etc. In the last 15 years or so, it has been a good idea to get the "best" house that you can barely afford. In the next 15 years, it will probably be a good idea to delay getting the "best" house that you can easily afford by at least 3 years.

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Ok this is my first topic so be gentle....

I bought a semi detatched ex council house in South Wales around 8 months ago for £72,000 on a lifetime tracker at a rate of 3.59% above base (10% deposit put down).

The house was an auction property which was in need of complete refurbishment which I have done and is now alsmost complete.

I have spent aprox £17k on this:

9k on two credit cards that were 0% APR for 9 months (soon to become around 15% each APR).

The rest from savings.

The property at present will market for an absolute minimum £130k based on sold house prices in the street and current homes for sale.

I live with my parents so this is my only home and I am in no rush to move out especially in the current climate.

So my options are to:

1) Sell up and make a decent profit, clearing the credit cards at tjhe same time

or

2) Get two of my friends to live in it with me and pay £250 each. This will easily cover my mortgage and combining it with my income I can easily pay at least £250 from each credit card per month.

I am very sceptical about house prices etc and would like some advice if anyone could help....

I am very sceptical about your expectations, but good luck.

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Wow, first of all thanks to all your replies, never expected so much advice...

Moving on, in reply to the negative quote : I am not looking to make money out of my mates but they are desperate to move out and it would cost them a great deal more to go alone - Neither would hey get a home to the quality mine has been finished

Anyway, the property has parking for 3 cars at the front and a large garden to the rear in a nice area with good schools. Some of you have mentioned the idea of friends 'moving on' but I would be prepared by this point to have my partner move in with me.

With regards to credit cards, I used to work with them so credit card debt is a no-no - once the debt I have created to rennovate the house has been paid, they are snapped! I may in the meantime balance transfer to a lower rate if possible or my mother (hate to admit this) will pay the cards and I will pay her as much as possible each month.

I hate debt and my aim for the past 10 years since leaving school was to have a mortgage free home as quickly as possible. However, I am weary of rising rates and evidence would seem to be pointing at a negative correction so I may be better to sell up now and sit on the profit.

On a final note, I work for the local authority on a salary of £26k so I am in dark as to how safe my job is......

Does any of this change your views??

Obviously what you said about the house, garden and neighbourhood weighs on the side of keeping it. If you'd said it was near a sink estate and overlooked by a tower block, I'd have advised to get rid B)

Apart from that, it hinges on how secure the LA job is. If they let you go, you could be forced to sell into a sharply-falling market, perhaps seeing much/all of the value you currently have in it wiped out. Then again, that value could also be wiped out if you sell now, lose your job, and turn out to have too many savings to qualify for benefits.

Sounds like you and your mates would have a more enjoyable time by going for it. I rented a room in a similar fashion when younger, a lot more fun than renting a flat alone :)

Having your mother pay the cards isn't necessarily taking advantage -- as long as you pay her a competitive interest rate (which would be more than she'd get in the bank).

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With regards to credit cards, I used to work with them so credit card debt is a no-no - once the debt I have created to rennovate the house has been paid, they are snapped! I may in the meantime balance transfer to a lower rate if possible or my mother (hate to admit this) will pay the cards and I will pay her as much as possible each month.

Have you asked your mother about this? Is she quite happy to take the debt off your hands? Do you still live with her? What happens if you get sacked and can't afford to pay her back? Will she be happy with this? Will it affect your relationship?

In short - it's your debt. Be careful what you do with it.

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Wow, first of all thanks to all your replies, never expected so much advice...

Moving on, in reply to the negative quote : I am not looking to make money out of my mates but they are desperate to move out and it would cost them a great deal more to go alone - Neither would hey get a home to the quality mine has been finished

Anyway, the property has parking for 3 cars at the front and a large garden to the rear in a nice area with good schools. Some of you have mentioned the idea of friends 'moving on' but I would be prepared by this point to have my partner move in with me.

With regards to credit cards, I used to work with them so credit card debt is a no-no - once the debt I have created to rennovate the house has been paid, they are snapped! I may in the meantime balance transfer to a lower rate if possible or my mother (hate to admit this) will pay the cards and I will pay her as much as possible each month.

I hate debt and my aim for the past 10 years since leaving school was to have a mortgage free home as quickly as possible. However, I am weary of rising rates and evidence would seem to be pointing at a negative correction so I may be better to sell up now and sit on the profit.

On a final note, I work for the local authority on a salary of £26k so I am in dark as to how safe my job is......

Does any of this change your views??

This just reinforces what I said earlier. If it was me I'd sell now take the profits while they are still there.

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  • 145 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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