Jump to content
House Price Crash Forum
Wig

Ftb Despair!

Recommended Posts

First post here, I've been reading this site for the last few months,

thanks for opening my eyes up to the bigger picture re the housing market is all I can say: :blink:

My Fiance and I are planning to buy our first house - we're both early 30s and have been looking in the town we currently rent (Swindon) we are settled in the area and the plan is to buy somewhere to grow a family into over the next ten years. A home not an investment by the way.

Both above average earners £75k combined gross income, and have saved a £35k deposit which we're adding to every month. Haven't been on holiday past couple of years don't go out much, basically focussed on getting a deposit together. Whilst saving for a wedding next year!

As we will never be in this position again as first time buyers, no stamp duty etc no moving fees as we have nothing to move in!! Our plan was to maximise what we can get now, stretch ourselves as much as possible etc etc. The banks say we can borrow up to about £320k which is a scary amount but have set our cap at around £220k (still scary :lol: ) which currently means a 15% deposit seems reasonably prudent, and at current rates would mean the mortgage repayments would equal about half of my takehome pay.

Anyway up until the last month or so we were pressing ahead trying to find a property to move into have been looking at the properties in our area up to the £250k level and putting in a few offers up to about £220k which have all been rejected. I'm becoming more and more conscious of how overpriced the market feels, mainly based on the fact that as above average earners with a half decent deposit, logic dictates we should be able to afford something above average. Which we cannot at current asking prices. This is not particularly aspirational, just a logical assumption on my part.

This is where I'm becoming frustrated with the market and believe prices are fundamentally flawed. I don't think we are anything special, nor have a divine right to house A at price B, but we both work hard pay our dues and there is no value in housing. Which is where I began to read this site and it was refreshing to see not everyone is repeating the mantra of house prices can only ever go up, invest in bricks and mortar you can't go wrong.

This of course has been true until the phenomenon of cheap credit (and BTL) which effectively turned housing from shelter into a commodity like any other, the dire consequences of which mean it is subject to the market forces of any other commodity which have the power to drive prices of said commodity in either direction away from its 'true value', namely Fear and Greed.

At some point I was considering that maybe we were being unrealistic and should look at smaller properties etc but I firmly believe we're not being unrealistic and the fact I keep coming back to is the average house = 7x the average wage? something is rotten in denmark.

Anyway since reading this site, I've been having some interesting conversations with EAs trying to gauge their true sentiment towards the market. It's thrown up some classic cliche's and some eye openers which I'll share in another post as I am rambling now.

Thanks for the great site, keep the great work up, and don't let the bastards grind you down!

Cheers

Wig

Share this post


Link to post
Share on other sites

If you are going to buy now you need more than a 15% deposit. Not only better deals available for lower LTV but you won't be able to remortgage with negative/little equity.

Share this post


Link to post
Share on other sites

Keep putting in low offers and try not to get emotionally attached to a place. Don't worry about "missing the boat", I don't think houses will go up in price in the foreseeable future.

I eventually got a 15 year old semi with garage, front and back gardens, 3 bedrooms and ensuite for less than £100K in Nottingham, but it took over a year of getting knocked back.

Share this post


Link to post
Share on other sites

Both above average earners £75k combined gross income, and have saved a £35k deposit which we're adding to every month. Haven't been on holiday past couple of years don't go out much, basically focussed on getting a deposit together. Whilst saving for a wedding next year!

Anyway up until the last month or so we were pressing ahead trying to find a property to move into have been looking at the properties in our area up to the £250k level and putting in a few offers up to about £220k which have all been rejected.

Have you done the two basics before viewing nethouseprices and property bee?

What area are you viewing in Swindon for £250,000?

Share this post


Link to post
Share on other sites

If you are going to buy now you need more than a 15% deposit. Not only better deals available for lower LTV but you won't be able to remortgage with negative/little equity.

This is my concern, that 15% is not enough and that prices could quite easily come down by that within the next year wiping out our deposit and leaving us up sht creek.

It feels like we're on the wrong side of both equations, ie buying at a high price, low interest rate. So at risk of interest rate rises and price falls compounding the reversal in our position.

Thanks for the response.

Share this post


Link to post
Share on other sites

First post here, I've been reading this site for the last few months,

thanks for opening my eyes up to the bigger picture re the housing market is all I can say: :blink:

My Fiance and I are planning to buy our first house - we're both early 30s and have been looking in the town we currently rent (Swindon) we are settled in the area and the plan is to buy somewhere to grow a family into over the next ten years. A home not an investment by the way.

Both above average earners £75k combined gross income, and have saved a £35k deposit which we're adding to every month. Haven't been on holiday past couple of years don't go out much, basically focussed on getting a deposit together. Whilst saving for a wedding next year!

As we will never be in this position again as first time buyers, no stamp duty etc no moving fees as we have nothing to move in!! Our plan was to maximise what we can get now, stretch ourselves as much as possible etc etc. The banks say we can borrow up to about £320k which is a scary amount but have set our cap at around £220k (still scary :lol: ) which currently means a 15% deposit seems reasonably prudent, and at current rates would mean the mortgage repayments would equal about half of my takehome pay.

Anyway up until the last month or so we were pressing ahead trying to find a property to move into have been looking at the properties in our area up to the £250k level and putting in a few offers up to about £220k which have all been rejected. I'm becoming more and more conscious of how overpriced the market feels, mainly based on the fact that as above average earners with a half decent deposit, logic dictates we should be able to afford something above average. Which we cannot at current asking prices. This is not particularly aspirational, just a logical assumption on my part.

This is where I'm becoming frustrated with the market and believe prices are fundamentally flawed. I don't think we are anything special, nor have a divine right to house A at price B, but we both work hard pay our dues and there is no value in housing. Which is where I began to read this site and it was refreshing to see not everyone is repeating the mantra of house prices can only ever go up, invest in bricks and mortar you can't go wrong.

This of course has been true until the phenomenon of cheap credit (and BTL) which effectively turned housing from shelter into a commodity like any other, the dire consequences of which mean it is subject to the market forces of any other commodity which have the power to drive prices of said commodity in either direction away from its 'true value', namely Fear and Greed.

At some point I was considering that maybe we were being unrealistic and should look at smaller properties etc but I firmly believe we're not being unrealistic and the fact I keep coming back to is the average house = 7x the average wage? something is rotten in denmark.

Anyway since reading this site, I've been having some interesting conversations with EAs trying to gauge their true sentiment towards the market. It's thrown up some classic cliche's and some eye openers which I'll share in another post as I am rambling now.

Thanks for the great site, keep the great work up, and don't let the bastards grind you down!

Cheers

Wig

Welcome, no doubt you'll have seen the 'regional' forum, there is a thread for Swindon in it somewhere (I also live in Swindon and have posted on the thread a while back).

As you say, there's little value around here, and when you move out of town prices just rocket. Any areas in particular you're looking at?

Worth keeping an eye on Strakers auction in Devizes, results are published online and there's usually stuff in and around Swindon so you can get a feel for what's happening at the sharp end:

http://www.strakers.co.uk/property-auctions.ashx

Good luck!

EDIT: read Timebandit's post re: PB etc, soryy!

Edited by cheeznbreed

Share this post


Link to post
Share on other sites

Keep putting in low offers and try not to get emotionally attached to a place. Don't worry about "missing the boat", I don't think houses will go up in price in the foreseeable future.

I eventually got a 15 year old semi with garage, front and back gardens, 3 bedrooms and ensuite for less than £100K in Nottingham, but it took over a year of getting knocked back.

Glad to hear it congrats on getting the deal you wanted, I agree persistance pays off and we are firmly sticking to our guns. In fact if anything we are reviewing our position in that we are feeling overstretched rather than the other way...

Share this post


Link to post
Share on other sites

Both above average earners £75k combined gross income, and have saved a £35k deposit

The banks say we can borrow up to about £320k which is a scary amount

Which bank?

4.25 x joint income and some people on here still think there is a credit squeeze.

Share this post


Link to post
Share on other sites

Have you done the two basics before viewing nethouseprices and property bee?

What area are you viewing in Swindon for £250,000?

Hi, yes I use both cheers

property-bee is useful to a degree, although I think the EAs are pretty cute at re listing to get around the chains. I've watched properties go sold, get delisted then come back on a week later as a new entry. Of course they could have sold but it wouldn't surprise me they haven't.

We're looking at west swindon mainly, have seen a couple bit further north where you get more for your money, but still hugely overpriced in my opinion.

thanks

Share this post


Link to post
Share on other sites

Welcome, no doubt you'll have seen the 'regional' forum, there is a thread for Swindon in it somewhere (I also live in Swindon and have posted on the thread a while back). I presume you have the Property Bee toolbar installed on Firefox, if not, do it(Google Property Bee) and you'll see the history of Rightmove listings when you search. Sold prices via zoopla.co.uk 'sold prices' tab or houseprices.co.uk (Zoopla goes back further for some reason).

As you say, there's little value around here, and when you move out of town prices just rocket. Any areas in particular you're looking at?

Worth keeping an eye on Strakers auction in Devizes, results are published online and there's usually stuff in and around Swindon so you can get a feel for what's happening at the sharp end:

http://www.strakers.co.uk/property-auctions.ashx

Good luck!

Thanks for the welcome, I was going to post on the Swindon thread but this was more a general comment on the state of the market, will certainly join the Swindon discussion thread in future though.

Yep I've been using all the tools available I've been able to find (mainly through browsing this site), although I haven't figured out how to update property bee, probably something very obvious but wanted to do my bit.

As for areas we are currently renting in old town so had planned to stay up here but it seems to be operating in a fantasy world of its own in terms of pricing, even more so than the rest of the town, so we've been looking out at west swindon grange park area and a bit further north.

Cheers for the auction links too, I have recently discovered the strakers link and have been keeping an eye on it will continue to do so

Share this post


Link to post
Share on other sites

Thanks for the welcome, I was going to post on the Swindon thread but this was more a general comment on the state of the market, will certainly join the Swindon discussion thread in future though.

Yep I've been using all the tools available I've been able to find (mainly through browsing this site), although I haven't figured out how to update property bee, probably something very obvious but wanted to do my bit.

As for areas we are currently renting in old town so had planned to stay up here but it seems to be operating in a fantasy world of its own in terms of pricing, even more so than the rest of the town, so we've been looking out at west swindon grange park area and a bit further north.

Cheers for the auction links too, I have recently discovered the strakers link and have been keeping an eye on it will continue to do so

yeah, you're right about old town, just nuts. I've no idea what sustains prices up there, especially with the flood of new builds at Okus road in the last few years. I like parts of West Swindon, Eastleaze has a couple of roads with nice houses, and Grange Park seems pretty good. We moved from Old town to the Northern road area, which offers some decent sized places with biggish gardens, wide quiet streets(as long as it's not Northern Road itself). All semi detached though, mostly 3 bedders and typically fairly small kitchens, if that bothers you. It's not a long walk to the town centre via the paths past the Oasis:

http://www.rightmove.co.uk/property-for-sale/property-17844336.html?premiumA=true

http://www.rightmove.co.uk/property-for-sale/property-28869877.html The seller is trying to flip this one, having bought it under a year ago:

16/08/2010 £128,000 94, Southbrook Street, Swindon, SN2 1HH

These really should cost about £120k, but as you say, fantasy is strong. I much prefer these ones to the terraces around Ferndale road etc though.

Share this post


Link to post
Share on other sites

Which bank?

4.25 x joint income and some people on here still think there is a credit squeeze.

I have to be honest I can't actually remember, it was when reviewed our finances through a whole of market financial advisor (friend of a friend) a few months back and that was the top level number in terms of what we'd be 'allowed' by the bank to borrow. It may well have come down now but it was mainly to illustrate that we're not trying to borrow pie in the sky amounts (relative to what we're 'allowed' to)

although the figures we are planning to borrow still feel painful in the current precarious state...

cheers

Share this post


Link to post
Share on other sites

Whilst saving for a wedding next year!

Please don't waste too much money here. The "wedding industry" ranks lower then estate agents in my book. Then again, I'm a bloke.

Share this post


Link to post
Share on other sites

At the risk of being a little personal, do your plans include any provision for the pitter-patter of tiny feet arriving over the next few years...?

This can have quite a dramatic effect, trust me....

XYY

Share this post


Link to post
Share on other sites

"The banks say we can borrow up to about £320k"

Of course you can.

10 times single earnings is a snip these days.

Share this post


Link to post
Share on other sites

Since no else's specifically suggested it, I'd say don't buy now.

The main problem with that is protecting your savings from inflation. Personally, and very much IMHO, that should be the priority.

Share this post


Link to post
Share on other sites

First post here, I've been reading this site for the last few months,

thanks for opening my eyes up to the bigger picture re the housing market is all I can say: :blink:

My Fiance and I are planning to buy our first house - we're both early 30s and have been looking in the town we currently rent (Swindon) we are settled in the area and the plan is to buy somewhere to grow a family into over the next ten years. A home not an investment by the way.

Both above average earners £75k combined gross income, and have saved a £35k deposit which we're adding to every month. Haven't been on holiday past couple of years don't go out much, basically focussed on getting a deposit together. Whilst saving for a wedding next year!

As we will never be in this position again as first time buyers, no stamp duty etc no moving fees as we have nothing to move in!! Our plan was to maximise what we can get now, stretch ourselves as much as possible etc etc. The banks say we can borrow up to about £320k which is a scary amount but have set our cap at around £220k (still scary :lol: ) which currently means a 15% deposit seems reasonably prudent, and at current rates would mean the mortgage repayments would equal about half of my takehome pay.

Anyway up until the last month or so we were pressing ahead trying to find a property to move into have been looking at the properties in our area up to the £250k level and putting in a few offers up to about £220k which have all been rejected. I'm becoming more and more conscious of how overpriced the market feels, mainly based on the fact that as above average earners with a half decent deposit, logic dictates we should be able to afford something above average. Which we cannot at current asking prices. This is not particularly aspirational, just a logical assumption on my part.

This is where I'm becoming frustrated with the market and believe prices are fundamentally flawed. I don't think we are anything special, nor have a divine right to house A at price B, but we both work hard pay our dues and there is no value in housing. Which is where I began to read this site and it was refreshing to see not everyone is repeating the mantra of house prices can only ever go up, invest in bricks and mortar you can't go wrong.

This of course has been true until the phenomenon of cheap credit (and BTL) which effectively turned housing from shelter into a commodity like any other, the dire consequences of which mean it is subject to the market forces of any other commodity which have the power to drive prices of said commodity in either direction away from its 'true value', namely Fear and Greed.

At some point I was considering that maybe we were being unrealistic and should look at smaller properties etc but I firmly believe we're not being unrealistic and the fact I keep coming back to is the average house = 7x the average wage? something is rotten in denmark.

Anyway since reading this site, I've been having some interesting conversations with EAs trying to gauge their true sentiment towards the market. It's thrown up some classic cliche's and some eye openers which I'll share in another post as I am rambling now.

Thanks for the great site, keep the great work up, and don't let the bastards grind you down!

Cheers

Wig

It's real simple, and I wish it was this simple when I was in your position a few years ago.

Look, interest rates are at a historic low, yet in real and nominal value house prices are falling. If you buy now with a huge mortgage are you not painting yourself into a corner? What are the chances of interest rates going down further?

So, chances are interest rates will rise and then the real fun will start - what about your jobs under these circumstances? Huge mortgage with rising costs and falling value of house, job insecurity and new baby on the way?

Think on...

Share this post


Link to post
Share on other sites

Please don't waste too much money here. The "wedding industry" ranks lower then estate agents in my book. Then again, I'm a bloke.

too late for that one mate, although its from parents and grandparents, I would have rather put it to the deposit but some things you've got to concede on... :ph34r:

Share this post


Link to post
Share on other sites

I have to be honest I can't actually remember, it was when reviewed our finances through a whole of market financial advisor (friend of a friend) a few months back and that was the top level number in terms of what we'd be 'allowed' by the bank to borrow. It may well have come down now but it was mainly to illustrate that we're not trying to borrow pie in the sky amounts (relative to what we're 'allowed' to)

although the figures we are planning to borrow still feel painful in the current precarious state...

cheers

I think it's more likely to have gone up not down. The banks want your wife's income.

On a 25 year mortgage at the long term average of 6% you pay 92% mortgage interest.

At the start of 1996 when the average house price was £59,652, the interest is £54,880, total repayment £114,532

May 2011 the average price is £161,823, the interest is £148,877, total repayment £310,700

That's an interest increase of £93,997 on just an average priced house, that goes to banks who are taking £14bn in bonuses this year.

Share this post


Link to post
Share on other sites

Anyway up until the last month or so we were pressing ahead trying to find a property to move into have been looking at the properties in our area up to the £250k level and putting in a few offers up to about £220k which have all been rejected. I'm becoming more and more conscious of how overpriced the market feels

There are stacks of pretty decent places in swindon, plenty of 3/4 bed semi/detached in nice areas in the low 200's even assuming you have to pay full asking, so you must be being pretty fussy given you (presumably) don't have a horde of kids to house as well e.g. http://www.rightmove.co.uk/property-for-sale/property-30534571.html assuming you can haggle even 10k off then your looking at places like this http://www.rightmove.co.uk/property-for-sale/property-28383652.html?premiumA=true

I mean your right that swindon hasn't reach the buyer resignation to reality stage BUT I dont think asking prices have too much further to fall around here because of all the development in the are in recent years - around 8 thousand new houses and flats in the last 4 years or so against an existing stock of maybe 60 thousand.

Still its good to be cautious with your money. By the way next time you want to make an offer let me know and I'll go and view it first and offer 5 k less than what your intending to so they should bite your arm off ;)

Share this post


Link to post
Share on other sites

It's real simple, and I wish it was this simple when I was in your position a few years ago.

Look, interest rates are at a historic low, yet in real and nominal value house prices are falling. If you buy now with a huge mortgage are you not painting yourself into a corner? What are the chances of interest rates going down further?

So, chances are interest rates will rise and then the real fun will start - what about your jobs under these circumstances? Huge mortgage with rising costs and falling value of house, job insecurity and new baby on the way?

Think on...

This is the position I'm beginning to come around to, as I mentioned in an earlier post, prices are only going to come down (probably) and interest rates cannot come down any lower (almost definitely)

Which is further compounded by the fact that as FTBs with 85% ltv we can't realise the lowest rates.

Thanks for the succint summary bud.

Share this post


Link to post
Share on other sites

Since no else's specifically suggested it, I'd say don't buy now.

The main problem with that is protecting your savings from inflation. Personally, and very much IMHO, that should be the priority.

Theres a whole topic in itself!! How do you protect your savings though? theres another global debt crisis around the corner with the greek first domino ready to topple at any moment, are your £s even safe in the banks this is the thing whcih is playing on my mind now...

Time to get bloody good at forex trading bloody quickly!! :D

Share this post


Link to post
Share on other sites

Theres a whole topic in itself!! How do you protect your savings though? theres another global debt crisis around the corner with the greek first domino ready to topple at any moment, are your £s even safe in the banks this is the thing whcih is playing on my mind now...

Time to get bloody good at forex trading bloody quickly!! :D

Well the 2 of you could stick £30k in index linked savings certificates, possibly get your parents and grandparents to hold some more for you as well.

Then if it were me, I would wait and see if prices come down much over the next couple of years - I doubt they will go up and I doubt interest rates will go up either.

The main level of inflation you are woried about when it comes to protecting your savings is house price inflation. If house prices stay nominally static and your savings certificates make 5%, or whatever inflation is, then you're winning. You'll also have a bigger deposit and can take advantage of better deals with a lower ltv ratio.

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 312 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%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.