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Hopeful FTB

What Would You Have Done?

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Probably been posted before but:

IF you had bought a house in say 1998 for 50K and just had it valued last year at 250k, what would you do? (taking into account the current state of the market obviously)

Would you:

1. Sell, rent, buy again when prices have dropped

2. Remortgage, buy lots of nice stuff, have nice hols, convert your loft etc

3. Remortgage, use money to buy another place to rent

It must be very tempting to at least use a small amount of the equity to convert your loft or have a new kitchen etc, or consolidate existing debts etc- guess it depends by how much though!

;)

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Probably been posted before but:

IF you had bought a house in say 1998 for 50K and just had it valued last year at 250k, what would you do? (taking into account the current state of the market obviously)

Would you:

1. Sell, rent, buy again when prices have dropped

2. Remortgage, buy lots of nice stuff, have nice hols, convert your loft etc

3. Remortgage, use money to buy another place to rent

It must be very tempting to at least use a small amount of the equity to convert your loft or have a new kitchen etc, or consolidate existing debts etc- guess it depends by how much though!

;)

1. Sell, rent, buy again when prices have dropped - That is what I would have done anyway

Why would you want to remortgage for any reason if selling now means that in a few years time you could use the 200k equity to buy something outright.

Surely you would also be able to buy something nicer if you follow this path which kind of loses the point of remortgaging to do up the house.

Remortgaging to "have nice hols" is absolute madness.

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Probably been posted before but:

IF you had bought a house in say 1998 for 50K and just had it valued last year at 250k, what would you do? (taking into account the current state of the market obviously)

Would you:

1. Sell, rent, buy again when prices have dropped

2. Remortgage, buy lots of nice stuff, have nice hols, convert your loft etc

3. Remortgage, use money to buy another place to rent

It must be very tempting to at least use a small amount of the equity to convert your loft or have a new kitchen etc, or consolidate existing debts etc- guess it depends by how much though!

;)

I would do 3 as it will not get maximum taper relief until 2008 - then churn it.

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Depends how much deposit I put down, how old I was and how much I earnt.

If over the past 7 years I'd not had a holiday and lived with a mouldy kitchen then yes I surely would MEW a few thousand. And why not? You could be dead tomorrow. I'm sure it irks some people on this forum that others were lucky with houses but there is no need to begrudge a person having a holiday or new car or new kitchen. These are probably the same people who did without a few years ago and only now get to reap a few rewards.

However, I doubt that a house anywhere has gone from 50k to 250k in 7 years. Prices have doubled, even trebled but that is a 5 fold increase!

The thing is that houses are not going to go back to 1998 levels. I bought my first house in '99 (in Rugby)and at that point they were still acknowledged as "cheap". In 1998 they were even cheaper. Even if there is a MASSIVE crash, property will still only drop 30% and inflation will probably be on the rise. Which on the 250k example takes it down to 150k. Add 5 years inflation and suddenly that figure is more like 180k again.

So still got 130k to MEW with then..

(BTW - to answer the question, I personally would do up my house or move to a more desirable area with the equity)

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Probably been posted before but:

IF you had bought a house in say 1998 for 50K and just had it valued last year at 250k, what would you do? (taking into account the current state of the market obviously)

Would you:

1. Sell, rent, buy again when prices have dropped

2. Remortgage, buy lots of nice stuff, have nice hols, convert your loft etc

3. Remortgage, use money to buy another place to rent

It must be very tempting to at least use a small amount of the equity to convert your loft or have a new kitchen etc, or consolidate existing debts etc- guess it depends by how much though!

;)

I would not want to be unfair to the buyer so I would sell it for 60K. This would give me a nice profit of 20% and it would make the buyer happy.

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However, I doubt that a house anywhere has gone from 50k to 250k in 7 years. Prices have doubled, even trebled but that is a 5 fold increase!

The thing is that houses are not going to go back to 1998 levels. I bought my first house in '99 (in Rugby)and at that point they were still acknowledged as "cheap". In 1998 they were even cheaper. Even if there is a MASSIVE crash, property will still only drop 30% and inflation will probably be on the rise. Which on the 250k example takes it down to 150k. Add 5 years inflation and suddenly that figure is more like 180k again.

You can use

Nationwide's house price inflation calculator to work out what £50k in 1998 would be worth in today's housing money.

I tried this for London N1. £50k in 3Q 1998 and it would be worth £146k today, following average HPI for the area.

Although it wouldn't have been a house, or even a flat. Studios were priced £80-100k then.

So it might have been a miniscule studio in a marginal street. 1 bed flats now start at around £180k so the studio would probably be closer to £150k.

To answer your question - if I couldn't trade up, I'd STR and wait until I could. I definitely wouldn't stay in the grotty studio.

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Probably been posted before but:

IF you had bought a house in say 1998 for 50K and just had it valued last year at 250k, what would you do? (taking into account the current state of the market obviously)

Would you:

1. Sell, rent, buy again when prices have dropped

2. Remortgage, buy lots of nice stuff, have nice hols, convert your loft etc

3. Remortgage, use money to buy another place to rent

It must be very tempting to at least use a small amount of the equity to convert your loft or have a new kitchen etc, or consolidate existing debts etc- guess it depends by how much though!

;)

Sell.

Or in actual fact - sold.

Sold enough to weather any storm and build up a cash pile which will be needed after the correction as lenders will get mighty stringent - you will need the good old 25% deposit capital and repayment commercial loan repaid over 10 years (15 years with good credit and track record) to buy a 'BTL'....which will cease to exist.

Realised (IMHO) that the top was near, and the closer to the top = the closer to the bottom we are.

I would never release equity from a property for piffling kitchens or loft conversions or cars or holidays....If you cant afford to buy it, you cant afford to buy it.

To think about drawing money out of your pension and retirement is ludicrous!! and at the end of the day, your house is an investment that you will need to sell at some point for some reason. It would be nice to think that when that time comes you will have more money than you owe.

As for borrowing to buy into an overpriced bubble......its been done before and I doubt any words I say will change people's minds about that one.

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It would depend upon my circumstances really. If I was on my own I may have sold up, invested it while I buggered off round the world for a while.

If I had wife and kids to think about I would definately have stayed put, overpaid the mortgage while IR's were rock bottom and enjoyed life with the family.

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Depends how much deposit I put down, how old I was and how much I earnt.

If over the past 7 years I'd not had a holiday and lived with a mouldy kitchen then yes I surely would MEW a few thousand. And why not? You could be dead tomorrow. I'm sure it irks some people on this forum that others were lucky with houses but there is no need to begrudge a person having a holiday or new car or new kitchen. These are probably the same people who did without a few years ago and only now get to reap a few rewards.

However, I doubt that a house anywhere has gone from 50k to 250k in 7 years. Prices have doubled, even trebled but that is a 5 fold increase!

The thing is that houses are not going to go back to 1998 levels. I bought my first house in '99 (in Rugby)and at that point they were still acknowledged as "cheap". In 1998 they were even cheaper. Even if there is a MASSIVE crash, property will still only drop 30% and inflation will probably be on the rise. Which on the 250k example takes it down to 150k. Add 5 years inflation and suddenly that figure is more like 180k again.

So still got 130k to MEW with then..

(BTW - to answer the question, I personally would do up my house or move to a more desirable area with the equity)

I actually know someone in Brighton who bought their house in 1996 for 75k and sold it last year for 450k- so such rises arent out of the question- brighton has seen stupid HP inflation over the last 7 years!

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If I still liked the house and the area I'd do nothing, glad i had a little mortgage compared to poor suckers who bought recently. It's just a place to live.

There's a billion way to 'have a punt' without helping to cause housing misery of one sort or another.

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If I still liked the house and the area I'd do nothing, glad i had a little mortgage compared to poor suckers who bought recently. It's just a place to live.

There's a billion way to 'have a punt' without helping to cause housing misery of one sort or another.

As above, we like our home and where we live, if we didn't, then option one, right now were waiting

for the correction and saving for the next rung, which should be alot closer.

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This is one of those fantasy questions like: "What would you do if you won the lottery?" ;) For most of us, we can only dream.

Having seen the destruction wrought by the '90s real estate crash and the 2001 stock crash, I no longer have any sentimentality whatsover about material assets. In the mid-90s, I went through 2 years of jobless hell, and was not in a position to buy a condo although prices were very depressed at the time. Many, many people were in the same boat; there were lots of dire newspaper stories about a "lost generation" (tail end of the Boomers, sometimes called Generation X) and about people close to retirement getting turfed out unceremoniously by their employers after years of service. Young and old workers alike were getting shafted.

In the stock crash, again like countless others, I found my pension investments taking a nose dive. I didn't sell when things were flying high, because all the financial advisors said not to, that it would just keep going up. That's what we all thought THEN.

Now, I hope, many of us know better. The stock market still hasn't recovered to those stratospheric levels, although it's made a respectable showing in the last few years. But because it DID truly crash (not just suffer a minor correction), it probably won't recover to the pre-crash level for about a decade (as happened with the '90s house crash).

Given what I know NOW, my answer would be #1. Never hold on too long, if you have a gut feeling (through experience) that things are close to the top, no matter what others are saying. As we know, VIs will never say things are going down or stagnatinig because:

1) They make their living through buying and selling, so why should they say anything against that? Would you?

2) Many EAs - the ones who do viewings anyway - are very young and don't know anything yet. They haven't gained experience and haven't seen downturns firsthand. They're indoctrinated to "sell sell sell," and who can blame them? It's the buyer's job to beware.

Only if I really adored the place -- and it would have to be something unique that would be hard to acquire again such as a waterfront view, a really unusual layout, or custom decor -- would I hold on to it, without regard for booms and busts.

Edited by Lake

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Probably been posted before but:

IF you had bought a house in say 1998 for 50K and just had it valued last year at 250k, what would you do? (taking into account the current state of the market obviously)

Would you:

1. Sell, rent, buy again when prices have dropped

2. Remortgage, buy lots of nice stuff, have nice hols, convert your loft etc

3. Remortgage, use money to buy another place to rent

It must be very tempting to at least use a small amount of the equity to convert your loft or have a new kitchen etc, or consolidate existing debts etc- guess it depends by how much though!

;)

To be truthful, I would try to pay off my mortgage as quick as possible, then rent it out, and take some time out to travel using the rental income to support myself!

Well you did ask ;)

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I'm not sure what I'd do really.

I know what I wouldn't do and that's release equity just to buy a fancy new kitchen or fritter even a small amount on rubbish.

To me money means freedom, nothing else.

Once I considered myself wealthy (that's enough cash not to work again) then I'd perhaps fritter a little.

Good question though, got me thinking.

NDL

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Probably been posted before but:

IF you had bought a house in say 1998 for 50K and just had it valued last year at 250k, what would you do? (taking into account the current state of the market obviously)

Would you:

1. Sell, rent, buy again when prices have dropped

2. Remortgage, buy lots of nice stuff, have nice hols, convert your loft etc

3. Remortgage, use money to buy another place to rent

It must be very tempting to at least use a small amount of the equity to convert your loft or have a new kitchen etc, or consolidate existing debts etc- guess it depends by how much though!

;)

Or:

4. Live in my house, don't remortgage, don't get in more debt. Pay any excess disposible income off my mortgage. Not search the net about economic news...

get it?

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This was almost exactly the position I was in. I bought a new build in 97 for 77k, valued at 190k in 2002. I MEW'ed 35k for a deposit on a new bigger house that I bought for 285k and rented out the first one. Not bad yields but being a landlord is a pain in the ****.

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I stumbled into 1) by accident. Didn't really think about why my house was getting more 'valuable' as I was also better off financially. It was the most expensive house on the street in 1998 at £60k and still the most expensive when we sold at £210k. I MEWed to create more bedrooms - but I really needed them and couldn't afford to move. Bought some land last year and thought I would build my own home so sold up. I think I have been lucky to have sold at the top of the current market. It makes financial sense to me to stay put renting and see what will happen.

Current baffled by the change in mood on this forum. I see lots of stagnation locally and while prices have not dropped much yet I feel confident that they will.

Edited by 2112

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I'm not sure what I'd do really.

I know what I wouldn't do and that's release equity just to buy a fancy new kitchen or fritter even a small amount on rubbish.

To me money means freedom, nothing else.

Once I considered myself wealthy (that's enough cash not to work again) then I'd perhaps fritter a little.

Good question though, got me thinking.

NDL

There is every chance that by fitting a new kitchen, the property value will increase (more than the cost of fitting the kitchen) , and you'd have a far nicer kitchen. Never say never :D

Good question yes, but I think that a majority of those that have been in this position have definately considered releasing equity to improve their homes.

If nothing else, to keep up with the Jones' :D

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  • 301 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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