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chiefofwales

Advice Needed - First Time Buyer (Potentially!)

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Hello everyone,

I thought I would post here to get some clear, honest advice from peope who actually know more of what they're talking about than some of the advice I have been getting (buy, buy, buy, loan the maximum you can, rent is dead money, house prices always go up etc).

So here's my situation:

Currently renting with my fiancee, small flat which we've been in for two years which we would ideally like to leave sooner rather than later.

Live in Cardiff, both 26, in full time employment, no kids, combined household income 56k before tax. We have managed to save nearly 20k. We could get a mortgage for some silly amounts (everyone is baffled as to why I don't want to max out) but I am very cautious about it all, even below 170k. We'd like to have kids in a few years so I don't know if it's best to keep saving for a few years whilst renting to get the most suitable house or get one now which might be able to cater for kids.....

Apologies for the longish post but any helpful advice from people as everyone else I seem to speak to bangs the same drum!

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2 recent policies which will be kicking in in the next while:

-Stamp duty hike for new entrant BTL from this coming April (3% surcharge on prevailing rate) = huge disincentive for new entrant BTL

-Tax relief reduction for mortgage interest phased in from 2017 = squeezing existing leveraged BTL landlords.

These are important as many leveraged BTLers will be forced to sell and the properties will be less likely to be sold to new BTL. Indeed some BTL landlords are already trying to offload properties in advance of the tax relief changes- the stamp duty hike is the cherry on top.

in short, no rush to buy in my view. April's stamp duty hike could massively curtail new BTL lending which would aid you as a potential buyer in any case. 4 months is not very long to wait. If you can find a more suitable rental you would be happier in for a while, (i know nothing about Cardiff's property situation) consider that instead.

Ask your other people what they make of the stamp duty and tax relief changes...

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2 recent policies which will be kicking in in the next while:

-Stamp duty hike for new entrant BTL from this coming April (3% surcharge on prevailing rate) = huge disincentive for new entrant BTL

-Tax relief reduction for mortgage interest phased in from 2017 = squeezing existing leveraged BTL landlords.

These are important as many leveraged BTLers will be forced to sell and the properties will be less likely to be sold to new BTL. Indeed some BTL landlords are already trying to offload properties in advance of the tax relief changes- the stamp duty hike is the cherry on top.

in short, no rush to buy in my view. April's stamp duty hike could massively curtail new BTL lending which would aid you as a potential buyer in any case. 4 months is not very long to wait. If you can find a more suitable rental you would be happier in for a while, (i know nothing about Cardiff's property situation) consider that instead.

Ask your other people what they make of the stamp duty and tax relief changes...

Thank you very much for the reply, really appreciated and funny how I haven't been a response like that from anyone else!

With regards to those changes and the people I've spoken with they know nothing of either of the changes really, the few that do see no correlation to house prices and to buy now or later :mellow:

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Thank you very much for the reply, really appreciated and funny how I haven't been a response like that from anyone else!

With regards to those changes and the people I've spoken with they know nothing of either of the changes really, the few that do see no correlation to house prices and to buy now or later :mellow:

No problem at all, of course I cannot claim to know the future(your opinion of me can go down as well as up..) but April is not far away and it should herald a sea change in the attractiveness and viability of what has become the destination for 80% of the net mortgage lending in the UK in the last year or so. The impact ought to be quite obvious quickly, and from then on the looming tax changes start turning the heat up on those landlords with big debts. Basically, unless there's a policy u-turn, a scramble for the exits is on the cards. It has been a long time coming..

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now, call me cynical, but what do you think people on a website called house price crash think about buying a house at today's insane, government propped, prices.

leave the country.

get out before your marched off to war to keep rich men in the manner they don't ever want you become accustomed to.

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I Brought a house 7 months ago.

Dealing with estate agent is a strange experince. You have to set your budget with some leway if things go wrong and You really DO have to be prepared to walk away from if the estate agent ask for more. i got 20k knocked off asking price because i did this.

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I lived in Cardiff for 29 years although I'm not Welsh. I've kept my eye on it property-wise since I left in 2006 and prices don't seem to have changed much overall since then. There cetainly hasn't been the boom seen in London or SE. In fact you can get a 3-bed semi for under £100K in Ely but you probably don't want to live there! (No offence to anyone living there reading this but it wouldn't be my first choice.)

It depends what type of house/property you want as there is a huge amount of Victorian property in various states of repair if you fancy some DIY. In my experience any "work" costs twice as much as you budgeted for and takes twice as long. There's also 30s 3-bed semis and plenty of newer properties. Generally the older property is in the middle and it gets newer as you move outwards. Area is really important in Cardiff, maybe more so than in many towns.cities as it affects the general neighbourhood/schools etc.

The areas on the up at present would appear to be to the north side eg Whitchurch/Rhiwbina whereas it used to be Pontcanna/Llandaff. I'm not sure why, maybe it's the schools. I agree about the possible BTLs about to hit the market although I'm not sure if these will be in the better areas, maybe there will be some around the UHW (University Hospital of Wales) in the Heath area.

Or maybe you fancy a flat in Cardiff Bay of which there are plenty. I don't know much about that area.

If prices drop as we're all hoping, I doubt it will affect Cardiff property as much as the true bubble territory in London/SE so I'd keep looking but not be in any rush to buy.

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2 recent policies which will be kicking in in the next while:

-Stamp duty hike for new entrant BTL from this coming April (3% surcharge on prevailing rate) = huge disincentive for new entrant BTL

-Tax relief reduction for mortgage interest phased in from 2017 = squeezing existing leveraged BTL landlords.

These are important as many leveraged BTLers will be forced to sell and the properties will be less likely to be sold to new BTL. Indeed some BTL landlords are already trying to offload properties in advance of the tax relief changes- the stamp duty hike is the cherry on top.

in short, no rush to buy in my view. April's stamp duty hike could massively curtail new BTL lending which would aid you as a potential buyer in any case. 4 months is not very long to wait. If you can find a more suitable rental you would be happier in for a while, (i know nothing about Cardiff's property situation) consider that instead.

Ask your other people what they make of the stamp duty and tax relief changes...

As its Cardiff you can add Rent Smart Wales to the list of downward pressures on BTL!

BTL has been 80% of the mortgage market, yes some of that will be people stupidly buying on BTL mortgages to get around MMR but this is going to drop significantly over Q1/Q2 of 2016. Banks are tightening lending to BTL and the BOE are making noises about applying limits to BTL mortgages to keep them more in line with OO mortgages. Hold out until Autumn and see whats going on in the market and reassess things from there... its about to get interesting!

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I lived in Cardiff for 29 years although I'm not Welsh. I've kept my eye on it property-wise since I left in 2006 and prices don't seem to have changed much overall since then. There cetainly hasn't been the boom seen in London or SE. In fact you can get a 3-bed semi for under £100K in Ely but you probably don't want to live there! (No offence to anyone living there reading this but it wouldn't be my first choice.)

It depends what type of house/property you want as there is a huge amount of Victorian property in various states of repair if you fancy some DIY. In my experience any "work" costs twice as much as you budgeted for and takes twice as long. There's also 30s 3-bed semis and plenty of newer properties. Generally the older property is in the middle and it gets newer as you move outwards. Area is really important in Cardiff, maybe more so than in many towns.cities as it affects the general neighbourhood/schools etc.

The areas on the up at present would appear to be to the north side eg Whitchurch/Rhiwbina whereas it used to be Pontcanna/Llandaff. I'm not sure why, maybe it's the schools. I agree about the possible BTLs about to hit the market although I'm not sure if these will be in the better areas, maybe there will be some around the UHW (University Hospital of Wales) in the Heath area.

Or maybe you fancy a flat in Cardiff Bay of which there are plenty. I don't know much about that area.

If prices drop as we're all hoping, I doubt it will affect Cardiff property as much as the true bubble territory in London/SE so I'd keep looking but not be in any rush to buy.

just for your information i got my house 3k less than the previous paid in in 2005 in worcestershire. you would think houseprice would have gone up in ten years? even though we on the house price crash website. 'not that i am complaing'

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Again thank you for all the replies, really appreciated. It's been quite difficult the last few weeks discussing with parents / fiancee about my thoughts on the property market and that we're due a big correction (fiance's aunty is now a BTL landlord...). Saying something that annoys everyone else and who think you're a fool is a bit tricky!

However, it's probably a bit harder to predict here in Cardiff due to some of the reasons above. The North of Cardiff, where we've been looking is very popular due to the schools but you can't help but think it's all due for a bit of a fall. My big issue is convincing my other half who thinks I'm a barking up the wrong tree though more recently have been getting somewhere..

A recent example which I don't know what to think of is for this property here: http://www.rightmove.co.uk/property-for-sale/property-35184171.html?premiumA=trueIt was originally listed for £220k in October, I put in an offer a couple of weeks ago at 195k...rejected, wanted more but I just walked away. I got a call yesterday from the estate agents saying they'd like to now accept. Good news on one hand but makes me think that it's still probably overpriced...

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That's about half of South East prices. Had a conversation with my colleagues recently that it would be nice to move entire office to Cardiff.

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My advice is - wait, wait for a year or two. Given all the recent changes, I think it would be foolish to buy at this time. You're a first time buyer, I'd use the Hellp to Buy ISA to further build up that deposit.

I think both you and your partner can take one out each so you're quids in.

Think about it. If you're earning 100+ quid interest on the ISAs each month, that should cover some of the cost differential between a typical mortgage and how much you're paying in rent.

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Typical new build postage stamp garden. I went to look at New build in Worcestershire. The 1970s I ended up with is almost twice as big for same price.

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Just a quick update and thank you to everyne for their words of wisom

Bland unsight - read your book this week and also got my Dad to start reading it which is great, very insightful.

I've managed to convinve my other half to stay put for a while even though the place we're in isn't ideal at all. I was away with work this week and had the conversation with everyone about buying. Everyone was of the opinion to "Go to the absolute maximum, buy now" etc...

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...I've managed to convinve my other half to stay put for a while even though the place we're in isn't ideal at all. I was away with work this week and had the conversation with everyone about buying. Everyone was of the opinion to "Go to the absolute maximum, buy now" etc...

I think spacedin's advice about the ISA would be pretty handy for combating this. It's not only a good way to build up a deposit it's also a good deflection technique for dealing with pressure to buy: oh yes, we're going to, we're just waiting for our ISA to mature. ;)

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I've managed to convinve my other half to stay put for a while even though the place we're in isn't ideal at all. I was away with work this week and had the conversation with everyone about buying. Everyone was of the opinion to "Go to the absolute maximum, buy now" etc...

The moment you find yourself in a position where everyone is recommending a certain course of action is the moment you should definitely take a step back & think twice - doing what everyone else is doing is rarely the route to success and happiness.

The best bit of advice I can give re buying a house (or anything else for that matter) is this, there are thousands of houses out there & lots like the one you want - take your time and be patient and the right one will come along for the "right" price (or as close to right as is possible in the housing market). Rushing and/or getting too attached to one individual property usually just results in paying too much & regretting the decision to buy.

For what its worth, my guess is that prices are more likely to go down that up in the near future so a patient approach may be well rewarded although I'd keep looking anyway - irrespective of market trends the right property may well come available at the right price regardless.

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The moment you find yourself in a position where everyone is recommending a certain course of action is the moment you should definitely take a step back & think twice - doing what everyone else is doing is rarely the route to success and happiness.

The best bit of advice I can give re buying a house (or anything else for that matter) is this, there are thousands of houses out there & lots like the one you want - take your time and be patient and the right one will come along for the "right" price (or as close to right as is possible in the housing market). Rushing and/or getting too attached to one individual property usually just results in paying too much & regretting the decision to buy.

For what its worth, my guess is that prices are more likely to go down that up in the near future so a patient approach may be well rewarded although I'd keep looking anyway - irrespective of market trends the right property may well come available at the right price regardless.

Yes it does strike me everyone getting in on how house prices only ever go up when there's ample evidence to prove that's not the case.

An alternate scenario I am now thinking about is to continue renting but look at getting a slightly bigger / less scatty flat or house. My stumbling block there is that my other half will protest again that we're not paying into anything...

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Yes it does strike me everyone getting in on how house prices only ever go up when there's ample evidence to prove that's not the case.

An alternate scenario I am now thinking about is to continue renting but look at getting a slightly bigger / less scatty flat or house. My stumbling block there is that my other half will protest again that we're not paying into anything...

Help to Buy ISA ;) but yes I know what you mean. It is after all though one of the biggest decisions you'll make in your life so no way should you feel pressured into it by anyone.

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Yes it does strike me everyone getting in on how house prices only ever go up when there's ample evidence to prove that's not the case.

An alternate scenario I am now thinking about is to continue renting but look at getting a slightly bigger / less scatty flat or house. My stumbling block there is that my other half will protest again that we're not paying into anything...

That sounds sensible, there's no point in putting up with substandard accommodation unless its mega cheap or there's some other extenuating circumstances. Whatever you decide to do, good luck & hope it works out the way you want.

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