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Hello all

I am new to this valuable and hope you can share your thoughts.

My partner and I have managed to save up about £50k which should be enough to cover deposit and costs for the purchase of our first home. The question is whether to buy now or wait? We are renting at the moment in a nice but smallish 3 bed semi and would like to buy something along those lines. Prices for such properties are from around £350k - £400k which I feel is very high. Around £300k gets you a mid terrace. Our ideal property would currently have a repayment higher than our rent cost.

I am prepared to wait if it makes sense to. I have read a lot on here about BTL changes, rising inflation and possible interest rate increases, Brexit etc...so much going on!

So I am confused on what to do. I'd rather not rush and pay over the odds only for prices to drop.

Wait or buy now? All thoughts are welcome

Thanks

 

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4 hours ago, RickyD said:

You've already answered for yourself.

Hello, thanks for the response. Does that mean that the expected reduction in prices say a year from now would more than offset the cost of a year of rental payments which for me is around £15K?

Also, is the dip in prices more likely to be a permanent one rather than a blip before prices shoot up again.

 

I guess I am looking for further informed clarification of the expected effect of the various national changes that have recently occurred (BTL for example) and are upcoming (Brexit, interest rates etc).

 

Thanks

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1 hour ago, tygar2 said:

Hello, thanks for the response. Does that mean that the expected reduction in prices say a year from now would more than offset the cost of a year of rental payments which for me is around £15K?

Also, is the dip in prices more likely to be a permanent one rather than a blip before prices shoot up again.

The truth is, no-body knows what will happen in the future. Prices could crash hard, crash very slowly, flatline, or go up slowly or go up fast. Glad to be be of help :)

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On 23/02/2017 at 6:55 PM, tygar2 said:

My partner and I have managed to save up about £50k which should be enough to cover deposit and costs for the purchase of our first home. The question is whether to buy now or wait? We are renting at the moment in a nice but smallish 3 bed semi and would like to buy something along those lines. Prices for such properties are from around £350k - £400k which I feel is very high. Around £300k gets you a mid terrace. Our ideal property would currently have a repayment higher than our rent cost.

OK here's my serious response. When working out how much to spend on a property, you need to ask yourself this question - can I still afford the mortgage repayments if the interest rates go up. If interest rates go up and house prices down, you could find yourself in negative equity. Your asset (the house), is now worth less than your loan, and to kick you while you're down, your mortgage payments have also increased. Added onto that, if you can't afford the repayments, you will probably lose the house. 

If I were in your position, I would wait at least until Brexit is formally triggered. Who knows what will happen. 

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9 minutes ago, RickyD said:

OK here's my serious response. When working out how much to spend on a property, you need to ask yourself this question - can I still afford the mortgage repayments if the interest rates go up. If interest rates go up and house prices down, you could find yourself in negative equity. Your asset (the house), is now worth less than your loan, and to kick you while you're down, your mortgage payments have also increased. Added onto that, if you can't afford the repayments, you will probably lose the house. 

If I were in your position, I would wait at least until Brexit is formally triggered. Who knows what will happen. 

furthermore the if you took out a 75% LTV mortgage and your house price falls the LTV could increase to 80% or 90% or even in a negative equity situation 110%, if this is the case the mortgage provider could exercise a Margin Call and force you to return the LTV to 75% which means find money from the ether or we could reposses your house.

 

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Thanks RickyD. Excellent info!

We are first time buyers and our deposit is only between 10% and 12% (depending on property found), so LTV will be appoximately 90%. I have played around with calculators and can comfortably absorb a number of interest rate rises after the 2 year initial fixed rate mortgage deal. Also banking on reducing LTV to at least 85% at remortgage time for better rates so might even out any ineterest rises. 

I will have to look into the Margin Call thing...never heard of it but the scenerio you painted is quite worrying...

Article 50 is due to be triggered by end of March so not long to go. If we did come across a suitable property, is putting in an offer and then waiting it out before completing (while surveys and stuff take place) an acceptable ploy?

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Same position as the OP with cash available and no income issues. Actually looking at buying within a reasonable multiple as well. I must admit at the costs in my area (CV) make me balk so I feel your concern if you're averaging nearly 150k more for a comparable property.

 

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1 hour ago, Warble said:

Same position as the OP with cash available and no income issues. Actually looking at buying within a reasonable multiple as well. I must admit at the costs in my area (CV) make me balk so I feel your concern if you're averaging nearly 150k more for a comparable property.

 

It is crazy down here! Exactly who is buying these houses and where is the money coming from? These 30 - 35 year mortgages and pyramid propping government help to buy schemes do not help. Am under pressure from the Mrs to buy now...sucks.

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On ‎27‎/‎02‎/‎2017 at 10:47 PM, tygar2 said:

If we did come across a suitable property, is putting in an offer and then waiting it out before completing (while surveys and stuff take place) an acceptable ploy?

I would definitely recommend you keep looking, even if you are likely to not to buy for a while. You never know when a vendor might suddenly drop his asking price. In any case it's always good to compare properties and see if you can get any info out of the EAs and vendors.

I think it's an acceptable and fairly sensible ploy. But it might not help you that much. Unless prices are increasing significantly, or transactions have completely dried up and sellers are desperate, it's hard to learn much from watching the market for another few months. So if you offer at the end of March and then you're ready to exchange in the summer, it's quite likely the market has just continued to tread water, and you're none the wiser whether it makes sense to pull out and wait a few more months or go ahead.

I think it's definitely worth putting in low offers to see what response you get. Do you get rejected and then see them go under offer and actually complete? Or does the agent encourage you to increase slightly.

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Missus not very happy right now.

Made an offer £5k under asking and got rejected. Seller wanted to meet half way last night but got an email this morning saying another first time buyer had offered asking price so that's that.

From what I could gather off zoopla etc , the asking price is the highest for a house paid on that road...so year, market is still treading.

Previously offered £10k below on another property and that was rejected - that one still yet to sell.

 

Was expecting something in the budget today but doesn't seem to be much going on. Hope I made the right decision but only time will tell.

 

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Fools rush in where angels fear to tread. Be astute. Be wise. Make your own decision around what you want to do, and take full responsibility for the consequences. Listen to others, read the news, absorb the statistics. Ultimately your life is in your hands.  

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8 hours ago, hp72 said:

Fools rush in where angels fear to tread. Be astute. Be wise. Make your own decision around what you want to do, and take full responsibility for the consequences. Listen to others, read the news, absorb the statistics. Ultimately your life is in your hands.  

I aint no fool - I want to be an angel too! Hahaha!

This forum gave me perspective. I held firm and waited....am still waiting. My first post was around 3 months ago and since then I have seen a small reduction in prices plus whats on offer seems to be improving. I have lowered my target price.

Knowledge is power. Thanks everyone.

 

 

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On 3/8/2017 at 2:25 PM, tygar2 said:

Missus not very happy right now.

To be honest mate, this should be your concern rather than house prices.

You need to be the captain of your ship, or she will find someone willing and able to nut up and take the lead. If she doesn't trust your course on this, you are going to have serious problems and heartbreak down the line.

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On 2017-2-27 at 1:20 PM, tygar2 said:

Does that mean that the expected reduction in prices say a year from now would more than offset the cost of a year of rental payments which for me is around £15K?

Hang on, let me just get my crystal ball...

Seriously though, join the club. I'm in exactly the same boat, although with  a bigger deposit and a repayment mortgage would be half of my monthly rent, yet I still can't quite bring myself to jump in just yet (we are looking but can't see much value - two low offers rejected, probably for the best!).

If I knew the answer to your question I'd be a property gazillionaire and not a renter loser in my late 30s ;)

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On 2017-6-9 at 11:57 AM, Locke said:

To be honest mate, this should be your concern rather than house prices.

You need to be the captain of your ship, or she will find someone willing and able to nut up and take the lead. If she doesn't trust your course on this, you are going to have serious problems and heartbreak down the line.

Wow...that is gold right there. You will never appreciate how on the mark your comment is...and how timely. Thank you.

Anyway, I stuck to my guns and 4 months later...I am still waiting. Mrs kicked off and pouted but now agrees I was right. House hunting is stressful and relationship cracks are revealed when the relationship is under stress - as I said, your comment is gold - you spying on me?:mellow:

Back to houses...at the moment there are many more suitable houses available and prices are calming down. Houses are not shifting - even one I thought would be gone in a flash is still hanging about. A few sales I was watching seem to have fallen through and are back at a reduced price. Lots of reduced properties in general too - yes, I made the correct informed decision thanks to you guys on this forum.

Now that the general election turned into a meltdown and the Lifetime ISA prop failed to take off plus rising inflation....I'm confident the market will continue to cool. 

 

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On 12/06/2017 at 2:53 PM, tygar2 said:

Wow...that is gold right there. You will never appreciate how on the mark your comment is...and how timely. Thank you.

Anyway, I stuck to my guns and 4 months later...I am still waiting. Mrs kicked off and pouted but now agrees I was right. House hunting is stressful and relationship cracks are revealed when the relationship is under stress - as I said, your comment is gold - you spying on me?:mellow:

Back to houses...at the moment there are many more suitable houses available and prices are calming down. Houses are not shifting - even one I thought would be gone in a flash is still hanging about. A few sales I was watching seem to have fallen through and are back at a reduced price. Lots of reduced properties in general too - yes, I made the correct informed decision thanks to you guys on this forum.

Now that the general election turned into a meltdown and the Lifetime ISA prop failed to take off plus rising inflation....I'm confident the market will continue to cool. 

 

Which part of the UK are you looking?

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Which postcode are you looking to buy in?

Southend on Sea looks almost dead for the past month with very few exceptions...

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On 2017-6-21 at 6:10 PM, flb said:

Which postcode are you looking to buy in?

Southend on Sea looks almost dead for the past month with very few exceptions...

I am looking roughly in the SS0, SS1, and SS2 postcode.

Funny enough noticed a lot of the properties previously for sale on my route to work have suddenly got sold signs...

Then again, I have seen this cycle before...could be an estate agent ploy.

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On 6/26/2017 at 1:53 AM, tygar2 said:

I am looking roughly in the SS0, SS1, and SS2 postcode.

Funny enough noticed a lot of the properties previously for sale on my route to work have suddenly got sold signs...

Then again, I have seen this cycle before...could be an estate agent ploy.

Just checked.

It's not a ploy, properties in there seem to selling (ss0 postcode). Average price at 268, but median closer to 240. If you're going to buy, I'd suggest offering below the asking price...30-40k below.

 

Regards.

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On 11/07/2017 at 5:05 PM, flb said:

Just checked.

It's not a ploy, properties in there seem to selling (ss0 postcode). Average price at 268, but median closer to 240. If you're going to buy, I'd suggest offering below the asking price...30-40k below.

 

Regards.

Thanks for that. How are you able to do the check?

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