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Sausage

FTBs - what's your current thinking?

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2 hours ago, Sausage said:

Current situation is 30% deposit, and 3.5 X joint income mtg, at 30% of take home on 10yr fix. Affordable 

I've been studying mortgage rates recently.  The 10 year fix rates are quite a bit higher than the 5 year, so that is worth looking at closely. Also whatever people think about HTB inflating house prices, on a new-build you are going to pay that inflated price whether you use HTB or not; so if you are eligible for HTB as a new-build FTB do investigate it; it's a free loan which makes you eligible for the lower interest rates available to those with 25% deposit.  And if you can't pay back the HTB loan in 5 years then you only have to ay interest on it at 1.75% and your main lender will still regard you as 75% LTV.

You can't win, but you can still make sure you don't lose.  Good luck.

Edited by Dyson Fury

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13 hours ago, Sausage said:

I'm on south east coast.

Regardless of your housing situation, remember that living on the SE coast gives you and your children a quality of life immeasurably superior to those who live far inland and face a 2 hour drive just to see the sea.

(Canterbury, since you ask)

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48 minutes ago, Dyson Fury said:

I've been studying mortgage rates recently.  The 10 year fix rates are quite a bit higher than the 5 year, so that is worth looking at closely. Also whatever people think about HTB inflating house prices, on a new-build you are going to pay that inflated price whether you use HTB or not; so if you are eligible for HTB as a new-build FTB do investigate it; it's a free loan which makes you eligible for the lower interest rates available to those with 25% deposit.  And if you can't pay back the HTB loan in 5 years then you only have to ay interest on it at 1.75% and your main lender will still regard you as 75% LTV.

You can't win, but you can still make sure you don't lose.  Good luck.

I looked at HTB loans but a few things put me off

Apart from paying the inflated new build price don't you lose in the end with a HTB loan if can't pay back the 25% at the end of the term

You can't rent it out

Selling  can be hard if there are other similar new builds still on sale

If prices drop and you want to resell you may have problems as it is HTB

and I'm not how if this is still relevant

You need a special mortgage and the rate may not be as good as offered to other customers.

If the bank needs a valuation and the price has gone down it won't be treated as 75% (or whatever)

I've not looked at this for years so apologies if out of date now

Edited by Flopsy

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3 hours ago, Sausage said:

Current situation is 30% deposit, and 3.5 X joint income mtg, at 30% of take home on 10yr fix. Affordable but by golly it feels like that should get more than a 3 bed semi.

you forgot to add that the government look after home owners not renters that has value in itself, with a family you probably should buy. i would find a large range of houses you are interested in and low ball them till one bites 😁

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54 minutes ago, Dyson Fury said:

Regardless of your housing situation, remember that living on the SE coast gives you and your children a quality of life immeasurably superior to those who live far inland and face a 2 hour drive just to see the sea.

(Canterbury, since you ask)

always quite liked bournemouth  easily pickup a detached place for 300k or less down there. 

£300 quid mortgage for me 😁

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4 hours ago, Pop321 said:

Numerous comments in all threads that houses are not an investment but is being ‘out of the market’ for so long waiting for a fall treating it exactly like an investment ie effectively ‘shorting the market’?

Not buying a house is not 'shorting the market'. Shorting the market is where you borrow an asset, sell it, wait for the price to move, then buy the asset back and give it back to the person you borrowed it off to close the short.

Thinking about it I suppose I could sell my landlord's house with the intention of buying it back before he wants it back at the end of the tenancy. I'll let you know how I get on.

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Renting with 2 small children. We like the house and the area, no hurry to move for at least a couple more years. When I was younger I treated rentals as rentals, now I treat them as home by buying suitable furniture and optimising the layout etc, furniture is dirt cheap second hand and making active choices like this is good for sanity. I wouldn't be keen to rent another furnished place again, I like the freedom of owning all the furniture and not having to worry about keeping it nice. It's also nice to see the legal situation tipping towards tenants like the fees ban, hopefully S21 will go in this Parliament. I think the grand house price correction will come, could take another 5-10 years though for demographics to fully kick in. If it takes that long so be it, I probably have another 50 years on this planet. I think people will be astonished by how low prices will go when the easy credit is sucked out of the system, I would not be surprised to see house prices at 2x single wages.

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5 minutes ago, Dorkins said:

Renting with 2 small children. We like the house and the area, no hurry to move for at least a couple more years. When I was younger I treated rentals as rentals, now I treat them as home by buying suitable furniture and optimising the layout etc, furniture is dirt cheap second hand and making active choices like this is good for sanity. I wouldn't be keen to rent another furnished place again, I like the freedom of owning all the furniture and not having to worry about keeping it nice. It's also nice to see the legal situation tipping towards tenants like the fees ban, hopefully S21 will go in this Parliament. I think the grand house price correction will come, could take another 5-10 years though for demographics to fully kick in. If it takes that long so be it, I probably have another 50 years on this planet. I think people will be astonished by how low prices will go when the easy credit is sucked out of the system, I would not be surprised to see house prices at 2x single wages. 

I am looking forward to it and hoping I can buy another house outright in cash when that happens

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20 minutes ago, warrior88 said:

I am looking forward to it and hoping I can buy another house outright in cash when that happens

Why would you want more than one house? If it's so you can rent one out, I have a feeling that rents are also going to go through the floor and the generation that spent 20 years stuck in crap private rentals is not going to treat private landlords kindly when it's in power.

Edited by Dorkins

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17 minutes ago, Dorkins said:

Why would you want more than one house? If it's so you can rent one out, I have a feeling that rents are also going to go through the floor and the generation that spent 20 years stuck in crap private rentals is not going to treat private landlords kindly when it's in power. 

I am making a point i.e. prices cant fall that much in general, just because of intrinsic demand.

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As a potential FTB my instinct is to continue to save. I’m up to 25k or 27k including LISA bonus and can see myself moving up North in the next five years.

I will continue to save, and I am hopeful Brexit will lead to some correction although ultimately, I think it will take another decade for boomers to lose their electoral power.

 

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1 hour ago, Dorkins said:

Not buying a house is not 'shorting the market'. Shorting the market is where you borrow an asset, sell it, wait for the price to move, then buy the asset back and give it back to the person you borrowed it off to close the short.

Thinking about it I suppose I could sell my landlord's house with the intention of buying it back before he wants it back at the end of the tenancy. I'll let you know how I get on.

I didn’t mean a direct comparison of shorting.

I guess I meant if you intend to buy before you die...then ‘waiting to buy for many years’ is taking a market position with risk. If you never buy that’s another option and effectively steps out of the market altogether  

What I am saying is if we assume housing isn’t an investment (again in the context of the many times that is stated in threads) then taking any position assuming a rise or fall seems contra to that. 

Don't get me wrong...prices are balmy and some cohorts in particular. New builds are over inflated in our area (one bought last year for £420k and now being sold at £350k against a rising market). Also ‘elephants breath’ and ‘shiny chandeliers’ and ‘log burners’ seem to add £80k to a price around here too.

Would I buy today on the south coast would depend on comparables, my desire to own, the house and I would be wary if prices have continued to rise over the past few years. 

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7 hours ago, Dyson Fury said:

I've been studying mortgage rates recently.  The 10 year fix rates are quite a bit higher than the 5 year, so that is worth looking at closely. Also whatever people think about HTB inflating house prices, on a new-build you are going to pay that inflated price whether you use HTB or not; so if you are eligible for HTB as a new-build FTB do investigate it; it's a free loan which makes you eligible for the lower interest rates available to those with 25% deposit.  And if you can't pay back the HTB loan in 5 years then you only have to ay interest on it at 1.75% and your main lender will still regard you as 75% LTV.

You can't win, but you can still make sure you don't lose.  Good luck.

2.39% versus 1.89%. Works out about £70 a month extra, but for 5 more years of fixed payments. Tricky decision!

You'll see from my posts on the large and multiple drops thread that I'm seeing lots of reductions in asking prices ... feels like i should sit it out until the spring.

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6 hours ago, warrior88 said:

I am making a point i.e. prices cant fall that much in general, just because of intrinsic demand.

The fraction of the population with 2 years of average wages saved in cash is small, and of those who do have such savings there are usually more important things they need the money for than buying a high maintenance liability like a second house.

Like I say, I think people will be astonished by how low the market bottom is going to be, exactly because of thinking like you describe. In the early 90s in former industrial towns in northern England there were people trying to sell you a terraced house in the pub and you could pay for it on a credit card. Arithmetic like that is coming back.

Edited by Dorkins

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6 hours ago, Pop321 said:

I didn’t mean a direct comparison of shorting.

I guess I meant if you intend to buy before you die...then ‘waiting to buy for many years’ is taking a market position with risk. If you never buy that’s another option and effectively steps out of the market altogether  

What I am saying is if we assume housing isn’t an investment (again in the context of the many times that is stated in threads) then taking any position assuming a rise or fall seems contra to that. 

This all seems like estate agent logic to me. If you're out of the market you're out of the market, you have no position and no risk. 'Thinking about buying a house' is not a market position.

I am choosing to hold my assets in asset classes other than property. Seeing every £ of capital as a house buying token waiting for its chance is just another example of property mania.

My paternal grandparents rented from about age 30 until they died and they had secure tenure on a perfectly decent house that was quite similar to the one I live in in terms of size and layout. It was a council house of course.

Edited by Dorkins

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28 minutes ago, Dorkins said:

This all seems like estate agent logic to me. If you're out of the market you're out of the market, you have no position and no risk. 'Thinking about buying a house' is not a market position.

I am choosing to hold my assets in asset classes other than property. Seeing every £ of capital as a house buying token waiting for its chance is just another example of property mania.

My paternal grandparents rented from about age 30 until they died and they had secure tenure on a perfectly decent house that was quite similar to the one I live in in terms of size and layout. It was a council house of course.

I do understand your wider view of property mania in the UK. I am not even nearly suggesting property purchase is a one way bet. I am bearish on this market also agree that many areas we are going to see a well deserved crash. 

Your paternal grandparents did not buy and I get that as an option. 

I didn’t say ‘thinking about buying’ I mean ‘definitely buying’ 

It’s a small point but all I am saying is if someone ‘definitely’ intends to buy at some stage before death then being out of the market (for a decade or more) is in itself taking a market position. This holds some risk that delaying a purchase (10/15/20 years) may not be financially prove to be beneficial. I say a risk not a certainty because it may be beneficial   

Would I buy a home today...unlikely in areas which have risen over the past years.  I imagine the south coast fits that category.

There have been many dips and because property is so illiquid then a FTB can expect to get at least 20% of previous peaks even with just a downturn in sentiment. I have seen 50% paid v’s comparables during 2013....the market never fell that much but a genuine ‘motivated seller’ in a soft market have few options. I would wait for poor sentiment a try get significant discount off comparables in a home which is a bit dated. 

 

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19 hours ago, longgone said:

the food supply chain is laced with something

Linoleic acid (vegetable oils) and refined carbohydrates

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I'm 28, have £15k saved (bugger all) and have no intention of buying unless there are huge falls. Just had a large pay rise, so planning to stuff it all away as savings.

 

I guess we'll see

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4 hours ago, Pop321 said:

I do understand your wider view of property mania in the UK. I am not even nearly suggesting property purchase is a one way bet. I am bearish on this market also agree that many areas we are going to see a well deserved crash. 

Your paternal grandparents did not buy and I get that as an option. 

I didn’t say ‘thinking about buying’ I mean ‘definitely buying’ 

It’s a small point but all I am saying is if someone ‘definitely’ intends to buy at some stage before death then being out of the market (for a decade or more) is in itself taking a market position. This holds some risk that delaying a purchase (10/15/20 years) may not be financially prove to be beneficial. I say a risk not a certainty because it may be beneficial   

Would I buy a home today...unlikely in areas which have risen over the past years.  I imagine the south coast fits that category.

There have been many dips and because property is so illiquid then a FTB can expect to get at least 20% of previous peaks even with just a downturn in sentiment. I have seen 50% paid v’s comparables during 2013....the market never fell that much but a genuine ‘motivated seller’ in a soft market have few options. I would wait for poor sentiment a try get significant discount off comparables in a home which is a bit dated. 

  

What you are saying makes sense.

People in UK are obsessed with house prices and this included people routing for HPC as they want/expect prices to crash.

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2 minutes ago, Locke said:

It induces dementia, so I suppose so

well when dementia sets in i won`t know about the corrupt system we live in anymore and will be a drain on society. sounds like a win to me. 

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I keep switching opinions, other half is of one opinion though. Doesn't help.

Waiting for October to take a decision, right now things are shifting in London for the properties I am following. Hoping for a dead cat bounce. If BoJo goes through it should help instigate fear in the London market

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From my perspective there appears to be a bit of an impasse in the market, many things are not moving.

In the areas where I am looking, the feeling that prices are slipping can almost be felt. A quick browse at the sold prices for some blocks of flats show that recent prices are lower than last year, and in some cases the year before, ie (https://www.rightmove.co.uk/property-for-sale/property-78807131.html)

Many sellers seem to want to deny reality and put their properties on like nothing has happened. I am hopeful that once we get past this month (where it will be too late to move for the new school year) this puts even further downward pressure on things.

 

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  • 224 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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