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Sell or rent in this situation in NI…


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I have been reading some of the topics on this forum to try and figure out the wise thing to do at the moment.Amazed at how close to the money you all were in 2007!

Our family need to move for my partners work abroad for a short time - around one year. We had considered renting in an effort to try and cover our rent abroad and ask for a mortgage holiday but when we had 3 separate estate agents give rental values the amount was not going to be nearly enough to cover rental costs where we’re going and so we thought perhaps we should Sell instead- given that we planned to sell and move in the next 2-3 years anyway and we may end up coming back to a house requiring significant spending to get it back to being in a sellable state. We have only very recently finished a modest renovation. We have out the house on the market and have a number of offers we’d be happy to take which more than cover what we’ve spent and the Costs involved in selling and would likely also cover all our rental costs abroad without loss of capital. so very thankful for that however- my worry is when we return in a years time, will the market be even more unaffordable and will we end up being unable to buy what we need size wise and regret not holding onto our home. We are only selling as we would be aiming to move in a few a years anyway  (1-2) and we don’t fancy moving 3 times rather than twice… 

any advice appreciated.

 

 

 

 

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  • 4 weeks later...

No one has a crystal ball.  However the cost of living crisis and inflation show no signs of improving so it may be better to take what you can get now and be free to choose  where to live when you come back.  You may not even want to come back.

 

I did this and have never regretted it but it's your decision - your money   DYOR.

 

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  • 2 weeks later...
On 15/05/2022 at 13:09, Sellorrent said:

I have been reading some of the topics on this forum to try and figure out the wise thing to do at the moment.Amazed at how close to the money you all were in 2007!

Our family need to move for my partners work abroad for a short time - around one year. We had considered renting in an effort to try and cover our rent abroad and ask for a mortgage holiday but when we had 3 separate estate agents give rental values the amount was not going to be nearly enough to cover rental costs where we’re going and so we thought perhaps we should Sell instead- given that we planned to sell and move in the next 2-3 years anyway and we may end up coming back to a house requiring significant spending to get it back to being in a sellable state. We have only very recently finished a modest renovation. We have out the house on the market and have a number of offers we’d be happy to take which more than cover what we’ve spent and the Costs involved in selling and would likely also cover all our rental costs abroad without loss of capital. so very thankful for that however- my worry is when we return in a years time, will the market be even more unaffordable and will we end up being unable to buy what we need size wise and regret not holding onto our home. We are only selling as we would be aiming to move in a few a years anyway  (1-2) and we don’t fancy moving 3 times rather than twice… 

any advice appreciated.

 

 

 

 

We're looking to move at present & have been looking now for 12 months... Prices were very 'healthy' 12 months ago & now we're seeing a lot of 'kite flyers' so market seems a bit overvalued now & in my opinion resembles 2006 somewhat.

None of us have a Chrystal ball but the fundamentals point to a correction on the horizon but when is anyones guess. We have just decided to sit tight for the time being... Q1/Q2 of 2023, if things haven't bubbled, will hopefully offer some so certainty on price direction. Personally I'm hoping prices dip but we'll see.

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7 hours ago, headmelter said:

We're looking to move at present & have been looking now for 12 months... Prices were very 'healthy' 12 months ago & now we're seeing a lot of 'kite flyers' so market seems a bit overvalued now & in my opinion resembles 2006 somewhat.

None of us have a Chrystal ball but the fundamentals point to a correction on the horizon but when is anyones guess. We have just decided to sit tight for the time being... Q1/Q2 of 2023, if things haven't bubbled, will hopefully offer some so certainty on price direction. Personally I'm hoping prices dip but we'll see.

I think your circumstances are common now. People are sitting out and waiting to see what happens. I think at the back of all minds is what inflation is going to look like this winter. If I was going to buy in the next 12 months I'd definitely go for a long fix. 

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It's hard to know what to do. I think prices are ridiculous at the moment, but some disagree and places are selling.

To my mind this looks like the absolute worst environment possible in terms of ability to support rising house prices - price of energy/food on the rise, mortgage rates on the rise, a recession looming.

On the other hand the lack of inventory is an eye opener; and I do wonder if we could see an extended time period, I'm talking 5+ years, of prices that are a bit ridiculous or even that most people clearly cannot afford, but combined with very low supply which keeps the prices high as desperate people who do not own stretch themselves to get a house - I know of a 45 year old FTB who tried to take out quite a 30 year mortgage recently.

The other aspect is inflation of costs; I don't think it's gonna get cheaper in terms of raw materials and labor costs to renovate a house, so buying a house that is already renovated to a standard you like might have a built in inflation hedge vs a fixer upper.

There does seem to be more demand than ever to live here, will that continue who knows, and in the IT industry anyway wages have gone way up so people in that occupation have more money than ever - remains to be seen whether that's a jobs bubble that could burst.

I don't expect some drop to 2012 prices, but it's not unreasonable at all to expect a drop to say 2018 prices. These £270K 3 bed semi's should be more like £200K IMO and wouldn't be cheap at that.

What I don't really understand are listings like this one; crumbling old small semi's that are going to cost a lot to renovate but already cost a lot:

https://www.propertypal.com/63-martinez-avenue-belfast/762786

I also remember very clearly how far apartments fell during the crash and think they seem especially overpriced:

https://www.propertynews.com/property-for-sale/3-5-the-front-holywood-bt18/property/RBWNRBWN4050/

I'm going on a second viewing of a house next week - modest semi for just under £200K but one that has had a fortune spent on it in renovations over the last decade.

But I won't be making any rushed decisions as I think this winter is going to be an eye opener and by next summer the cost of energy and the cost of borrowing might not support these prices at all.

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5 hours ago, 2buyornot2buy said:

If I was going to buy in the next 12 months I'd definitely go for a long fix. 

Yeah I was chatting to the building society today - they have a 10 year fix at 3.55%.

If I do buy somewhere with a mortgage, I'll be going for a long fix with the idea that I'd have enough to completely pay it off by the end of those 10 years.

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25 minutes ago, JoeDavola said:

Yeah I was chatting to the building society today - they have a 10 year fix at 3.55%.

If I do buy somewhere with a mortgage, I'll be going for a long fix with the idea that I'd have enough to completely pay it off by the end of those 10 years.

Try and be smart with your money too. Savings rates are going up and there are some decent dividends out there also, though nothing to match inflation. 

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7 minutes ago, 2buyornot2buy said:

Try and be smart with your money too. Savings rates are going up and there are some decent dividends out there also, though nothing to match inflation. 

Aye if I do pass on this house I'll shift the money about and get more out of it.

Interesting to see how bad this stock market drop ends up by the end of the financial year i.e. is it a buying opportunity for S&S ISA or catching a falling knife.

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4 minutes ago, JoeDavola said:

Aye if I do pass on this house I'll shift the money about and get more out of it.

Interesting to see how bad this stock market drop ends up by the end of the financial year i.e. is it a buying opportunity for S&S ISA or catching a falling knife.

I'm past the stage of looking at share price. I mostly go for yield. 

There are some notice accounts paying about 2%. Get it moved now, and go slow the conveyance. Or stick it in an instant access paying 1.56. 

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3 hours ago, 2buyornot2buy said:

I'm past the stage of looking at share price. I mostly go for yield. 

There are some notice accounts paying about 2%. Get it moved now, and go slow the conveyance. Or stick it in an instant access paying 1.56. 

Now that's food for thought - if I could get 2% on my savings it would pay almost 4 months of my rent for the year.

And when you take into account that when renting I don't have a rates bill (equiv of another two months rent), or any heating costs (seriously, the apartment is always warm), then waiting out the next year under those conditions might not be a bad idea. Certainly not a time to rush in for fear of 'missing out'.

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10 hours ago, JoeDavola said:

It's hard to know what to do. I think prices are ridiculous at the moment, but some disagree and places are selling.

To my mind this looks like the absolute worst environment possible in terms of ability to support rising house prices - price of energy/food on the rise, mortgage rates on the rise, a recession looming.

On the other hand the lack of inventory is an eye opener; and I do wonder if we could see an extended time period, I'm talking 5+ years, of prices that are a bit ridiculous or even that most people clearly cannot afford, but combined with very low supply which keeps the prices high as desperate people who do not own stretch themselves to get a house - I know of a 45 year old FTB who tried to take out quite a 30 year mortgage recently.

The other aspect is inflation of costs; I don't think it's gonna get cheaper in terms of raw materials and labor costs to renovate a house, so buying a house that is already renovated to a standard you like might have a built in inflation hedge vs a fixer upper.

There does seem to be more demand than ever to live here, will that continue who knows, and in the IT industry anyway wages have gone way up so people in that occupation have more money than ever - remains to be seen whether that's a jobs bubble that could burst.

I don't expect some drop to 2012 prices, but it's not unreasonable at all to expect a drop to say 2018 prices. These £270K 3 bed semi's should be more like £200K IMO and wouldn't be cheap at that.

What I don't really understand are listings like this one; crumbling old small semi's that are going to cost a lot to renovate but already cost a lot:

https://www.propertypal.com/63-martinez-avenue-belfast/762786

I also remember very clearly how far apartments fell during the crash and think they seem especially overpriced:

https://www.propertynews.com/property-for-sale/3-5-the-front-holywood-bt18/property/RBWNRBWN4050/

I'm going on a second viewing of a house next week - modest semi for just under £200K but one that has had a fortune spent on it in renovations over the last decade.

But I won't be making any rushed decisions as I think this winter is going to be an eye opener and by next summer the cost of energy and the cost of borrowing might not support these prices at all.

Inflation & IR's are the key... Everything is financialised now. Everything is priced in 'monthly payments'... tech, furniture & cars etc... I'm also in the mkt for a new car but refuse to pay over the odds using finance, got are the days of 'striking a deal' with cash...

I agree with your opinion on this winter, I'm sitting tight until Spring 2023. I don't trust any of the fiat monopoly currencies nor the banks... I'm old fashioned & still trust the yellow shiney stuff backed up with a speculative amount of silvery stuff. I believe the days of Au & Ag are still in front of us.

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16 hours ago, 2buyornot2buy said:

I think your circumstances are common now. People are sitting out and waiting to see what happens. I think at the back of all minds is what inflation is going to look like this winter. If I was going to buy in the next 12 months I'd definitely go for a long fix. 

If prices dip from current levels to 2018 levels I hope to be able to buy & be mortgage free. 

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13 hours ago, headmelter said:

If prices dip from current levels to 2018 levels I hope to be able to buy & be mortgage free. 

Logic would dictate that they should; but nothing seems to follow any logic these days!

What would that be in percentage terms - about a 20% drop?

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3 hours ago, JoeDavola said:

Logic would dictate that they should; but nothing seems to follow any logic these days!

What would that be in percentage terms - about a 20% drop?

I'm looking in mid Ulster where a 20-25% correction would be close to the mark but not sure about Belfast. Prices in mid Ulster have inflated considerably in the last 12 months... but they're selling. 🤨

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1 hour ago, headmelter said:

I'm looking in mid Ulster where a 20-25% correction would be close to the mark but not sure about Belfast. Prices in mid Ulster have inflated considerably in the last 12 months... but they're selling. 🤨

I've heard Magherafelt is crazy. 

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On 25/06/2022 at 18:50, 2buyornot2buy said:

I've heard Magherafelt is crazy. 

That's the area with up to a 10 mile radius that I'm looking at.... It's gone absolutely bananas over the last 12 months but as I said they're selling... usually between 10-20% above asking... but what goes up will eventually come down especially when they're over valued & we're on the precipice of a potential economic thunderclap...

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9 hours ago, headmelter said:

That's the area with up to a 10 mile radius that I'm looking at.... It's gone absolutely bananas over the last 12 months but as I said they're selling... usually between 10-20% above asking...

Any idea who the demographic is they're selling to? Is it people moving away from the city as they can WFH, and/or people moving over to NI from England?

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3 hours ago, JoeDavola said:

Any idea who the demographic is they're selling to? Is it people moving away from the city as they can WFH, and/or people moving over to NI from England?

A bit of both as far as I can tell but mostly locals... I've been to a few 'open' viewings & they've been busy. Anything decent  seems to go sale agreed 10-20% above asking after about 3 weeks... There seems to be a lot of money about along with fomo... We've bid on 2 but both went to unrealistic levels imo... EA valuations are already pitched high so adding 20% pushes what I'm looking for over £300,000... I'm not that keen to take on another mortgage... I'm hoping asking prices will take a 20% hair cut by summer 2023 but it could well be Summer 2024. 🙄

Edited by headmelter
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9 minutes ago, headmelter said:

A bit of both as far as I can tell but mostly locals... I've been to a few 'open' viewings & they've been busy. Anything decent  seems to go sale agreed 10-20% above asking after about 3 weeks... There seems to be a lot of money about along with fomo... We've bid on 2 but both went to unrealistic levels imo... EA valuations are already pitched high so adding 20% pushes what I'm looking for over £300,000... I'm not that keen to take on another mortgage... I'm hoping asking prices will take a 20% hair cut by summer 2023 but it could well be Summer 2024. 🙄

There are a lot of older people with a lot of money in the bank, talking hundreds of thousands of savings and reduancy paments and inheritence etc...all looking for a home.

And then the prices are further inflated by English selling prices being used to fund NI purchases.

The other thing to consider is that there has been a tech jobs boom and there are people earning far higher wages than they would have done 5 years ago for the same jobs. A couple in tech who are say 30 but are ambitious and have made the right job moves could well be bringing in £120-140K between them and the amount of lending that gets you.

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7 minutes ago, JoeDavola said:

There are a lot of older people with a lot of money in the bank, talking hundreds of thousands of savings and reduancy paments and inheritence etc...all looking for a home.

And then the prices are further inflated by English selling prices being used to fund NI purchases.

The other thing to consider is that there has been a tech jobs boom and there are people earning far higher wages than they would have done 5 years ago for the same jobs. A couple in tech who are say 30 but are ambitious and have made the right job moves could well be bringing in £120-140K between them and the amount of lending that gets you.

I can't complain as I returned from England in 2004 & did he same. My salary is nowhere near £120K now but I didn't have 4 kids back then... Things, especially financial, change as you get older & have a family... I just refuse to over extend myself financially & I'm no longer career orientated at this stage of my life... I'm hoping for some significant IR increases to put the damper on prices as I can't really see another credit crunch occurring any time soon.

3 bed ex-council terraced houses in the town where I currently live ballooned to around 110,000 in 2007 then crashed to £50-60k by 2011. they're currently asking around £100k... 3 bed semis in new developments are asking £197,500, so we're not far off the 'bubble peak' of 2007.

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16 minutes ago, headmelter said:

I can't complain as I returned from England in 2004 & did he same. My salary is nowhere near £120K now but I didn't have 4 kids back then... Things, especially financial, change as you get older & have a family... I just refuse to over extend myself financially & I'm no longer career orientated at this stage of my life... I'm hoping for some significant IR increases to put the damper on prices as I can't really see another credit crunch occurring any time soon.

3 bed ex-council terraced houses in the town where I currently live ballooned to around 110,000 in 2007 then crashed to £50-60k by 2011. they're currently asking around £100k... 3 bed semis in new developments are asking £197,500, so we're not far off the 'bubble peak' of 2007.

Yeah, I was never career oriented so I earn a very modest wage and have to make sure I don't buy something that will end up costing too much to buy/maintain on one wage.

I love renting this flat but I don't want to buy a flat as they're overpriced and don't want to be beholden to ever soaring building maintenance costs. Plus the particular model of flat I rent which is perfect for me has just never come up for sale.

Went for a second viewing of a semi today and the bidding is up another 3 grand from the weekend with more people interested; probably because there's so little in the market.

I actually wonder if the EA's are having problems paying their bills with such low volumes, maybe they get a ton of money from the rental properies they manage.

Yes £200K seems to be the entry point now for a 2.5/3 bed semi in much of the country - I guess when you compare it to the 'bubble peak' of 07 you need to take inflation into account - so according to an inflation calculator £197K in today's money is the equivalent of £145K in 2007 money, so we're some way off the peak (though I still think things are too expensive especially as I don't see energy/fuel prices dropping).

I specifically remember the semi my folks lived in that they'd bought in 1998 for £80K was worth £325K at the peak of the 2007 madness....which is £436K in today's money apparently; things obviously haven't gotten that bad yet but they still feel very very expensive, essentially because wages in general have trailed behind inflation since then.

 

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31 minutes ago, headmelter said:

I can't complain as I returned from England in 2004 & did he same. My salary is nowhere near £120K now but I didn't have 4 kids back then... Things, especially financial, change as you get older & have a family... I just refuse to over extend myself financially & I'm no longer career orientated at this stage of my life... I'm hoping for some significant IR increases to put the damper on prices as I can't really see another credit crunch occurring any time soon.

3 bed ex-council terraced houses in the town where I currently live ballooned to around 110,000 in 2007 then crashed to £50-60k by 2011. they're currently asking around £100k... 3 bed semis in new developments are asking £197,500, so we're not far off the 'bubble peak' of 2007.

Interesting with one of the best educations in UK due to the large number of grammar schools (highest ratio per pupil in the UK and a well kept secret from the Tories) helps to continue the huge exodus to London for work (my 2 nephews and a neice all working in London).  Retiring home to N Ireland is a great way of boosting that retirement pot the only risk is the political impasse and risk of death if you need to use the local NHS as it is so bad.  

My wife is from Newcastle County Down and we have a forest lodge being built in her Mum's large garden where a mobile used to be all set up with water and electrics and heating oil.  The back has a lovely view of the Mourne Mts and 2 rocking chairs await our arrival when we come over.  Total cost to use was 25K for the build and running costs minimal as we rent out in July/Aug which covers the overheads for the rest of the year.  We are selling our home in Austria and my wife is 55 in 2 yrs so the plan is for us both to retire and downsize from our latge detached home in Bournemouth to a 2 bed flat with a balcony and seaview and spend time in both parts of the world.  I can also apply for a EU passport once we have lived there for 3 yrs so we might investigate buying in spain for the winter months to keep heating costs low.

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41 minutes ago, headmelter said:

I can't complain as I returned from England in 2004 & did he same. My salary is nowhere near £120K now but I didn't have 4 kids back then... Things, especially financial, change as you get older & have a family... I just refuse to over extend myself financially & I'm no longer career orientated at this stage of my life... I'm hoping for some significant IR increases to put the damper on prices as I can't really see another credit crunch occurring any time soon.

3 bed ex-council terraced houses in the town where I currently live ballooned to around 110,000 in 2007 then crashed to £50-60k by 2011. they're currently asking around £100k... 3 bed semis in new developments are asking £197,500, so we're not far off the 'bubble peak' of 2007.

I'd add that I'd be happy to stretch to a £300K house, but £300K no longer gets you anything that is in any way a significant step above the bog standard small 3 bed semi.

For example at one point in the last decade it would have been within the realms of possibility for me to afford something like this; but it's obviously completely out of the question at todays prices:

https://www.propertypal.com/12-edgcumbe-view-belmont-belfast/762914

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