Buying First House?.... eeek
Discussion
As those of you who know me will know I am the "arch bear" of the housing market and subscribe to all the doom sayers thesis of a "correction" (ok I may have turned bearish a few years too early...)
Anyway, having just said all that, I've found a place that is the best compromise of anywhere i've seen (space / location / price etc) (not to mention big garage!).
This is a massive dilemma - it is the right stage in my life etc to buy and I can (just about) afford it. I'm not looking for the standard two bed flat in London, so finding the right place is not easy... But would you leap in now as a first time buyer?????
PS - why is life so complicated....!
Anyway, having just said all that, I've found a place that is the best compromise of anywhere i've seen (space / location / price etc) (not to mention big garage!).
This is a massive dilemma - it is the right stage in my life etc to buy and I can (just about) afford it. I'm not looking for the standard two bed flat in London, so finding the right place is not easy... But would you leap in now as a first time buyer?????
PS - why is life so complicated....!
MBH said:
Anyway, having just said all that, I've found a place that is the best compromise of anywhere i've seen (space / location / price etc) (not to mention big garage!).
Get it bought! People really do faff about with houses, its no different to buying a car, or a newspaper and a Mars bar.
I did 5 months ago and haven't look back! Granted I'm financially crippled by the mortgage payments, but the warm feeling of doing it on my own with no help makes it all worth it.
I over-stretched myself to buy somewhere as nice as I possibly could. As such I'm happy to stay put for a long time, so the market can "correct" itself as much as it likes, I'm not bothered!
My advice would be to go for it - in the short term you might lose a bit but long term your money is safer in property than anything else.
Anyway I can't see this correction taking place now. There's talk that interest rates will now drop again, hardly the precursor for a housing market slump!
I over-stretched myself to buy somewhere as nice as I possibly could. As such I'm happy to stay put for a long time, so the market can "correct" itself as much as it likes, I'm not bothered!
My advice would be to go for it - in the short term you might lose a bit but long term your money is safer in property than anything else.
Anyway I can't see this correction taking place now. There's talk that interest rates will now drop again, hardly the precursor for a housing market slump!
_Dobbo_ said:
I did 5 months ago and haven't look back! Granted I'm financially crippled by the mortgage payments, but the warm feeling of doing it on my own with no help makes it all worth it.
I over-stretched myself to buy somewhere as nice as I possibly could. As such I'm happy to stay put for a long time, so the market can "correct" itself as much as it likes, I'm not bothered!
My advice would be to go for it - in the short term you might lose a bit but long term your money is safer in property than anything else.
Anyway I can't see this correction taking place now. There's talk that interest rates will now drop again, hardly the precursor for a housing market slump!
don't want to wait until the rates do drop or you will be faced with rising prices again! get a cheeky offer in and see where it gets you... you might find you get a stonking reduction in the current market 
It won't cost you anything to offer, so work out what you would pay top whack, then offer 10% below and see what happens. Don't piss about with increases of £500 here, and £1000 there, you will annoy the vendor and the estate agent, and reduce your chances of getting it tied up... go up in £5k lumps till you can agree on a price... remember, every £1k will cost you about £7-8 on a mortgage monthly. But get mortgage Advice from a free IFA
Good Luck
My theory is that house prices are pretty much proportional to the interest rate. In other words, the more people can afford to borrow, prices rise to match it.
Interest rates go up or down to try to control the economy. Despite what Labour says, I don't feel that Britain is very healthy in a sustainable way - so IMHO that makes an interest rate rise unlikely. If anything, I think it will go down a bit. And that bodes well for your house value.
Interest rates go up or down to try to control the economy. Despite what Labour says, I don't feel that Britain is very healthy in a sustainable way - so IMHO that makes an interest rate rise unlikely. If anything, I think it will go down a bit. And that bodes well for your house value.
referral fee please minimax, we agreed 50% of prop fee and life didn't we... err do you smoke MBH? 
Agree with what's been said, unless you want a quick profit (bad idea) then the only right time to buy is now.
I bought my place in 2002 when everyone said I was mad as the market was at it's peak and prices could only fall.
My house is about to go on the market for 30% more than I paid in 2002...
I bought my place in 2002 when everyone said I was mad as the market was at it's peak and prices could only fall.
My house is about to go on the market for 30% more than I paid in 2002...
Do it.
Have a mate who was going to buy my old house in 2002 - he is kicking himself now as it is worth £45k more and he can still only afford the same level of mortgage realistically, oh and has spent a lot of his deposit on holidays. (for the love of God holidays!!!! Why not cars??? Mad man).
Wise man once said – there is only so much land, you can’t make any more, unlike cars, holidays, tv’s, etc (okay so you can if you really try but you get the gist!)
MBH said:
But would you leap in now as a first time buyer?????
IMHO the market is beginning to weaken which has been reflected in the fact that there hasn't been an increase in interest rates for the last 2 quarters. I don't anticipate any increase before the election in May and quite possibly there could be a drop by a quarter of a point around Sept to stimulate a slow market before Xmas. There's great deals to be had at the moment too, last month Portman were offering 4.49% and they may better that next month. Speak to a good broker who'll find you the best deal that suits your requirements - it's the best £250 I've invested. You're in a good position if you're a 1st time buyer with a deent deposit to put down. Vendors like to be able to deal with a hot buyer who's got no chain, it makes it a whole lot easier for them to move up the ladder.
Even so, if you do manage to complete on a place you like and the market does drop don't be too dispondent about it. Just make sure you don't stretch your finances too much and you should be ok. Your investment will recoup any losses and increase in value in the medium to long term e.g. around my area in the late 80's a 3 bed semi Lang style home was valued to be worth £160k approx. This then dropped to £130k by 1992. Last year the asking price was minimum £300k, today you'd be able to deal at £285k. It's a familiar pattern.
people often say if the market drops I may be able to save x thousand pounds of off the asking prioce, but don't forget the rent you will pay in the meantime.
I have friends who live in docklands who have been putting off buying for 2 years but in the meantime have spent £35,000 in rent.
Just something to bear in mind.
I have friends who live in docklands who have been putting off buying for 2 years but in the meantime have spent £35,000 in rent.
Just something to bear in mind.
ledger said:
people often say if the market drops I may be able to save x thousand pounds of off the asking prioce, but don't forget the rent you will pay in the meantime.
I have friends who live in docklands who have been putting off buying for 2 years but in the meantime have spent £35,000 in rent.
Just something to bear in mind.
And if they'd bought, how much would they have paid in interest payments (and how much interest lost on their deposit?).
For your first property, make sure you can afford it and even have a little in reserve, it always costs more than you think.
Now you are on the housing ladder, presumably your circumstances will change over the years and you subsequent properties will be bigger and more expensive.
If your property goes up in value over this period, fine you have some equity towards the next one.
If on the other hand house prices fall,,,,,Great!
Say your first property is 1ook and the market falls 20% (unlikely)....if the next house you look to buy is more expensive, you have less money to find to move on up the ladder.
You have to be pretty cute and lucky to work out the housing market in a 1-2 year period, but as a long term investment it has done very well...so in the short term make sure you can afford what you buy then you won't look back.
Now you are on the housing ladder, presumably your circumstances will change over the years and you subsequent properties will be bigger and more expensive.
If your property goes up in value over this period, fine you have some equity towards the next one.
If on the other hand house prices fall,,,,,Great!
Say your first property is 1ook and the market falls 20% (unlikely)....if the next house you look to buy is more expensive, you have less money to find to move on up the ladder.
You have to be pretty cute and lucky to work out the housing market in a 1-2 year period, but as a long term investment it has done very well...so in the short term make sure you can afford what you buy then you won't look back.
Or....say your first house is 100% and all houses for 20% over a 2yr period. After the 2 years you want to buy a 200k house.
If you'd mortgaged for 2 years, you'd now need to find:
20k + 160k = 180k - 5k paid off the mortgage = 175k
If you'd rented (at the same price at the mortgage), you'd need to find
160k - the interest you gained on your deposit.
Net loss = 15k.
It's all swings are roundabouts, and it depends on what you think the market will do. In the long term, prices will increase. Short term, who knows?
If you'd mortgaged for 2 years, you'd now need to find:
20k + 160k = 180k - 5k paid off the mortgage = 175k
If you'd rented (at the same price at the mortgage), you'd need to find
160k - the interest you gained on your deposit.
Net loss = 15k.
It's all swings are roundabouts, and it depends on what you think the market will do. In the long term, prices will increase. Short term, who knows?
clubsport said:
Deejay,,,one of the points I was trying to make is that if you buy somewhere you can afford and make regular payments this can pay dividends with lenders when you want to go for a more expensive house later.
true, establishing payment history is valuable when considering larger loans in future. My point was, it's not necessarily and win-win situation and in some situations, renting is not 'throwing your money away', but is in fact a better option that buying in an uncertain market.
I'm about to move from owning to renting as I believe it's the most sensible thing to do in my situation and others may find the same...
D
_DeeJay_ said:
true, establishing payment history is valuable when considering larger loans in future.
Agreed. Even in these supposedly uncertain times, lenders are currently willing to offer me 4.5 to 5 times my salary with a small deposit... try getting that as a FTB. And that's after just over two years of payments.
_DeeJay_ said:
establishing payment history is valuable when considering larger loans in future.
Not necessarily so, you only need to show 3 months wage slips and bank statements to get a mortgage agreed.
Continued payments of any services (i.e. utilities, mobile phone, gym membership, etc) are sufficient for lenders to approve the loan of funds. At the end of the day the lender still holds the deeds to the property and if there was default of payment there should be sufficient equity/value in the house for them to get their money back (as long as their surveyor has done his homework in the first place).
Alternatively self certified mortgages are available without the disclosure of your accounts but the downside is lenders increase the interest on loans of this type.
>> Edited by AC79xxx on Tuesday 22 February 14:41
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