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Glen0000
Posts: 446 Forumite
We are currently council tenants. Never been able to afford to buy. I have recently inherited £20k from my grandmother. This now leaves us in the position to be able to think about buying. I currently earn £33k. My wife earns £8k, but am not going to include her in the mortgage calculations as her job is not secure as mine.
Our rent on a 3 bed council terrace is £350 a month. To buy a similar property would cost us £120k. I am not really a financial wiz. What I want to know is on those figures is it worth buying now? My wife is desperate to get out of our council house (pride) and is sick of living in a throwback to the 80’s due to council not updating kitchen and bathroom for years.
It would cost us more per month to buy, I am aware of that. What I want to know is, is it a wise financial choice? There is all this talk of a crash, but prices do not seem to be dropping at all when I look on rightmove. Am very worried that prices will rise more and in 2 years time it will cost us more for the same property. Everyone (especially my Dad) says renting is dead money and we should buy ASAP.
Also is buying a £120k house doable on a £33k salary and £20k saved? Will I get a mortgage?
Our rent on a 3 bed council terrace is £350 a month. To buy a similar property would cost us £120k. I am not really a financial wiz. What I want to know is on those figures is it worth buying now? My wife is desperate to get out of our council house (pride) and is sick of living in a throwback to the 80’s due to council not updating kitchen and bathroom for years.
It would cost us more per month to buy, I am aware of that. What I want to know is, is it a wise financial choice? There is all this talk of a crash, but prices do not seem to be dropping at all when I look on rightmove. Am very worried that prices will rise more and in 2 years time it will cost us more for the same property. Everyone (especially my Dad) says renting is dead money and we should buy ASAP.
Also is buying a £120k house doable on a £33k salary and £20k saved? Will I get a mortgage?
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Comments
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A lot of home owners wouldn't mind exchanging circumstances with you at the moment.
Council house @ £350 a month, and no stress.
You do realise house prices are dropping £350 per week according to many news reports.0 -
No.
House prices are falling, especially where you are.
Sit tight, save hard (add as much to that £20k as you can) and build a big deposit.
Watch those £120k houses fall to £80k over the coming years.
As for you not noticing prices falling in rightmove:
- Use firefox browser (free from http://www.firefox.com )
- Install/launch that then go to http://www.property-bee.com and download/install the free Add In
- Use firefox to go to www.rightmove.co.uk - as you search it will remember the prices the houses were. Next time you search if any have changed you will see what it used to be as well... it keeps a complete history of prices for you
I guarantee you that if you do that now, by this time next week you will be spotting price drops.
If you give us the first part of your postcode we can look and point out some of the price drops already
As for the figures, yes you'd get a mortgage now ... but why would you. Especially as we can prove prices are dropping and show you them.0 -
With a mortgage at 6% you would be paying £500 a month on a £100k mortgage for the interest alone. If you want to pay back the capital then this will be more.
You should be able to get a mortgage provided you have no adverse credit whatsoever.
If I were you I would continue to rent for the time being. Market sentiment is the worse ever in the whole history of the market since records began and prices are unlikely to start shooting up and away anytime soon.
Your Dad is wrong that renting is dead money. You are paying for a service. Whats more dead money, £350 a month to the council or £500 a month to the bank? Buying seems a lot more dead money than renting at the moment[FONT=Arial, Helvetica, sans-serif]Rise like Lions after slumber
In unvanquishable number -
Shake your chains to earth like dew
Which in sleep had fallen on you -
Ye are many - they are few.[/FONT]0 -
PasturesNew wrote: »No.
House prices are falling, especially where you are.
Sit tight, save hard (add as much to that £20k as you can) and build a big deposit.
Watch those £120k houses fall to £80k over the coming years.
As for you not noticing prices falling in rightmove:
- Use firefox browser (free from http://www.firefox.com )
- Install/launch that then go to http://www.property-bee.com and download/install the free Add In
- Use firefox to go to www.rightmove.co.uk - as you search it will remember the prices the houses were. Next time you search if any have changed you will see what it used to be as well... it keeps a complete history of prices for you
I guarantee you that if you do that now, by this time next week you will be spotting price drops.
If you give us the first part of your postcode we can look and point out some of the price drops already
As for the figures, yes you'd get a mortgage now ... but why would you. Especially as we can prove prices are dropping and show you them.
We live in a house very similar to this now, in this area CH1
http://www.rightmove.co.uk/viewdetails-17349460.rsp?pa_n=2&tr_t=buy
I know you say a property like this will be worth £80k in a few years, but I really can't see it. Guess I am just scared of missing the boat yet again!
I want to wait, maybe 2 years, and save. Wife wants out and is not convinced of big drops.0 -
I know you say a property like this will be worth £80k in a few years, but I really can't see it. Guess I am just scared of missing the boat yet again!
I want to wait, maybe 2 years, and save. Wife wants out and is not convinced of big drops.
I guess suggestions such as these will have no impact on house prices whatsoever:
Telegraph
Take a look around at the anecdotal evidence. Has the wife studied economic history. She brighter than Kirstie?Britain could be heading for an "avalanche of redundancies" in the coming months as economic reality finally catches up with the jobs market, a leading expert has warned.0 -
Take a look around at the anecdotal evidence. Has the wife studied economic history. She brighter than Kirstie?
We are just ordinary working class people. When friends have ours have made £100k in 7 years on a 3 bed semi, it is really hard to see how a crash could be allowed to happen. Many people have borrowed on their houses and will not sell for less than they are worth now as they just can't. Not one ex council house has sold on my estate in over a year. People just can't afford to sell for less and won't put the prices down.0 -
It's easy for a poster to say this, but 'pride' isn't a good enough reason to jump into a house purchase right now! Prices certainly won't be going up, IMHO.
Ask yourself how secure is your job? What can you afford repayments if inflation on food is 8% and there's a 35% jump in lecky/gas this year?
Are you OK with DIY? If so, you could attend some house auctions and get a feel what what is on offer as repos etc. and maybe pick up something at 25%-35% discount to EA prices which should cover the likely decline in values generally.
To be honest, don't think about buying into an 'iffy' area because it looks 'cheap'. From 1988-1996, the biggest falls in price were in houses in dodgy estates and those which were ex-Development Corporation and the like.0 -
How long are you planning on living in this HOME you would potentially like to buy?
As a rough estimate, your mortgage interest should be around the same as you'd expect to pay in rent on an almost identical property in the same condition.
i.e. if you're looking at a mortgage for £100k, then you could get a 3 year fixed deal at say 5.8%, which would be paying about £630 a month (£480/month which is interest), taken over a 25 year period. You could borrow about 3x your joint salaries, perhaps a bit more... so £100k is about right for your salary alone.
I do see your wife's frustration, as when it comes to a home, so long as it's affordable, it's not really about the money. Some people find that a very difficult concept to understand. Yes, prices might drop, but if you're not planning on selling, then the selling price isn't an issue.
What matters is that you have a family home that you are all happy in (whether it be council, private rented, or bought), and that you can afford the monthly payments.Should've = Should HAVE (not 'of')
Would've = Would HAVE (not 'of')
No, I am not perfect, but yes I do judge people on their use of basic English language. If you didn't know the above, then learn it! (If English is your second language, then you are forgiven!)0 -
We are just ordinary working class people. When friends have ours have made £100k in 7 years on a 3 bed semi, it is really hard to see how a crash could be allowed to happen. Many people have borrowed on their houses and will not sell for less than they are worth now as they just can't. Not one ex council house has sold on my estate in over a year. People just can't afford to sell for less and won't put the prices down.
No they havent "made" £100k!
They can only "make" £100k if they sell their homes at that price. Then what? Be the richest vagrants on the estate? This whole idea of "making money on my house" is an utter nonsense brain-washed into the national psyche but countless hours of property !!!!!!.[FONT=Arial, Helvetica, sans-serif]Rise like Lions after slumber
In unvanquishable number -
Shake your chains to earth like dew
Which in sleep had fallen on you -
Ye are many - they are few.[/FONT]0 -
GLEN000
We are just ordinary working class people.
it is really hard to see how a crash could be allowed to happen.
This really does prove that at school level people should be taught economics. i despair at the level of financial knowledge at some of the working class..It is nice to see the value of your house going up'' Why ?
Unless you are planning to sell up and not live anywhere, I can;t see the advantage.
If you are planning to upsize the new house will cost more.
If you are planning to downsize your new house will cost more than it should
If you are trying to buy your first house its almost impossible.0
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