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  • FIRST POST
    • greengirl89
    • By greengirl89 19th May 17, 6:46 PM
    • 2Posts
    • 0Thanks
    greengirl89
    Should I buy?
    • #1
    • 19th May 17, 6:46 PM
    Should I buy? 19th May 17 at 6:46 PM
    Hi

    My partner and I have a joint income of around 60k with 30k savings, and I'm expecting to inherit 40k shortly so we'll have 70k savings, with no debt aside from undergrad student loans. Neither of us are expecting a substantial pay rise anytime soon. Circumstances mean we need to be within 1.5 hours of Central London for the next 2 years. We're in our late twenties and want to have children in a few years time, though not just yet - so for now we just need a 1-bed but a 2-bed seems more sensible so we don't need to move again too soon.

    We are happy with the flat we rent, but I'm worried about 1) having all that cash in the bank not earning much interest and 2) property prices increasing so much that if we wait a couple of years we'll miss our chance.

    Does anyone have any general thoughts or things we might think about? I keep trying to research options but it's just so confusing.

    Thanks
    G
Page 1
    • Crashy Time
    • By Crashy Time 19th May 17, 6:52 PM
    • 4,012 Posts
    • 1,936 Thanks
    Crashy Time
    • #2
    • 19th May 17, 6:52 PM
    • #2
    • 19th May 17, 6:52 PM
    Keep an eye on how public and political sentiment has changed towards property, and don`t blow your savings in a housing bubble, the PTB are doing everything bar saying outright that they want a crash (They are hoping to use Brexit as a smokescreen) Politically, and more importantly for the banks, a house price correction makes a lot of sense.


    http://www.telegraph.co.uk/property/house-prices/tory-manifesto-proposes-mapping-owns-land-uk-first-time/
    • Crashy Time
    • By Crashy Time 19th May 17, 7:09 PM
    • 4,012 Posts
    • 1,936 Thanks
    Crashy Time
    • #3
    • 19th May 17, 7:09 PM
    • #3
    • 19th May 17, 7:09 PM
    The cues from the MSM keep coming, forget the LLL years, HPI is no longer considered a good thing, they are dropping hints all over the place about what needs to happen now....


    http://www.itv.com/news/2017-05-18/amber-rudd-caught-out-over-constituency-house-prices/
    • conqueror01
    • By conqueror01 19th May 17, 8:48 PM
    • 24 Posts
    • 3 Thanks
    conqueror01
    • #4
    • 19th May 17, 8:48 PM
    • #4
    • 19th May 17, 8:48 PM
    Its only if you think you will move geographically in the nearish future you shouldn't. As otherwise you will ride out any peaks and troughs and not be paying rent (someone else's mortgage). Being on the ladder is better than not being on the ladder.
    • Cakeguts
    • By Cakeguts 19th May 17, 9:05 PM
    • 2,276 Posts
    • 2,871 Thanks
    Cakeguts
    • #5
    • 19th May 17, 9:05 PM
    • #5
    • 19th May 17, 9:05 PM
    What I would suggest is to keep saving for the next couple of years with the view to moving jobs to a cheaper area of the country in order to buy a family home. You will probably earn less but your savings will go much further towards the cost of the house which means that you can have the same lifestyle but earn less and afford a much better property.
    • Crashy Time
    • By Crashy Time 19th May 17, 9:30 PM
    • 4,012 Posts
    • 1,936 Thanks
    Crashy Time
    • #6
    • 19th May 17, 9:30 PM
    • #6
    • 19th May 17, 9:30 PM
    Its only if you think you will move geographically in the nearish future you shouldn't. As otherwise you will ride out any peaks and troughs and not be paying rent (someone else's mortgage). Being on the ladder is better than not being on the ladder.
    Originally posted by conqueror01

    It hasn`t been a "ladder" for some time. Functioning ladders don`t need to be "propped up", and who in their right mind would jump on a ladder that isn`t working properly and needs to be "propped up"?
    • conqueror01
    • By conqueror01 19th May 17, 9:35 PM
    • 24 Posts
    • 3 Thanks
    conqueror01
    • #7
    • 19th May 17, 9:35 PM
    • #7
    • 19th May 17, 9:35 PM
    It hasn`t been a "ladder" for some time. Functioning ladders don`t need to be "propped up", and who in their right mind would jump on a ladder that isn`t working properly and needs to be "propped up"?
    Originally posted by Crashy Time
    Yeah I agree things aren't great in many areas...

    To be paying a mortgage is better than to be paying rent though...
    • greengirl89
    • By greengirl89 19th May 17, 9:39 PM
    • 2 Posts
    • 0 Thanks
    greengirl89
    • #8
    • 19th May 17, 9:39 PM
    • #8
    • 19th May 17, 9:39 PM
    Yes - we are paying 14,000 a year rent

    I think a key question that would be useful to get thoughts on is how long you should realistically envisage staying in a property for before selling up - e.g. if you know you may want to sell up and move on in 2 years is that too short? 4 years? 6 years? I guess it depends how much the property value has changed, but is there a rule of thumb?
    • Crashy Time
    • By Crashy Time 19th May 17, 9:48 PM
    • 4,012 Posts
    • 1,936 Thanks
    Crashy Time
    • #9
    • 19th May 17, 9:48 PM
    • #9
    • 19th May 17, 9:48 PM
    Yeah I agree things aren't great in many areas...

    To be paying a mortgage is better than to be paying rent though...
    Originally posted by conqueror01

    In any circumstances, at any purchase price? I would beg to differ there, sorry.
    • note3
    • By note3 19th May 17, 10:21 PM
    • 259 Posts
    • 402 Thanks
    note3
    Having myself been stuck in a house that was too small and a bad mortgage deal for the best part of 7 years due to the last recession, I would now advise people plan for a house for the next 10 years. That should generally give enough time to ride out a crash
    • hazyjo
    • By hazyjo 20th May 17, 1:09 AM
    • 8,971 Posts
    • 11,185 Thanks
    hazyjo
    Having myself been stuck in a house that was too small and a bad mortgage deal for the best part of 7 years due to the last recession, I would now advise people plan for a house for the next 10 years. That should generally give enough time to ride out a crash
    Originally posted by note3
    Seven years? Blimey! Mine's nearly doubled in four. Traditionally, house prices used to double every ten years. You have been very unlucky!

    Hoping to move this year - will be my 8th move in roughly 25 years. Can't imagine only having moved twice in that time!

    Mortgage deals are very good at the moment. If people buy and overpay, they really should be able to avoid the problems you've incurred.

    Jx
    2017 wins: Opera tickets; film preview; lipstick; Ideal Home Show tickets + afternoon tea & bottle of Champagne; 2 cases of NKD; notebook; bath rack; book; film Premiere; Broadchurch DVDs
    • Tiners
    • By Tiners 20th May 17, 7:24 AM
    • 82 Posts
    • 90 Thanks
    Tiners
    Seven years? Blimey! Mine's nearly doubled in four. Traditionally, house prices used to double every ten years. You have been very unlucky!

    Hoping to move this year - will be my 8th move in roughly 25 years. Can't imagine only having moved twice in that time!

    Mortgage deals are very good at the moment. If people buy and overpay, they really should be able to avoid the problems you've incurred.

    Jx
    Originally posted by hazyjo
    Not very unlucky at all really, there are many parts of the UK that have seen only modest house price inflation post 2008 and certainly haven't seen values double.
    • juniordoc
    • By juniordoc 20th May 17, 8:50 AM
    • 88 Posts
    • 52 Thanks
    juniordoc
    If you're only going to stay 2 years or less, it doesn't make sense to buy, you may not make back the money you spend in fees.
    If you are struggling to earn any interest on your savings you could start overpaying your student loan if you are one of those people who will pay it all off before it's wiped.
    • Planet Switzerland
    • By Planet Switzerland 21st May 17, 1:16 AM
    • 94 Posts
    • 60 Thanks
    Planet Switzerland
    Yes - we are paying 14,000 a year rent

    I think a key question that would be useful to get thoughts on is how long you should realistically envisage staying in a property for before selling up - e.g. if you know you may want to sell up and move on in 2 years is that too short? 4 years? 6 years? I guess it depends how much the property value has changed, but is there a rule of thumb?
    Originally posted by greengirl89


    It does depend on how the property value has changed, but also how much capital you've paid off versus costs of home ownership such as moving costs or costs for repairs.
    • kilby_007
    • By kilby_007 21st May 17, 1:52 AM
    • 700 Posts
    • 437 Thanks
    kilby_007
    Goodness me there's some silly statements on here!

    Unlucky because someone's house price hasn't doubled over the last 10 years?
    - No, house prices haven't doubled in 10 years because wages have gone down in real terms! The system is broken and it's the very fact that prices boomed for decades whilst wages didn't even track inflation for large parts of it that we're now in this mess, where half the amount of young people (aged 20-30) are able to buy when compared to the last generation 20 years ago!

    Better to be on the ladder than off it?
    - Not if the ladder is about to fall over!
    - Not if you're submitting to a 25 year mortgage, maxing out at 4.5x your salary with a 95% LTV mortgage on a trendy wooden shed in Peckham!

    Better to be paying a mortgage than renting?
    - Not if that mortgage lands you in negative equity in a year's time!

    If you're going to move on in a couple of years then the moving fees (stamp duty, solicitors, mortgage fee, removal costs) PLUS the reduced value of your property relative to what you paid for it, could easily set you back more than the equivalent rent. This isn't some wild assumption by the way - it's well known that house prices are now falling and the writing has been on the wall for some time.
    Last edited by kilby_007; 21-05-2017 at 1:54 AM.
    • MobileSaver
    • By MobileSaver 21st May 17, 6:30 AM
    • 1,149 Posts
    • 1,580 Thanks
    MobileSaver
    Goodness me there's some silly statements on here!

    This isn't some wild assumption by the way - it's well known that house prices are now falling and the writing has been on the wall for some time.
    Originally posted by kilby_007
    And yet house prices have gone up in your area (Hull) since you sold to rent in March 2016?

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    • mysterymurdoch
    • By mysterymurdoch 21st May 17, 7:03 AM
    • 86 Posts
    • 70 Thanks
    mysterymurdoch
    Kilby why do you just blurt out statements like that as if they're fact when they actually aren't true? It's clumsy.
    • kilby_007
    • By kilby_007 21st May 17, 10:11 AM
    • 700 Posts
    • 437 Thanks
    kilby_007
    And yet house prices have gone up in your area (Hull) since you sold to rent in March 2016?
    Originally posted by MobileSaver
    Yes they have thanks Stalky McStalkerson, but nationally (on average) house prices have fallen for 3 consecutive months. Does nobody read the various reports out there? Land registry, Halifax, nationwide - all stating pretty significant falls...
    Last edited by kilby_007; 21-05-2017 at 10:17 AM.
    • kilby_007
    • By kilby_007 21st May 17, 10:13 AM
    • 700 Posts
    • 437 Thanks
    kilby_007
    Kilby why do you just blurt out statements like that as if they're fact when they actually aren't true? It's clumsy.
    Originally posted by mysterymurdoch
    It's a statement of fact. Have you seen the statistics or do you have your head in the sand?
    • MobileSaver
    • By MobileSaver 21st May 17, 10:31 AM
    • 1,149 Posts
    • 1,580 Thanks
    MobileSaver
    nationally (on average) house prices have fallen for 3 consecutive months. Does nobody read the various reports out there? Land registry ... - all stating pretty significant falls...
    Originally posted by kilby_007
    Why are you completely making stuff up? Talk about "alternative facts!"

    The January data shows an annual price increase of 6.2% which takes the average property value in the UK to 218,255. Monthly house prices have risen by 0.8% since December 2016.
    by Land Registry
    The February data shows an annual price increase of 5.8% which takes the average property value in the UK to 217,502. Monthly house prices have risen by 0.6% since January 2017.
    by Land Registry
    The March data shows an annual price increase of 4.1% which takes the average property value in the UK to 215,847. Monthly house prices have fallen by 0.6% since February 2017.
    by Land Registry
    Where are the significant falls?!?!?

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