What to do next... what would you do?

jimnastics

Ok, my fiance and I are in that position of just not knowing what to do next, I think maybe all the talk of the credit crunch and house prices tumbling has alarmed us a bit.

We currently own a 2 bed flat that we bought as first time buyers in May 06 for £148,500, wth a £22k deposit. It's in a nice area in the South East (Worthing, West Sussex), and we had it valued earlier this year at £165,000. We're now at a point where we're starting to feel like we've outgrown the place, and would like to make the next step up the ladder as it were, particularly with intentions of starting a family soonish. We want to get "the" house if you know, the one we could potentially live in for the next 10+ years and raise our kids in. Putting it bluntly we don't particularly want to be in this flat for the foreseeable future, even though it is very nice for what it is.

I've got all sorts whizzing round my head now though What if we buy a house for £280k then see it's value plummet? I know that the value could rise again considering we could be in there for many years, but it'd frustrate me a hell of a lot knowing we could have saved (and then made) tens of thousands if we'd waited. But then on the otherhand, if we do wait, we could potentially see the value of our flat plummet even below what we paid for it, which wouldn't be great.

Any advice on what we should be looking at doing?

Premier_2

Well you've missed the boat already for selling - the peak was last October.

Do you think you'll accurately predict the bottom of the trough for buying?

Owning a home isn't about buying low and selling high - that's for the stockmarket.


In the meantime, you'll need to live somewhere - would you prefer to lose your money to a landlord or buy a home of your own.

Why not buy a dump and work on it/extend it in your spare time increasing it's value?

mrs_deadline

I would do some research on rightmove to find out what flats like yours are selling for in today's market, and also ask local estate agents how long flats are taking to sell. In lots of places, buyers are thin on the ground, mortgages are hand to come by, and sales are falling through at the last minute over price fears... in the face of this, buying a house at huge expense and possibly losing value is all somewhat theoretical.

jimnastics

Premier wrote: »

In the meantime, you'll need to live somewhere - would you prefer to lose your money to a landlord or buy a home of your own.

Why not buy a dump and work on it/extend it in your spare time increasing it's value?

Well we both agree that we wouldn't want to go back to renting again... not after making that first leap on the ladder a few years back.

Do you think there is still potential in the whole "doing up a dump" idea in this climate? I guess it's a good way of clawing back loss of value suffered by market decline?

jimnastics

mrs_deadline wrote: »

I would do some research on rightmove to find out what flats like yours are selling for in today's market, and also ask local estate agents how long flats are taking to sell. In lots of places, buyers are thin on the ground, mortgages are hand to come by, and sales are falling through at the last minute over price fears... in the face of this, buying a house at huge expense and possibly losing value is all somewhat theoretical.

Yes I did have a look at this and unfortunately it does seem some similar flats in the area are dropping below £160k and further (I have that Property Bee plugin installed which shows some alarming cases!!). One plus point for us though is that we do live in a very popular and sought after group of flats, where no one has sold up (or even attempted to sell) for well over a year (that one going for £160k). I'm hoping this might at least be a string in our bow.

I don't think I'm really getting your last bit about "buying a house at huge expense and possibly losing value is all somewhat theoretical." Could you expand a little on that?

amcluesent

So the ship has sailed of you wanted to sell to rent (STR). The usual advice would be say that you'll get less for your house, but then the one you're buying has fallen too. However, as you bough near the top of the market and there's a glut of new build flats on the market, you're asset could drop furthest and quickest. You should asses how you could manage if prices came off 40%, in which case your flat would be saleable at £90k. You have to be realistic, in any pyramid scheme someone is left when the music stops.

Not being funny, but IMHO England is finished anyhow. Have you both considered emigrating ?

jimnastics

amcluesent wrote: »

You should asses how you could manage if prices came off 40%, in which case your flat would be saleable at £90k. You have to be realistic, in any pyramid scheme someone is left when the music stops.

That's one of the other issues, we're still pretty new to all this and I wouldn't know how to assess how we would manage. Say we did saty in our flat (bought at £148500 and with around £25k "tied up") and it did drop to £90k, can you tell me all the bad news on what that would mean to us in a practical sense?

Premier_2

amcluesent wrote: »

Not being funny, ...

No you're not. :rolleyes:

lostinrates

In all seriousness, if you decide to sit it out you could have a child in a two bed flat. You could have two for a fe years room sharing even if mixed sex while they are tiny. Kids take things as they come, they know no different! It miht even take a while to get pregnant.

mlz1413

surely what you are looking at is affordabililty.

If you move and stay there for 10 years then as long as you can afford the bills that is what matters.

I bought in 2001 and saw my house drop from £35k to £25k over the next 2 years, but it was mine I was happy to stay. 16 years later when I sold it I got substanially more money but it was still only worth first rung of the ladder money.

If your going to be happy to live in a family home and accept that prices will go down and up at different times and accept that you can't always buy and the bottom and sell at the top

jimnastics

lostinrates wrote: »

In all seriousness, if you decide to sit it out you could have a child in a two bed flat. You could have two for a fe years room sharing even if mixed sex while they are tiny. Kids take things as they come, they know no different! It miht even take a while to get pregnant.

Yes we definitely could. Our flat is on the ground floor, has big rooms and with a front door going straight onto the garden path, if there ever was a flat you could raises kids in it'd be this one! But it's not just about that, we both feel that we'd like to move on with everything... get married, have kids, and live in a family house. We're 24 and 26 now, this flat was only ever meant to be a first-rung place for a couple of years. I really think we'd feel pretty deflated year on year if we hung around here. There must be plenty here who can sympathise with that!! I know that if we got a nice 3 bedroom house around here, we could be set for the next 10, 20, 30+ years... I'd love to have that feeling.