To buy or not to buy?

Bluebirds1975

Hi all

Just looking for a little advice.

My wife and I are FTB and have been renting for 5 years. We have a deposit of £21k and went to view a property close to our family/friends.

It is a vacant 4 bed detached which was on the market at £224.995 at the start of the year. It has recently been reduced to £209.995 and the EA has told us the gentleman has lost his wife and moved away from the area so just wants rid as he has had 3 sales fall though due to the chain collapsing

The property is 3 years old with 7 yeas NHBC left. I have checked the postcode for property prices in the past 6 years. He bought the propert as a new build in 2005 for £200.995. Recently 2 new builds have sold for £229.995 and £224.995 (March and February 2008)

The cheapest 3 bed sale listed was £187.000 and no four beds have sold for under £200.000

When viewing the house the EA told us that the lowest he would accept was £200.000. We came away from the viewing and talked in through and phoned the EA with a bid of £190.000

We had a call back from the EA to say he wouldn't go lower than £196.000 as this was the remainder of his morgage.

I stuck to my guns and said £190.000 is our max to which the EA said there is no way he would accept it.

Anyway got home from work yesterday and had a message on my voicemail to ask me to contact the EA as it looks like the vendor may accept our £190.000 offer.

There is one other four bed for sale in the street which we viewed. pretty much the same house although a slightly bigger back garden and up for sale at £249.995

With a 10% deposit this would give us a morgage of £171.000. Our view is to stay there long term so was woundering if at this price its worth proceding or to wait a year or so to see what the market does?

I have taken this info for the last 6 months from http://www.uklocalarea.com/index.php


PropertyType Sales MeanPrice
Detached 19 £219,305
Flat 3 £111,667
Semi 17 £148,707
Terraced 23 £110,752

Cranston_2

Whilst nobody knows the future for sure, some of us here think house prices have a further 25% to fall from current levels.

Bluebirds1975

I agree but if you take the house in the street up for 249.999 and take 25% off that that would make it £187.500 which is still more that the £171.000 morgage we would have

And with the ave house price currently at £219.035 take 25% off that and it would be around £165.000 which is £5k under our morgage.

Thats providing they do fall as much as 25%

mewbie_2

No one knows for sure what the market will do, or when, or in which areas, but the likelihood is of more drops. So you need to balance your life against money. If you can keep renting for a year, chances are it will be the 'best' year in terms of making houses cheaper, so you could save thousands.

However, money, even on a forum like this and me being a bear, is not everything. If you can afford it comfortably, will not be overstretched, have safe jobs, and really really want this house then it may be 'worth' you going for it.

Back in the old days - ie a few years ago - people bought houses to live in, raise kids, maybe die in too. They were homes, not 'investments'. So maybe you should just buy yours as a home, and be happy together.

I have to say though 171k mortgage is absolutely frightening, are you millionaires?

Bluebirds1975

millionaires? not the last time I looked!!

We both have well paid stable jobs and i do agree £171k is quite nerving but we are both in our 30's and want to have our house paid by the time we retire

A few years back we couldn't even get on the property ladder due to high house prices

Lotus-eater

£171k sounds alot to me as well. if one of you loses your job or you have a baby or two, can you still afford it?
See, our first house was a two bed terrace, we knew we could afford it, now we live in a 4 bed semi, but only after many years of paying the mortgage down so we could do it without a huge one.

carolt

Sadly, 171K doesn't sound a lot to me - it sounds outrageously cheap for a 4 bed! Obviously depends on the area.

If I could buy one for that round here, I'd jump at the chance, but it'll take more than 25% falls to do that!

Whether it's a good decision depends on your current needs - it does sound like a good deal, but prices, on the other hand, will probably fall further. Then again, a bird in the hand...

Best of luck!

Bluebirds1975

carolt wrote: »

Sadly, 171K doesn't sound a lot to me - it sounds outrageously cheap for a 4 bed! Obviously depends on the area.

If I could buy one for that round here, I'd jump at the chance, but it'll take more than 25% falls to do that!

Whether it's a good decision depends on your current needs - it does sound like a good deal, but prices, on the other hand, will probably fall further. Then again, a bird in the hand...

Best of luck!

Thats the point I was trying to make. £171k is very cheap for a 4 bed detatched in the area we live. Three bed semis are from £164k-£179k

My only fear if the prices drop 25%. It wouldnt be the end of the world as I think this would only mean us having a very small amount of neg eq. about £5k

carolt

Personally, I think prices could fall by more than 25%. So you need to need to decide how much you like the house, how long you want to stay there, how much your mortgage would be monthly compared to your rent, how little you like living in rented accom., how stable your jobs is, etc etc.

Too many variables for anyone else to answer.

It sounds like you want to buy it, in your heart. So you need to sit down and work out a worst-case scenario to see if you can afford it.