FTB - Are we mad to buy now?

IHS88

I know the Northern Irish market well.

Prices have fallen fast, off at least 20% in the last year alone. It can work to your advantage as you could be in a great position to negotiate. Vendors love fist time buyers, provided you have your mortgage arranged.

Northern Irleland is awash with cheap property at the moment. Ignore the asking price and make an offer, at the price YOU can afford.
Properties worth £140,000 last year can now be picked up for around £90k. Lots of people need to sell and the Northern Irsih tend to have a lot of equity in their property this leaves plenty of room to negotiate.

So dont be afraid to make cheeky offers. Sure, some people will tell you where to go but other will listen. Cheeky offers will protect you from further price falls.

I can understand the rent now, wait and see attitude but its nice to live somewhere without the stress of "the landlord might throw us out in a year".

I'd perhaps lower my expectations on the type of property I could afford. A mortgage payment of around £1100 must mean you are looking at property worth £180,000 plus.

A mortgage of £120,000 will cost you no more than £600 a month.

Good luck!

cmart021

Cheers for the reply.

The vendor has rejected an offer of 185,000 and is holding out for 190,000. We have looked at the finances and we can afford the mortgage payments.

I tried to play the we are moving out if the house does go on the market and we intend to do this, but he still is not moving on it.

House prices have fallen 18% in the last year leaving it at just over 203000.

If they drop 25% a further 7% it would leave the property at 187,500.

Would this be a reasonable last offer?

wymondham

I'm assuming it's just the two of you? - a five bedroomed house is a pretty big entry to the housing market - do you need that size? A smaller house would be more affordable in terms of bills etc and then allow you to jump to a repayment basis straight away??

I have no idea on the market in NI, but now might not be the best time to do this anyway if things are falling as they are here....

Alleycat

Ignoring the other issues for a moment (i.e cost if mortgage over rent etc), if you are in the middle of a fixed term tenancy, you could negotiate further as a property sold tenanted will potentially be worth less (or at least have a smaller market appeal) than a property sold vacant. You may therefore have the ability to bargain the rent down a bit further.

neverdespairgirl

cmart021 wrote: »

The NI market is dropping just a little slower than in mainland. Although prices here have always been a lot lower.

As I understand it, the NI market inflated massively over the past few years, and is now dropping off a cliff. In fact, it's falling faster than the mainland, not more slowly.

The last Nationwide breakdown showed this:

http://www.nationwide.co.uk/hpi/historical/Q2_2008.pdf

Region with weakest annual price growth: Northern Ireland

Even their chief economist couldn't spin the NI figures much:

Northern Ireland continues to show by far the steepest correction in house prices across the UK.

Prices in the Province were down by 18.6% y/y in the second quarter, following a fall of 3.4% y/y in the first quarter. The recent falls come on the back of unusually sharp increases in prices during 2006-7. Within the space of these two years, prices in the Province had grown by 79%.

These increases were clearly not sustainable and left the market in Northern Ireland particularly vulnerable to external shocks such as the financial market downturn that began last August. We are now seeing the consequences of that excess vulnerability. However, even with the last two quarters of very large falls, the price of a typical property in Northern Ireland is still higher than at the end of 2006.

Prices in NI were down 9% in 2 months, and 18% over the year.

I'd suggest buying in NI now is a really bad idea, especially as it's so very much more expensive than renting. Rent somewhere else, and save like mad.

hethmar

Its not the perfect house for you - another will turn up, dont get desperate about buying it.

cmart021

Just an update. Having taken on board all comments we did decide to put an offer in on the house.

We plan to stay here for a long time and start our family here. We are friendly with neighbours etc and would hate to risk moving and hating it, leaving what we have behind.

Anyway now to the mortgage issues. We got an offer for 187,500 accepted. While chatting to the mortgage advisor she said that although my wife was a supply teacher she would be able to talk the lendor around due to the teaching situation in northern ireland.

This was fine and had a mortgage agreed in principal, although I was chatting to another advisor and he said it would not be that easy and that it would only be my income taken into consideration as it is a fixed contract.

This leaves us in a real pickle with the offer in and accepting. Cant get a hold of the original advisor who was so certain.

Im on about 25,000 and my wife makes around 22,500 supply work. Would there be ay way of taking a self cert mortgage with her income being used as additional income for me?

Just trying to think of ways around it or will be looking for another house to rent.

Any help appreciated, rather than comments about us flushing our deposit down the toilet!:cheesy:

cheers

mlz1413

Cmart can I just re-cap the house is not and has not been on the open market. You and wife are discussing price with LL as you donot want to live anywhere else due to liking the neighbours and the neighbourhood?

How long is your rental agreement for?

Your LL is holding out for a high price in a falling market and you may or maynot be able to get the maximum mortgage needed depending on the lenders decision when you commit.

The main point here is that the LL refuses to believe the house is worth less than £190k, would it be worth you agreeing to the house being marketed for a short period to prove 3rd party interest - or not. Is the LL going to sell if he can't get the full asking, if not will he continue to rent it? IMO its the LL long term plan that you need to know, there is no point over stretching yourself if the LL is going to continue to rent house if he doesn't get a high sell price. And if the LL is going to sell at any price then you need to find out what people are prepared to pay and bid that amount only.

Good Luck!

andrewmp

Offer £174,999 take it or leave it, saved yourself stamp duty.

cmart021

mlz1413 wrote: »

Cmart can I just re-cap the house is not and has not been on the open market. You and wife are discussing price with LL as you donot want to live anywhere else due to liking the neighbours and the neighbourhood?

How long is your rental agreement for?

Your LL is holding out for a high price in a falling market and you may or maynot be able to get the maximum mortgage needed depending on the lenders decision when you commit.

The main point here is that the LL refuses to believe the house is worth less than £190k, would it be worth you agreeing to the house being marketed for a short period to prove 3rd party interest - or not. Is the LL going to sell if he can't get the full asking, if not will he continue to rent it? IMO its the LL long term plan that you need to know, there is no point over stretching yourself if the LL is going to continue to rent house if he doesn't get a high sell price. And if the LL is going to sell at any price then you need to find out what people are prepared to pay and bid that amount only.

Good Luck!

Thanks for the reply. No the house has not went on the open market. Yes it is the house we want in a very very nice neighbourhood. I have spoken to the landlord and he has said that he will put the house on the market but its very difficult to find out his long term plans.

The letting agrement is now up as of this month although the estate agent had previously told us that we would be able to continue to rent until it is sold.

To me this is a bigger risk.

1. If the house goes on the market at this price it will almost (I know its really a guessing game) certainly be snapped up due to the location and the difference in asking prices in this house and others in the area.

2. If we do continue to rent this house when it is on the market we are left in a pickle if he does get another buyer it may leave us hunting for a new house at a time which may not suit (e.g. christmas). It would just be a constant worry if we will get a call.

Also, there are very little nice houses for let for the same money in this area, and id be gutted to pay out 800 a month in rent knowing that a mortgage would cost just over 1000.

Andrew if only!:D