Right time to buy?

collinsc

Hi Guys

Looking for a bit of general advice. Is it the right time to buy a house? (First time buyer)

I am looking at a house for about 120k. I earn circa 20k a year gross.
I have 10k tied up in a 1 year bond and 5k which i can access.

All advice appreciated!

Thanks

wymondham

Now is definately not the best time to buy as further substantial drops in prices are being widely reported, but it's a personal choice as who can tell where prices will end up?!

Hold fire, save, clear any debts and then you'll be in a good place to buy when things pick up....

mewbie_2

Type "house price crash" into google and do some research.

Next?

collinsc

thank you wymondham

mewbie - next what...

jim83

First and foremost, you can't afford it. The most you can afford, or more accurately the most the banks can afford in the current climate, would be a property "worth" £75k. This is assuming you can use the full £15k you have as a standard 20% deposit, the rest is made up of a mortgage of 3x salary... It is currently possible to borrow between 3.5x and 4x salary, but mortgage providers currently require a larger deposit than £15k, which you don't have.

Secondly, it is not worth it. It used to be the case that renting was "dead money" - you were paying more for your rent than the interest on a mortgage; Now it's the polar opposite - it is considerably more expensive to pay interest on a mortgage than it would be to rent the same property. Buying is now dead money.

Thirdly, it's likely you will lose a lot of money. House prices have peaks and troughs over time. Currently it appears as though we are on a downward slope into a trough. It is not unfeasible that house prices will drop another 25-30% from today before they start to rise again, so a £120k property could well be worth ~£85k (in today's money) in 3 years time. This can lead to sticky situations like negative equity.


Having said all that, there's the possibility that you choose to ignore me and everyone else, buy regardless and somehow make a pile of cash. The people who make the most money in this world form their opinions independently based on their own good reasoning. Occasionally those opinions can be against the flow of general consensus.

brit1234

Its simple, buy now and go into negative equity even if you have a large deposit. Banks have reverted back to lending 3-4 times salary rather than 8-9 times. That alone means prices are going to fall about 50% with already 25% in large parts of the country now.

Wait and save.:exclamati

Chris2685

Unless you can find a desperate seller and buy somewhere dirt cheap

collinsc

thanks everyone

EagerLearner

collinsc I am in the same boat as you - we're 'interested' but still hanging on to see what happens - in the next few months the government will hopefully make a decision on stamp duty also, which will hopefully benefit FTB. as well as any additional price re-balancing...

wymondham

EagerLearner wrote: »

collinsc I am in the same boat as you - we're 'interested' but still hanging on to see what happens - in the next few months the government will hopefully make a decision on stamp duty also, which will hopefully benefit FTB. as well as any additional price re-balancing...

i'm curious, would no stamp duty mean you'd buy, even now ?

Incisor

EagerLearner wrote: »

collinsc I am in the same boat as you - we're 'interested' but still hanging on to see what happens - in the next few months the government will hopefully make a decision on stamp duty also, which will hopefully benefit FTB. as well as any additional price re-balancing...

Lifting Stamp Duty help FTB? I doubt it. ANYTHING helps anyone EXCEPT FTB's. What really needs to happen is for sellers to take on board the fact that prices must be cut to enable FTB's to get on board. All a Stamp Duty cut will do is enable sellers to delay cutting prices for a little bit longer. It is always the case that the first home costs as much as the FTB can afford and a little bit on top.