Advice Required Please, But or Not To Buy?

manish121

Hi All

My OH and i have a daughter that is about to start school, the area we live in has poor schools (League tables and impression after viewing). We have decided to up sticks and move to an area that has potentially nicer schools. This is the primary reason for us to move.

Our dilemma is should we move now?

We have found a house that needs some modernisation to it, OH more than I have fallen in love with the area and property. This would have been beyond our reach last year. Should we take this as a blessing?

The house was advertised (with the help of property bee ) we found that it was up for
Feb 2008 £725,000
July 2008 £695,000
September 2008 £650,000 (This is when we viewed it)

They have accepted our offer of £550,000

After racking my sums and house prices, I am trying to work out to the best of mine and hopefully your opinions that this is not a bad price. I have come to the conclusion that It looks like I am paying 2004 prices for a house today.

I know that the starting price of £725,000 was over priced in the first place, but I also know that in the height of the boom this house would have sold for at least £675,000 if that is any thing to go by.

I need/ want to move due to the better school, I can wait but that will have a knock on affect on our daughter getting into year 1 and on I guess.

I have a mortgage in place 70% LTV from Abbey on a 2 year tracker 0.94% above base

Assuming that the current house is paying for it self by way of rent what are your thoughts on

a) Moving at this time and more importantly
b) Your views on what i am paying today for the house.

I am ready to push the button for valuation and exchange in the next 2 weeks or so.

I am aware neither of us have a crystal ball but your feedback would be MUCH appreciated

Thank you in advance
Manish

wymondham

General consensus is house prices still have a LONG way to fall. If you've made an offer then you've made your decision already havent you?

sarkin

Why dont you buy a house for 350,000 and put the rest towards private education

mewbie_2

My thoughts are that this is the last place I would come for advice. People will either say yes or no, or something in between, and it means nothing at all because it depends on your personal situation. By all means read the threads and use the links to gauge what is happening to house prices, and from that what is likely to happen - but why base your decision on what a few internet freaks are likely to say?

fwiw - I would say you must be stark staring bonkers to consider buying at any price in this market. Unless of course you are so rich that it doesn't matter, in which case there is no need to ask.

Lotus-eater

mewbie wrote:

but why base your decision on what a few internet freaks are likely to say?

Ahhh, we all love you too.
xx

Thats a large mortgage!

Realy

mewbie wrote: »

My thoughts are that this is the last place I would come for advice. People will either say yes or no, or something in between, and it means nothing at all because it depends on your personal situation. By all means read the threads and use the links to gauge what is happening to house prices, and from that what is likely to happen - but why base your decision on what a few internet freaks are likely to say?
.

I agree with the above.
It has to be your decision if it does not feel right, don’t do it, if it does do it.
As you have put this is more than a financial decision so we are basically irrelevant.
It is a decision you and your OH have to make it.
If you go for it make sure you set your self up that you can hold on the house for at least 12 months with savings and salary protection.

manish121

My mother-in-law was made a widow, she has moved in with us and now require more space.
We considered private education but the problem is it does not allow us to move from where we are now, we need to move because OH and I feel that the area is not the best to raise a child in and would like to move more out of London for a better dare i say it safer life style.
I wanted some thoughts on the prices quoted 725K --> 550K, we made that offer before that last round of major financial turmoil, I am asking because i am trying to rule with my head and not my emotions as you know they can run wild.


Thanks

chewmylegoff

some questions you might want to think about

i) what would it cost to rent a similar house in this area? does renting present a cheaper option? it would be more flexible if you move there and discover that you don't like the area after all.

ii) would moving to this house actually guarantee your child a place at a good school?

iii) you say the mortgage would have been beyond your reach before - does this mean you would be at full stretch if you bought at this price? if so what would happen if one of you lost your job? are either of your jobs (if you both work) recession sensitive? if so could you afford to pay the mortgage for an extended period with one of you out of work?

manish121

chewmylegoff wrote: »

some questions you might want to think about

i) what would it cost to rent a similar house in this area? does renting present a cheaper option? it would be more flexible if you move there and discover that you don't like the area after all.

ii) would moving to this house actually guarantee your child a place at a good school?

iii) you say the mortgage would have been beyond your reach before - does this mean you would be at full stretch if you bought at this price? if so what would happen if one of you lost your job? are either of your jobs (if you both work) recession sensitive? if so could you afford to pay the mortgage for an extended period with one of you out of work?

[FONT=&quot]i) Renting works out slightly more then mortgage at current levels + .5%. We know that area pretty well and would be happy there.

ii) Not guaranteed but we are within the catchment area (we are willing to take the risk)

ii) We would not have bought at 725K or anywhere near that amount as it would have not made sense, way over priced! we have savings that can cover mortgage for 12 months if required.

Should we view the price £550,000 from a high of £725,000 asking price as a blessing or a warning (is the glass half full or empty I guess).

It just that its an emotional and important decision for us right now, one that we will stick to for some time to come.

Thanks
[/FONT]

Pal

Do you have a house to sell before you can relocate?

I agree with previous comments. Our opinions are largely worthless, but for what my worthless opinion is worth, I wouldn't buy now. Now more than ever is the time to rent for a year or so.

mewbie_2

manish121 wrote: »

[FONT=&quot]Should we view the price £550,000 from a high of £725,000 asking price as a blessing or a warning (is the glass half full or empty I guess).[/FONT]

A more traditional answer follows...
Forget what the price was. It means nothing. Look at the current price and the turmoil in the markets which will affect everything - jobs, interest rates, credit availability. Guess the likely price drops still to come. My guess is up to 50% in total now. I know it seems mad, but if anyone had predicted the last weeks events a fortnight ago they would also have seemed mad.

So take your current price, and make a wild guess as to where it will be in six months, a year, five years. Does it matter to you? If not - then buy, if scared - then don't.