Anyone else in the same boat?

Ingsy

Hello, I'm just curious as to if anyone else is in the same boat as me, which is the following:

FTB buyer 4 years ago. Bought for a place to live, rather than an investment. We could afford it at the time, and still can (touch wood!). We were hoping to be able to move up the ladder end of this year / early next as wife & I planned to be in our first home for about 4-5 years, then move up and be able to start a family.

Of course, with recent events we're now stuck with little (or even -ve) equity, making the next step up the ladder a bit more... challening to say the least.

I'm not really moaning, more.... disappointed. We love our flat and so we are not forced to move, but it makes you wonder if it's worth bothering with plans when stuff can happen to mess them up.

Friends of ours who are renting or still at home with parents are loving the drop, but we're not so pleased

So, anyone else in the same, or similar situation?

uiop123uiop123

Yep, bought in Aug 2007 as an asset rather than a place to live (D'oh), lost about £30k due to house price crash but still not in -ve equity as I put down a £31k deposit 'luckily'. Am Gutted!

SavingSteve

Short answer - no...

BUT - I did read somewhere that if you're 'moving up the ladder' then surely you are in a better position?

Let me do an example;

You purchased your property for 200k.
At that time your 'next rung on the ladder' properties were 300k
So you would need to spend an additional 100k to move up.

NOW:
Your place has fallen 20%, so now selling for 160k
Your next property should also have fallen by 20%, so now 240k
In this scenario you only now need to spend an additional 80k, therefore better off now than before.

Brian_Bullocks

Ingsy wrote: »

Hello, I'm just curious as to if anyone else is in the same boat as me, which is the following:

FTB buyer 4 years ago. Bought for a place to live, rather than an investment. We could afford it at the time, and still can (touch wood!). We were hoping to be able to move up the ladder end of this year / early next as wife & I planned to be in our first home for about 4-5 years, then move up and be able to start a family.

Of course, with recent events we're now stuck with little (or even -ve) equity, making the next step up the ladder a bit more... challening to say the least.

I'm not really moaning, more.... disappointed. We love our flat and so we are not forced to move, but it makes you wonder if it's worth bothering with plans when stuff can happen to mess them up.

Friends of ours who are renting or still at home with parents are loving the drop, but we're not so pleased

So, anyone else in the same, or similar situation?

At least you bought 4 years ago, some people who bought for the first time in the summer of 2007 are really in the !!!!!!.

Ingsy

Steve - your example is true, providing you have equity in the property you are selling. Otherwise you have to pay the difference, plus a deposit on a new property.

Brian - is that when the "peak" was. I've got a valuation of a our property from Dec '06 when we re-mortgaged, but I don't know how to use that to work out (very!) roughly what it might be worth now. Presumably it went up slightly going into 2007, then down like a lead balloon since?

domcastro

Ingsy wrote: »

Steve - your example is true, providing you have equity in the property you are selling. Otherwise you have to pay the difference, plus a deposit on a new property.

Brian - is that when the "peak" was. I've got a valuation of a our property from Dec '06 when we re-mortgaged, but I don't know how to use that to work out (very!) roughly what it might be worth now. Presumably it went up slightly going into 2007, then down like a lead balloon since?

We're around early 2005 / late 2004 prices according to the Halifax (not taking inflation, wages etc into account)

QTPie

Hi I am in a similar position (read http://forums.moneysavingexpert.com/showthread.html?t=1453497 if you have the sanity and patience to understand all of the ins and outs). However we DO have good equity (75%) - so that will put a different tint on things...

Can you move with negative equity? You have a deposit from some other source?

We bought our current house just over 5 years ago. It was our second house and I had planned for it to be our house for a LOOONG time. Five years have passed, husband's business is doing very well and we are desperately trying to start a family (already started trying, no luck this past 10 months, but that is probably for another forum.... my advice on that front "don't expect things to work immediately", but am hoping that they do for you ). I have realised that our current house is not the "ideal family home" that I want (some nesting instinct is kicking in... it is lovely house, but..) AND we have the money to comfortably increase our mortgage.

So all we have to do is sell our house and buy... but it is a falling market, brilliant! Ok we may have to sell at 2004 prices, but we can buy at 2004 prices right? Wrong!

We had an offer on our house and got gazundered (see thread I linked to) to 2004 prices. BUT all the homes that we are interested in (basically large, family homes) are being marketed at "late 2007 plus a little extra on top" prices (recession, what recession?!). These prices are not seeming to drop (have been watching closely for the past year): either the properties stick at thse prices or they are rmoved from the market (the buyers are at the top of the ladder, looking to downsize - many are deciding to hang on for 5 years rather than sell in a falling market). We cannot afford to sell at 2004 prices if there is a chance that we can never buy at 2004 prices...

This may be specific to our area (a city where "larger family houses" are in the minority) or it MAY be a wider issue.

Have a look at the property market in your area: what is your house worth, what are the houses that you want to buy worth? If you can afford it and are hapy with the price and it will be a "forever" (or at least a good few years) home, then it is definitely worth considering. We certainly would! I definitely want to move before we have a baby and we will do one way or another: if we can't sell, we will keep it and let it (moving into a more suitable rental property) and will go from there...

Good luck
QT

Ingsy

I did read some of your thread, personally I think you're right to not take the new offer. I think that at some point in the next 6 months, sellers are going to realise exactly what's going on, and prices will come into line with what buyers can afford.

Moving just isn't an option - we got married last October, and while we didn't get into debt at all, it did wipe out a lot of our savings. Going to knuckle down, build savings this year, and then overpay the mortgage like !!!!!!y next year. Maybe in that timeframe the market will have calmed slightly - at whatever level that may be - and we can take it from there.

Good luck with the baby, I'm sure your husband isn't too worried about the lack of success just yet

Ingsy

domcastro wrote: »

We're around early 2005 / late 2004 prices according to the Halifax (not taking inflation, wages etc into account)

Thanks for that, putting that date into the Nationwide HPI gives a drop that wasn't as bad as I expected. Although I'm not quite sure how accurate that is, at least I have a rough idea.

Squish_21

Yup im in the same situation. Bought our flat almost 2 years ago and planned to move up after 2 years with the equity from this place as a deposit.

Fat chance of that now!!:(

Nee to save another LARGE deposit PLUS enough to cover negative equity. On the amount we are currently able to save, we worked out it will take at least 5 years.

By which time we had originally planned to have children, all out the window now tho.

QTPie

Ingsy wrote: »

I did read some of your thread, personally I think you're right to not take the new offer. I think that at some point in the next 6 months, sellers are going to realise exactly what's going on, and prices will come into line with what buyers can afford.

Moving just isn't an option - we got married last October, and while we didn't get into debt at all, it did wipe out a lot of our savings. Going to knuckle down, build savings this year, and then overpay the mortgage like !!!!!!y next year. Maybe in that timeframe the market will have calmed slightly - at whatever level that may be - and we can take it from there.

Good luck with the baby, I'm sure your husband isn't too worried about the lack of success just yet

Good luck to you... Hope everything turns out ok

Actually husband is getting worn out...

QT