Buying a property - am I stupid not too?

kroo345

Van Persie - you mention the state of the propert market. Do you reckon the situation could actually improve in the future for first time buyers?

I've looked at my local market enough to understand which flats might have renting potential, which are in up-and-coming areas, and which are in high end areas where flats are bought up by rich students parents!

Doozergirl

meanmachine wrote:

The OP doesn't even have rent to pay and yet people on here are advising him to buy - WITHOUT A DEPOSIT SAVED. Sheesh.

:doh: Missed that bit. Most important point, third line down, no capital letter in sight.

I agree entirely, if you are at home and working you have no excuse not to save for a deposit before buying. The point made by Ian Griffiths about saving the amount you expect to pay in mortgage each month is the most sensible option for the OP right now.

I'll also reiterate that investing in property is not the most sensible, nor obvious thing to do. Once everyone's talking about it, it's over. There's no massive gains to be had, buy for a home, nothing else right now.

davilown

Doozergirl wrote:

:doh: Missed that bit. Most important point, third line down, no capital letter in sight.

I agree entirely, if you are at home and working you have no excuse not to save for a deposit before buying. The point made by Ian Griffiths about saving the amount you expect to pay in mortgage each month is the most sensible option for the OP right now.

I'll also reiterate that investing in property is not the most sensible, nor obvious thing to do. Once everyone's talking about it, it's over. There's no massive gains to be had, buy for a home, nothing else right now.

Do you think waiting three years before buying is a good idea then?
:beer: monster

zar

I hope the situation will improve for FTBs. I'm not sure what will happen, as I've heard good arguments for both sides and I'm not an economist. And noone can be certain about the future! If you want to hear the other side of the story to that normally presented in the media (where rising house prices are universal Good News :rolleyes: ) have a look at housepricecrash.co.uk - there are articles and a forum not quite as friendly as this one but interesting to read nonetheless. The thing is to make your own, informed, mind up, and not be persuaded to buy (or not) by peer pressure.

Some thoughts of mine, which you are welcome to ignore if they don't make sense in your life:
-I'm 24 too and have rented some really lovely houses that we could never have bought at our current salary levels. (e.g. atm instead of a small 1 bed flat,a 2 bed house with big garden) - even though I'd love my own house one day, I'm personally not willing to sacrifice my standards of living just at the moment.
-Renting while you are young allows you to try different styles of houses out and see what's important to you and also forces you to be flexible - I'm hoping this will help me if I buy one day! It also lets you move around the country with jobs without all the anxiety and cost of selling. (There are angsts with renting too of course!)
-You aren't so tempted to take out more loans when you get your mortgage to buy lots of new stuff for your house - you can rent furnished or part-furnished or are happier to have second-hand furniture in an unfurnished property as you are not trying to match your furniture with your decoration IYSWIM
-Perhaps your single status will change - renting would allow you to be flexible to move nearer to/in with your partner one day
-Assuming your board to your parents is less than you'd be paying to rent somwhere you can save the difference now for a deposit for a house in the future - agree with others that this is important.

Doozergirl

davilown wrote:

Do you think waiting three years before buying is a good idea then?
:beer: monster

:beer: monster,

I think that people should do what is right for them. I think most people that ask advice on buying here are not serial house-movers like me and are looking at staying put for a little while. If you have a medium term plan to be in the house you buy, don't borrow too much and can weather out the storms, you will be left with a great asset at the end of 25 years. The sooner you start, the sooner you pay it off, but a little bit of hard saving initially helps greatly and gets you into the habit of taking responsibility for your personal finances.

I'm lucky. We started 7 years ago with a 10% deposit of £5000 on a London flat. How we wish we'd kept that flat. If we knew then what we know now!

sm9ai

Kroo345,

Calculate the full cost and see if you can afford it. Include food & bills in this as well which will probably be approximatly £200+ a month.

As things stand in the current housing market the stock market is a far far far etc. better investment, making over 20% in the last year! Yet the housing market made approx 5% (although possible lost money depending upon who you speak to). Obviously stocks could crash, but so could the housing market (Which probably seems more likely at the moment). Also mortgage repayments are effected by interest rates which also seem likely to raise over the next few years.

Its a tough decision, and the over the next few years if things go wrong, which depending upon who you speak could happen, you could very easily be bankrupt.

Its a very tough decision and needs a lot of thought and research.

Wickedkitten

sm9ai wrote:

Also mortgage repayments are effected by interest rates which also seem likely to raise over the next few years.

Hell, our rent payments have already seen a 5% increase since we moved in here in February of 2004, and it's looking to have another 5% increase in 2 months.

gingin_2

Hi Kroo345,

If you were to buy and thinking of renting it out if in the future then just make sure that the rental income would cover the cost of the mortgage before you buy. The house we live in and many landlords in our area are having to make up the mortgage shortfall each month, our landlord is paying an extra £250 per month just to cover the interest on his mortgage.

MORPH3US

meanmachine wrote:

You're not spending a penny on rent and you think somehow it's "dead money".

Although I agree with what you are saying, they never mentioned if they are paying any keep to their parents. OP, can you confirm if you are paying anything at the moment to live at home!??!

In your situation I would say, stay at home as long as you can, (offer to pay some keep if you aren't already if that will keep them happy) and save like you've never saved before until you have enough for a deposit (and all the associated fees don't forget) and only then should you consider buying a house.

When you have the money ready, sit down and have a real think about where you see yourself living for the next 5 years and if you think you can commit to that then think about buying.

If you are thinking of buying a house as an investment, think again. In the long term (IMO) houses will always go up, but there could be a crash in between times. If you are in for the long run then you'll be ok but short term its a big risk!

M

zar

Wickedkitten wrote:

Hell, our rent payments have already seen a 5% increase since we moved in here in February of 2004, and it's looking to have another 5% increase in 2 months.

Have you looked at what other properties in your area are charging for rent to see if this is reasonable? Maybe you could negotiate - the hassle for the landlord of finding another tenant and void periods would make them want to keep you as a tenant. The rent you pay should be determined by the local rental market rather than your landlord's mortgage rate - from what I've read for certain types of properties e.g. flats there's so much competition it's driving rents down rather than up. 5% a year might not sound like much, but its above inflation and wage inflation so it seems a bit much to me?