Buying a property - am I stupid not too?

sm9ai

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.

Unless you got your place very cheaply something is extremely wrong here.

Rents are going down not up. You need some better negotiation skills

Or what Zar said

Wickedkitten

sm9ai wrote:

Unless you got your place very cheaply something is extremely wrong here.

Rents are going down not up. You need some better negotiation skills

Or what Zar said

lol I have yet to see a landlord actually lower the rent after you have moved in.

Zar, like I said already, we are going to be moving into our 2 bed terrace house soon so renting isn't really a problem anymore.

sm9ai

In that case as I said "you need some better negotiation skills"

But if your moving soon then it doesn't really matter.

van_persie

kroo345 wrote:

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 look at the property market from a very objective standpoint; I'm not a first-time buyer but neither am I someone looking to profit from property.
I am old enough to have lived through the past 2 property 'crashes' and am more convinced than ever that there will be another 'correction' in prices. Cheap credit is ending, IRs are certain to go up mid to long term and I feel the best thing for first time buyers to do is simply to wait.

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!

When you say 'renting potential' you mean in terms of demand, yes? Well, consider this: you buy a flat and let it our ALL YEAR with no voids and WITHOUT CONSIDERING CAPITAL GAIN, pull in a yield of around 5%. I'm being generous, here.
Now consider CAPITAL LOSS in the event of a price correction over 4/5 years; a gradual decline in the value of that property, perhaps just 5% per annum. You'd be far better off sticking your deposit in the bank!

The question I'm asking is this: Do you believe there's more capital gain to be had from a market widely accepted as being vastly over-priced and do you believe there will not be a price correction (during the trough of which, the clever money will return to property)? If you believe this, go out and buy-to-let, now. There are many banks willing to lend you money, they've even relaxed their criteria in recent months. Hmm. Wonder why..?

zar

Wickedkitten wrote:

lol I have yet to see a landlord actually lower the rent after you have moved in.

Zar, like I said already, we are going to be moving into our 2 bed terrace house soon so renting isn't really a problem anymore.

Sorry, I hadn't noticed that post.

I don't want to tempt fate but I've never had a rent rise (or fall) - but I've never been in one house over a year before like I have now... hope I don't have to face one soon. :eek:

van_persie

MORPH3US wrote:

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

The question is not merely a case of being in it for the 'long run', it's a matter of timing. Buying 'for the long run' at the market low is the trick - it would save tens of thousands...calling the bottom is somewhat more difficult!
Buying now just doesn't make sense, IMHO.

supersaversarah

Hi,

I'm a bit of a lurker round here, but this thread has actually got me to sign up. For two reasons really....

1. I can completely unerstand where Kroo is coming from. There is a pressure to buy property. Im not saying its right, or that people should do it, but its definately there.

I definately agree with the person who said you should but a house you will be happy living in for the foreseeable future. Anything could happen with the market but if your happy with your home, and happy to stay there, you can just ride it out - for better or worse. If the market was so predictable we'd all be millionaires by now I am sure.

2. My dad helped me make a little spreadsheety type thing. It lists all the usual outgoings etc, so you can see what you need to be earning to buy a house for x amount. Let me know if you want me to email it you. Its nothing sophisticated, but helpful all the same I tihnk.

wibble68_2

Ian_Griffiths wrote:

Put £750pm in to a savings account while you make up your mind.

That'll show you what your money situation looks like when you do get it, plus you'll be in a better position when you do.

This is very good advice in a stagnant market.

Please don't get sucked in to this buying property for an investment thing.

The home you live in cannot be classed as an investment unless you have the ability to cash it in. And for the vast majority of people in this country that's not going to happen.

When people say how much money they've made on their house ask them how they intend to lay their hands on the profit.

Gem_

Kroo - good luck, it's a tough decision.

Personally I would move out. But that's just my thoughts - and in fact what I did. I am also 24 and could not imagine wanting the loss of freedom and space that living with my parents would mean. I have moved cities 3 times in the last 4 years and managed to buy in each one for a lot less than the cost of renting.

The most important piece of advice I have is don't borrow up to your limits!!! Interest rates are likely to go up. If you couldn't afford to pay the mortgage if the rate went up by 2 % then run for the hills .... if you could then you are in a great position.

HTH

claz

At the end of the day the advice i would give to the orignal poster is SAVE SAVE SAVE

my partner and i had to choose between buying and renting as we were given notice by our landlord

we decided to buy because the price of renting a similar property to the one we bought was £50 per month obviously we then pay insurance etc aswell so it works out at £150 per month more expensive (contents insurance has to be paid when renting)

anyway if you can stick it at home for a bit longer then do it set yourself a reasonable target each month until you have saved up a nice deposit and enough to cover any fees and then save up a little more as an emergancy fund

my partner and i did not have much in the way of savings so we struggled when we had to do extra surveys on "the house of our dreams" but it was worth it in the end

good luck let us know what you are thinking of doing, we decided to take the risk and we are glad we did it's a great feeling knowing that a house is yours