FTB advice - House Price Crash or Stagnation???

tomstickland

If you want to buy, can survive a doubling in interest rates and don't mind property possibly losing 20% of it's value then I reckon you should do it.
If you still have doubts then go round to the house a few more times and ask yourself whether you could see yourself living there.

Joe_Bloggs

@lightspeed and all
I was turned down by a lender for the lack of any credit score. Clearly, properly operated mobile phones accounts are a source of building credit history. It used to be that catalogue companies were a step on the credit ladder for those without any history. Times move on.
You may feel occasionally panicky about money once you have spent your nest egg. Stick with this site for, 'I know what it feels like advice' and the best available options. Don't rush into additional home improvement debt and consumer spending fervour trying to make the 'instant perfect home'. I know you won't but we get 4 x guests to every forum member so I felt a duty to mention it.
J_B.

tomstickland

Good point that - like all good MSE activity, it's about planning for the long term. I've just bought my place, but I'm going to take my time kitting it out. Spend the money as I earn it.

libitina_2

tomstickland wrote:

I'm not having to deal with some slackarsed landlord and I've got my own home (on paper).

Good luck in your new home, but remember, instead of renting from a landlord who was responsible for the upkeep of the property, you are now renting from your mortgage provider, and the responsibility for the upkeep of the property is now yours

brasso

It's a bit of a cliché, lightspeed, but I'll say it anyway -- property (like the stock market) is a long term investment. Let's suppose that there was a correction next year. So what?!

We may have a year or two of discomfort then values would pick up again. Over the course of your 25 year mortgage you'll see a variety of ups and downs. Apart from the first dip perhaps, you'll almost certainly have enough equity in the house to ride out future glomy spells.

And what if my house dropped 10% in value? All this would mean is that the house I want to buy is also 10% cheaper than it would have been, so how much should it really matter to me?

The other danger of course is interest rates. From what you say you seem to have a reasonable amount of insulation against rate rises, I find it hard to imagine that our leaders would allow colossal rises to occur. The chaos would be unthinkable. Maybe I'm complacent, and I do like to take the odd risk it's true, but I'm still alive and reasonably financially happy having had that attitude all my life.

Ultimately, I think we tend to overstate the financial implications of property ownership. Why not think of it in terms of building your own 'nest' and being able to create the sort of habitat that best suits you? Get excited about having your own place and garden or whatever, and let the finances look after themselves.

As John Lennon said, "life is what happens while you're busy making other plans".

Money is important, but it's not worth worrying yourself silly about.

Enjoy your new home!

tomstickland

libitina wrote:

Good luck in your new home, but remember, instead of renting from a landlord who was responsible for the upkeep of the property, you are now renting from your mortgage provider, and the responsibility for the upkeep of the property is now yours

Which is the way I like it. I can now make my own decisions as to how much I'm prepared to spend on an item, how important it is to me and when/how I want it done.
You've written that as if I should somehow be shocked at my responsibility, or maybe I didn't realise this in the first place.

Ultimately, I think we tend to overstate the financial implications of property ownership.

I've got a financial spreadsheet and I couldn't face the depression of subtracting my mortgage debt from my daily total, so I've come up with a fix to make me feel better. I'm not including mortgage debt in my spreadsheet. Instead I'm hiving it off to another spreadsheet where I'll regard the debt as being balanced out by the value of the property.

BobProperty

Joe_Bloggs wrote:

...I am lucky to witness the slowest building of a huge sweeping block of flats in history. Looks like the architect was influenced by the 70s Moss Side council flat movement in the scale and design. I think the builders have lost the will to carry on.

Where? Which flats do you mean? The soul-less Moss Side tower blocks or the Hulme Crescents (the ones no one crossed the centre of :eek: )

meanmachine_2

brasso wrote:

And what if my house dropped 10% in value? All this would mean is that the house I want to buy is also 10% cheaper than it would have been, so how much should it really matter to me?

Quite right.

If only all homeowners were as smart. Sadly, when they see an Express headline saying "house prices booming" they stupidly think it means they're richer.

Then, they moan when they find they have to pay 3% to the treasury and X% more for the next rung up.

However, this talk of "leaders" not wanting to put interest rates up points to an astonishing naivety. I'm sure "leaders" didn't want to mess up in Iraq, or the home office, or lose badly in the local elections.

The fact is politicians have little power over global shifts in the money system. ALL countries in the west have enjoyed abnormally low interest rates and low inflation. It's nothing to do with Gordon Brown or anybody. If it WAS in the politcians' power, you can be sure they'd have screwed up by now.

Think about that.

brasso

meanmachine wrote:

However, this talk of "leaders" not wanting to put interest rates up points to an astonishing naivety.

Of course global economic shifts are beyond the control of one party in one country but a deterioration can be managed well and can be managed badly. There are ways of resisting a total collapse, and I'm damn sure the government would find them, regardless of your obvious scepticism. Let's not get into a row about the performance of the government

I've no doubt that things will get worse than they are at the moment but I remain convinced that there will be no cataclysmic collapse.

Yes, perhaps I am being complacent, but we'll just have to wait and see who is right.

Joe_Bloggs

@Bobproperty
The building is a cresent. It has no facade and just spaces for windows. It is probably six months to a year behind for occupation. You rarely see any builders working on it. My observations could be just ignorance or the time when I see the building. The project is being built by a non charitable housing association. Good luck to them as these are all supposed to be flats for key workers and shared ownership buyers in Tooting.

@tomstickland and all
It is difficult to bear the thought of a mortgage total after you have had savings. What makes it easier is if you can see the total going down over time. I make my mortgage my modest mortgage overpayments from hard earned savings. I could claim mortgage overpayments back so it is a kind of tax free savings, while I keep the overpayments in the mortgage.

I stretched my self to the limit in trying to fill a mini-cash ISA last tax year.
In the end I got an interest free season ticket loan for a ticket I had purchased the month before with an Egg Money card. I invested my savings buffer in the ISA to make the total allowance and felt miserable until I gradually built up modest savings totals again.

I've just got a Sainsburys 0% 12 month purchase card. I put equal amounts of total spent into savings accounts. I will try to pay council tax this way too. The interest on the savings account balance will be mine.
J_B.