FTB advice - House Price Crash or Stagnation???

libitina_2

tomstickland wrote:

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.

Did I?
I meant it as in you don't 'own' the property yet. The mortgage provider does. This is not a personal dig btw, just a general one...Actual home 'owners' a rarer than we think, the majority are in the same situation as you.

BobProperty

Joe_Bloggs wrote:

@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.

If anyone is interested in what the Hulme Crescents were like:
What they looked like: http://www.manchester.gov.uk/libraries/lsuimage/streetview/rolls.htm
Why it didn't work: http://www.jrf.org.uk/KNOWLEDGE/FINDINGS/housing/H5.asp
Rolls Cresent was named after the "Rolls" of Rolls Royce fame. There was a "Royce Crescent" too I think. The two met and started up in Hulme.
The story I know about the crescents came from someone I knew 30 ish years ago. As a student they studied the crescents for Architectural and Demographic reasons, and he told me two scarey things. One, no one walked across the middle of "horseshoe" shape as you felt that 400 pairs of eyes were watching you. Two, it was the only place he had ever seen where someone had blown a door off its hinges with a shotgun.

Now - who on here ever went to the Aaben?

Ian_W

libitina wrote:

I meant it as in you don't 'own' the property yet. The mortgage provider does. This is not a personal dig btw, just a general one...Actual home 'owners' a rarer than we think, the majority are in the same situation as you.

I always find "the lender owns it not you" or "you're only renting off the bank" quite perverse, as well as highly inaccurate.

The vast majority of purchasers put down a deposit and the mortgage is renting the money to buy the rest of the property. If the property increases in value you get to keep the whole of that gain and even if it doesn't you still increase your stake in the property by paying off the mortgage. The renter of the money can, of course, seek to get their money back by selling the property if, but only if, you fail to keep up the repayments. But they certainly can't decide to turf you out for other reasons, like their investment priorities have changed so they now want to sell the property, it isn't theirs to sell.

As a genuine "home owner" it is a long jouney, but as the great man once said - they all begin with a single step. If you're not inclined or it's not the right time to take that step, fair enough, it's your choice and not compulsary. It does, however, sound rather bitter to snipe at those who do decide to buy a home.

tomstickland

Well, I've been round cleaning my purchase today and I still think buying was a good idea.
A thought struck me whilst I was talking to my neighbour. The block consists of 9 modest 1 bed flats in a nice location on a late 80s "bovis home" style estate. The flats sell for around £85-95K. I thought it was mainy tenants, but it turns that there are fair few owners now and the flat above me is for sale.

Anyway, my thought was that those who can afford to buy for £90K on their own are mainly professional people or divorcees who have sold their marital home, or those who bought 6 years ago. I think I'm part of a little world in this block, a mini professional single person world.

My neighbour is cute btw, which is a plus.

Ian_W

My neighbour is cute btw, which is a plus.

:rotfl: ... and of course that han't clouded your judgement at all Tom?

tomstickland

I can separate the variables! My thoughts about the flat or the location have not changed. Rather satisfyingly as I learn new things they tend to reinforce my intial impressions. Having met 2 cute neighbours is a pleasant bonus.

observer_2

Well, in reply to the original question... if you can afford the property on say a 5 year fix, and the property is perfect then why not. You are buying in to short term capital gains (area and property right, for sure) and can afford the place.

Longer term though, interest rates will go higher as they always do and once they hit 7% the buy to letters are going to bail out.

If you can handle a 2-3% rise in interest rates then do it now, if not stay cash and wait for the fall.

meanmachine_2

Ian_W wrote:

The renter of the money can, of course, seek to get their money back by selling the property if, but only if, you fail to keep up the repayments.

You should check the small print of your mortgage.

I think you'll find that, if the value of the property falls below that of the loan, the bank can demand the "owner" makes up the shortfall.

Now, that's not a worry for anyone with significant equity, but for those on these mad 100% mortgages, plus recent buyers, it's another reminder that the bank has you by the wobblies.

zar

Ian_W wrote:

I always find "the lender owns it not you" or "you're only renting off the bank" quite perverse, as well as highly inaccurate.

In this week's How to... be rich by Guy Browning in yesterday's Guardian:

"The reason money is so important to ordinary people is because they have a mortgage, which demands continual feeding. People still think of their home as their castle, but it's really a lot more like a debtor's prison."

Deciding when to buy as a FTB is like deciding how thick you want the walls to be that you have to break through to actually own your house. HPI => thicker walls. I guess lower interest rates could correspond to sharper tools as more of your money can go on paying off the capital rather than the interest. Actually I think I am trying to stretch this a bit too far...

brasso

BobProperty wrote:

If anyone is interested in what the Hulme Crescents were like:
What they looked like: http://www.manchester.gov.uk/libraries/lsuimage/streetview/rolls.htm
Why it didn't work: http://www.jrf.org.uk/KNOWLEDGE/FINDINGS/housing/H5.asp
Rolls Cresent was named after the "Rolls" of Rolls Royce fame. There was a "Royce Crescent" too I think. The two met and started up in Hulme.
The story I know about the crescents came from someone I knew 30 ish years ago. As a student they studied the crescents for Architectural and Demographic reasons, and he told me two scarey things. One, no one walked across the middle of "horseshoe" shape as you felt that 400 pairs of eyes were watching you. Two, it was the only place he had ever seen where someone had blown a door off its hinges with a shotgun.

Now - who on here ever went to the Aaben?

I never lived in the crescents but had many friends who did when we were students in the early 80s, and spent a lot of time visiting. Actually, the people who lived there seemed to regard them as OK but I never liked going there much.

The Aaben cinema? I remember it well. Followed by a few pints at the Cypress
Tavern and a walk down to the Plaza for a 'curry'.

Apologies all for this blast of self-indulgent nostalgia.