Is it the right time to buy??

sparkle84

missk_ensington wrote:

Sparkle- My personal plan (not saying its fool proof or ideal for everyone) is to sell my property (that Ive bought for 92k) for 110k or above, buy again for 110k (keeping my 82k mortgage the same, just putting more down) sell that for perhaps 130k after renovation- after this I can either downsize back to maybe 95k and the 35k (ish) I have pay off the mortgage. Or I could buy again at 130k and so the chain goes on...Hence how I will repay capital on IO.

I have a fixed rate for 2 years, so I'm keen to pay some off in case interest rates do increase. I can't overpay for 2 years as the rules state, but after that I will.

For 1000th time, I know it is a risk, apart from maye ISA's all investments carry an element of risk. Thought stamp duty was 120k??! Perhaps I've got my info wrong, I thought they'd doubled it from 60k? If its 125k threshold then even better!

I also live up north if that makes a difference, perhaps in London/down south it'd be much harder with FTB properties being so much more. Where I live I could get a 2 bed terrace for 70k, which you obviously couldn't do in London.

My mum has benefitted from price booms, however her company isn't just going to stop now! She's still buying up, although as Ive said, she's moving away from buy to let, and towards buying Freehold businesses as I mentioned earlier, and renting out the accomodation above, renting the business for 400-500 a month and selling the leases for 35k+ every 12 years. At some point, when convenient for her, I think she intends running a restaurant herself but at the mo she's not got enough time.

I think there is money to be made on property, but its not fool-proof, I'm not suggesting for one minute you can buy any old house, and oooh 12 months later you've made 20-30 grand! There are many more factors!

First thing I have to say is interest are going without a single doubt go up over the next year no question.

Secondly your figures don't add up you minus the renovation costs your IO morgtage your legal fees you EA fees your moving costs = what will you make £10,000 max over 2 years big deal

Careful_girl

I agree with Miss K in my experience Many people are put off by trivialities. The house I am currently selling for example took over a year to sell when I bought it. We knocked the price down and got it for a bargin. The carpets were stained, there were stickers all over bedroom doors and some walls, the carpets were a range of orange and purple and paintwork was similar garish colours. The garden had rubble in and the fencing and gate was rotten.I met an agent who had tried to sell it and he complained about a smelly dog being at the property. We have sloshed magnolia around used some great sticker remover, bought a new Dyson and tidied up the garden. We have NOT spent much and in less than 2 years we have made £90K. We sold it in a month and have chosen a cash buyer with no chain for a quick sale. On to the next. I have done the big renovation too but it was a lot of hassle and didn't really make that much profit.
Those worms are Everywhere. Get them back in the can!!:p
CG

manhattan

Careful_girl wrote:

I agree with Miss K in my experience Many people are put off by trivialities. The house I am currently selling for example took over a year to sell when I bought it. We knocked the price down and got it for a bargin. The carpets were stained, there were stickers all over bedroom doors and some walls, the carpets were a range of orange and purple and paintwork was similar garish colours. The garden had rubble in and the fencing and gate was rotten.I met an agent who had tried to sell it and he complained about a smelly dog being at the property. We have sloshed magnolia around used some great sticker remover, bought a new Dyson and tidied up the garden. We have NOT spent much and in less than 2 years we have made £90K. We sold it in a month and have chosen a cash buyer with no chain for a quick sale. On to the next. I have done the big renovation too but it was a lot of hassle and didn't really make that much profit.
Those worms are Everywhere. Get them back in the can!!:p
CG

WELL DONE!
just be very careful on your next development,but i suppose you will have lots of equity as a back up, in case anything does slide the other way!

lynzpower

I do think ( and having an IO myself) that IOs are just too risky over the long term if you are choosing those as you cant afford a repayment, which is what I had to do. EDIT chose to do

Investing is a completely different kettle of fish to finding somewhere to live, and its like comparing apples & oranges.

meanmachine_2

How stupid of me to have an education, and develop some career skills.

All I need is a tin of magnolia (John Travolta style) and a vacuum cleaner. Yeahhhaw!

Easy money.

Hmm. Sounds a bit too easy to me.

Ah well, best not think about that. With property you just CAN'T lose....

*struts down street, with paint pot and sound of Night Fever in the b/g*

Careful_girl

Good old magnolia!!:j

lynzpower

meanmachine wrote:

How stupid of me to have an education, and develop some career skills.

All I need is a tin of magnolia (John Travolta style) and a vacuum cleaner. Yeahhhaw!

Easy money.

Hmm. Sounds a bit too easy to me.

Ah well, best not think about that. With property you just CAN'T lose....

*struts down street, with paint pot and sound of Night Fever in the b/g*

I can picture it, but you have to do that side-kicky thing into the sunset a la Wizard of oz too

manhattan

sikejsudjek wrote:

So house prices can only go up and interest rates will never rise ?

Yeah right.... remember the 80's. And before anyone points out that interest rates need to be at 10%+ for a house price crash remember that this time around with the massive mortgages people have taken out at 6x income a small interest rate rise will trigger a massive crash and recession.

I bought at 35k after the last crash and sold for 105k, my wife did the same. Now we have no mortgage on a 185k home. Anyone buying now is buying at the peak and not likely to make money. Property is a bubble about to burst. If I was in the market for a home right now I'd rent.

Have a look at this site. Pay attention to the graph of house prices over the last 50 yrs and ask yourself where they are likely to go next ! Happy reading.

http://www.dailyreckoning.co.uk/website/contrarianinvesting.html

yeah! that last peak looks like mount everest! lol

Claire_DC

**Long Post Alert**



We're currently buying a house, and i can honestly say i feel like it's the best decision we could have made. We'll be paying only £300 a month as we were given £11k deposit for the place by my fiance's father, £50 a month more than we do in this awful little council flat with our awful druggie neighbours (repayment, not interest only but over 40 years to start with and we're going to be rate tarts after the 5 year fixed is over and keep going for the lowest rate mortgages, always overpaying as much as possible, hopefully bringing the term down each time so we pay off in 25 years or less).

The house will be ours though.. no more dead money. Our home insurance will go up by less than £6, life insurance will be £7 a month extra and then everything else should stay pretty much the same as council tax is the same band as we're in now, we're not really gonna use much more electricity than we do now and we barely have our heating on as we prefer to get a duvet out and cuddle up on sofa if it's a bit chilly so gas shouldn't be a huge amount extra either.

In my opinion, we are in a win win situation.. even if we stay in the 2 bedroom property we're buying now, it's room enough to see us for at least 5 years (no children yet, and even if we had one, we'd have a room for it) and when we sell it, i am sure it will have retained it's value (we're already paying £5k under it's current value). If prices to drop/crash and we need a bigger place then we can easily rent out i'm sure, or just ride it out as best we can.

As for the council rented accomodation when you're older and on a pension, that's all well and good saying that now.. but i n my experience and from the experience of my mum also (who is almost at retirement age) it's so hard to even get in a council property these days, i can't even begin to imagine how hard it will be in future. What with more and more people coming to this country/teenagers having loads of kids etc, and many councils selling their properties in right to buys, transferring over to other housing associations, or even just knocking them down full stop.. i can't see that getting any better, in fact i can see it getting a whole lot worse.

I don't really want to risk it, especially not if we're planning on having a family at some time.. and that we can sell our house at any time if we need to move somewhere bigger etc, whereas with a council property you're probably looking at a 2 year wait even to be considered for a move, and even then the house/area may not be what you need/want so you get put on hold as you're obviously not desperate enough for a place. My mum is actually in a council owned bungalow, but she's having problems there with kids and their idiot parents (where they are almost attacking her, and are throwing egg etc at her windows) and she's asked to be moved, she's very ill with arthritis etc and she's probably going to have to wait 2 years just to be able to move to a place where she isn't being harrassed and bothered by idiot people. I really don't want to end up like that myself, she could live with us but her arthritis won't allow her to use the stairs much longer as she even has difficulty even now with a few steps.

It's fair enough if you're likely to inherit a house from parents, even if you're not reliant on it.. there's a chance a long way down the line that we could from our respective parents too (my dad owns his own place, as do my fiances parents) many years down the line (the longer the better, obviously), but we don't want to wait forever to own a place and we didn't want to spend thousands of pounds renting, and see nothing back from it. Also, i think we'll personally feel a bigger sense of achievement to have earned the money to pay for the house ourselves, especially once it's all done up how we want it.. especially as it's costing us a lot less than moving to a private rented accomodation (£500 a month min for a decentish place), which is what we would have to do if we hadn't bought as this place and the neighbours really get us down.

I'm not saying that renting is the devils work or that buying is best for everybody.. because i know people have different needs/wants etc, and i'm not naive enough to think we're automatically going to increase the value of our home by tens of thousands just by living there a couple of years and putting in a new kitchen, i also know that the value could decrease too.. but we're creating a home for ourselves, and hopefully planning well for our future, and our children should we have them and in this respect, it works for us.. which at the end of the day, is all that matters.

It just seems like some people are convinced there will be a crash, some aren't and some probably don't care as long as they have a place to live. I don't see why people are getting sarcastic/personal over it because nobody is right or wrong here, if it works for you, then it's all good.. whatever you do.

mystic_trev

Claire_DC wrote:

**Long Post Alert**

It just seems like some people are convinced there will be a crash, some aren't and some probably don't care as long as they have a place to live. I don't see why people are getting sarcastic/personal over it because nobody is right or wrong here, if it works for you, then it's all good.. whatever you do.

I love the long post alert but you we're right!

I'm a property bear and believe there will be a correction in the near future. However I agree with much of what you've said. You seem to know what you're doing and have worked out all the facts and figures - well done. You're buying a home not an investment and I really hope it works out for you.