Is it the right time to buy??

Spendless

rrwfotr wrote:

Is it the right time to buy??

Any views would be appreciated.....

With intrest rates etc is it worth the risk nowadays getting a big loan or better off renting....

Hi well I bought my 1st house and within a year I was in negative equity.
What I would say is this what are your current circs,if you are young single and without kids and can only afford a 1 bed flat than I wouldn't as the same situation might happen to you as happened to me.

I met my now husband and had 1st child and the place was too small and we were stuck in a too small house in an area we didn't want to be in. Not only was the house in negative equity but my house was the 1st rung of the ladder, so people leap-frogged over this style to get a bigger, better place leaving my sort of property hard to sell.

My experience of a price crash wasn't that people had to spend less on their house it was that they bought more for the same money. We eventually resoved this by renting the place out and buying a bigger place and of course in the time the tenants were there the boom happened and took my place bang out of neg equity into profit (approx 10 year circle from start to finish).

If on the other hand you can afford a bigger place in the area you wish to live, have no intention of ever looking for a job outside the area and it will be big enough for any partner and/or kids that come along I'd say go for it.

As to what will happen to interest rates -no idea

brasso

Personally I don't think it's a good time to buy your first property. Way too much volatility and unpredictability in the market. Property is very unlikely to appreciate significantly over the next couple of years, so may as well ride it out and see where we are then.

Of course, there have been hotspots over the past year or two, and will be more hotspots over the next year or two. If you were lucky, or will be, then fair enough but don't let it cloud your judgement about the recent and likely state of the housing market.

I'm staggered by the number of younger people I meet who seem to be totally unaware that property prices periodically go down (even crash) as well as up. They will go down again, and they will go up again, and so it goes on. In the long term you will benefit but I repeat, this is a risky period for property and to overstretch yourself now with a 100% mortgage or an interest-only mortgage is (IMHO) unwise.

Arch-Angel

missk_ensington wrote:

I won't pay stamp duty on next property as I'll ensure it's just under 120k, although I'm finding most houses on market for 120-135k advertise 'stamp duty paid' probably for that reason entirely.

Lynzpower how do I come out with 7k? Buy Its cost me, say £94k inc fee's to buy and sell again, and 6-7k spending on it, that stands me at just over 100k, the MINIMUM it will sell for is 110k, its more likely to be 115-120k, but even at 110 I get close to 10k pure profit, as well as what I've saved in only paying 380mortgage a month and not 550 a month rent. Don't think thats bad for under a years work, many people only get 10k a year as a salary before tax!

Maybe I'm being thick - I'm a (hopeful) FTB after all but..

Isn't the limit for Stamp Duty now £125,000? If you're sums are that bad...!!

Your other paragraph bears close attention as well. Let's look at the numbers here:

Expenses

House Cost £94K
Renovation Cost £7K
Mortgage £3800 (over 10 months - less than a year...)

Cost £104800

Income

House Sale £110000

Total Profit = £5200

That's not a lot!! Granted you could well sell the property for more than £110K - or it could take you less time to renovate. But what if you don't sell straight away? All your profit (and your income) is tied up in a house - no sale = no income!

I'm not being picky - or trying to start flame wars! There is profit to be made in the buy-renovate-sell model; but IMHO you'll need a better margin to make the risk worthwhile.

lynzpower

Arch-Angel,

thats what I thought. Miss K im certainly not flaming at you, especially as my maths is pretty pants too But I was also factoring in estate agents costs of 1k also to sell, although thats only a figure that I picked up on here, as Ive never sold myself as yet.

Lynz
x

sparkle84

missk_ensington wrote:

So how you gonna pay your rent when you're on a pension??? Surely by then (I dont know how old you are but say you're 35) in 25 years or so rent will be innexcess of £500 a month, and the current state of pensions you'll probably only get paid £800 a month, leaving you £200 to live off.

No thanks, I though retirement was about being comfortable, not scrimping and saving in the same way you did at 18!

I am confused you have an IO mortgage how are you going to pay off the capital? Unless you have a way repaying the capital you are just renting from the bank IO mortgage are a joke

Snow_Dog

Quote:
Originally Posted by MORPH3US
By who? and why?

M


By anyone with an ounce of financial sense, which unfortunately precludes most of the population.

If you bought a house in 1997 then today it would look like it was an amazing investment. However if you had bought the same property in 1989 in 1997 it is unlikely it would have been worth much more over the 8 years, and in 1992 it was probably worth a bunch less.

But you don't want to hear that, just repeat after me :-

Get on that ladder,
houses only go up in value
there's no risk
no one ever loses

manhattan

it seems to me that some people are ignoring or not wanting to know the FACT that house prices can and do actually go down in value.

because they have seen there asset rise in value for the last few years they seem to think it will go on and on?

i have friends and family going on about why i havent brought my first house yet,and they are adamant that prices will just keep on rising!

i was not in a position to buy 5 years ago,and even though i have now managed to save a large deposit i personaly i think now is not the right time to buy.

Careful_girl

I would always buy property. Investing in property over recent years has brought much better returns than any other investment around. I put every penny I can into property as rather than putiing it in savings I get to enjoy my money every day. Prices have been rising and the returns are good financiallly and naturally this cannot be guarenteed to continue. I have not heard of there being huge problems predicted for the near future.
The point is to be clever about what you buy. I have always bought the worst house in the best area and improved it in any way I can. Sometimes the very minimal effort increases the house price.
I agree with the moving problem. I have bought a house every 2 years for over 10 years now (only one at a time). The moving costs a fortune. The last move cost £25K and my current will be a similar figure. This wipes much of my profit off my house!! However you can always buy rent it out and rent something else in the new area. I toyed with the idea of renting this time but the chioce of properties and rental could not match the choice for sale. I am buying a house this time and will extend it and make it work for me! I think as I have paid so much stamp duty over the last years they could waiver this one, a bogof offer would be good!!!
Buy a cheapie and rent it out to students!! :T They sold houses in Newcastle a few years ago for 50p!! Allegedly!! I missed them!!:mad:
CG

brasso

Careful_girl wrote:

I would always buy property. Investing in property over recent years has brought much better returns than any other investment around. I put every penny I can into property as rather than putiing it in savings I get to enjoy my money every day. Prices have been rising and the returns are good financiallly and naturally this cannot be guarenteed to continue. I have not heard of there being huge problems predicted for the near future.
The point is to be clever about what you buy. I have always bought the worst house in the best area and improved it in any way I can. Sometimes the very minimal effort increases the house price.
I agree with the moving problem. I have bought a house every 2 years for over 10 years now (only one at a time). The moving costs a fortune. The last move cost £25K and my current will be a similar figure. This wipes much of my profit off my house!! However you can always buy rent it out and rent something else in the new area. I toyed with the idea of renting this time but the chioce of properties and rental could not match the choice for sale. I am buying a house this time and will extend it and make it work for me! I think as I have paid so much stamp duty over the last years they could waiver this one, a bogof offer would be good!!!
Buy a cheapie and rent it out to students!! :T They sold houses in Newcastle a few years ago for 50p!! Allegedly!! I missed them!!:mad:
CG

If you've been buying and selling property over the past 10 years you are likely to have a distorted view of what happens to property prices. It's been an extended bull market for property but things have slowed right down now. A correction is almost certain, and some people (not necessarily me) are noting that all the indicators are pointing towards a painful crash.

If this happens, prices will rise again in time as they always do but you are deluding yourself if you think that the last 10 years is the way it always is. You have to prepare yourself for the possibility of several years of price stagnation and even falls.

If you buy property just to live in, like me, then it really doesn't matter what happens to the market, as long as you don't overstretch yourself.

I repeat, this is NOT the best time to buy, but if you can dig yourself in with an extended fixed-term repayment mortgage with not too high a LTV mortgage then you will be OK in the long term. Personally, I would avoid 100% mortgages or Interest only mortgages at this time.

lynzpower

Careful_girl wrote:

I would always buy property. Investing in property over recent years has brought much better returns than any other investment around. I put every penny I can into property as rather than putiing it in savings I get to enjoy my money every day. Prices have been rising and the returns are good financiallly and naturally this cannot be guarenteed to continue. I have not heard of there being huge problems predicted for the near future.
The point is to be clever about what you buy. I have always bought the worst house in the best area and improved it in any way I can. Sometimes the very minimal effort increases the house price.
I agree with the moving problem. I have bought a house every 2 years for over 10 years now (only one at a time). The moving costs a fortune. The last move cost £25K and my current will be a similar figure. This wipes much of my profit off my house!! However you can always buy rent it out and rent something else in the new area. I toyed with the idea of renting this time but the chioce of properties and rental could not match the choice for sale. I am buying a house this time and will extend it and make it work for me! I think as I have paid so much stamp duty over the last years they could waiver this one, a bogof offer would be good!!!
Buy a cheapie and rent it out to students!! :T They sold houses in Newcastle a few years ago for 50p!! Allegedly!! I missed them!!:mad:
CG

They did sell flats for 50p round the corner from where I used to live in Fenham area. the whole road was derelict and it certainly wasnt worst houses in best area, in fact many students wouldnt even move there, choosing more *upmarket* fenham ( in about98/99) Additinoally buyers had to state that they were willing to live there for at least 5-10 years if I remember rightly.