Exchanged Contracts - Biggest Mistake of my life?

92203

Running_Horse wrote: »

So you've been thinking about this for over a month:

http://forums.moneysavingexpert.com/showthread.html?t=2242443

You asked advice on here, got a range of answers, and decided to go ahead.

Now you want us to tell you you can change your mind about a legally binding contract?

Sorry, but you can't. The time to change your mind was several weeks ago.

I agree, I have been a plank. Ironically, up until the beginning of this week I was very uncertain about my job and employment prospects. Fortunately my employers have moved me into a role which I find fulfilling and that I am good at.

I guess, I made the snap decision on impulse. I was very keen for my girlfriend to get through her nursing course, and was also very keen to make sure that we didn't lose the small amount of equity we had left in the house.

I had visions of one/or a combination of the following scenarios taking place, resulting in my girlfriend having to forgo her university course.In addition to this, staying would have incurred £2k estate agent fees ;

• Living costs spiralling out of control due to uncontrolled inflation
• The bank of England Base rate going up and making our mortgage unaffordable
• One or both of our cars (GFs required for uni, mine required for travelling on company business) breaking down and requiring costly repairs which we couldn't afford
• Loss of my job or being subjected to a pay cut, or having to leave due to being so unhappy (as I mentioned earlier in this post, ironically the issues with my job were sorted earlier this week).

I don't think I'll even bother investigating staying put.

By moving we'll achieve the following ;

• Vastly reduced commute time for my girlfriend, so she can spend more time studying
• Go down to running one car
• Avoid some potentially difficult situations which may occur in the future with some awkward neighbours
• Live in a city with a multitude of large firms who could employ me if my current job goes pear shaped
• Remove our reliance on a low base rate
• Potentialy save £400 per month towards our next house.

Unfortunately my commute time will increase, and my fuel costs will increase to £200-250 per month. I will be car sharing with a colleague on the final leg of my journey. He will be contributing £60 per month to my petrol bill.

I do have the option of staying with my parents during the week, though they have recently downsized their house so I would have to stay in their box room.


I will also be doing between 200 & 600 business miles per month, and get paid 40p a mile for this.

Ian_W

92203 wrote: »

When my girlfriend graduates in Dec 2011, prices will have no doubt recovered to 2007 levels and we'll find it difficult to get another house

You really think so? I'm no doomster but I think it's even money whether house prices will actually still be at their present levels and quite long odds that they'll be back to 2007 levels by then.

Whoever wins the election is going to have to put up taxes and cut back significantly on public spending, including quite large PS job losses. Private sector wages aren't going north anytime soon either. That probably means less buyers, with less money and less confidence to splash the cash.

Additionally, the banks will be under more pressure at the end of 2010 when the BoE ends it's special liquidity scheme - so they may well have to pull back on lending.

Folks forget the housing crash of the 90's took several years to work through and we're only really 18 months into this one. This is messier in terms of the economy and it's only the banks (under Govt pressure) being very generous with those in arrears that has lead to a shortage of houses on the market which caused increases in latter 2009.

Who knows in December 2011 you may be thinking, " thank God we sold when we did, we can get a much better/bigger house for our money now"! Just save as much as you can between now and then.

Fire_Fox

FWIW I think you are right to sell up - I remember your other thread and you were not willing/ able to make changes to make that house and location work for you. Why don't you stay with your parents two night a week? That will save you perhaps £80 on petrol which is not to be sniffed at. Long term there is no reason to think you won't have another 'bite of the cherry' on the property market. There may be another boom but if so there will be another bust, when it gets to the point that the majority are priced out of the market and have to stay put. In the mean time just keep your eye on the ball and save.

92203

Thanks for the supportive replies. I am feeling much better and a bit less sad about the whole situation.

In an ideal world this wouldn't have happened, however I have to focus upon the fact that as of December next year, my girlfriend will hopefully be a qualified nurse, with a starting wage of 20k per annun. Significantly more than the £14k per annun that I was earning in IT until just over four years ago.

We'll save, save and save, and then hopefully buy a house within our means with a sub £100k mortgage.

Thrugelmir

Ian_W wrote: »

You really think so? I'm no doomster but I think it's even money whether house prices will actually still be at their present levels and quite long odds that they'll be back to 2007 levels by then.

Whoever wins the election is going to have to put up taxes and cut back significantly on public spending, including quite large PS job losses. Private sector wages aren't going north anytime soon either. That probably means less buyers, with less money and less confidence to splash the cash.

Additionally, the banks will be under more pressure at the end of 2010 when the BoE ends it's special liquidity scheme - so they may well have to pull back on lending.

Folks forget the housing crash of the 90's took several years to work through and we're only really 18 months into this one. This is messier in terms of the economy and it's only the banks (under Govt pressure) being very generous with those in arrears that has lead to a shortage of houses on the market which caused increases in latter 2009.

Who knows in December 2011 you may be thinking, " thank God we sold when we did, we can get a much better/bigger house for our money now"! Just save as much as you can between now and then.

I agree with your sentiments. The economy is far from fixed. Freely available credit is something in the past. The recession for whose in work has had little impact. Unfortunately the party is over and the bill will have to be repaid shortly.

For those who make a determined effort to save. There will be real rewards to be had.

Catblue

You'll have £10K left after solicitor's fees? That's not bad actually.

Sounds like you won't miss the house (or the neighbours), so just do what you were planning to do - move out and save, save, save.

In two years' time, your girlfriend will have graduated and hopefully have been offered a secure job. If you do save £400 per month for the next two years, that'll give you over £10K (with the interest added) to add to your initial £10K so you will have a great deposit of over 20K for your house and then you can get an affordable mortgage that takes two incomes into account. Happy days.

chappers

personally speaking I think you have done the right thing, bank the £10K, you think your job is looking iffy, if you lose your job, you will have some savings to fall back on and can probably claim HB for a rented property, rather than struggling to pay your mortgage and maintain your house.

When your financial situation improves get saving, I can't see house prices doing anything drastic in the next few years

sarah_elton

I think there's virtually zero chance of house prices being back to peak in less than two years from now.

See here:

http://farm4.static.flickr.com/3381/3603195810_99aaab18d1.jpg

Peaks in house prices in the early 70s, 1980, 1990 and 2007. They have never recovered in just four years. In real terms, the early 70s peak was recovered by the late 70s, the 1980 peak by 1986, and the 1990 peak by 2002, roughly.

Housing prices are a relatively long term cycle. This recession has been plain weird by historical standards, but nonetheless I just don't think prices are going to rocket up again any time soon. They may well be a little higher by December 2011 than they are today, but not by anywhere near as much as you're picturing.

We've had a few months of headlines about rising prices but this week the headlines are already that things are cooling again.

SandC

Ian_W wrote: »

You really think so? I'm no doomster but I think it's even money whether house prices will actually still be at their present levels and quite long odds that they'll be back to 2007 levels by then.

Whoever wins the election is going to have to put up taxes and cut back significantly on public spending, including quite large PS job losses. Private sector wages aren't going north anytime soon either. That probably means less buyers, with less money and less confidence to splash the cash.

Additionally, the banks will be under more pressure at the end of 2010 when the BoE ends it's special liquidity scheme - so they may well have to pull back on lending.

Folks forget the housing crash of the 90's took several years to work through and we're only really 18 months into this one. This is messier in terms of the economy and it's only the banks (under Govt pressure) being very generous with those in arrears that has lead to a shortage of houses on the market which caused increases in latter 2009.

Who knows in December 2011 you may be thinking, " thank God we sold when we did, we can get a much better/bigger house for our money now"! Just save as much as you can between now and then.

I completely agree. I bought my house at the end of the recession in the 1995 and the value didn't rise at all for 5 years. Historically, property has always been a good investment, but a LONG TERM investment.

Hopefully we will not see any sort of ridiculous rises in the future as it was totally out of control.

poppysarah

SandC wrote: »

Hopefully we will not see any sort of ridiculous rises in the future as it was totally out of control.

But the journey back to sane-land means huge price drops...