If you are thinking of buying this summer ....

steve237

tyllwyd wrote: »

If you are thinking about buying a house this summer, are you waiting to see what comes in the emergency budget on 22 June before doing anything, or does that make no difference to you?

If you are waiting for the budget, do you expect it to make you more or less likely to go ahead with a purchase?

(Just curious! Estate agents are all saying that the market is quiet waiting for the budget so I wondered what the word on the street was!)

Back on topic and in reply to the original OP, our situation is as follows:

We are do to exchange any day now. Moving from a 3-story 4 bed detached to a 2 story 4 bed detached (got a 2 month old baby, the new house has bigger rooms - it's perfect for our family home for the long term). Selling for £161k, buying for £190k. We have 20% equity in our home.

We have pondered constantly over the last few weeks whether to delay exchange/completion until after the emergency budget. But from our perspective, I don't really think it matters. It's highly unlikely there will be any changes to stamp duty in our case. Also, if capital gains tax increases do force more properties on the market and bring house prices down, then it would affect the value of the house we currently own as well as the house we are buying - so ultimately the amount we would borrow would be the same whichever way house prices go.

Having said that, we're aiming to exchange before the 22nd and complete after the 22nd - just in case they abolish stamp duty for house purchases under £250k for everyone, not just FTBrs (possibly as a way for government to prop up house market to counteract influx of buy-to-lets going on market??)

Please tell me if anyone thinks my logic is flawed! I would be interested to hear peoples views.

steve237

To add to my above post, I think the most important thing when making a decision about buying/upsizing in the current climate (low interest rates, economic climate, uncertainty..) is to look at your affordability and safeguard yourself accordlingly. In our case, we have locked into a 7 year fixed rate deal (5.39%) and our mortgage payment will be just less than 28% of net monthly household income.

I think as long as any prospective buyers take whatever measures they need to feel secure, and the house they are buying is for the long term, then they should just get on with it.

There are hundreds of bears out there who have been anticipating enormous drops in house prices for over a decade, chucking tens of thousands into landlords pockets. In the meantime, Joe Bloggs has settled into his family home and just started paying off his mortgage like everyone else. Life is too short. House prices ALWAYS go up in the long term.

tyllwyd

[thanks for bringing my thread back on topic, I was beginning to despair of it!!]

I do agree that in your position, whether house prices rise or fall doesn't make a lot of difference to you, as long as the houses you are buying/selling are both affected in the same way, so why not get on with your life without trying to second-guess the housing market.

Does your solicitor agree that delaying completion until after the budget is a good idea, just in case?

steve237

tyllwyd wrote: »

Does your solicitor agree that delaying completion until after the budget is a good idea, just in case?

She thinks it's highly unlikely there will be any changes that effect me, so didn't advise anything either way and was just happy to take my instruction.

Henry_P_Chester

steve237 wrote: »

Back on topic and in reply to the original OP, our situation is as follows:

We are do to exchange any day now. Moving from a 3-story 4 bed detached to a 2 story 4 bed detached (got a 2 month old baby, the new house has bigger rooms - it's perfect for our family home for the long term). Selling for £161k, buying for £190k. We have 20% equity in our home.

We have pondered constantly over the last few weeks whether to delay exchange/completion until after the emergency budget. But from our perspective, I don't really think it matters. It's highly unlikely there will be any changes to stamp duty in our case. Also, if capital gains tax increases do force more properties on the market and bring house prices down, then it would affect the value of the house we currently own as well as the house we are buying - so ultimately the amount we would borrow would be the same whichever way house prices go.

Having said that, we're aiming to exchange before the 22nd and complete after the 22nd - just in case they abolish stamp duty for house purchases under £250k for everyone, not just FTBrs (possibly as a way for government to prop up house market to counteract influx of buy-to-lets going on market??)

Please tell me if anyone thinks my logic is flawed! I would be interested to hear peoples views.

The only thing I would say is that lowe prices benefit upsizers. For example your step up will currently cost you £29k

if prices fall 10% then your house will be worth £145k and your new house £171k so your step up would be £26k.

In your case it's probably not worth waiting as a big enough saving to justify the wait will probably take years. No point delaying IMO.

For FTBs it's a different story.

steve237

Good point.

Also, the 3 story properties on our road tend to sit on the market for about 2 years. Nobody seems to want them and they are selling at rock bottom prices anyway. We are happy we found a buyer within 2 weeks of going on the market.

I don't think there will be a better opportunity to move in our case.

ninky_2

we've been toying over various house move options. mortgaging isn't a problem. my current lender has said they will port our deal (whicht is boe +0.49) - and actually increase it to 5x joint salary (!). currently mortgage is just in my name.

what's stopping us is the worry over the economy. not just in how this will effect prices but the very real possiblity of finding ourselves out of work. it's not like our current living situation is so awful we have to move. it would be nice to have more than one bedroom and a garden. but that's it. it would be nice. it's not essential. our mortgage deal still has a good few years to run so it seems silly to rush and put ourselves in a potentially stressful situation when at the moment we have a comfortable cushion of overpayments to fall back on if needed.

i would also like to go travelling in a couple of years so that too puts off a climb up the housing ladder. i've always felt that if you get your dream home all you do is look at and wait to die whereas memories of travel / doing stuff stay with you forever.

neas

I think its catch 22. all you people waiting now will get a cheaper house but a larger interest rate on mortgage... meaning a net effect of not owning a house of your own while still paying a monthly repayment (on a cheaper house but more expensive mortgage rate).

We've found house we love and have used this lull to get a decent price. We are paying same 3.5k miore than the vendor paid in 2004 for our house.. with 35% equity... and are hoping to get a ficve year fix... so are buffeted for most eventualities.

chucky

neas wrote: »

I think its catch 22. all you people waiting now will get a cheaper house but a larger interest rate on mortgage... meaning a net effect of not owning a house of your own while still paying a monthly repayment (on a cheaper house but more expensive mortgage rate).

and finally...

neas

Although in waiting these 2 years my property asking price dropped from 180k to 170k and my deposit rose about 20k...allowing me to get a good interest rate.

Although i know the window of opportunity for buying a house is in the next few months before interest rates Ramp ramp up .