First time buyers - will you or won't you?

desperadoV2

Hi all,

I'm a First time buyer and the volatile house market makes me think over and over again whether I should buy a property now or wait for it. I'm just wondering what other first timer buyers are thinking, hence this simple survey.

Which group do you belong to?

Group 1: Waiting for a house price crash and won't buy until then.

Group 2: Will wait for the next three months and see how house market reacts to the next predicted interest rate hike and then decide.

Group 3: Looking for property now and will buy property regardless whether interest rates rise or not and property market crash or not.

I belong to Group 2. Which group do you belong to?

SmartGirl_2

I am between groups 2 and 3, i.e. I am currently looking for a property to buy but I won't commit unless I find a bargain, which is very unlikely - everything I have seen so far has either been in appalling condition or overpriced. By overpriced I mean that asking price is significantly higher than any other property sold on the same road.

After doing some sums I am having doubts whether it is a good idea to buy. In the area where I live renting is TWICE CHEAPER than buying. I am currently renting a property for £1000 a month, a similar property on the same development is on the market for £340k. At 6% interest rate, mortgage on £300k is approx £1920 a month, £1490 of which goes on interest. Besides there are additional costs to owing a home, such as maintenance bills, furniture, additional insurance, etc.

I have reached the age (30) where I would like to settle down and have my own home, but I am not convinced it makes financial sense. I reckon I am better off saving £1000 a month and move abroad few years later!

pawpurrs

Its sort of funny but I felt the same when I bought my first house 7 years ago, I was so worried that prices were going to crash as they had risen so much in the previous year, everyone thought I was mad buying a house, as the market was going to crash, thank god I didnt listen, and went for it, even though it was a stretch at the time, and I had to go through hell to get a mortgage, buying your first house is nervewracking, as is your second (spending so much money!), but in most cases its worth it, as long as you are going to stay put if prices come down so will your next move if that makes sense.
Its allways a bit of a risk! If we all knew what was going to happen we would all be rich and have bought loads of BTLS years ago!

poppy_f1

bit of everything, chances are i will buy at the beginning of next year as i cant do it at the moment for family reasons, but im not in a hurry and waiting for something that suits me and is in my price range,
im not going to buy something just for the sake of owning my own home

RHemmings

desperadoV2 wrote:

Hi all,

I'm a First time buyer and the volatile house market makes me think over and over again whether I should buy a property now or wait for it. I'm just wondering what other first timer buyers are thinking, hence this simple survey.

Which group do you belong to?

I would buy at the right price. At the current time, vendors aren't prepared to sell for my "right price". A house price crash might help bring my and vendors' "right prices" together. But as we saw in the auction bargains thread, a house sold significantly under market value might also fit the bill.

If events do confound my expectations and prices remain high, then there will come a time when I might buy. But it would be a matter of looking at the market rather than a specific time period to get bored or "give up".

By a "house price crash" here I mean a crash in real terms, rather than nominal terms. So a sudden burst of high wage inflation without house price inflation could tip me over too.

RHemmings

SmartGirl wrote:

After doing some sums I am having doubts whether it is a good idea to buy. In the area where I live renting is TWICE CHEAPER than buying. I am currently renting a property for £1000 a month, a similar property on the same development is on the market for £340k. At 6% interest rate, mortgage on £300k is approx £1920 a month, £1490 of which goes on interest. Besides there are additional costs to owing a home, such as maintenance bills, furniture, additional insurance, etc.

I think this situation cannot last. It's like if the supermarkets were selling all their food for under cost price. You could imagine some incredible cut-throat period of competition where the supermarkets were prepared to make massive losses temporarily. But they couldn't go on doing it indefinitely.

manhattan

desperadoV2 wrote:

Group 1: Waiting for a house price crash and won't buy until then.

i will only buy when i think prices are reasonable,so group 1.

desperadoV2

I'm paying a monthly rent of £700 a month and a studio apartment is going for £120,000/- and one Bed apartment for £140,000/- and two bed apartment going for a maximum of £160,000/-

How on earth first time buyers like me can afford. Its unbelievable and it can't carry on like this, can it? I have to find 6 or 7 times my salary to afford a two bed semi or terraced house. £160,000 two bed flats are very small.

BOE increased interest rate from 4.50 to 4.75% and for the month of august there property prices also increased. I can't how?? I think, we should deduct 20% of the asking price of any property. That's what it is worth. Nothing more.

RHemmings

manhattan wrote:

i will only buy when i think prices are reasonable,so group 1.

Surely you would buy if someone suddenly offered you a house for 30% less than current prices. That would be the same as buying after a 30% crash.

Sarahpuggy

We are first time buyers..and we have decided to take the plunge. We live in an incredibly expensive part of Greater London, but we are going to be here for the foreseable future and paying £700 a month for a small 1 bed flat, and we are going through with a purchase on a 2 bed flat in a nice area at £175,000.

It seems very scarey but we will only be paying about £300 a month more for a repayment mortgage inc all extra bills. I have recently been left some inheritence which has enabled me to put down a 5% deposit, but before this we were considering a 100% mortgage, but i am so so relived we dont have to go down that route.

i dont know whats going to happen as much as the next person. We tried doing in depth research about what was the right decision, and at the end of the day we have decided to take the risk and know what the risks are..What else can we do? Our salaries are set to rise which is a good thing, but honestly..i dont know how a single person is supposed to do this as neither of us would be able to buy any kind of property if we were on our own. its pretty bad!

Sarah x

SmartGirl_2

RHemmings wrote:

I think this situation cannot last. It's like if the supermarkets were selling all their food for under cost price. You could imagine some incredible cut-throat period of competition where the supermarkets were prepared to make massive losses temporarily. But they couldn't go on doing it indefinitely.

It really depends on what price landlord bought the property at. My landlord paid £196k for the property where I live, so he is making a reasonable return on it, but at today's prices such investment would not make much sense.

According to one of London evening papers the average asking price for properties in London have gone up by £8200 in last month! So here we go for a crash... Or is everybody rushing to buy before interest rates go up again?