Am I crazy to be thinking of buying a house right now?

JuniorSherlock

We have previously said we would wait until spring/summer of next year before looking for a house. I'm self employed but have only been so for a year so my income will not be taken into consideration by the lenders. My husband has a take home pay of £20k pa.

We had been looking around as my husband is now 45, we are privately renting and as the kids are growing older, we feel that time is not on our side. We have to act quick if we ever want to get on the property ladder.

A house we had previously been interested in came back on the market after an offer fell through. It's on at £133,250 but we know the offer was £125,000. It's a 3 bed ex-council house but in a hamlet in a desirable area. We have a deposit and could just about afford it. However with prices due to come down and interest rates bound to rise, will we be making a mistake?

Obv it will be a home more than an investment, but we know that as a home it is far from our dream house, so we are buying hoping that if all goes wrong, we may be able to sell at a profit and get something a little better. Yet if all goes wrong we may be stuck there.

There are a couple of bad points. There was an application to build affordable housing at the back of the property (at the moment there is nothing at the back but a lovely field and views), that was knocked back by a campaign by residents, but they could appeal or apply again couldn't they? These plans don't tend to go away permanently. The area was plagued by problems 5 years ago (teens, drugs) but that has now changed. It is isolated, no proper shops within walking distance and just a few other families with kids.

The good points are that the address is desirable, the rural location could also be seen as a benefit, the property has lots of potential.

Should we go ahead bearing in mind our circumstances and the fact that right now the only other houses we can afford are those in dodgy areas, or should we bide our time?

Radiantsoul

No-one can really answer this for you.
It seems that if property prices rises are moderate or negative then you probably don't want to buy somewhere you don't see yourself staying for a good few years. If you are going to want something better in two or three years then you might be better off saving a bigger deposit.
The longer you are planning on staying the safer.

tyllwyd

Just on the planning application point - there is a field behind us where the residents fought planning permisssion for years. It got refused several times by the local council, and in the end it went to the Secretary of State who passed it (I don't think they ever gave us a good reason why!). If you are thinking of buying it, I'd say you should do it on the assuption that they will build the houses.

The worst thing about the field behind us is that when we bought, we assumed that the houses would be built straightaway, so whenever we went to sell, the building work would be over & wouldn't put people off. But with all the appeals & the housing crash, six years later they still haven't built on the field, so there is still that question mark hanging over it.

JuniorSherlock

Thanks, those were my thoughts too. However looking at the property and seeing it's location, it could be a really good investment. The last house in that area sold in Jan for £165,000 and it was roughly the same size albeit with a slightly larger garden but without the nice views. It's a repossession which is why it's so cheap. I'm thinking (hoping) that a 3 bed end terrace in a cul-de-sac rural area will not drop below £125,000 no matter what the market does. After all they were at those prices more than 10 years ago.

The rejected development is my main worry.

But also, yes it would be nice to have it as a home for some time to come. We're not renting in a great area at the moment so it would be a step up from where we are.

I know it's an impossible question to ask as no-one knows what the market will do. But it's such a huge decision to make in these uncertain times and I'm worried that at our ages, we really don't have the time to wait and see what the market does.

JuniorSherlock

I've decided to check with the council to see why the application got knocked back and if there are any plans to submit any other applications in that area.

If not then we'll take the plunge.

PasturesNew

You're talking yourself into it. You've gone from "it's lovely" to "it's been a problem". You've gone from "it's a home", to talking about it being an investment.

You're better off waiting longer, house prices won't suddenly go mad.

It's an ex council house, in an isolated area, where you're just leaping in because you're frightened of missing a perceived boat.

JuniorSherlock

I know I am! But the future is a worry.
I'm 38 and my husband is 45, so the only mortgage we could get is a 20 year one.
I'm self-employed and would need to be for another 2 years before they will consider my income.
We are privately renting and have been for 7 years.
We've been looking at houses for the last 2/3 years and for a house in a decent area we are looking at over £150,000.
Prices may well come down, but enough to be affordable for us? Even if they are more affordable, will we be eligible for a mortgage? Our bank will only lend us £75,000, the rest we have to make up ourselves.
If we get a foot on the housing ladder then surely we are in a better position than if we don't?
Yes I do hope it will be an investment, but right now we need a home for our kids aged 10 and 6.
This house is in the catchment area for a very good secondary school, one of the top 10 in the country. It's within walking distance to a medieval village and has the village as the address.
I'm talking myself into this again, but I wonder if we'll get an opportunity as good as this one in the future? We've waited 7 years for prices to come down to affordability, seen our deposit lose £6,000 because of the recession and have been putting money into someone else's pocket so we can live in their house. I'm not sure how much longer I can wait to be honest.

But I appreciate those opinions that tell us not to do it. We are proceeding with caution and want to weigh up all the pros and cons.

The planning application by the way, just found out, it never went to planning. They had a public consultation. The HA own some garages at the back along with a field. They were looking at building 8 HA houses on the site. They have no plans to continue with that but cannot guarantee that they won't consider it again in the future.

p00hsticks

JuniorSherlock wrote: »

If we get a foot on the housing ladder then surely we are in a better position than if we don't?

Not if house prices are going down and it's costing you more each month to buy than to rent....

You haven't stated how large your potential mortgage repayments would be compared with the rent you pay now - havbe you looked into this ? And could you comfortably cope with the repayments if interest rates went up in a year or tow ? You also need to factor in maintenance costs that you won't currently have in rented property.

JuniorSherlock

We currently rent at £600pcm, our mortgage over 20 years would be £450pcm. Obv we need to allow for buildings insurance and so on. Luckily my husband is pretty darn good at fixing, repairing and maintaining so that should be ok. The mortgage don't forget, haven't taken my wages into consideration at all. So I can save and if the worst comes to it, hopefully we'll have built up some equity in our savings.

However no matter when you buy a house, there is always a risk that prices may fall, no matter what. The future is never certain.

jozbo

JuniorSherlock wrote: »

However no matter when you buy a house, there is always a risk that prices may fall, no matter what. The future is never certain.

Damn right. The only thing that's certain is that we'll all die and our time on earth is limited!

suljka

JuniorSherlock wrote: »

I know I am! But the future is a worry.
I'm 38 and my husband is 45, so the only mortgage we could get is a 20 year one.

My husband and I are of the same age as you guys but we were told by mortgage advisor that we could get a mortgage on 24 repayment. Now, that might make a bit of difference for you in terms of affordability as well... The question is - is our mortgage advisor telling us fibs? Anyone knows?