To buy or to save?

fimonkey

Opinions please.....

If you were single, 30yrs old living in Bournemouth earning 28k Gross p.a. and about to inherit 20K. Would you.....

a) Chuck the 20K into a savings account and continue to rent (which is much cheaper than any potential mortgage will be) in the hope that house prices will stabilise and you can continue to save 5K a year to add to this 20K.

b) Sort out a mortgage for approx 110K with the added 20K as a deposit on a 5 yr fixed rate deal, then hope property prices in Bournemouth don't drop quickly (stabilising not a problem, it's negative equity I'm worried about).

I KNOW this is an old chestnut discussed time and time again, but as a complete financial/economical virgin with no knowledge of how interest rates and employment affect house prices I'd appreciate your opinions please.

many thanks

lynzpower

I know bournemouth fairly well, my OH is from there.

Personally, I reckon prices are falling there. Even kirsty & phil ( who are hardly the doommongers of the market) thought last year that poole was falling ( as you know poole more desirable, & reflected in price wise) ( apart from places like sandbanks course

One thing Ive always thought though is that the properties themselves - although cheaper than london in the main, remain expensive, as I dont think jobs pay that well, and pub prices/ resturaunts/parking/general living costs etc much the same as london. But without the salary to match.

What sort of property are you looking for, and where abouts?

fimonkey

Hi Lynzpower (I recognise that username, CAG??)

I'd be looking to buy east of Boscombe, towards Christchurch (so 4 mile radius of BH5 postcode) though will consider anywhere if right price and flat. I also want it to be 2 bedrooms, or main bedroom and boxroom as I work from home a lot and would need a seperate space, especially if boyfriend moves in with me.

I've kinda kept one eye out on various websites and prices seem to have stabilised, though only been vaguely looking for past 3 months. I completely agree that properties are expensive for what they are, and the best ones go incredibly quickly even though the market seems to have settled a bit.

Given this extra info, what would you do? (Question open to all please).

Many thanks

Fi

Snow_Dog

Most areas in the bmouth/poole/xchurch conurbation have been showing little change since about summer 2004.

Certain areas have been trying to rise eg Merley (Poole/Bmouth northern border) where I have seen a number of properties in 2005/2006 where the asking price seriously exceeds and other sales in the same road, a number of these have hung around, price drops then disappear off the radar with no shows on the likes of nethouseprices.

I have seen properties in the poole area that have been bought up, done up, and then have taken a long time to sell. This includes a number of new builds in Oakdale and Parkstone areas as well as Poole centre.

Theres a lot of flat building going on in poole with the massive development in hamworthy, plus the old power station site still to develop. Also the old gasworks. I would keep an eye on the prices of flats in these areas because when that lot come online, if market sentiment is starting to take a bit of a beating then there will be some serious price cuts.

If anyone suggests that you read the HPC or globalHPC sites, understand that the views presented there are very persuasive as they are mainly one sided and its quite easy to see HPC converts on other forums such as this one when they trot out the "party line" arguments like the scientologists and their "religion". The sites however are informative and are useful for information. Just bear in mind there are users on there with titles like "crash2004".

What would I do in your situation? Dunno, you haven't given us 1% of the required information to judge:-
1. How safe is your job?
2. Boyfriend may move in - maybe wait 1 year and if its serious ooo - joint mortgage.
3. Do you have family backup who can help you bail out in an energency.
4. Do you have major outgoings, drug habit, expensive car to insure

and so on.

As you've probably already seen on this forum, there are totally differing views from "the world is going to end and property will crash tomorrow" to "it will never happen, prices only ever go up". In reality, although this is not much of a prediction, it will be somewhere in the middle of these predictions.

My tuppeneth, stagnation for a period of 5 years, with some areas holding up better than others, as with Hamworthy, big glut of flats will possibly oversupply and there will be local falls. After that who knows, and this prediction is given with the current economic climate, any shock to the markets and all bets are off.

PS. I'd save up for a bigger deposit. Goodness, I think thats my longest post on this forum.

lynzpower

Something also struck me ( did I read it on here or in the papers? cant remember) but there is a phenomenal amount ( or there certainly was last summer of people selling off thier back gardens & cramming in one or two houses on the back. Now I know this happens everywhere ( certainly happening in south mcr where my family are) but I simply cannot believe the amount of it seemingly happening in bournemouth ( parkstone I noted a LOT)

Personally, Id bank the money as well. It may well be significantly cheaper to rent and better to have the bank giving you money than vice versa. thats my opinion.

lynzpower

ps yep , im a cagger

lynzpower

fimonkey wrote:

Hi Lynzpower (I recognise that username, CAG??)

I'd be looking to buy east of Boscombe, towards Christchurch (so 4 mile radius of BH5 postcode) though will consider anywhere if right price and flat. I also want it to be 2 bedrooms, or main bedroom and boxroom as I work from home a lot and would need a seperate space, especially if boyfriend moves in with me.

I've kinda kept one eye out on various websites and prices seem to have stabilised, though only been vaguely looking for past 3 months. I completely agree that properties are expensive for what they are, and the best ones go incredibly quickly even though the market seems to have settled a bit.

Given this extra info, what would you do? (Question open to all please).

Many thanks

Fi

Also to say, go have a nose around some of those that have been hanging about for a while. You might be surprised at the offers they might be open to accepting.

Snow_Dog

Near to Parkstone is Oakdale and I believe that there is a development in Dorchester Road, Oakdale, where they have built about 12 houses in the back of just a few gardens, bearing in mind most of the properties there are ordinary 30s/40s 3 bed detached places with average size gardens, 12 houses is just extrordinary.

I have no idea how they have fitted them in (well a sneaky one involving alternate parallel universes), must take a drive over there one day and check it out. You can bet the parking is awful. Perhaps the residents take it in turns to have visitors due to blocking the access road.

scorpio_princess

lynzpower wrote:

Something also struck me ( did I read it on here or in the papers? cant remember) but there is a phenomenal amount ( or there certainly was last summer of people selling off thier back gardens & cramming in one or two houses on the back. Now I know this happens everywhere ( certainly happening in south mcr where my family are) but I simply cannot believe the amount of it seemingly happening in bournemouth ( parkstone I noted a LOT)

Personally, Id bank the money as well. It may well be significantly cheaper to rent and better to have the bank giving you money than vice versa. thats my opinion.

My mum and dad's next door neighbour has sold off some of their corner-plot garden, and a 4 bed detached has been slapped up in lightning speed - and what a montrosity it is! Most of the houses in this area are quite old, and each one charming and unique. Not any more! This house is sooo ugly - it just dwarfs everything else and is much closer to the road than any of the other houses, so looks very out of place. And it looks like it should belong on one of the new rabbit-hutch developments. I'd be interested to see how much it goes up for sale for...

franklee

Well a) for me.

But then I'm a little older, earn a little less, have saved up rather more and... sold up to go renting...

I've been watching this market like a hawk, it's been pretty static these last two years. Prices up a bit, volumes of sales down a lot, time on market up a lot.

I'm sitting it out

chardhouse

I'm just getting on the property ladder- it's a time of life thing. 38 last summer and finally decided to settle down after a nomadic 18 yrs.
Yup, I'm buying at a (possibly) crazy time.
I've saved for about 10 yrs and have a 43k deposit to go with a 120k mortgage fixed at 5.11% for 5 yrs (with my fiancee.)
It sounds like an investors worst nightmare but I've written off the 43k already- I suppose I can absorb a relatively hefty price drop.

If the house plummets from 163k to 120k in value (could happen!) then all is not lost. I think.
Fingers crossed.