When do I buy??

mazy_m

Hi there,

I'm not in a position now to buy but between me and my partner we can save up a reasonable amount in the next few months to a year. Now that the majority of our debt is luckily on an interest free blance transfer card. We've worked out what we need to pay every month until that's paid so this debt should hopefully not be an issue.

Sorry going off topic a bit there so basically i've been reading into house buying and as I said before probably not in the immediate future but if we can save a decentish deposit when should we aim to buy (Does anyone have advice on a decent deposit?)

Is this government scheme a positive thing for a first time buyer such as ourselves this is the one in which you only need to find 5% and the building company and government stump up a 20% loan then you have 75% mortgage.

However it seems like these houses seem to be very highly valued and I don't think i'd be willing to pay this much for a house such as this. I'm not really a fan of new builds either. Althugh if the general advice is that it is a good thing then I think I'd need to put preferences aside just to get on the properly ladder.

Would getting a mortgage for this be in essence a little easier as it's only a 75% mortgage?

Getting a decent mortgage is also a major concern we both earn ok wages but nothing great at all. When I do plan on getting a mortgage it will be when we have only one debt on my credit account which will be my car that whill have just over a year left until it's paid off. We always pay everything on time and pay extra instead of the minimum - would anyone say that this would mean effectively my credit rating should be good?

I've read a few conflicting arguments as to whether or not to go forward with this government scheme or if it's just there to profit both the government and developers.

So just to get to the point now would you wait for say 3/4 years and get a mortgage on your own accord with a bigger deposit or hope that the deposit percentages decrease, to be able to buy any properly (that was affordable!!) or use a scheme such as this in the next couple of years? Bearing in mind that under £250000 there's no stamp duty for the next two years also?

What financially makes the most sense to people who know about this? As I admit I know nothing at all.

Thank you so much for taking the time to read this and I appreciate any help!!

Maz

poppysarah

mazy_m wrote: »

Hi there,

I'm not in a position now to buy but between me and my partner we can save up a reasonable amount in the next few months to a year. Now that the majority of our debt i

become debt free.
save.

Come back when you have £15k in the bank.

Running_Horse

It's like the credit crunch never happened!

Jimmy_31

You have said yourself that the houses seem over valued and you wouldnt be willing to pay that price for what you get in return, thats the position i was in during the boom, i could have easily borrowed enough money and have a tiny deposit in place to buy a house in my area but i chose not to because i wasnt getting value for money (nowhere near value for money).

IMO the new government scheme is not a good thing for FTBs, im waiting to buy a house and will do so once they have dropped to an acceptable price, i dont want any help from the government because the scheme is just going to keep house prices high which to me is a bad thing and will always be a bad thing (i dont want another boom after i have bought a house).

The reason the government have set up this scheme is so that FTBs can buy an over priced house with a very small deposit, they have chosen to do this because the banks are now not willing to lend people 95% of the cost of a house as it is too risky due to the state of the housing market, So banks are basically saying we wont lend you that much cash for that house because its probably going to lose a lot of its value, so to me if a bank sees that house purchase as too risky then you dont go finding other ways or using government schemes too enable you to buy the over priced risky house.

If i was you id keep saving until you have a big enough deposit to enable you to buy a house with out resorting to any of these "helpful schemes", but thats just my opinion and im sure somebody will be along shortly to tell me that im stupid to just keep saving a deposit and buying a house the old fashioned or normal way.

Dont forget at some point you may want to move to a second home and i know quite a few people on every different kind of scheme that has been available over the last few years and none of them can afford to move to the next step of the ladder and most of them wish that they had just waited to buy, still the odd one or two saying its the best thing they have ever done mind you.

brit1234

Pay off your debt first, and save a bigger deposit as house prices fall.

The government scheme will leave you in negative equity, stay clear.

mazy_m

Hey guys thank you so much for clarifying that for me I will save save save until I've got a good deposit and try for a mortgage that way. I've managed to 'nearly' clear all my debts in the last year just by being sensible and a bit frugal and it's not been as bad as I thought so I'm sure I can do it for the next couple of years so I can get this deposit. At few family and friends have recently brought but they were lucky enough to have help with deposits so I think I was just worrying that I was doing the wrong thing by renting.

Not to mention I watch too many renovation etc shows which makes me itch to do up a house how I'd love it!!

I'll have to stay clear of these programs!! ha ha!!

Maz

HAMISH_MCTAVISH

mazy_m wrote: »

So just to get to the point now would you wait for say 3/4 years and get a mortgage on your own accord with a bigger deposit or hope that the deposit percentages decrease, to be able to buy any properly (that was affordable!!) or use a scheme such as this in the next couple of years? Bearing in mind that under £250000 there's no stamp duty for the next two years also?

What financially makes the most sense to people who know about this? As I admit I know nothing at all.

There's no reason to rush into buying a house in the next 6-12 months.

Prices dipped over winter, are currently rising over spring/summer, but in essence they're stagnating, and are unlikely to see much beyond mild fluctuations this year.

BUT.....

Prices will almost certainly be rising strongly 3-4 years from now, so waiting that long is a huge risk and highly inadvisable.

There is a massive housing shortage building up, as population is growing and housebuilding is at record low levels.

Plus of course, hundreds of thousands of people have been saving since the credit crunch started, and will have saved their deposits before you. This will add a big surge of demand, probably by the middle of next year, with rising prices the inevitable outcome.

Also don't forget, the government scheme is strictly limited in size, and will only help around 10,000 buyers. It's likely to be fully subscribed very quickly. So if you do want to consider it, best look in early.

brit1234

HAMISH_MCTAVISH wrote: »

BUT.....

Prices will almost certainly be rising strongly 3-4 years from now, so waiting that long is a huge risk and highly inadvisable.

Really Hamish, so tell us where all this money is coming from in 3-4 years time to allow these strong rising prices?

Public sector wage cuts and unemployment has just started. Interest rates are about to start going up.

More likely prices will be stagnant then or still going down to normal levels.

Another thing is there are not as many as you imagine who have saved war chests to get on the housing ladder.

Orpheo

In 3-4 years time genetic engineering will almost certainly have achieved this:

Orpheo

HAMISH_MCTAVISH wrote: »

Plus of course, hundreds of thousands of people have been saving since the credit crunch started, and will have saved their deposits before you. This will add a big surge of demand, probably by the middle of next year, with rising prices the inevitable outcome.

Allow me to illustrate the source of the above:



Using this medical dummy of course.

The average UK savings amount is about 2k, which means that you can put me alongside 30 other people and I will be the only one with savings.

motherofstudents

I would steer clear of the government scheme and save as much as possible. I don't have a crystal ball to say when house prices will increase or decrease so in my opinion the best time to buy is when you have the money to do it and you see a house that you would like to live in. It will be your home rather than an investment. Don't forget that in addition to your deposit you will need enough to cover conveyancing etc.