FTB: should I or shouldn't I??

ashm1

Personally I'm waiting for the December CPI figure, the Bank of England January minutes, and the next quarterly Bank of England Inflation report.

fimonkey

Well Tony, I'm personally also re-thinking my decision to be a potential FTB after teh recent interest raterise and expected next one. I'm now thinknig about a complete u turn and renting whilst my money(deposit) sits in a high interest account and works for me. I want to see the effect of teh recent interest rate rise on the local housing market, and i'm also beginning to consider politics... we're due a general election soon aren't we?

High interest rates good for savers, bad for borrowers. At the moment you can be one or the other...

fimonkey

ashm1. What's the significance of the stuff you mention? Are you also a potential FTB? PLease educate us with your knowledge! ;-)

brabzzz

During my financial review (read: agonising sales pitch) with Alliance & Leicester, my 'advisor' (read: 26 your old grad…) told me property funds were becoming like the latest 'fashion accessory' to have in ISAs. Along with tulips, shares and tech shares (at various points in history), it seems like a sure sign of a bubble when every man and his dog is getting in on the act.

I'm in a similar position. 24, London based, similar income, stupidly expensive hobby, savings - and the same dilemma. Buy small, buy big + rent out 3 rooms...or keep on renting? For the moment, I think I've missed the 'raging' housing boom by half a decade and there is therefore no rush. It'll probably keep going up for a while, but not at a sufficient rate to make it worth buying, buying anything just to be 'in'. I very much doubt it'll crash outright - but growth will slow and levels might correct a bit. If interest rates climb a bit higher, that would be nice. I'm personally holding off unless something exceptional materialises - which I'll only recognise that if I've done sufficient research - and that's going to take months I suspect!

Who knows, maybe I'll be eating my words in 2009.

Guy_Montag

You could always try to get a job up in t'north.

Prices are pretty high here too, but not as outrageous as London & the south. It might mean a paycut, but then you could probably afford a nice(ish) place in a nice(ish) place (terribly chavvy up here in most places - be warned).

tomstickland

During my financial review (read: agonising sales pitch) with Alliance & Leicester, my 'advisor' (read: 26 your old grad…) told me property funds were becoming like the latest 'fashion accessory' to have in ISAs. Along with tulips, shares and tech shares (at various points in history), it seems like a sure sign of a bubble when every man and his dog is getting in on the act.

Can you expound some more on this? I started a thread on it http://forums.moneysavingexpert.com/showthread.html?t=339604

lynzpower

Shared ownership not good for all though, mhy bother investing/updating a property if you'll only get 25% of your return and the other party gets 75% of your hard work when you come to sell?

Not so fimonkey.

Im selling my SO at the mo, and it was my SHARE im selling, the rent and value on the rest remains the same.

fimonkey

Hi Lynz,

Forgive me if I've got the wrong end of the stick (which happens a lot with me and finances) but I thought if I have a SO property, and say I owned 50% and the housing association (HA) owned the other 50%, and the property is worth 100 000k, then I build an extension that adds 10K to the propery value, .... When you come to sell is this extra 10K on the new property value all yours?

What happens if you want to buy more of the property (the 'stepping' process?) If you've added 10 K to the value of your property, is this refelcted in the price you pay to the HA, therefore you pay more for extra shares in the property?

Cheers

Bestthingsinlifearefree

It's never easy to get on the ladder (especially in London) and when ever you do it, it will be expensive and you must be willing to make sacrifices. But from your figures it seems like you can do it at a stretch.

So rather than pay of your landlords mortgage, why not pay of your own ?

lynzpower

fimonkey wrote:

Hi Lynz,

Forgive me if I've got the wrong end of the stick (which happens a lot with me and finances) but I thought if I have a SO property, and say I owned 50% and the housing association (HA) owned the other 50%, and the property is worth 100 000k, then I build an extension that adds 10K to the propery value, .... When you come to sell is this extra 10K on the new property value all yours?

What happens if you want to buy more of the property (the 'stepping' process?) If you've added 10 K to the value of your property, is this refelcted in the price you pay to the HA, therefore you pay more for extra shares in the property?

Cheers

Ok what happened to me was that I got 3 EAs round to value it. they all said £X. therefore I did the calculations of what 40% oif X was and marketed it at that ( well i took a few K off as I felt a bit unscupulous asking for what they reckoned it was worth not money saving really) I expect the staircasing or adding extentions would be the same priinciple, its valued at what irts valued at.

However, I know of others who have had the HA value and had a different process, more like what you describe. I suspect its down to individual HAs more than anything. However, most SOs where I am are flats, so extensions/ conservatories etc wouldnt be appropriate in any case.