1st time buying a flat - and so so sorry for this!!!

bitsandpieces

jumperabv3 wrote: »

It doesn't cost much to exchange but it's a question of predicting where the market will go.

Some says not to deal with it because it's dangerous, do you agree? Is it not one sided that Europe is in big troubles??

I don't know where the currency markets will go - if I did I'd be sitting in my Manhattan penthouse after having made a few fortunes through spread betting Do you know enough about these markets to trade effectively on currency fluctuations? I'd worry that you could end up effectively gambling your life's savings on markets you don't adequately understand (that's not an insult, by the way - currency markets are very complex, I have my doubts about even the professionals playing this game...)

One thing to consider - if you are going to go ahead with the UK purchase - is what happens if the £ shoots up against the dollar? Could you leave yourself without funds to complete?

jumperabv3

bitsandpieces wrote: »

The third element in this case is the £/$ exchange rate - which could significantly affect both of these, for better or worse.

If I look 20 years forward it shouldn't matter, and for rent wtvr - $50 more or less, who cares ... I care more about the property itself not to fall in value ... if the tenant needs anything he got management but I want to offer him great place to be in and good rate as well, I don't mind beating other landlords by offering low rent but getting good tenants ... (dunno if I think right or not)

I care more about the propety, keep it in value, dont go up but just dont go down, dont crash - that's why I chose London, my friend told no places to build, no places to develop, no new builds, so many people wanna live there - so I figured why not ...

But now I'm worried about the property itself ... this is all I'm worried about, I don't care about the rent or the exchange rate for the rent I'm getting - I just wanna know I put my money in a safe place and this conception has been hurt and damaged by this financial crisis hitting the UK badly (and who knows when our country would fall too)

Lavendyr

OK, at this stage I'm seriously starting to wonder if OP is a troll as they keep repeating the same thing over and over. "What if the pound reaches parity?" "The UK currency is in freefall!" "Isn't the UK a dreadfully dangerous place to invest?" ...

This has been going long enough for anyone's initial panic at seeing FX rates fluctuate to have dissipated into, at least, a little bit of common sense.

In case you aren't a troll, one more time for the record. Property is a LONG TERM investment. Currency can go down as well as up. Property values can go down as well as up. Simple as. Now that you've bought this property, bite the bullet and complete - you will lose less by doing that than by pulling everything out now.

ILW

jumperabv3 wrote: »

That's what I want to do and that's what I told myself I do it for, not for a short term, but for a long term (I want to work and save, not to rely on this as my only income) ...

My fear is that London is going to repeat the 1997 of Hong Kong ...

http://static.alsosprachanalyst.com/2011/01/Hong-Kong-Real-Estate-History-in-a-chart1.png

Look at the graph in 1997 - before that Asian Financial Crisis prices went up like crazy in Hong Kong .... just like in London nowadays ... and then guess what, the prices crashed and only 15 years later (2012) they are back to where they were and this time I assume they would go up from here ....

Don't you think the same fate is waiting for London just like HK of 1997? I didn't take it into consideration before buying but now I do now that the markets are so fragile and stocks are falling and no doubt we're heading into a crash.

Same happened to London property in 1990, took 10 years to regain value. ( and then took off).

apniproperties6

Well,

There may be little bit problem for the first time that you don't know what to do what would be the next step.

Thanks.

pinkshoes

Jumper, just STOP worrying and go with the flow! Leave the money in £GBP, and pay the balance upon completion. What's done is done, so chill out and stop worrying yourself into an early grave.

Life is too short - IT'S ONLY MONEY!

You CAN pull out after exchange, but it's not just your 10% deposit you'll lose. The vendor can then pursue you for any losses i.e. assuming you paid £375k, if they then can only sell it for £300k, they can sue you for the additional £75k plus all expenses.

Your ONLY option unless you potentially want to lose a HUGE amount of money is to carry on with the purchase.

bitsandpieces

jumperabv3 wrote: »

If I look 20 years forward it shouldn't matter, and for rent wtvr - $50 more or less, who cares ... I care more about the property itself not to fall in value ..

Over 20 years, the return from renting the place will - or should! - be a significant part of the return on your investment. If the exchange rate moves up and down, you'd hope this will even itself out over time. If there are long- or medium-term moves, this could mean your investment does much better or much worse as a result.

I care more about the propety, keep it in value, dont go up but just dont go down, dont crash - that's why I chose London, my friend told no places to build, no places to develop, no new builds, so many people wanna live there - so I figured why not ...

But now I'm worried about the property itself ... this is all I'm worried about, I don't care about the rent or the exchange rate for the rent I'm getting - I just wanna know I put my money in a safe place and this conception has been hurt and damaged by this financial crisis hitting the UK badly (and who knows when our country would fall too)

I'm not sure if it's just cause you're panicking, but from what you're saying it's hard to see why you've put the money into a foreign property. If you really just want your money to be safe and are happy to accept a low return in order to achieve this, why not put it in cash savings accounts or other conservative investments? There are plenty of good reasons why people make the type of property investment you've made, but you seem to be giving lots of reasons for following a more conservative investment strategy.

You are where you are, though. Pulling out after exchange of contracts will be expense, at best - and could end up very expensive indeed, at worst. At an appropriate time, however, it does seem worth getting investment advice - to see where's best to keep your money in order to achieve your goals.

jumperabv3

ILW wrote: »

Same happened to London property in 1990, took 10 years to regain value. ( and then took off).

It doesn't feel so good to read this ... 1990 is going to repeat itself and I bought exactly in the wrong moment ...

GBP will go down.
Property prices will go down.

It sucks ....

mjdh1957

Are you sure you're reading your crystal ball correctly? Most people have no idea what the future holds, but you seem to be convinced by something or other.

In any case, it's too late, you're now committed. But you have about the worst case of 'buyer's remorse' I've seen.

jumperabv3

mjdh1957 wrote: »

Are you sure you're reading your crystal ball correctly? Most people have no idea what the future holds, but you seem to be convinced by something or other.

In any case, it's too late, you're now committed. But you have about the worst case of 'buyer's remorse' I've seen.

It's not too late to pay upon completion and sell the property and then look for something else in NYC (might find something for $550k) ... but I'm not sure if that's the right thing to do, or perhaps the right thing to do is just to SIT with this investment and let it go.

I am also not sure if I want to stay in America or move back to the UK in some point again (I have a European Passport so I can live in either places) ... either way I think I'm just freaking out as a 1st time buyer.... What's sure for the near term, very near term - if the GBP keeps on falling like this the London prices will go up so badly before the crash ... so you never know how bad things will end, but they seem pretty bad, worldwide, we might find ourselves in 2 weeks with the fed doing some QE3 and lowering the value of our currency too ...

There's no escape.