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

jumperabv3

SternMusik wrote: »

Just out of curiosity, is it this development here? http://www.rightmove.co.uk/new-homes-for-sale/property-36860882.html

You left it a little late to do your research! A rightmove search will tell you what the asking price is for pre-owned two-bed flats in the area. Not that it helps you as the ramifications of pulling out of a deal after exchange of contracts can be quite serious, I believe. (Legal costs? Deposit lost? The developers can probably sue you for breach of contract or something.)

Oh my god, what should I do now?
I feel devastated now.

kmmr

jumperabv3 wrote: »

Oh my god, what should I do now?
I feel devastated now.

The developer could also sue you for any further loss they experience on a future sale. So if you agreed $600k, and it later sold for $550 after you failed to complete, you have to compensate them for that loss ($50k) plus any legal costs etc.

kmmr

But seriously... stop stressing. Worrying everyday about every bip will drive you crazy. I work in a professional investing environment, with traders with 10 screens in front of them who seem less buzzed than you are about this purchase.

As someone said above, it not healthy to stress over every move, especially when you are buying something like property which is clearly a long term investment, with a nice reliable income stream in the UK.

If US GBP reaches parity, move to the UK and live in your lovely house! You will make money on any further savings you bring across.

Remember - Europe may well muddle through all this, they may effectively manage a Greek default, they may not. China may go into reverse with a collapse of their property bubble and GBP USD become safe havens... or who knows. There are things you can control, and things you can't, so chiiiilllll...

jumperabv3

bitsandpieces wrote: »

The problem is that - if you're going to go ahead and buy the place - you'll need to move the money back into sterling again. I don't know where the £ will sit against the $ in three months but - as you've found out - things can move up and down a fair bit. Much brighter and better-informed people than me fail to accurately predict short-term currency fluctuations.

I've never changed that amount of currency, but is there much of a cost to each transaction?

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??

Zorz_2

jumperabv3 wrote: »

You guys are not worried prices in London will fall just like the GBP is falling now?

No because prices here are being propped up by people like you (and I dont mean this in a derogatory way) that see London as a safe haven.

jumperabv3 wrote: »

I'm just not sure there will be rental if Europe goes bust - who would like to live in Europe or London (even for work) if their currency worth nothing?
Most immigrants come to London to work and send £££ back to their home country but now the £££ is smashed and is getting smashed more - what can you do now?

Well, unless London is going to be ravished by flames and alien zombies like in the movie Lifeforce, I think we'll be all right in the end.

kmmr wrote: »

I work in a professional investing environment, with traders with 10 screens in front of them who seem less buzzed than you are about this purchase.

In all fairness, that's because they are trading other people's money...:whistle:

I do agree though that the OP should take a chill pill....

BobQ

OP I can see that you are disturbed by what you have done. Overall if these things worry you that much you are temperamentally unsuited to investments of this kind. It is certainly not wishing your health over these matters.

As you say you have done the deed. If you intend to default on your contract in the UK, you might try to get advice in the US on how easy it would be for a someone in the UK to pursue you for the breach of contract? If its an indivdual I doubt they would bother unless they have some kind of legal costs insurance a new build developer might be more willing to try.

I see no point in taking money in GBP that you need to complete the transaction (if you intend to do this) and cponverting back to $US. If might be a good deal but suppose when you convert it back in 3 months time (you have no choice of the time) you may not have enough to complete the deal and have to send yet more money.

As others have said, calm down and take the long term view.

By the way given you are concerned about risks and your worst case scenario of a run on UK banks you appear to have 600K in a single UK bank (the government backed protection on personal savings is £85K per institution. It seems unlikely that Barclays would collapse but thought you might want to considr moving the money to more than one bank.

jumperabv3

BobQ wrote: »

As others have said, calm down and take the long term view.

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.

Loopgames

Your investment will have two aspects to it.

- the property value
- the monthly income

You seem focused solely on the former. Even though that is one realised once you sell. And you may be fulfilling your worst nightmare by selling at a loss. Fear and greed are two emotions that that you should consciously try to avoid.

jumperabv3

Loopgames wrote: »

Your investment will have two aspects to it.

- the property value
- the monthly income

You seem focused solely on the former. Even though that is one realised once you sell. And you may be fulfilling your worst nightmare by selling at a loss. Fear and greed are two emotions that that you should consciously try to avoid.

If I wanted high return I would go for a property that I can rent with 6% yield, I wanted something safe, as you can see my fear is that banks will collapse so you can imagine how I feel ... I haven't acted out of greed, I just thought London could be a safe place (and it might be after all) ... looking at things from a 2 weeks ago - I realize for such amount NY could have been a much better place to invest ... but it's quite too late now, at least for the next 3 months ... and selling the property right away might not be a good idea neither .... I might end up with less $ to buy NY property, and if the US would fall into a new crisis after Europe (we're in such a serious debt) - then what, I would invest back in the UK?

You see - the entire world is shaking, it's not only Europe, it's everywhere, it's so scary that no one knows where to park his money ... and trust me - I won't be surprised if New York would get busted with its property prices too ... you can never win ... you just do what you think is the best ...

This is the frustration I'm in right now, I'm wasting all my energy on this which is bad..

bitsandpieces

Loopgames wrote: »

Your investment will have two aspects to it.

- the property value
- the monthly income

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