1st Time Buyer - jump on market now or keeping waiting?

Mike5588

Hi all,

I've been saving for the last few years whilst living at home. Now that the government have set-up the 'Help to Buy' it has given me the opportunity to increase my deposit significantly and buy a new build.

I've travelled to a new development approx 32 miles from work in an area outside of Bristol (Weston-Super-Mare). House prices are significantly cheaper than Bristol but means cost of commuting will increase. I've been advised by the developers mortgage advisor that I can afford up to 150k. Unfortunately this pushes out my ideal property type of a 2 bed end terrace and leaves only a top floor apartment within budget.

I'm concerned that this government scheme will push house prices up and mean that I will not be able to afford to buy house/apartment for a number of years. It seems a number of papers and independent bodies are very critical of this new scheme and are concerned it will cause a housing 'bubble'.

Its now a big decision whether I jump, buy the top floor 2 bed apartment and get on the housing ladder before house prices increase or keep saving for x number of years; hoping that house prices will eventually fall and then be able to buy my 'dream' 2 bed end terrace house (seems unlikely?).

Any advice or people in similar situation to me?

brit1234

Mike5588 wrote: »

Hi all,

I've been saving for the last few years whilst living at home. Now that the government have set-up the 'Help to Buy' it has given me the opportunity to increase my deposit significantly and buy a new build.

I've travelled to a new development approx 32 miles from work in an area outside of Bristol (Weston-Super-Mare). House prices are significantly cheaper than Bristol but means cost of commuting will increase. I've been advised by the developers mortgage advisor that I can afford up to 150k. Unfortunately this pushes out my ideal property type of a 2 bed end terrace and leaves only a top floor apartment within budget.

I'm concerned that this government scheme will push house prices up and mean that I will not be able to afford to buy house/apartment for a number of years. It seems a number of papers and independent bodies are very critical of this new scheme and are concerned it will cause a housing 'bubble'.

Its now a big decision whether I jump, buy the top floor 2 bed apartment and get on the housing ladder before house prices increase or keep saving for x number of years; hoping that house prices will eventually fall and then be able to buy my 'dream' 2 bed end terrace house (seems unlikely?).

Any advice or people in similar situation to me?

I'm in the same situation in London with a big deposit Already priced out by hoards of foreign buyers and this scheme is likely to price me out further However I know the scheme is flawed and won't touch it with a barge pole.

It doesn't really add to your deposit as it is a loan. In reality its buying with a 5% deposit on an overpriced new build which will leave you in negative equity.

My solution is to keep saving the deposit and wait for mortgage rates to rise as the countries credit rating falls further. Just be careful where you put the cash.

Mr._Pricklepants

brit1234 wrote: »

My solution is to keep saving the deposit and wait for mortgage rates to rise

Wonderful advice. :cool:

Beware people, this brit1234 poster is well known in the Debate House Prices and the Economy section of this board as a bit of a laughing stock. Time after time his ludicrous predictions and assertions have been discredited. You might have noticed his signature is a bit out of date also.

Please do your own research.

Mrs_ted

We are jumping on the ladder now but have thought is this the right time but who knows. We did look into several schemes but either way they try and screw you. Best of luck

chewmylegoff

You need to work out what is best for you and your personal circumstances taking into account what is happening to the housing market in the area you want to buy. No one can really advise you on whether it is the right time to buy however a couple of points:

1) be wary of using a developer's mortgage broker - suggest you see an independent whole of market broker or at least post your financial circumstances on the mortgage board here and still what people think you might be able to borrow

2) look at what you can afford that is not new build - you're likely to pay a premium for a new build and it might be a bit rubbish.

Mrs_ted

chewmylegoff wrote: »

You need to work out what is best for you and your personal circumstances taking into account what is happening to the housing market in the area you want to buy. No one can really advise you on whether it is the right time to buy however a couple of points:

1) be wary of using a developer's mortgage broker - suggest you see an independent whole of market broker or at least post your financial circumstances on the mortgage board here and still what people think you might be able to borrow

2) look at what you can afford that is not new build - you're likely to pay a premium for a new build and it might be a bit rubbish.

Can you elaborate on what you mean by premium? Sorry- very new to the housing market.

casperlarue

Which side of Bristol do you need to commute to? Getting out of Weston in the morning is chaos, you need to leave by 7am or after 9am, in between is gridlock. There is currently an upgrade scheme going on to improve J21 access but honestly, most of the locals will tell you it's a waste of £20million.

Fire_Fox

Mike5588 wrote: »

Hi all,

I've been saving for the last few years whilst living at home. Now that the government have set-up the 'Help to Buy' it has given me the opportunity to increase my deposit significantly and buy a new build.

I've travelled to a new development approx 32 miles from work in an area outside of Bristol (Weston-Super-Mare). House prices are significantly cheaper than Bristol but means cost of commuting will increase. I've been advised by the developers mortgage advisor that I can afford up to 150k. Unfortunately this pushes out my ideal property type of a 2 bed end terrace and leaves only a top floor apartment within budget.

I'm concerned that this government scheme will push house prices up and mean that I will not be able to afford to buy house/apartment for a number of years. It seems a number of papers and independent bodies are very critical of this new scheme and are concerned it will cause a housing 'bubble'.

Its now a big decision whether I jump, buy the top floor 2 bed apartment and get on the housing ladder before house prices increase or keep saving for x number of years; hoping that house prices will eventually fall and then be able to buy my 'dream' 2 bed end terrace house (seems unlikely?).

Any advice or people in similar situation to me?

Prices will fall again, they always do, sooner or later is anyone's guess. The property market is not a simply 'ladder' it's a game of snakes and ladders - short term it is a gamble, longer term it is generally an investment. IMO using every rung on the 'ladder' (going up or down) makes no sense, you waste perhaps £10K each time in costs of buying and selling. Much better to leapfrog if you can.

Do you intend to settle down with a lovely lady/ gent/ babies/ pets at any point? How does a top floor flat or two bed house work with that? Does the long lease permit tenants or pets? Who is the target market for selling and lettings there, is it broad or narrow?

What are your finances like generally, as well as your deposit do you have money for mortgage arrangement, legals, survey, contingency, decor and furniture, three months mortgage payments in case the worst happens (illness, injury, redundancy, unplanned pregnancy)?

Have you factored service charges, ground rent and major works into your budget? Be aware service charges are often artificially low in the first couple of years, to attract buyers and because the place is new. It's far from unknown for them to double or even triple.

Davesnave

A top floor, new-build flat isn't exactly everyone's idea of a great investment, especially in a place like Weston. Like any new thing, you will pay a premium price for it, and if prices do fall, or simply stagnate, you could be out of pocket should you want/need to move.

Does a 64 mile commute stack up financially and in terms of stress? As a younger person you will want to put as much into your work as you can in order to move up the career ladder, which is, ultimately, the best way to fund your future IMHO.

casperlarue

Mike5588 wrote: »

Hi all,

I've travelled to a new development approx 32 miles from work in an area outside of Bristol (Weston-Super-Mare). House prices are significantly cheaper than Bristol but means cost of commuting will increase. I've been advised by the developers mortgage advisor that I can afford up to 150k. Unfortunately this pushes out my ideal property type of a 2 bed end terrace and leaves only a top floor apartment within budget.

Do you specifically want new build? There are plenty of 2 and 3 bed houses well within your budget in Weston .... look at Worle, St Georges, Wick St Lawrence, Weston Village and Locking Castle

harpoboy

brit1234 wrote: »

Just be careful where you put the cash.

Wise words indeed.

This is from someone who cashed out of stocks and shares in August 2012 to plough their dough into gold.

http://forums.moneysavingexpert.com/showpost.php?p=55395731&postcount=117

FTSE 100 is up from 5,700 in August to north of 6,400 now.

And as for gold. Well - I think we all know how well that has done over the past six months.

:rotfl: