First time buyers, some unbiased real opinions needed

Unknown1234_2

Just to give you my situation

I bought a two bedroom flat with my partner in November 06 at 135K on an 100% mortgage fixed for 5 years.

Ms_Piggy_2

saunaboy wrote: »

We've just had an offer accepted for 125k, 3 bed place in an area that's nice enough & on the edge of a stupidly expensive area (to cut long story short, there's a dean, one side you'll pay 250k, our side you'll pay 125k).

Jesmond Dene by any chance? Very nice!

phlash

saunaboy wrote: »

not really, just convinced that we've tried our best to be sensible about it and passing on the main points.

Isn't that the point of this forum ???

some friends here bought 3 bed new build on land surrounded by council estates, that isn't built yet and is 190k.

we put far more effort into choosing the type of place that we were after than anything else to be honest. We've been abroad for a few years and returned to find the UK housing market isn't the piggy bank for any chancer with a few quid to spend than it was in 2000...

I was just being cheeky. Your points are valid, and sensible.

The one thing that did make me bite my tongue, was the "There's only one thing that stresses me about the whole thing... that if there were to be a crash, and we needed to move, then we'd be !!!!!!ed. But remember here, we wouldn't be the only ones. There'd be literally millions in the same situation so I'm banking on this not happening."

I always write in a 20% 'correction' to see what the result to my finances would be. Its just a simple risk assessment as such, where you have already thought of the consequences. It sounded as though your reasoning for a correction not occuring was because it would land many people in negative equity. Unfortunately a house price correction is will not correlate with the number who may find themselves in negative equity.

As for your reference to BTL Landlords mainly having bought when prices were reasonable, do you have any evidence? The only graphs of BTL mortgages that I find on the web, all seem to suggest that the majority of BTL's have been bought recently and speculatively. (See the Council of Mortgage lenders website, http://www.cml.org.uk/cml/statistics) Therefore a mad rush to the doors in the event of a correction, is indeed a distinct possibility.

saunaboy

ms piggy

no, tynemouth park. metro station side is all 3-5 bed very expensive places (250-400k-ish), other side looks very similar in style to jesmond but all priced at 90k downstairs flat, 120-150k upstairs/maisonette and about 180k house.

there's a high turnover but looking like a hell of a lot of people are buying in there to live. Sounds snobby but families who bought very cheap are selling to generate income to buy bigger (ex council) places with gardens a few miles down the road & I get the impression this place is being quickly populated by your typical young professional lot. Like me

saunaboy

phlash

You'll be more right I'm sure. I've done no proper research, just based my opinions on what was hapening in 2001 and what I've seen different since coming back to the north east a year ago. When I left it was going daft, but IMO there's been stagnation here at least since I came back. No real leaps in prices & no real disasters except for a few places advertised with silly prices attached.

I plan to stay here anyway so hopefully any crash wouldn't affect us too much.

Errata

In the past, when people got a bit stretched by increases in their mortgage interest rate, they tightenedd their belts, got an evening job down the local pub/chippy/whatever and weathered the storm, and some rented out a room or a couple of rooms. Not a totally pleasant situation to be in, but they kept a roof over their heads.

Ms_Piggy_2

saunaboy wrote: »

ms piggy

no, tynemouth park. metro station side is all 3-5 bed very expensive places (250-400k-ish), other side looks very similar in style to jesmond but all priced at 90k downstairs flat, 120-150k upstairs/maisonette and about 180k house.

there's a high turnover but looking like a hell of a lot of people are buying in there to live. Sounds snobby but families who bought very cheap are selling to generate income to buy bigger (ex council) places with gardens a few miles down the road & I get the impression this place is being quickly populated by your typical young professional lot. Like me

Ahhhh! We were looking at Whitley Bay/Tynemouth/Monkseaton for a solid 'family' house. May also look at Tynemouth Park/North Shields.

Thanks!

CB1979_2

Mr Ouija, things have changed alot in the last 10 months alone in croydon (well south croydon)

i bought a place for £167k (got a very good price, but we were FTB) in South Croydon in July/August last year, now there's 2 places up for sale in my building which are both 2 beds for £210k & £220k.

http://www.townends.co.uk/SITE/php/property.php?id=CRO070481&type=b&from=results&newhome=

http://powering.expertagent.co.uk/(S(a4qean45l05hlh55quggxhb3))/PropertyDirect.aspx?pid=275f373e-7bc9-47b1-bc9b-2520fea04863&aid=!!61b33ad7-37c0-414a-83e1-c3d5fa19d2bd}

it's an old victorian conversion as you can see near enough to South Croydon/East Croydon station but far enough away from the centre of Croydon as well.

there's new build 2 bed flats popping up all around for like £225-£250+! :eek:

in answer to your question though, i'd be more inclined to fix it for 5 years (but then we're talking 2012 when everyone is so sure the crash will really happen after the olympics etc)

phlash

saunaboy wrote: »

phlash

You'll be more right I'm sure. I've done no proper research, just based my opinions on what was hapening in 2001 and what I've seen different since coming back to the north east a year ago. When I left it was going daft, but IMO there's been stagnation here at least since I came back. No real leaps in prices & no real disasters except for a few places advertised with silly prices attached.

I plan to stay here anyway so hopefully any crash wouldn't affect us too much.

If you plan to stay somewhere long term, then the major factor is future lending criteria, ie interest rates as previously posted about.

I hear of far too many people, mortgaging to the hilt in the current climate, where any small increase in interest rates or drop in house prices would see them in a terrible financial situation. Stuck with a property they can't sell due to negative equity and can't afford because of increased repayments, they then have no way out.

People often compare the current affordability to be on par with what it used to be as a percentage of take home pay. That is a fair enough comment on the surface, but when you dive deeper, you find that that was at a time when interest rates were high, and house prices low. Their risk profile was therefore ALOT different, they had future positive outcomes (interest rate falls, and house price inflation) compared to now.

Addiscomber

I agree with the poster who described his home, not his house. If you are buying because you think a house is an investment then, in my view, it is not certain that prices will continue to rise. They may stagnate or they may fall slightly, or they may crash. The whole point is that nobody knows or can predict the future. If you have chosen a home for the foreseeable future then different factors come into play, but whatever you do, do not overstretch yourselves financially. Remember that interest rates are not the only things that rise. So do council tax, energy and fares. World food prices also appear to be going up. Make sure that your projected budget includes everything you can possibly think of, and build in some "wiggle room".

I also agree that you should maybe think about a longer fixed rate period, even at a slightly higher rate, to buy yourselves some stability. The arrangement fees have been increasing for some time now. If you are worried now about interest rates having risen in 2 years time, will you be in a position to pay a huge arrangement fee for another deal?