Scared to buy - is it the right time for me?

SaveSomeMore_2

I'm a single first time buyer luckily in the position where I can now quite easily afford to buy "something".

I have seen a house which I could get with a 65% LTV mortgage which I've worked out would cost me 20-30% of my gross monthly salary (depending on term) due to a good staff mortgage rate. Or 30-35% on an average rate if circumstances change.

I "like" the house and others I've seen but they all do have compromises (convenient location, but not my desired one). It would probably be somewhere I'd look to live for 3-5years or so, more of an investment than a home. It does have a lot of potential though.

I cannot afford my "ideal home" (and I've never expected it as my first, especially as a single buyer), and even if house prices stayed put I'd have to save probably another 3-5years to get there. I've already lived with parents saving for 4 years, another 5 is a scary thought!

Am I along the right lines in the logic that the rising house prices are going to be more valuable than savings rates? So money sat in a house is going to increase more than or equivalent to money sat in a savings account or ISA?

p00hsticks

SaveSomeMore wrote: »

It would probably be somewhere I'd look to live for 3-5years or so, more of an investment than a home. It does have a lot of potential though.

SaveSomeMore wrote: »

Am I along the right lines in the logic that the rising house prices are going to be more valuable than savings rates? So money sat in a house is going to increase more than or equivalent to money sat in a savings account or ISA?

Buying and selling houses is an expensive process, particularly if you are talking about the sort of price range where stamp duty is applicable.

It also sounds like you might be thinking of spending money on improving the property when you are there - there are very few home improvements you can make which are cost effective in terms of adding value to the property price.

In my opinion, in the relatively short timescale of 3-5 years, there's a reasonable chance that any price increase could be more than outweighed by your buying and selling costs and your expenses on improving/maintaining the property in the interim. So don't count on coming out of it with any more money than you put in.

marksoton

Treating a home as an investment is folly in my opinion. Because like it or not it would be your home.

Surely your independence is more important than any return you may make on the property?

SaveSomeMore_2

p00hsticks wrote: »

Buying and selling houses is an expensive process, particularly if you are talking about the sort of price range where stamp duty is applicable.

The house I'm looking at is well under the range for stamp duty, although my "ideal house" I'd want in 5 or so years time would probably be over.

p00hsticks wrote: »

It also sounds like you might be thinking of spending money on improving the property when you are there - there are very few home improvements you can make which are cost effective in terms of adding value to the property price.

I'd just be redecorating. Currently the house is quite shabby (worn carpets, an ugly lean-to taking up garden space, some very bad choices in decorating!). So it would just really be tidying it up and presenting it better. I think the house is currently a good price and if presented better would probably add £10-15k to the asking price (based on a lot of comparisons in the area) which would hopefully absorb any costs (in purchasing and doing it up). No major work.

p00hsticks wrote: »

In my opinion, in the relatively short timescale of 3-5 years, there's a reasonable chance that any price increase could be more than outweighed by your buying and selling costs and your expenses on improving/maintaining the property in the interim. So don't count on coming out of it with any more money than you put in.

marksoton wrote: »

Surely your independence is more important than any return you may make on the property?

I'm not looking to make a massive profit. Just really reassurance that I wouldn't "lose" a drastic amount of money in comparison to waiting and saving. I'm willing to make a slight net loss overall though - worst case say being £5000 worse off in five years time compared to sitting and saving. I could deal with that and think that would be a reasonable amount to spend for some independence.

PasturesNew

You will always be scared. Even if you were on your 4th house and just won the lottery and were about to buy.

You will rarely/never find a house without a compromise.

Best thing you can do is just buy it, move in and accept that "There will be things I didn't expect that are wrong with it/need immediate fixing; there will be things that will annoy me forever; there will be changes I'd have wished to have made if I'd have been the person to design it".

Then shrug, sit down, get out the takeaway menu and order your favourite takeaway while thinking "I can sit and eat this in my pants, then toss the tray into the corner of the room ..... because I own this house and while I pay my monthly payments nobody will want to do a random inspection or give me notice without any reason"...... then smile and enjoy your meal!

SaveSomeMore_2

PasturesNew wrote: »

You will rarely/never find a house without a compromise.

Yeh, I'm not talking massive compromises here, and on my budget I feel I kind of "deserve" compromises!

This one has a small and quite overlooked (by neighbour, not at rear) rear yard, the bathroom is a bit cramped (although has a bath), and the location is very convenient but not the prettiest. BUT it is cheap and otherwise very spacious.

PasturesNew wrote: »

Then shrug, sit down, get out the takeaway menu and order your favourite takeaway while thinking "I can sit and eat this in my pants, then toss the tray into the corner of the room ..... because I own this house and while I pay my monthly payments nobody will want to do a random inspection or give me notice without any reason"...... then smile and enjoy your meal!

An excellent point! :T

getmore4less

Investement, make it work for you.

Tart it up and rent out rooms share the costs.


Just be sure it it has sell on potential and a good leting property.


The biggest risk is usualy becoming a forced seller, job loss/move.

renting it out is the back up plan.

If you stretched further and rented out room(s) how much closer to a more idea place would you be or could you skip one move?

Lord_Baltimore

And don't forget to factor in that an interest rate rise is possibly coming early next year.