London Help To Buy apartment due exchange 17th, should I wait until referendum

magicpork

Hello forum,

I'm in the processing of purchasing an apartment in London E10 area and I'm taking advantage of London Help To Buy scheme for 35% equity loan.

Both my solicitor and mortgage adviser told me the process is going very smooth and they expect all paper/mortgage offer to be in place early next week and I'm expected to sign the exchange the contract and pay the deposit on the 17th.

Do you guys think I should probably somehow deliberately delay (not sure how) this by an week or so, just to see the outcome of the referendum? I quite like the apartment I'm purchasing but the possibility of brexit followed by a sizeable hit on the housing market makes me a little uncomfortable.

Thanks for reading.

elverson

If it's a vote for leave, are you expecting to lower your offer and expecting the seller to accept this?

marksoton

If you're planning to purchase it should be with a long term view not short term.

Fosterdog

You could wait but the market could go either way or not be affected at all. What would you do if the market suddenly shoots up and the seller pulls out to sell at a higher price? You could then be priced out of the market and not be able to buy at all in London

magicpork

elverson wrote: »

If it's a vote for leave, are you expecting to lower your offer and expecting the seller to accept this?

I think it's worth trying and the developer may be willing to lower the price given the site will be completed in August and they wouldn't want to leave anything unsold by then.

marksoton wrote: »

If you're planning to purchase it should be with a long term view not short term.

I agree with what you said and that's indeed my intention. however if there're chances for short term gain.. that's a nice bonus to have too. maybe I'm thinking too much.. if you were in my situation, would you go ahead regardless of the outcome of the vote

Cakeguts

Start again. Why are you buying this property? Is it somewhere to live? If you are living in it any gain is in the value of the property which you can't get at unless you sell so what difference is it going to make? If your property goes up so will all the others so you will stand still in terms of what you can afford to buy so there will be no difference.

magicpork

Fosterdog wrote: »

You could wait but the market could go either way or not be affected at all. What would you do if the market suddenly shoots up and the seller pulls out to sell at a higher price? You could then be priced out of the market and not be able to buy at all in London

I didn't consider the possibility of the seller pulling out, so they're obliged to sell me the property only until the contractual exchange date? I should probably read the Help To Buy reservation agreement more carefully when I get back to home! Thanks for the info.

marksoton

magicpork wrote: »

I agree with what you said and that's indeed my intention. however if there're chances for short term gain.. that's a nice bonus to have too. maybe I'm thinking too much.. if you were in my situation, would you go ahead regardless of the outcome of the vote

No. But that's because i wouldn't purchase with an equity loan. Or in London for that matter. Ridiculous market.

magicpork

Cakeguts wrote: »

Start again. Why are you buying this property? Is it somewhere to live? If you are living in it any gain is in the value of the property which you can't get at unless you sell so what difference is it going to make? If your property goes up so will all the others so you will stand still in terms of what you can afford to buy so there will be no difference.

It's for myself to live, at least for a couple of years, until I have family and kids so may start looking to move to a house.

I get what you said, and this does calm my nerves a bit, it's just that purchasing a property is such a big investment these days. Thanks

magicpork

marksoton wrote: »

No. But that's because i wouldn't purchase with an equity loan. Or in London for that matter. Ridiculous market.

I know.. but I have no choice because I work in London and I don't have much flexibility in terms of relocation.

about equity loan, again I don't have much choice.. shard ownership only costs more (with equity loan at least there's no interest from year 1-5), and a regular mortgage will probably need 150-200k deposit.. I think my earnings are decent but it will still take some time to build that much in cash.

AnotherJoe

The issue is, house prices arent going to crash the day after the referendum if its a leave. They will take months to fall. I'm not even convinced they will except as a sort of vicious spiral caused by people thinking they should fall, etc, people like you thinking "you should offer less" and you'd need a lot of people to think that way. More likely IMO is a stagnation, but if prices do fall, you wont know except in retrospect in 6-12 months time.

So IMO either buy anyway or wait a year minimum. (and even then if the vote was leave, we'll still be in, we dont come out on 24th!. It could take 2-3 years to extricate the UK and the economic effects would rumble on for years after.)

So delaying by a week wont help you unless its a simple as, you are positive you shouldn't buy if the verdict is leave, in which case why not be up front just tell your solicitor you wish to exchange on Monday June 27th as long as the verdict is remain otherwise you dont wish to proceed..