I wanted to Buy a House In Cash for £600k but am not sure after brexit

Grenage

Honestly, if you view your 600k as primarily an investment, you probably shouldn't put all your eggs in one basket.

If it's going to be a home for 10 years plus, you might as well ride the waves of the property market.

peter_we

There have been no alterations to lending since Brexit was

RICs have advised to be cautious in valuations. They are down, which will affect lending.

What is the yield on the house ? How does it compare with other forms of investment. How risky are those investments?

iantojones40

thesaint wrote: »

I guess making money isn't for you which is fair enough.
Good luck with your wait for a 40% drop.

Perhaps he just prefers to make money in a morally and ethically correct way, rather than by being a rent seeker?

thesaint

iantojones40 wrote: »

Perhaps he just prefers to make money in a morally and ethically correct way, rather than by being a rent seeker?

I haven't seen this type of talk for several years.
Hopefully the wait isn't too long, and your dreams come true.

ScorpiondeRooftrouser

AFF8879 wrote: »

Even if you lose 30%, you're paying cash. So if house prices fall in general anything you lose you would just save on the next house. You'll never have negative equity / be trapped in a mortgage.

Secondly, for that price in that area I imagine you're getting a pretty grand house. Larger houses tend to hold their value more than small places.

He could still lose a large part of his money though If that house is going to drop 30% and be 400K in 12 months time, he should wait and buy it then. Then he is in the property market with 200K in the bank, rather than just being in the property market. If and when he buys his next house, whether prices have risen or fallen, he will still have the 200K in the bank and the next house.

Regardless of the fact that "the next house" rises and falls, what matters is the time you put money into the market, and the time you take money out. You want to put money in when the market is low and take it out when the market if high. If you are putting in 600K it makes all kinds of sense to try and make sure you're not doing that at the top of the market, or you are just throwing money away.

ukcarper

ScorpiondeRooftrouser wrote: »

He could still lose a large part of his money though If that house is going to drop 30% and be 400K in 12 months time, he should wait and buy it then. Then he is in the property market with 200K in the bank, rather than just being in the property market. If and when he buys his next house, whether prices have risen or fallen, he will still have the 200K in the bank and the next house.

Regardless of the fact that "the next house" rises and falls, what matters is the time you put money into the market, and the time you take money out. You want to put money in when the market is low and take it out when the market if high. If you are putting in 600K it makes all kinds of sense to try and make sure you're not doing that at the top of the market, or you are just throwing money away.

But that is the problem trying to time the housing market is extremely difficult and what if prices don't drop. If it's a home you can sit put and ride out any fall saving rent as you do an investment is a different but you will still get a return in the way of rent which could be much higher than interest.

Mickygg

If prices do suddenly drop, many people will take their house off the market. Only those that have to sell will be trying to sell.
One thing I think people are missing who say wait is you could be waiting years for the next property to come along....and prices may have risen back up!
I'd go for it, think and look long term.
I'm Looking at a property, I'm not thinking if prices fall as I've found a property a like now that I want go buy now. I've been looking for years and no damn Brexit is putting me off!

ScorpiondeRooftrouser

ukcarper wrote: »

But that is the problem trying to time the housing market is extremely difficult and what if prices don't drop. If it's a home you can sit put and ride out any fall saving rent as you do an investment is a different but you will still get a return in the way of rent which could be much higher than interest.

I'm not even attempting to forecast the market. Just pointing out that the argument that it doesn't matter because other houses also rise and fall is fallacious. If you put money into the housing market when it's high, you lose money.

You can't "ride out a fall" if you put money into the market a year before a crash; you have still lost out if you compare it to putting that money in a year later.

As an example I bought a house at the bottom of the market in about 1997 for 40K. I sold it a year later for 42K, because I was relocating; then rented and didn't buy another house for a few years - by which time the original one was worth about 80K. I didn't lose out, and I have made money from the housing market subsequently (on paper at least) but if circumstances hadn't inclined me to sell I'd have 40K more now than I do, because I took money out of the market at the wrong time.

I can't say it keeps me awake at night but it's pointless denying the reality of it.

In his case if he waits a year and prices do drop significantly, he would be throwing his money away to buy now. That's unquestionable. What he is actually asking is whether prices are going to drop; which is something nobody can tell him. If we knew, we'd all be immensely rich.

AnotherJoe

Emidb wrote: »

I will be keeping the first one as well. It is just I am wholeheartedly not sure and cannot make up my own mind whether to buy or withdraw. My only fear is that I have invested my 10 years of life, sacrificed my most important times not able to really spend so much time with my family in order to make savings which is what I have now), I just do not want to have lost over £50k or £60k in just 1 or 2 years once Brexit has been fully applied.

So your real question is "should i invest £650k (that is property price plus taxes plus solicitors costs) in property in the UK right now?"

And I'd say the answer is "no you should not".

Now, if you were selling your existing house and replacing it with this one, which you then intended to live in for a long time, you'd get a different answer, from me at least.

ukcarper

ScorpiondeRooftrouser wrote: »

I'm not even attempting to forecast the market. Just pointing out that the argument that it doesn't matter because other houses also rise and fall is fallacious. If you put money into the housing market when it's high, you lose money.

You can't "ride out a fall" if you put money into the market a year before a crash; you have still lost out if you compare it to putting that money in a year later.

As an example I bought a house at the bottom of the market in about 1997 for 40K. I sold it a year later for 42K, because I was relocating; then rented and didn't buy another house for a few years - by which time the original one was worth about 80K. I didn't lose out, and I have made money from the housing market subsequently (on paper at least) but if circumstances hadn't inclined me to sell I'd have 40K more now than I do, because I took money out of the market at the wrong time.

I can't say it keeps me awake at night but it's pointless denying the reality of it.

In his case if he waits a year and prices do drop significantly, he would be throwing his money away to buy now. That's unquestionable. What he is actually asking is whether prices are going to drop; which is something nobody can tell him. If we knew, we'd all be immensely rich.

I agree if he waited and prices fall and he buys latter he is better off, to many people talk as if the fall is 100% guaranteed if they increase or stay the same he is worse off its a gamble.