Should I buy?

mysterymurdoch

A couple of months of non solid data doth not a house price fall make! I see the Guardian stating that lenders expect prices to rise 2% this year overall. Nationwide state that confidence is high and mortgage approvals steady, in their April press release.

Where's the "writing on the wall"?

From http://www.theweek.co.uk/house-prices/61987/house-prices-in-softest-patch-for-several-years
"House prices are continuing to increase at a very modest pace, according to the latest house price index from Your Move.

Average homes in England and Wales now cost £301,606 following a rise of 0.1 per cent in April - the second month in a row that averages hit above £300,000 and a new all-time high."

ruperts

In financial terms buying is a no-brainer due to the amount of money you commit to equity each month being more than half of the payment at current rates. That's not a cost to you, it's an investment .

Say you bought a £300k property with a £60k deposit, the current best buy mortgages would cost you around £1k per month on a 3-year fix. Of that about £650 would be committed to equity every month. You'd also have to pay about £1k in mortgage fees and say £4k in buying and selling costs, (I'm including selling costs up front because you are basically committed to them as soon as you buy a property you know you won't be in forever) as well as paying for your own maintenance for which I'd budget 1% of the property value per year so £250 per month (if you buy a leasehold then service charges have to be taken into account here as well).

So £5k upfront, £1k mortgage repayment of which £650 is your equity in the property (so effectively you only pay £350) plus £250 maintenance per month looks like this

Month / monthly cost / cumulative cost
1 / £5000 / £5000
2 / £600 / £5600
3 / £600 / £6200
4 / £600 / £6800
5 / £600 / £7400
6 / £600 / £8000
7 / £600 / £8600
8 / £600 / £9200
9 / £600 / £9800

Meanwhile your renting on around £14k per year looks like this

1 / £1150 / £1150
2 / £1150 / £2300
3 / £1150 / £3450
4 / £1150 / £4600
5 / £1150 / £5750
6 / £1150 / £6800
7 / £1150 / £7950
8 / £1150 / £9100
9 / £1150 / £10250

So as early as month 9 you are already better off and could at that point sell the property and be in no worse as a position than if you'd carried on renting. No brainer.

There are other factors like property prices but you can't affect them, you can only go on what you know.

Crashy_Time

https://www.theguardian.com/business/2017/may/21/car-loans-second-mortgages-ingredients-for-new-credit-crunch

kilby_007

MobileSaver wrote: »

Why are you completely making stuff up? Talk about "alternative facts!" :rotfl:

Where are the significant falls?!?!?

The YoY figure is falling each month, no matter what data set you use (see below). The average of the MoM figures over the last 3 months are either slightly negative or 0% depending on which data set you use, but monthly figures aren't a reliable statistic given their volatility.

The fall in the YoY figure is significant in the context of previous price increases and it gives a clear downward trend, which coupled with the FACT that prices in many London areas have plunged -5% to -12% YoY gives a fairly good indication of where the rest of the country is headed. Only someone knee deep in BTL would convince themselves otherwise :rotfl:

HALIFAX

April 2017
Annual change +3.8%
Monthly change -0.1%

March 2017
Annual change +3.8%
Monthly change +0.0%

Feb 2017
Annual change +5.1%
Monthly change +0.1%

NATIONWIDE

April 2017
Annual change +2.6%
Monthly change -0.4%

March 2017
Annual change +3.5%
Monthly change -0.3%

Feb 2017
Annual change +4.5%
Monthly change +0.6%

LAND REG

March 2017
Annual change +4.1%
Monthly change -0.6%

Feb 2017
Annual change +5.58%
Monthly change +0.6%

Jan 2017
Annual change +5%
Monthly change 0%

kilby_007

conqueror01 wrote: »

The OP has quite a big deposit.

I don't recall anyone recommending taking out a 95% LTV on this thread.

I was replying to you - not the op, and your statements were general, as were mine.

conqueror01

Unless you are able to become a cash buyer at some point in your liftetime (which might be harder whilst renting). Then you will be faced with taking out a mortgage. The sooner you start paying on a mortgage (generally speaking) the better - because of compound interest and because if you leave it too late (age) you might not even get one.

Its people with the highest LVT who will be hit badly by a crash. As they cannot hammer the mortgage down and worse may find themselves in negative equity. If you are like the OP and have a potentially good LVT and also the possibility of overpaying the mortgage then why wait indefinitely. There's also the security of having your own place and not being given unexpected notice from a landlord.