House Price Crash Discussion Thread

sarahj.perkins

Hi, sorry haven't replied as been on holiday. Our mortgage rate is 5.99% and outstanding is 97000 (we took a payment break for 6months to get married). So looking at about 12000 NE in the current market, I think I would be willing to loose 6k but 12k is far to much even for our situation. We will definatly be renting until we get some money together for a deposit so think thats gonna be the direction we will be heading for. Our mortgage advisor seems to think that we can't transfer our mortgage while we have NE, is it worth considering another bank? Our fixed rate ends july next year but we don't have a deposit could we still transfer? Thanks for the help and time you have taken to respond IveSeenTheLight

yofa21

Sarah - would it be an option to take the £200 hit and rent your flat for the highest price you can get, while your family move to rent a slightly bigger place temporarily as you wait for the flat to move out of NE? You could look at different areas to rent to try to get the best amount of space for your money.

It will mean higher outgoings per month in terms of making up the mortgage payment by 200 plus whatever the new rent is (minus the 400 you would get in rent) but moving a mortgage to a bigger place would presumably cost you more in mortgage payments anyway?

motoko

Sarah, I'm no expert, but if your fixed rate ends in July next year you should go onto your mortgage provider's standard variable rate. At the moment I believe most SVRs are pretty low compared to the 5.99% you are paying now. So you may not need to transfer your mortgage to another provider to get a better rate, you may just need to wait 9 months for it to happen automatically. This should put you in a better position regarding trying to cover the mortgage payments with any rent you get from the property if you move to rent out a larger place. You'll need to check out your lender's SVR, work out how it would affect your repayments and whether that makes things any more affordable. I know 9 months is a way off yet, but its something to bear in mind when you make your decision.

mudshark

Sarah - given the financial penalties involved and that cash is a big issue for you I think you have to put up with your situation for the time being unless you can transter the mortgage to a bigger place. You've not been too concerned with money in the past (that payment break for 6 months to get married is craziness IMO) and think you have to deal with this now so as not to end up financially even worse off.

southantrim3

sarahj.perkins wrote: »

Hi, sorry haven't replied as been on holiday. Our mortgage rate is 5.99% and outstanding is 97000 (we took a payment break for 6months to get married). So looking at about 12000 NE in the current market, I think I would be willing to loose 6k but 12k is far to much even for our situation. We will definatly be renting until we get some money together for a deposit so think thats gonna be the direction we will be heading for. Our mortgage advisor seems to think that we can't transfer our mortgage while we have NE, is it worth considering another bank? Our fixed rate ends july next year but we don't have a deposit could we still transfer? Thanks for the help and time you have taken to respond IveSeenTheLight

Think I'm with IveSeenTheLight here. Might be an idea to rent for a while until you've built up enough money for a deposit for a bigger place and maybe (if you want to) let out your own place while you rent somewhere else.

Take care.

adam1982

We bought a 1 bed flat purchased June 2006 for £105k. We have £82k left on the mortgage. Two identical flats sold for £114k in July 07. Ours is currently for sale as we need more space to start a family. We are asking £106,950 with little interest. Other people are asking £112,950 for reasons unbeknown to me. Estate agents seem to be clueless regarding asking prices at the moment and have even less advise on what price would seriously tempt a buyer.

Most of my neighbours are people my age who bought all at the same time from new with single incomes just below the national average. Most of them also had 95% LTV mortgages and have had no payment problems.

These flats are a very small development in a nice area and were perfect for 1st time buyers. I honestly believe that the main problem in this situation is the mortgage supply and the fact you need 15% deposit to get a rate over 5%. How long can the property market function without a decent first time buyer market?

For people like us 'staying put' is not really an option. Nor is it for some of my neighbours who also want to start families.

borntobefree

Hi Adam,

I sold a flat in 1993 for £500 less than I bought in 1987 because we had to move on as my wife was pregnant. But we also bought a house at a rock bottom price so in the long term it really didn't matter.

If you sell cheap - make sure you buy cheap and it will all turn out ok in the end imho.

adam1982

borntobefree wrote: »

Hi Adam,

I sold a flat in 1993 for £500 less than I bought in 1987 because we had to move on as my wife was pregnant. But we also bought a house at a rock bottom price so in the long term it really didn't matter.

If you sell cheap - make sure you buy cheap and it will all turn out ok in the end imho.

Yes i suppose it is swings and roundabouts isnt it. Thanks for the advice.

joerugby

I think we might have to change our mindset with regard to the "housing ladder".

In countries such as Germany a young person in their 20s would not usually become a "first time buyer". Buying a flat with the intention of selling few years later to buy a house would be regarded as very odd, what with the costs and risks involved. More likely the twentysomething would rent a flat and save up a deposit for later on.

House purchase would come on to the agenda once a couple are married, settled and ready to raise a family. Then the house purchased (or often newly built) would be big enough to live in for the rest of their lives.

House prices are not a regular topic of conversation since they tend not to change much. They go up as well as down but it doesn't really matter if you are never really planning to sell. In fact the main concern about house prices (if there is one) is that they are low enough to be affordable.

That kind of world has some real attractions especially for youngsters in the UK today who fear they may be condemned to a lifetime of insecure and expensive private rentals. I think it might be a better place.

FTBFun

joerugby wrote: »

I think we might have to change our mindset with regard to the "housing ladder".

In countries such as Germany a young person in their 20s would not usually become a "first time buyer". Buying a flat with the intention of selling few years later to buy a house would be regarded as very odd, what with the costs and risks involved. More likely the twentysomething would rent a flat and save up a deposit for later on.

House purchase would come on to the agenda once a couple are married, settled and ready to raise a family. Then the house purchased (or often newly built) would be big enough to live in for the rest of their lives.

House prices are not a regular topic of conversation since they tend not to change much. They go up as well as down but it doesn't really matter if you are never really planning to sell. In fact the main concern about house prices (if there is one) is that they are low enough to be affordable.

That kind of world has some real attractions especially for youngsters in the UK today who fear they may be condemned to a lifetime of insecure and expensive private rentals. I think it might be a better place.

I agree fully, despite being a homeowner myself.

Part of the problem with house prices being as they are, is that there is a very pro-landlord viewpoint on rental properties in this country. As was demonstrated with the "squatter" case on GMTV, many landlords ride roughshod over their tenants rights.

I understand that tenants in Germany have much more rights in terms of their rental, and have the right to redecorate and so forth.

To put house prices on an even keel, the UK would need to move towards this situation, but unfortunately I doubt it will happen.