Cash buyer near completion... brexit housing crash fears..?

diggeroony

It is very bittersweet for me that my mother's death a few years ago when I was 21 years old left me with enough money to be able to buy a three-bed semi in the local area (north Lincolnshire) at around £170,000.

We are at the stage of signing all the papers for the purchase of this house and the fear of Brexit and a housing crash has come over me.

I appreciate I have been left a great gift and want to ensure my mother's money is spent as wisely as possible. I wholeheartedly wish i had my mum here and no money, but that isn't the situation i am in.

I have read many threads on here and found little advice with regards to a cash purchase in our current climate. (I'm currently living with my partner who has a mortgage, who plans to rent his house when I purchase our future, hopefully forever family home)

Any help and advice is highly appreciated,
Thank you for your time.

Herzlos

People will always shout about a housing crash, but if house prices drop it'll be by a few percent, and likely less than the banks will tighten up lending, which isn't an issue as a cash buyer.


So you may, if the market dips, find that you can get a better deal as sellers get desperate, but you might also spend months or years waiting for a suitable house to come up for sale.


So unless you're not bothered about the house you're going to buy, I'd just get it now and not worry about doom mongering. Even if the price drops it'll come back up again in a few years.

Crashy_Time

Unless the house is really special ("3 bed semi" doesn`t sound overly special TBH) I would keep your cash, stick it in premium bonds and a Marcus account for a while, see what happens, I can`t see 3 bed semis jumping in price because of Brexit TBH.

PokerPlayer111

Sorry for your loss.



If you have been watching markets, brexit can and has hit the value of GBP. I dont see a crash in house to GBP terms happening much beyond say 10%, houses in the UK are priced in GBP.



I just 100% cash bought a house 3 months ago as a 1st time buyer, i liked the house and enjoy living in it which is very important. I also got it at 10k off - when it had just been reduced by 15k but i bought it mostly because it was suitable, not for the discount deal. Just buy if you like the house IMO. What else would you do with the 170k?

PasturesNew

Any crash that occurs is often only "if you take inflation into account", or "not where you are/not that sort of house".

Just buy the house you've chosen... and quit your worrying. A house is a home....

If you worry about the market you could dither and "lose out" too.

You've chosen to buy a house, you've chosen a house ... just enjoy it and don't worry about the price as you're staying there as it's local and large enough for life.

Crashy_Time

PokerPlayer111 wrote: »

Sorry for your loss.



If you have been watching markets, brexit can and has hit the value of GBP. I dont see a crash in GBP to house terms happening much beyond say 10%, houses in the UK are priced in GBP.



I just 100% cash bought a house 3 months ago as a 1st time buyer, i liked the house and enjoy living in it which is very important. I also got it at 10k off - when it had just been reduced by 15k but i bought it mostly because it was suitable, not for the discount deal. Just buy if you like the house IMO. What else would you do with the 170k?

? Start building a diversified and liquid portfolio of stocks, bonds and cash/other investments, or keep it as a cash cushion in case of emergencies, instead of dropping it into a very illiquid, over-priced asset at one of the most unstable economic points in most of our lifetimes? Once you drop 170k into property it is gone, until you find a buyer who shares your (or your seller`s EA`s) views on property values. 3 bed semi`s have a long way to drop in value after Brexit and a few rate rises IMO.

ukcarper

Crashy_Time wrote: »

? Start building a diversified and liquid portfolio of stocks, bonds and cash/other investments, or keep it as a cash cushion in case of emergencies, instead of dropping it into a very illiquid, over-priced asset at one of the most unstable economic points in most of our lifetimes? Once you drop 170k into property it is gone, until you find a buyer who shares your (or your seller`s EA`s) views on property values. 3 bed semi`s have a long way to drop in value after Brexit and a few rate rises IMO.

It's not an investment it's a home what happens if he pulls out there will be costs. I'm not sure I would take the opinion of someone who has been predicting for years seriously.

51mm5

Your buying a home and it's too difficult to predict what will happen with house prices. I'd only pull out if you have worries about the house itself.

LydiaJ

If you plan to live in it for at least 5 years, and you're buying it as a home, go ahead and don't worry. Owning your home outright is a reassuring element of stability in uncertain economic conditions, so go ahead, buy your home, and enjoy it. Enjoy the freedom from worrying about interest rates going up, whether or not to fix your mortgage, and all that stuff.

If you expected to move after a year or three, or were buying primarily as an investment, then maybe now would not be the best time. But it doesn't sound as though that's the case.

Cakeguts

Look a couple of years after we bought our house it dropped significantly in value. That made absolutely no difference to us. It was our home we lived in it and still do.



You are buying a home. If you buy it with cash it will be mortgage free and you won't be paying any rent.



The money invested in a house is only ever money on paper you can't get it out of the house unless you sell the house. If you sell the house you will still needs somewhere to live.



The point about buying a house is that eventually you get a rent and mortgage free period where the house belongs to you. You are starting from this point. You only ever need to earn enough to pay your bills that is great. You have complete freedom to make your life fit this home.



If you have no intentions of selling it there is no problem.

Jack_Johnson_the_acorn

Cakeguts wrote: »

Look a couple of years after we bought our house it dropped significantly in value. That made absolutely no difference to us. It was our home we lived in it and still do.



You are buying a home. If you buy it with cash it will be mortgage free and you won't be paying any rent.



The money invested in a house is only ever money on paper you can't get it out of the house unless you sell the house. If you sell the house you will still needs somewhere to live.



The point about buying a house is that eventually you get a rent and mortgage free period where the house belongs to you. You are starting from this point. You only ever need to earn enough to pay your bills that is great. You have complete freedom to make your life fit this home.



If you have no intentions of selling it there is no problem.

The equivalent rent is probably in the region of £800pcm so over 5 years that's £48,000.00 saved. It's a no brainer IMO.