Buying a house without a mortgage

Frugaldom

Two years last November and now landlord wants his house back. Maybe it's the push I need to commit to something longterm without the worry of being asked to move. If I could make the next one a permanent move it would be great! Trying our best to find a 'forever' house before the property market makes moves towards a recovery. I still think everything's over priced, though!

Frugaldom

Thought I'd best fill in the gaps that appeared over the past couple of months.

JANUARY:

Welcomed arrival of newest member to the family, DGD was born on 31/12/10 and arrived home in time for New Year. Mum, dad, baby and her big sis all doing incredibly well and are all settled in their own home - thankfully they bought 3-bed house, so no need to worry about any future moves. Christmas & New Year stayed within budget - I spent less on others and blew everything else on 'baby things' and extra treats for DGD1

Had relatives to visit

Had a bit of bother with landlord's dog attacking next door's hens, which is possibly how he ended up taking it out on me, personally! I ran to the aid of infirmed neighbour while dog was chasing & killing her poultry and then, apparently, said what I thought about it. WRONG thing to do! (Although I certainly didn't say what he later accused me of saying!!)

FEBRUARY:

Week 1: Letter arrived from LL asking us to quit this house, we have to be away by 7th April. Completely unjustified, in my opinion, but who wants an untrustworthy landlord? Not us!

Week 2: The car died a horrible, irrepairable death, leaving us stranded out here in rural frugaldom land. News finally sank, in after a week of sleepless nights worrying about becoming homeless etc, that househunting was going to be tough, especially without transport. (Thankfully I have an obliging neighbour) Started contacting all estate agents within 15m mile radius - all 3 of them! :rotfl:Almost all the rentals within the area are short term assured for 6 months because they are also for sale!

Week 3: Managed to get out and look at a fixy-up flat in a neighbouring village - priced at £50k - and was so disgusted by what they'd named a 'flat' that I accidentally offended the seller by offering him £20k cash! He did say he'd consider less than the asking price, but don't think he meant that much less! :rotfl: The 'flat' was on 2 levels with NO proper kitchen, just a cupboard with a sink in it, and NO proper bathroom - it was a second cupboard with a shower suite JOINED TO THE 'KITCHEN'! :eek: Several 'flats' later, I gave up and bought another pack of cigarettes and spent the rest of the week scanning websites for anything that wasn't a flat, no matter how close to being derelict it was!

Still looking at rentals and anything else we can think of and have, since, applied for a property but, being my luck, owner is away on holiday (this week was midterm break here) so we need to wait until they're back to hear anything.

Think that's everything that's been happening about here. We need to dig up all the frugal garden, dismantle the raised veg beds, take down the shed, dismantle the greenhouse and lift all the slabs we had laid. And we'll probably have to remove the log burner we had installed (at our expense) then repaint all the walls magnolia so LLs have no reason not to return our deposit. They did say that they'd pay for the stove, but we have never been reimbursed, so will need to wait and see what happens next.

Everything's a waiting game for now but we have tallied up every penny from every possible account to ensure we have enough to see our way clear to making the next move without impacting negatively on the longterm plan of saving to buy a house without a mortgage.

Progress will me logged as and when available. Hoping to go see a house midweek but must, first, find a car to buy. It'll need to be a cheap runaround as it's a rather unplanned and badly timed expense that we could really do withou!

Happy ending to this long catch-up post... the sun has just decided to shine! :T

PS: I still have the premium bonds (don't cringe, Pavlov's ), so here's hoping I'll have a win first week in March.

Frugaldom

ORIGINAL COST ANALYSIS IN 2007:

STAGE 1 - TARGET TOTAL £2,100
Mortgage arrangement fee - NIL (No mortgage to arrange)
Basic lender's valuation fee - NIL (No lending involved)
Survey Fees - £1500
Land registry - £100
Local authority search - £100
Other search fees - £100
Conveyancing - £300
Stamp duty - NIL (it's going to be a cheap property)

STAGE 2 - TARGET TOTAL £7,100
House viewing allowance (meals, B&B, travel if in different area) - £1000
Removals - £1000
Immediate essential repairs - £3000 (Remember it's going to be a fixy-up)

STAGE 3 - THE HOUSE FUND
Having spent many, many hours online researching fixy-up house prices in various parts of the country, it is not unrealistic to expect to find a house in need of renovation for around £50,000. Once it's bought, it will have to be lived in regardless of condition and repairs carried out as an on-going project. I'll add savings stages as percentages of £50,000 just as soon as I complete stage 2, which should be very soon, depending on what interest I make at the end of this month. I've used up my current ISA allowance, so need to look for the best place to save between now and April 08 without getting into the 'regular savers' market. Being self-employed, my income is not guaranteed from one month to the next.

There's both good and bad news regarding the above.

The bad news:

a) conveyancing fees have increased by around 50% and
b) most fees incur vat, which has now increased to 20%
Latest quote for conveyancing & associated costs, including vat came in at around £650.
c) interest rates have never recovered after hitting BoE base rate of 0.5%

The good news:

a) No money wasted on valuations and surveys thanks to the Home Report, assuming the property was on the market before these got scrapped again. Woopee! More than covers the increase in the legal fees.
b) Home Energy Certificates and all sorts of interesting information are already contained in the home reports
c) Home reports are FREE if you're prepared to access them online and print out your own copy. The estate agent dealing with the sale should be able to give you an access code for the site. They really do make interesting reading! I have about 3 of them sitting here in front of me now and I haven't had to spend a penny going to view the properties beforehand. OK, so we've viewed 2 of these ones as potentials and DS, who still lives at home, has to be taken into consideration with regards to travel distance from work, so it has narrowed the playing field a bit.

There has been quite a drop in property prices in our area since I first began this challenge in 2007. In some cases, it's by as much as 30%. I still think starter homes for first time buyers are grossly over priced, but there are some fantastic offers available right now if you're prepared to go straight for a 2 or 3 bedroom house.

Despite this drop, there are still houses being built, so that's affecting plot prices - eye watering for some! Another but... sales of new builds have fallen to the point that many more developers are accepting part exchanges on a much wider range of properties and these all have to be offloaded at some point, too. Or else tenanted.

Scottish Landlord Registrations are compulsory, so it's illegal for anyone to rent out a residential property unless they have applied for registration to their local authority. This SHOULD make it easier for prospective tenants to find out a little bit about their potential new landlords (and it's about time too!) but it doesn't go far enough, in my opinion. I hate that tenants need to hand over credit checks, ID, bank statements etc to prove their suitability as a tenant, yet no such reciprocation occurs to disclose possibility of an unscrupulous landlord.

In summary - at last - it's stage 3 of the challenge, the gloves are off and the search is on in ernest.

Frugaldom

Very quick update, as MSE forums don't seem to like me this morning - page keeps reloading and I lose the posts.

Looked at one house, a battered old fixy up, scrutinised the Home Report, checked out the home report facts, as I suspected they were wrong - they were wrong! Put an offer in for the house, anyway. Rejected. Negotiated, got a verbal acceptance and have now submitted the formal offer, awaiting formal acceptance.

We'll be skint, soon!

pavlovs_dog

details woman, details!

Frugaldom

Hi Pavlov's

I can't really give many details at the moment, as we're keeping everything shrouded in mystery. That's mainly because the current landlord appears to read what I write online and he knows that we can't vacate his house by the date specified. I've left the lawyer to deal with that.

House is a 3-bed, end-terraced cottage, with a garden. It's a complete renovation job, but we're hoping to make it habitable by end of May. So far, current landlords have failed to respond to any request from us, the estate agent or our lawyer, for an extension to our leaving date.

[Deleted User]

Hey Frugaldom
great news on the house!!
I would love to save up outright to buy- not convinced it is possible where I live but its a fantastic idea!! will have a read back of your diary to see how you did it!

Frugaldom

Hello to Deleted_User

It is possible, it just takes quite some time. My diaries & blogs go back several years, as it all started off with a frugal living challenge, about 7 years ago. I think I started that on MSE late 2007.

Have fun reading and stay positive about your own challenge. It takes a while to get into frugal mode, especially when big family events arise. As they say, a penny saved is a penny earned and we just have to be focused enough to split the real needs from wants, clear off all debts and then watch the savings grow. It's no thanks to interest rates over the past 2 years, though.

Beats having to pay a mortgage for 20 to 30 years, even if we do have to live the ultimate in 'frugal lifestyles' in the meantime.

Frugaldom

I should also add that things have been hurried along here by circumstances beyond our control. That, aided by house prices in our area falling by over 30%, was a winning combination. Only this morning, I received an update on a property valued at £125,000... it's now being re-advertised at offers over £79,950

anoneemouse

Good luck with your housebuying.

I have noticed that houses in rural areas seem to have fallen a lot in price recently, so obviously this improves your chances, just as you anticipated.

Is it your assessment that prices in urban areas in Britain are also falling and, if so, by very much?