SDLT pantomime

Wkmg

grumiofoundation said:

Wkmg said:

Sibbers123 said:

jonnygee2 said:

As a FTB I am not already vested in the property market so any fall in value after purchase will cost me.

You are overthinking it, as many do. You are buying something to live in, hopefully for a long time. Once you buy you'll have a mortgage you can afford and a place you can call home.

The value of the property in one or two years time will be irrelevant when you own it. The value when you come to sell might be relevant, but you can't predict prices 10 or fifteen years into the future so don't even try or worry about it.

There is nothing stopping me staying put for say 12 months, although not ideal. As a FTB I won’t be buying a family home so will probably be moving again in 3-4 years - here lies my predicament.

In my situation, I don’t want to be buying at the height of the market, as no one would.

Then work out the difference between what you would pay in rent versus what you would pay in interest on a mortgage. If there's no difference unless prices rise you haven't missed out. If rent is more expensive then work out by how much. Compare this to what you predict the fall in property prices will be. That will give you a pure financial answer on whether now or waiting 12 months is right for you (assuming you're able to acurately predict the fall in value you're expecting). I suspect you'll find that the interest portion of your mortgage will be a good bit less than your rent.

It’s not as simple as interest versus rent. You also need to include:

 - the costs of buying and selling. 

- over 3 (Calendar) years as a FTB you can also get extra £4000 towards deposit if you are able to pay £4000 per year into LISA. 

- assuming stamp duty goes back to normal after this 6 months (not guaranteed of Course). Also need to consider you will then have lost FTB stamp duty relief. 

Cost of buying doesn’t need to be included as the question isn’t should I buy now or never. It’s should I buy now or later. OP will still have to pay solicitors fees etc whenever they eventually buy. THe change in price of them isn’t likely to be dig significant. As for stamp duty, that depends on where OP is and how’s much they’re planning to spend. I assume they’re clever enough to work that but out for themselves Andre hopefully they’re below the ftb threshold anyway. 

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grumiofoundation

Wkmg said:

grumiofoundation said:

Wkmg said:

Sibbers123 said:

jonnygee2 said:

As a FTB I am not already vested in the property market so any fall in value after purchase will cost me.

You are overthinking it, as many do. You are buying something to live in, hopefully for a long time. Once you buy you'll have a mortgage you can afford and a place you can call home.

The value of the property in one or two years time will be irrelevant when you own it. The value when you come to sell might be relevant, but you can't predict prices 10 or fifteen years into the future so don't even try or worry about it.

There is nothing stopping me staying put for say 12 months, although not ideal. As a FTB I won’t be buying a family home so will probably be moving again in 3-4 years - here lies my predicament.

In my situation, I don’t want to be buying at the height of the market, as no one would.

Then work out the difference between what you would pay in rent versus what you would pay in interest on a mortgage. If there's no difference unless prices rise you haven't missed out. If rent is more expensive then work out by how much. Compare this to what you predict the fall in property prices will be. That will give you a pure financial answer on whether now or waiting 12 months is right for you (assuming you're able to acurately predict the fall in value you're expecting). I suspect you'll find that the interest portion of your mortgage will be a good bit less than your rent.

It’s not as simple as interest versus rent. You also need to include:

 - the costs of buying and selling. 

- over 3 (Calendar) years as a FTB you can also get extra £4000 towards deposit if you are able to pay £4000 per year into LISA. 

- assuming stamp duty goes back to normal after this 6 months (not guaranteed of Course). Also need to consider you will then have lost FTB stamp duty relief. 

Cost of buying doesn’t need to be included as the question isn’t should I buy now or never. It’s should I buy now or later. OP will still have to pay solicitors fees etc whenever they eventually buy. THe change in price of them isn’t likely to be dig significant. As for stamp duty, that depends on where OP is and how’s much they’re planning to spend. I assume they’re clever enough to work that but out for themselves Andre hopefully they’re below the ftb threshold anyway. 

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Good point - I was thinking if they bought and would need to sell that before buying again (no idea where I got that idea from???).  

moneysavinghero

Sibbers123 said:

Here is one example of developers being greedy in my local area. 

Guess it must have cost them £25,000 to dig up the grass.

jonnygee2

Cost of buying doesn’t need to be included as the question isn’t should I buy now or never. It’s should I buy now or later. OP will still have to pay solicitors fees etc whenever they eventually buy. 

I think the point might have been that if they buy now and then need to move in three years, then they are buying twice and selling once, instead of just buying once in the bigger house that they can afford in three years time. Also losing that FTB stamp duty relief is a big deal.

Wkmg

jonnygee2 said:

Cost of buying doesn’t need to be included as the question isn’t should I buy now or never. It’s should I buy now or later. OP will still have to pay solicitors fees etc whenever they eventually buy. 

I think the point might have been that if they buy now and then need to move in three years, then they are buying twice and selling once, instead of just buying once in the bigger house that they can afford in three years time. Also losing that FTB stamp duty relief is a big deal.

It's a big deal for some people but not for others. I'm a 1st time buyer but I don't get relief because I'm buying with someone who isn't and because we're spending over the threshold anyway. That's by the by.

What I understand OP to be asking is;

"Should I buy now or should I wait and see what happens in 12 months." Whether they buy now or in a year I still don't think they'll be getting their forever home. Do many people get their forever home 1st time round? I wouldn't have thought so. Perhaps I'm wrong. 

bravotango

The way I look at it (I'm a FTB too), is buying a property is about taking a "calculated" risk/gamble (like most other big decisions, you make a calculated gamble). Where you make an informed decision based on your findings, i.e. you get a surveyor in to do a survey, you assess your own personal finances to see if you can stretch to a bigger deposit, or to a higher purchase price, etc, etc.

If a buyer doesn't do the relevant due diligence, they can only blame themselves. No one really can 100% predict what will happen in the future.

In the OP's case, I would say, if they are worried about the property they are buying now being worth less next year, or the year after that, then put in a lower offer now, OR simply just wait until next year, and see if your gamble has paid off, and property prices are better. Once again, no one knows for sure. What we do however know is that there is likely to be a significant recession as the UK Chancellor said, and there will be higher unemeployment, but is it going to cause property prices to plummet, who knows?

AdrianC

moneysavinghero said:

Guess it must have cost them £25,000 to dig up the grass.

Eh? You know they aren't the same plot on the development, right...? The different numbers of bedrooms could have been a clue...

https://www.rightmove.co.uk/property-for-sale/property-71738349.html
https://www.rightmove.co.uk/property-for-sale/property-94574177.html

If there is no demand, then they're going to have some very expensive unsold plots. But, somehow, I think they'll probably sell them. They must be reasonably sure, after all, else they wouldn't have built 'em in the first place...

jonnygee2

The way I look at it (I'm a FTB too), is buying a property is about taking a "calculated" risk/gamble (like most other big decisions, you make a calculated gamble). 

For investment properties sure. For residential properties not really.

You need a house to live in, you buy a house, you get a house and live in it, no gamble involved. I realise that looking back at some previous ten year stretches it's tempting to think of this as a potential way to make money through asset price rises, but that's not how to look at it. You can't predict the market and you don't need to - the main point is to have a roof over your head and a mortgage you can afford.

Wkmg

jonnygee2 said:

The way I look at it (I'm a FTB too), is buying a property is about taking a "calculated" risk/gamble (like most other big decisions, you make a calculated gamble). 

For investment properties sure. For residential properties not really.

You need a house to live in, you buy a house, you get a house and live in it, no gamble involved. I realise that looking back at some previous ten year stretches it's tempting to think of this as a potential way to make money through asset price rises, but that's not how to look at it. You can't predict the market and you don't need to - the main point is to have a roof over your head and a mortgage you can afford.

I's not as simple as you say. If you are a first time buyer living at home and there is likely to be a crash in the market it may make financial sense to wait.

jonnygee2

I's not as simple as you say. If you are a first time buyer living at home and there is likely to be a crash in the market it may make financial sense to wait.

I don't think you really get it.

You don't know if there is going to be a crash in the market. You will never know until it happens. If people knew there would be a crash, the crash would happen now, because no one would buy until the crash they knew was coming had happened. 

In retrospect, you may have been better off if it crashes. But also if prices go up or interest rates go up etc you may have been worse off. There's no way to predict it.