First time house purchase and finances. Am I being sensible?

lika_86

Dimension_ said:

lika_86 said:

Have you budgeted for Stamp Duty and fees? You're highlight unlikely to get in before the SDLT holiday ends now. I'd wait until you have an emergency fund in place before you buy, which you should be able to build quickly at home (obviously there will be the time in the conveyancing process but it's good to have a good buffer). In addition you'll likely want around £10k minimum for doing the place up. You're in a privilege position, many people end up paying rent of £1400 in London (i.e. me). 

Yes, thanks i have budgeted for SDLT. If i found a place with a chain free seller in early Jan - do you think it would still be difficult to complete before the relief is withdrawn? Forgive my ignorance here with completion times

We've just bought a chain-free property as FTB from a seller who had already moved out to speed things up and who was motivated to get it through. It took us 10 weeks from making an offer, it could potentially have been two weeks faster if the seller had been faster with some of the paperwork but it largely went through quickly because my solicitor was ace and I knew what was coming next and when to follow up because I have worked in conveyancing before, so I know the process. I'd say to allow 12 weeks but it could be much longer, particularly with a chain. You'd be pushing it and would need everyone else to be pushing in the same direction. Also, things may well slow up on the conveyancing side as everyone tries to get done before then, compressing timetables. A chain-free seller is less likely to be motivated to get things done by a certain deadline as they don't have skin in the game.

FTB_Help

lika_86 said:

Dimension_ said:

lika_86 said:

Have you budgeted for Stamp Duty and fees? You're highlight unlikely to get in before the SDLT holiday ends now. I'd wait until you have an emergency fund in place before you buy, which you should be able to build quickly at home (obviously there will be the time in the conveyancing process but it's good to have a good buffer). In addition you'll likely want around £10k minimum for doing the place up. You're in a privilege position, many people end up paying rent of £1400 in London (i.e. me). 

Yes, thanks i have budgeted for SDLT. If i found a place with a chain free seller in early Jan - do you think it would still be difficult to complete before the relief is withdrawn? Forgive my ignorance here with completion times

We've just bought a chain-free property as FTB from a seller who had already moved out to speed things up and who was motivated to get it through. It took us 10 weeks from making an offer, it could potentially have been two weeks faster if the seller had been faster with some of the paperwork but it largely went through quickly because my solicitor was ace and I knew what was coming next and when to follow up because I have worked in conveyancing before, so I know the process. I'd say to allow 12 weeks but it could be much longer, particularly with a chain. You'd be pushing it and would need everyone else to be pushing in the same direction. Also, things may well slow up on the conveyancing side as everyone tries to get done before then, compressing timetables. A chain-free seller is less likely to be motivated to get things done by a certain deadline as they don't have skin in the game.

I would budget for the fact that you are more likely than not going to make the stamp duty holiday, firstly with Xmas round the corner there won't be many solicitors/ EA's working until early Jan, 2ndly you've not actually found a place that you want to actually view and even if you do find a place you love, they might need to buy so will be stuck in a chain, 3rdly mortgage application may take a while (mine was 19 days but many have waited months).
Just to be pessimistic, budget for stamp duty instead of rushing into and settling just to save stamp duty.

Crashy_Time

Slithery said:

Crashy_Time said:

Dimension_ said:

@crashy - possibly, but there will also be plenty of people in my industry that will not be made redundant. We don't know, no one does. Organising lodgers and tenants if i faced financial hardship would be worth the "hassle" as you say. I think i am pretty decided on wanting to buy as soon as i find a home that suits. It is more a question of, am i being finically foolish and stretching myself. 

Based on the really useful POVs shared here, i think the way i feel about putting all my cash into a house is completely normal and i should probably continue as planned. 

As a thirty something year old, I'm not sure i want to wait for dip in house prices - they may never fall by a significant amount. And if they did after i buy, i'm hoping i would be okay to weather the storm, particularly if i had a house that i could grow into and i purchased something i was really happy with. 

It doesn`t add up for me that you are in your mid 30`s, work in finance, and have over a very short space of time, seemingly been convinced by a handful of posts from strangers on the internet, who lets be honest mostly have a strong VI in property,  that "putting all your cash into a house is completely normal"? At the present time especially I would say that could be verging on a possibly abnormal strategy....

Yet the rest of us would say that it's a good idea.

How's the house-hunting going Crashy? Has the 300% crash that you need to break even happened yet?

But it is obviously a terrible idea given his circumstances to join the London Bubble in the present economic environment, that is why I said advice from people with mortgages on the internet is not very helpful, but that doesn`t really answer the question I asked though?

Crashy_Time

Dimension_ said:

Crashy_Time said:

Dimension_ said:

@crashy - possibly, but there will also be plenty of people in my industry that will not be made redundant. We don't know, no one does. Organising lodgers and tenants if i faced financial hardship would be worth the "hassle" as you say. I think i am pretty decided on wanting to buy as soon as i find a home that suits. It is more a question of, am i being finically foolish and stretching myself. 

Based on the really useful POVs shared here, i think the way i feel about putting all my cash into a house is completely normal and i should probably continue as planned. 

As a thirty something year old, I'm not sure i want to wait for dip in house prices - they may never fall by a significant amount. And if they did after i buy, i'm hoping i would be okay to weather the storm, particularly if i had a house that i could grow into and i purchased something i was really happy with. 

How do you know? These boards are full of tenant/lodger horror stories. My point is that you don`t need to face financial hardship. London is going into another lockdown as we type, I really don`t get why anyone would be in a hurry to buy into the London property bubble at the moment.

Let me try and make things a little clearer. I am not saying i would deliberately get myself into a position of financial strain and then deal with lodgers/tenants, which i am sure will come with additional stress. I am saying, if i found myself in that situation that could provide some good financial cover and it would be something i would look to do irrespective of the stress that is comes with. 

Re bubble - if house prices began to fall, yes i would consider waiting but the truth is, if i found a property that i liked and could afford, i would more than likely continue to try and buy it.  

What I was saying is that lodgers/tenants are not  necessarily "good financial cover", they could end up actually costing you a lot of money, and unless you have previous experience of dealing with them there could be surprises in store, in finance it would be the equivalent of investing in a stock or fund that you know nothing about and hoping that it provides financial cover when you need it to! The absolute best financial cover is a large pot of money and very low housing costs plus minimal reliance on others for your income, you are in a very good position now to make that happen.

Crashy_Time

https://www.rightmove.co.uk/properties/90160118#/
30k price drop so far.

Getting_greyer

Crashy_Time said:

https://www.rightmove.co.uk/properties/90160118#/
30k price drop so far.

Looks bigger on streetview

MFWannabe

FTB_Help said:

Dimension_ said:

FTB_Help said:

Just out of interest are you looking to buy around the West of London (Uxbridge area)? 
575k-600k can still buy you a decent 2/3 bed terrace in most parts of London.
Even if you do go for the max range of 675k, 1.3k in mortgage a month is actually really decent for someone on your salary so don't worry about "over stretching" yourself as you'll still have approx 2.5k left AFTER mortgage and bills, which is the equivalent of a take home pay for someone earning around 40k a year so you are not over stretching yourself at all.

At the moment you sound ready to settle down and find your forever home right now, but finding a property you want to live in for the rest of you life is going to take time, maybe take the pressure of finding a forever family home and look for a really nice home that you will enjoy, once you get this out of your head, then you'll feel less stressed that you might be making the wrong decision and won't feel like your over stretching your self.
Have you had a look online on properties between 550k-675k? Other than extra bedroom and larger floor space, what is pushing you to go for the 675k mark? Is it the interior design/ fancy furniture? Do you really need 4/5 bedrooms, will 3/4 be enough? The 675k house might have a large kitchen but does the 550k house have potential to extend into the garden etc, etc

I am looking at Ruislip and Eastcote and surrounding areas. You were close - what made you think Uxbridge?

I think you're right, i shouldn't put so much pressure on myself. But i really am ready to buy a place that i could see myself living in for the longer term.

Most 3 bed semi's that i like are going for somewhere between 650-675k in these areas. These are in a good locations, in streets with mostly owner occupied homes and a short walk to one of the local tube stations. I don't need 3 bedrooms but one would be a home office. I'd also want a garage, not only so i have development potential but also for storage. Many of these properties at this price point are a mixed bag - some are nicely decorated whilst others are bare bones - and surprisingly still selling for close to ambitious asking prices. I find that houses up to 650/675 tick most of my boxes, particularly location and size. I would not for example want to spend 575k and live on a street where most houses are rented out or you have difficult neighbours - maybe this is a little pessimistic. But happy to have someone try and change my mind :-)

When you mentioned zone 6 it just automatically popped in my head to be around the Uxbridge area!
Just having a very quick search on RM I found:

https://www.rightmove.co.uk/properties/86828971#/ - £600k - 4 bed and office, and even lower in your budget range:

https://www.rightmove.co.uk/properties/97238315#/ - £550k - 3 bed.

Both are located less than 1/2 a mile away from the Ruislip station (the £600k is literally round the corner) and both are well under your max budget range, both look to be in good condition, just a lick of pain and some re-tiling but both very spacious and fit your criteria, they don't have garage but both are spacious enough to forgo garage

Of course if you're looking at ones around £675k, they probably tend to be owned by people with money so will have fancy decor and furniture on display or nice tiles etc, but don't be swayed by things that won't be left when they move out anyway (except the tiles!)
So if you're really worried about over stretching yourself these 2 that I've just found after 2 mins on RM are well under budget.

Edit: actually the £550k one does have a garage access to the rear, not shown in pictures - so extra storage space - there you go!

The 550k house is beautiful 
Well under your max figure @dimension_ leaving you more of your cash in the bank as a safety net 

MFWannabe

These are nice and lower prices than your max: 
https://www.rightmove.co.uk/properties/99325325#/

https://www.rightmove.co.uk/properties/76182972#/  Although I’m not a fan of shared drives 

https://www.rightmove.co.uk/properties/100902956#/

MFWannabe

https://www.rightmove.co.uk/properties/75895689#/

FTB_Help

MFWannabe said:

FTB_Help said:

https://www.rightmove.co.uk/properties/97238315#/ - £550k - 3 bed.

Both are located less than 1/2 a mile away from the Ruislip station (the £600k is literally round the corner) and both are well under your max budget range, both look to be in good condition, just a lick of pain and some re-tiling but both very spacious and fit your criteria, they don't have garage but both are spacious enough to forgo garage

Of course if you're looking at ones around £675k, they probably tend to be owned by people with money so will have fancy decor and furniture on display or nice tiles etc, but don't be swayed by things that won't be left when they move out anyway (except the tiles!)
So if you're really worried about over stretching yourself these 2 that I've just found after 2 mins on RM are well under budget.

Edit: actually the £550k one does have a garage access to the rear, not shown in pictures - so extra storage space - there you go!

The 550k house is beautiful 
Well under your max figure @dimension_ leaving you more of your cash in the bank as a safety net 

The 550k has now just gone under offer, when I posted it yesterday it was still available, but I agree the 550k is lovely and well under his budget