House price increases. Is everyone absolutely loaded?

Grumpy_chap

nicknameless said:

We're looking around at the moment and are currently looking at properties priced approximately x3 the value of our current property which is a city based 2 bed flat.  We are a couple without children and approx. 5 years from a position where we could consider stepping down from full-time work.

Our reasoning is that we can easily afford a 5 year fixed mortgage (we have been saving for years into pensions and ISAs) with plenty of leeway and as long as there isn't a 50% market crash in the meantime downsize / down cost to a different and cheaper part of the country at the end of that period or shortly after when we are looking to change working patterns.  We are looking at approx. 80% LTV btw.

I have to admit the prospect is making me slightly nervous with the current housing market and this going against our long term strategy of cheap housing = money in the bank / pension, but we are assuming (hoping?) that if there is a significant market correction in the meantime that our next property will also be cheaper too and that whilst we might lose a little in equity that would not be a disastrous outcome.

I wait to have my logic corrected.

It hardly sounds as though you are stretching yourself to make the move.  Potentially many other couples would have made the move from flat to house sooner.  Fill-yer-boots! 

davilown

NameUnavailable said:

Lots are in a little Covid bubble. Earnings unaffected, income increased as not going out spending money, working from home so thinking let's get more space, low interest rates so let's borrow more......

All of this will come to an end, sooner rather than later. People will get called back to the office, long commutes will become tiresome and expensive, interest rates will increase........

And those individuals who have continued to work in their normal jobs and work places who saved a lot.

plus their jobs won’t be affected by the CoVID situation 

davilown

MobileSaver said:

lookstraightahead said:

panic buying always comes with consequences.

Is there any actual evidence that people are "panic buying"?

I find it hard to believe that many if any people are rushing into something that typically takes six months to complete from start to finish...

Totally true - not all buyers are panic buyer, rather taking advantage of the situation where someone is willing to pay a premium for their property.

We’re doing just that - downsizing at 40 for a property half the price. Yes it’s now a semi but no mortgage and cash in the bank, still a lovely location, and only ‘have’ to work 3 days a week with (hopefully soon!) 2 or 3 holidays a year. 

No working from home either as both in key worker roles.

I think we were fortunate to be buying a house that was SSTC in December when the market went quite quiet, and came back up a few weeks ago at the same price.  Identical house in same condition sold for 5% less 4 years ago so not too much of an increase in price either.

Added advantage of being a cash buyer with no chain helped as well.

All comes down to priorities - what does successful me to yourself?

zpargo

The government only cares about the rich getting richer. They don't care about the young people of this country who are trying to get a foothold on the property ladder. These stamp duty changes on top of people's savings from pandemic mean property prices sky rocket. As a FTB have found it very tough as well. At the current rate, I do worry about the future of young people. Education is expensive and now properties are unaffordable. 

woahsoah

I'm about to sell a house I've rented out for a while. Its approximately 750k (London). I'm really interested to see who is going to buy it.

Slithery

woahsoah said:

I'm about to sell a house I've rented out for a while. Its approximately 750k (London). I'm really interested to see who is going to buy it.

Don't forget to allow for your CGT bill.

woahsoah

Thanks. I'm not planning on buying. It isn't my main home so ill just take it out of the sale price. Hopefully I will find a buyer with nothing to sell!

Slithery

woahsoah said:

Thanks. I'm not planning on buying. It isn't my main home so ill just take it out of the sale price. Hopefully I will find a buyer with nothing to sell!

CGT has nothing to do with buying a property. It's due when you sell a property that isn't your main residence.

woahsoah

Slithery said:

CGT has nothing to do with buying a property. It's due when you sell a property that isn't your main residence.

Yes I know.. I assumed you meant I would need the cash for buying a new property. I will obviously have enough to pay the CGT bill as it is from the 'gain'

jazzyja

Me personally, I've barely spent anything last 12 months, got a promotion at work so was able to save for my deposit. I originally planned on buying in 2-3 years.....covid hit I managed it in a year. Silver lining and all that