Sanity check - Buying a 1 bed new build with estate charges

snowqueen555

silvercar said:

I’d rather be an owner and risk any paper losses, given that losses only materialise when you sell, than not buy and risk never being able to afford to do so.

I’ve sold at a loss in the past, but the next purchase was cheaper as a result, so I didn’t mind and certainly would have preferred it that way round than renting while waiting to buy.

I could never afford my current home that I bought 16 years ago. It’s gone up and down in value over the years, but this doesn’t matter if your not selling 

Mr.Generous said:

silvercar said:

I’d rather be an owner and risk any paper losses, given that losses only materialise when you sell, than not buy and risk never being able to afford to do so.

I’ve sold at a loss in the past, but the next purchase was cheaper as a result, so I didn’t mind and certainly would have preferred it that way round than renting while waiting to buy.

I could never afford my current home that I bought 16 years ago. It’s gone up and down in value over the years, but this doesn’t matter if your not selling 

Agree with every word.

I have financial security because of property. I rode out the storms because the good years add so much more than the bad years take away. I see people on here post things about debts or money with earning much, much higher than my best years in employment, but my net worth is more than I ever thought I'd get close to. The best financial decisions I ever made were buying properties.

Sometimes you have to just go for it. I'd rather take a slight risk by being in the game than watch house prices get further out of reach from the sidelines.

Thank you both. Main issue I have is figuring out if I should or can afford my own place. On paper I would only have £400 a month left after all costs. 

I have a second job that bring in an additional £500 but I don't want to work this forever so haven't factored that in.

Sarah1Mitty2

snowqueen555 said:

Sarah1Mitty2 said:

snowqueen555 said:

Sarah1Mitty2 said:

snowqueen555 said:

Sarah1Mitty2 said:

snowqueen555 said:

Sarah1Mitty2 said:

snowqueen555 said:

Hello,

I'm a FTB in my late 30's considering buying a 1 bed newbuild out in the suburbs. I think they are struggling to sell it. It was on for £210k but I've negotiated it down to £195k which is good considering a lot of older run down apartments are going for £180k-ish that requires refurbishment or replacing things.

My main worries are trying to sell it on in the future. A lot of these new estates have estate charges on top of the service charge, this covers maintenance of the greenspaces. This is currently £140pa and the standard service charges are £1040pa. I am also paying the same fees as 2 bed flats so feel like it it expensive, unfortunately I have no control over that.

Should I give this a hard pass, I've been looking for a year and it has been pretty tough. I think I'd be happy there but worried about the saleability in the future, because it is only a 1 bed and also the possible off putting nature of the estate and service charges. I'd like a 2 bed but can't quite seem to be able to get one.

Pass this time, they will be cheaper in future, and so will 2 beds.

If only I had a crystal ball. I've been saving up close to a decade so this has been pretty long experience. I'm not sure prices will fall where I am (Bristol).

I`ll stick my neck out and say they will, The Bristol bubble (like the London, Edinburgh, Manchester etc. etc. bubbles) is built on cheap credit, why not just enjoy some higher savings rates for a while?

I've been waiting a loooong time and invested so much energy. But I am slowly leaning towards waiting. Thanks for your feedback.

Interest rates are back to where they were in 2008, that is before you even started saving? This alone should help you to pause and think about how prices are created by borrowing costs.

Will prices really reduce enough to counteract the 1-2% rates rises? I'm not so sure, there also seems to be a really big lag.

£100k borrow @ 5% = £585pm
£90k borrow @ 6% = £580pm

From 4% to 5% the price of the house would need to reduce almost 10% to be the same, I really can't see that happening. So you're right, interest rates have a huge impact on price, but I don't see prices falling that much.

You don`t see prices falling 10%? That is an extremely optimistic position IMO. Why not post up examples of the sort of property you are looking at so we can follow the price movements with PropertyLog?

No I don't, and I don't see it as optimistic. I just don't see them dipping that much, outside of interest rates and house prices there will always be a lack of housing supply in this country.

Rather than focus on specific properties it would be fairer to track the average sold price with a city or region. By all means prove me wrong, it is just my opinion.

 We have to look at actual sales as well, there are plenty of places to live it is just that people desire the best places to live, but when affordability is constrained it seems that a lot of people just stay where they are already living?

https://www.plumplot.co.uk/Bristol-property-transactions.html

Mr.Generous

So as we can see you may well see 10% reductions on properties or even more, but the sale prices move upwards over time. If you saved 10k a year towards a house but didn't buy between 2020 and 2023 you'd have £32k after enjoying the interest.

The house would be on ave £46k more.

Sarah1Mitty2

Mr.Generous said:

So as we can see you may well see 10% reductions on properties or even more, but the sale prices move upwards over time. If you saved 10k a year towards a house but didn't buy between 2020 and 2023 you'd have £32k after enjoying the interest.

The house would be on ave £46k more.

So unless you downsized you would be better off with the money in the bank? Assuming of course that interest rates do their job of bringing prices down.

CSI_Yorkshire

Sarah1Mitty2 said:

Mr.Generous said:

So as we can see you may well see 10% reductions on properties or even more, but the sale prices move upwards over time. If you saved 10k a year towards a house but didn't buy between 2020 and 2023 you'd have £32k after enjoying the interest.

The house would be on ave £46k more.

So unless you downsized you would be better off with the money in the bank? Assuming of course that interest rates do their job of bringing prices down.

That's roughly the opposite.

lookstraightahead

What are estate charges?

Op, if you do buy, I think an older flat might be better, because if prices go down, new ones on estates seem to go down first. 

Personally I do think house prices will come down, but I don't have a crystal ball either. 

[Deleted User]

What part of bristol 

if it’s a new build and the lease starts after July last year at least you won’t get stuck with the ground rent issue as new builds only have a peppercorn GR

my son is buying in Bristol and knocked 15k off the price off a gorgeous 3 bed house in Whitchurch only last week and the sellers accepted it that day would 

He’s in a good position as chain free and he has a huge deposit 

he doesn’t have to do anything to it either it’s in show house condition so he can just move his stuff in 


There seems to be a lot of ex rentals on the market in Bristol at the moment and what I’ve noticed is hat a house either sells straight away ie within a week or it’s stays there for weeks and weeks before they reduce the price and it still doesn’t seem to sell

The ones that sell seem to be in excellent condition and don’t need any work doing to it 

Sarah1Mitty2

CSI_Yorkshire said:

Sarah1Mitty2 said:

Mr.Generous said:

So as we can see you may well see 10% reductions on properties or even more, but the sale prices move upwards over time. If you saved 10k a year towards a house but didn't buy between 2020 and 2023 you'd have £32k after enjoying the interest.

The house would be on ave £46k more.

So unless you downsized you would be better off with the money in the bank? Assuming of course that interest rates do their job of bringing prices down.

That's roughly the opposite.

A house isn`t a savings account, that is the lesson that people are unfortunately learning now in real time with real financial consequences for them and their family.

jonnydeppiwish!

snowqueen555 said:

Sarah1Mitty2 said:

snowqueen555 said:

Hello,

I'm a FTB in my late 30's considering buying a 1 bed newbuild out in the suburbs. I think they are struggling to sell it. It was on for £210k but I've negotiated it down to £195k which is good considering a lot of older run down apartments are going for £180k-ish that requires refurbishment or replacing things.

My main worries are trying to sell it on in the future. A lot of these new estates have estate charges on top of the service charge, this covers maintenance of the greenspaces. This is currently £140pa and the standard service charges are £1040pa. I am also paying the same fees as 2 bed flats so feel like it it expensive, unfortunately I have no control over that.

Should I give this a hard pass, I've been looking for a year and it has been pretty tough. I think I'd be happy there but worried about the saleability in the future, because it is only a 1 bed and also the possible off putting nature of the estate and service charges. I'd like a 2 bed but can't quite seem to be able to get one.

Pass this time, they will be cheaper in future, and so will 2 beds.

If only I had a crystal ball. I've been saving up close to a decade so this has been pretty long experience. I'm not sure prices will fall where I am (Bristol).

Do you love the flat/new development? Who are your neighbours likely to be? Predominantly Homeowners or rental?

With the properties that require work, are they liveable now (do they need a new kitchen bathroom at some point in the next 5-10 years or do they need it now)?

I would normally go for older buildings but others here prefer new. If you can get that off the new, what can you get off the older ones? Would it then stretch to a 2 bed?

snowqueen555

[Deleted User] said:

What part of bristol 

if it’s a new build and the lease starts after July last year at least you won’t get stuck with the ground rent issue as new builds only have a peppercorn GR

my son is buying in Bristol and knocked 15k off the price off a gorgeous 3 bed house in Whitchurch only last week and the sellers accepted it that day would 

He’s in a good position as chain free and he has a huge deposit 

he doesn’t have to do anything to it either it’s in show house condition so he can just move his stuff in 


There seems to be a lot of ex rentals on the market in Bristol at the moment and what I’ve noticed is hat a house either sells straight away ie within a week or it’s stays there for weeks and weeks before they reduce the price and it still doesn’t seem to sell

The ones that sell seem to be in excellent condition and don’t need any work doing to it 

I think your son has done well then. If I could get a house I would, no matter the condition. I would be in the BS16 area. I'd say the cheapest houses are probably £250k right now?

Yeah no ground rent but that bloody estate charge has replaced it.jonnydeppiwish! said:

snowqueen555 said:

Sarah1Mitty2 said:

snowqueen555 said:

Hello,

I'm a FTB in my late 30's considering buying a 1 bed newbuild out in the suburbs. I think they are struggling to sell it. It was on for £210k but I've negotiated it down to £195k which is good considering a lot of older run down apartments are going for £180k-ish that requires refurbishment or replacing things.

My main worries are trying to sell it on in the future. A lot of these new estates have estate charges on top of the service charge, this covers maintenance of the greenspaces. This is currently £140pa and the standard service charges are £1040pa. I am also paying the same fees as 2 bed flats so feel like it it expensive, unfortunately I have no control over that.

Should I give this a hard pass, I've been looking for a year and it has been pretty tough. I think I'd be happy there but worried about the saleability in the future, because it is only a 1 bed and also the possible off putting nature of the estate and service charges. I'd like a 2 bed but can't quite seem to be able to get one.

Pass this time, they will be cheaper in future, and so will 2 beds.

If only I had a crystal ball. I've been saving up close to a decade so this has been pretty long experience. I'm not sure prices will fall where I am (Bristol).

Do you love the flat/new development? Who are your neighbours likely to be? Predominantly Homeowners or rental?

With the properties that require work, are they liveable now (do they need a new kitchen bathroom at some point in the next 5-10 years or do they need it now)?

I would normally go for older buildings but others here prefer new. If you can get that off the new, what can you get off the older ones? Would it then stretch to a 2 bed?

The location is in a new suburb so mainly families, quiet but good connections to work.

Most properties available need work, liveable but lets say changing carpets, repainting and bathrooms and kitchens need work. It does surprise me how people don't look after their homes. But if they are 20k less than a newbuild it will surely cost £10k or more to do them up.