First time buyer with deposit, what can I afford?

Generali

dannyboycey wrote: »

You don't know anything for certain, even that the sun will come up tomorrow. However, there's a really, reeeaallly, reeeaaaaallly strong chance that prices in 2 years will be lower than they are now!



Sorry. A house is always an investment, good or bad, whether you choose to look at it that way or not. Extreme example, but say you buy a house and a few years later you lose your job, interest rates are 10% and your fixed rate has come to an end. You can't say to the repo company "it's ok.... It's a home, not an investment."

The way to look at a house is as a home not an investment IMO. If you buy something (on a long fixed rate for preference) then you're fixing a large essential cost in effect as well as getting security of tenure.

You have to keep up the mortgage to keep that tenure but just see how long you last if you stop paying the rent. In most cases the LL will have you out a lot quicker than the bank!

carpetbelly

dannyboycey wrote: »

Sorry. A house is always an investment, good or bad, whether you choose to look at it that way or not. Extreme example, but say you buy a house and a few years later you lose your job, interest rates are 10% and your fixed rate has come to an end. You can't say to the repo company "it's ok.... It's a home, not an investment."

another example, a house is not an investment you buy a house you and your family live in. You keep your job. Happily live there all your life and have paid off your mortgage. Omg, who'd have ever thought :rolleyes: It does happen as I'm sure your scenario does play out as well.

There are always extremes when you have a distribution. Nothing is certain. Yes, there are probabilities. But you even talk crash and the word crash. Some people are talking a few % as a crash, some people talk of double didgit % moves as a crash. Its perspective really.

adr0ck

dannyboycey wrote: »

It is.... Now. In fact the price of your house has probably dropped a couple of quid since you made your ill-informed ramble of a post.

danny

in your opinion whats a crash in house prices?

drop of 1% 2% , 5% 10% etc

to me a crash would have to be over 10%

is there a proper description?

Generali

adr0ck wrote: »

danny

in your opinion whats a crash in house prices?

drop of 1% 2% , 5% 10% etc

to me a crash would have to be over 10%

is there a proper description?

In the stock markets, a bear market is informally defined as one where prices fall 20%.

As the house market is a lot less liquid than most stock markets, I would say that a fall of 20% in prices acheived by forced sellers would count as a crash.

If you want to call a 10% or a 30% fall a crash, far be it from me to argue though. I guess another way of looking at it is how many years worth of rises are wiped out? The housing market is quite a tough one though as supply is highly regulated and houses serve a use other than as a pure investment (you can live in it or even grow food in the garden!).

dannyboycey

Generali wrote: »

The way to look at a house is as a home not an investment IMO. If you buy something (on a long fixed rate for preference) then you're fixing a large essential cost in effect as well as getting security of tenure.

Sure, you're reducing the risk of your investment substantially. But personal circumstances are subject to change and there are certain scenarios that just can't be factored in (and perhaps shouldn't be - who knows). Laterally speaking even renting can be an investment of sorts. I guess it boils down to how you think - maybe I think in financial terms, where someone else may think in more emotional terms and use the "house as a home" argument (something which personally gets under my skin. Horses for courses though. I'm certainly not going to argue with you Generali, as you make a very useful contribution to this forum. More so than I.

adr0ck

thanks for that Generali

i'll say 20% then

so if average house prices are now say £185K

were talking average house prices falling to £148K

before were talking of a crash

dannyboycey

adr0ck wrote: »

danny

in your opinion whats a crash in house prices?
....

is there a proper description?

Not that I'm aware of. Which may explain the reluctunce of many to use the word. In my opionion though, the lines between 'correction' and 'crash' are easily blurred. What's for sure, is that when money is at stake, people are very careful about the terminology they use.

I personally see drops of 30% over the next 5 years, but that's purely anecdotal speculation based on my own understanding of things.

dannyboycey

adr0ck wrote: »

thanks for that Generali

i'll say 20% then

so if average house prices are now say £185K

were talking average house prices falling to £148K

before were talking of a crash

It's worth pointing out that many new builds have plummeted by much more than this already since the peak.

....Right, I'd better get on and do some work

Generali

dannyboycey wrote: »

Sure, you're reducing the risk of your investment substantially. But personal circumstances are subject to change and there are certain scenarios that just can't be factored in (and perhaps shouldn't be - who knows). Laterally speaking even renting can be an investment of sorts. I guess it boils down to how you think - maybe I think in financial terms, where someone else may think in more emotional terms and use the "house as a home" argument (something which personally gets under my skin. Horses for courses though. I'm certainly not going to argue with you Generali, as you make a very useful contribution to this forum. More so than I.

I guess it depends on your viewpoint. I moved to central London to rent so I had no commute and would never be late for work (and for a nice lifestyle - I could see the kids every day). That was an investment of sorts in my career and family.

I try to think with the head not heart when it comes to housing, for the time being anyway. I can see why someone 'falls in love with a house' too.

OP - You should be able something for about £150k, perhaps more depending on the goodwill of your parents. If I was looking to buy right now I'd be looking at auctions. I think that's where you'll get the best prices from a buyers viewpoint. Or put an ad in the paper saying, "Will buy for cash 25% below market value, quick completion". It's as close to the truth as any other ad like that.

Skyhigh

I'm in a similar position, almost.

£15k savings - so less.
£30k ish salary
No debts.

I can get about £120k mortgage from most lenders, working out on various products (i.e. 2 year fixed at 5.69%) payments of £727 per month.

Depends where you are in the country, in London you may be able to borrow more (or even less).

"House crash" wise, prices rise every 7 years so if you're not planning on moving anytime soon then you'll be fine with avoiding negative equity, etc, if/and/or/when you come to sell up.

Average house price, quite high, the 3 bed semi with field-views (4 year old build) I'm looking at is on at £130k, same house a few miles away in a 'better area' would be about £180k, and down south....an insane amount

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