First time buyer with deposit, what can I afford?

PasturesNew

Skyhigh wrote: »

"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.

I bought in about 1990. In 1997 when I came to sell, I was still in negative equity and had to write a cheque out for 4.6% of the original amount I borrowed to complete the sale.

Prices don't rise every 7 years. Only if in hindsight you pick particular years.

Generali

PasturesNew wrote: »

Oops, I see a few people wanted the spreadsheet. Unfortunately this thread became buried in the volume of threads until just now.

My situation is different to most people's. I sold my house last year and my savings are the only money I have in the world and when I buy a house it will be for life. And I won't ever have a well paid job and I don't want a mortgage.

So I need to make the most out of what I have and try to judge the market in the next few years to make the most of it. Yes a house is a home first, but if you've ONE shot at getting it right (like I have), there's no point in paying, say, £40k more for a house today than I could do in 3-4 years, while losing £40k interest in that time. I have NO pension plan and am too old/poor to ever start one. So whatever I can squeeze out of my savings/house purchase is vital to being a bit secure as I will be on State Basic Pension when I retire.

If you plan to trade up in the next 10 years, you need to also think like this I believe. Or you're throwing your savings/deposit away.

The figures I used in my personal spreadsheet did start with a big pile of savings, but the spreadsheet worked monthly and assumed:

Decrease in house prices at .006667/month
Rent increasing by .003/month
Buying cost would be 3% of cost (stamp duty, solicitor, searches, VAT, tarting it up a bit [I have ZERO belongings/furniture to my name])
Savings interest was calculated at .045/12 (rough, I know - I am a basic rate taxpayer too)

Based on those figures it could then calculate 'cost to buy now' and 'savings account' on any month.

It wasn't a rocket science solution. Just chucking formulae about in Excel.

You're trying to time the market which is very high risk. You could reduce this risk by buying something with a positive correlation to house prices bit-by-bit over the bext few years until you're ready to buy.

Debt_Free_Chick

PasturesNew wrote: »

Yes a house is a home first, but if you've ONE shot at getting it right (like I have), there's no point in paying, say, £40k more for a house today than I could do in 3-4 years, while losing £40k interest in that time.

I agree entirely with your sentiment, but we simply don't know that we might pay £40k more today, compared with 3-4 months time, let alone 3-4 years time.

I have a decision to make soon .... about buying the home that I currently own with my ex.

To be honest, some of the reasons for doing so are emotional, but there are others ......

There is potential in the house
It needs a refurb. It's not "shot" but it needs a new kitchen, bathroom ... it needs two bedrooms knocked into one to create a guest b/room with en-suite (currently five beds .... one master with en-suite b/room and en-suite dressing room. Four other beds ..... doubles, but with not a lot of extra room. Knocking two together would create four beds, 3 baths, 2 en-suite.

Ideally, it needs a makover to a "Georgian Rectory" style, but with a modern twist. Painting it white/magnolia and putting in laminate flooring is not going to work. It has beams, an inglenook and an Aga .....

I want to stay in the village
In the past five years, only 3 properties have come on to the market. Residents are mostly retired, so unlikely to feel the pinch from any credit crunch ..... no "urgent" sales expected here. How long would I have to wait for another property to come to the market?

Prime location
It will always sell .... eventually ... at the right price Stunning views ... woodland, fields, river, castle - it's 100m above the valley floor, so no potential flooding issues. Not overlooked - although next door to the village pub, but it's a village pub which is 75% food, not full of hoodied yoofs in sooped up escorts supping wife-beating beer :rotfl: And it's opposite the Parish Church.

Now I think about it ... I'll post a link to RM when it goes on the market (EAs in on Friday) as ex wants to sell it. I'm waiting "to make my move" .... which is probably when we get an offer for £430k as he wants £500k :rotfl: Yes .... he's the lion, I'm the witch and he's the one that walks through the wardrobe :rotfl:

Sorry .... strayed OT, but it was just was I thinking as I read your post.

Debt_Free_Chick

PasturesNew wrote: »

I bought in about 1990. In 1997 when I came to sell, I was still in negative equity and had to write a cheque out for 4.6% of the original amount I borrowed to complete the sale.

Prices don't rise every 7 years. Only if in hindsight you pick particular years.

Interesting .... I bought in Birmingham in 1989 for £65k .... sold in 2002 for £138k!!!


This one is three doors up and on for £285k!!!:eek: :eek: :eek:

teabelly

If you don't mind living in Stoke on Trent then you can buy a house for 10k! Don't believe me then look on right move here:

http://www.rightmove.co.uk/viewdetails-19223891.rsp?pa_n=1&tr_t=buy

There's another one on at 10-15k in the same road.

You'd have to be a cash buyer as I don't think you can get a mortgage for less than 25k these days.

Cheap as chips

chriz1000

That is the guide price at auction though. The same property is listed several times on at different prices. I suspect the property will fetch considerably more.
Hey if it was listed in an estate agents window with an £8k price tag I would buy it just for somewhere to stay when we visit Alton Towers!

teabelly

Actually there are 3 different but similar properties in the same road. Rightmove doesn't show the house number but EIG auction info does and there are 3 different ones.

One of those would be cheaper than buying a camper van! You could rent it out to others going to the Towers

rocklee

dannyboycey wrote: »

Did you actually read the responses?

Sorry danny I did, just haven't checked this thread for a while and was reading an article that prices were going up. Actually I think its inevitable and personally prices for some the houses that I've seen just outside of London seemed expensive as well (in Barking terraced houses are 250,000 GBP minimum). I don't know if that's normal but I felt that after looking at some of them they seemed a bit overpriced that what I've seen in other countries. Yeah sorry for sounding like a broken record back there :-)

chriz, I see what you're saying and with council taxes you're right! But we don't have to see it this way. A house is a home when it is filled with warmth and good memories. It may be the only consistent "rock" in everyone's lives.

Den

brit1234 wrote: »

I've got a £25k deposit and a salary about £35k, still can't afford in London.

I would wait there is increasing surplus of properties on the estate agents books just like America before the big falls.

Did you try Watford?