Midway through a purchase

macatak

I'm a first time buyer, but have a substantial deposit, and have been planning to buy a large place, letting out a couple of rooms. I put an offer in on a place about a month ago, got 5% off the price they were asking for in December, and have got the mortgage straightened out. The house is in Seven Sisters in London, and has very good transport links for the center of london.

OPbviously now the end times seem to be approaching, and I'm worried that my bi deposit will be eaten away by the collapse of civilisation. Should I finalise the process and move in at the end of the month? If I back out now there will be circa £1000 of fees to pay I imagine, but maybe I should do that and wait for the market to pan out. Maybe I should say I don't think I can go ahead at the current price and ask for another 10% off. I would feel kind of guilty about backing out now or reducing my offer - is it a scurrilous thing to do?

Your advice very welcome!

chappers

In a word yes, however are you buying this house purely as a business oppertunity or are you looking to live there longterm and are just renting the rooms out to make the place more affordable.
If you are buying the house as shortterm business venture and are thinking of selling up in the next couple of years, then i would maybe think twice.

If you intend to keep hold of the house long term as your home maybe with regard to getting rid of your lodgers then i wouldn't worry too much about the housing market, just be aware that any drop in value may affect any remortgage you try to make in the future so either don't tie yourselves into any deal or if you do maybe think alittle bit longer than the 2 year deals that seem to have become de facto nowadays.

What sort of LTV are you looking at with this property.

macatak

I have about 15% of the value as deposit (sitting in MSE's recommended bank accoung).

I haven't any major drive to buy as opposed to rent (my shared house is a little small, but I can always rent elsewhere easily).

I understand that its OK to go negative if you plan to stay in the house a long time, but a 10% reduction in house price is a nice thing to have off your repayments. I think I'm convincing myself not to go for it!

carolt

If you were stuck there for a long time, due to negative equity, I believe Seven Sisters is not the most salubrious location. Whilst it's fine for young, 20-something renters, you might not want to be stuck there in your 30's trying to bring up a family.

Just a thought.