Debate House Prices


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Should First Time Buyers Wait

:eek: :eek: :eek: Me and my partner have been looking for the right house for over 2 years, we have managed to save a 25% deposit for a house that has had our offer accepted 5 weeks ago for 129000. It was on the market for 138000.

Do I wait for the prices to drop and pull out of this sale, or risk loosing my deposit into negative equity
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Comments

  • carolt
    carolt Posts: 8,531 Forumite
    Have a look at this thread - covers very similar ground.

    http://forums.moneysavingexpert.com/....html?t=859551
  • The house is exempt from stamp duty, I have had my survey report that has valued the house as 129000 in the current climate, do you think I can reduce my offer.
  • carolt
    carolt Posts: 8,531 Forumite
    Yes you can. It's called gazundering, and is not popular with a lot of people. It is the opposite of gazumping, which happens in rising markets.

    Here is some more info:

    http://www.fool.co.uk/news/property-home/2008/04/15/capitalise-on-house-price-falls.aspx?source=ioowftxt0010011

    http://www.guardian.co.uk/money/2008/apr/12/property.houseprices3

    Mind you, I'm not recommending it. You risk losing the property, and associated costs, unless the vendor feels they can recoup the costs further up the chain.

    If you are worried that prices have fallen, you might be better pulling out altogether, as prices will almost certainly fall further. Or if further falls are announced next month, do you plan to ask for further discounts?

    If you genuinely like the house, and can afford it, you need to decide whether further price falls worry you that much. If they do, then I'm not really clear why you are looking to buy now, anyway.
  • renting a one bed council flat married with a new born baby and renting in the roughest parts of birmingham have to move out !!!!!!!!!!! it is costing me £350 a month , buying a house at 129000 with a deposit of 25%. leaves me with a mortage of 97800, on a interset only mortage the payments will be £420. dead money both ways, but have to make a decision at some point. to buy or not to buy?????
  • carolt
    carolt Posts: 8,531 Forumite
    THSHARIF wrote: »
    renting a one bed council flat married with a new born baby and renting in the roughest parts of birmingham have to move out !!!!!!!!!!! it is costing me £350 a month , buying a house at 129000 with a deposit of 25%. leaves me with a mortage of 97800, on a interset only mortage the payments will be £420. dead money both ways, but have to make a decision at some point. to buy or not to buy?????

    Have you got a mortgage agreed? What is that figure based on? How do the figures you've quoted compare to renting at the moment? Would it bother you if prices fell and you lost all the equity you'd saved, and possibly 'trapped' you in your flat, ir unable to sell/remortgage to a better or remotely equivalent rate, if prices fell sufficiently to place you in negative equity? Is the place you're moving to big enough to bring up a family in? Are you planning to have any more kids? How long do you plan to stay in this place you've offered on? Are the local schools ones you would want to send your child to in due course? Can you comfortably meet the mortgage? Is your job secure? How do you plan to repay the mortgage - interest only is VERY risky, in my opinion?

    Questions, questions.

    Only you know the answers to these, but without working out the answers to these, no-one on here can give you a meaningful answer tailored to your situation - and if they claim to, they're lying.

    The general consensus is prices will fall, by anything from 5-50% depending on whom you choose to believe. But that is only part of the calculation.

    Best of luck with your decision.
  • Unless there is something very remarkable about that house it (or one very similar to it) will be c.£13k (or more) cheaper in a year's time. Personally I would wait and find somewhere better to rent, even if you have to pay slightly more rent. The final decision does depend on your personal circumstances of course.
  • I thought to buy a house/flat before bringing family, but with the actual economic crisis no chance to risk the little I have. I prefer to have children still renting and be able to provide for decent education and food.
    I am also in desperate position now to solve the rent thing but I would recommend just rent in better place
    All the best in whatever you decide to do



  • Microstar wrote: »
    Unless there is something very remarkable about that house it (or one very similar to it) will be c.£13k (or more) cheaper in a year's time. Personally I would wait and find somewhere better to rent, even if you have to pay slightly more rent. The final decision does depend on your personal circumstances of course.

    I have been looking for 2 years a 3 bed houses simlar to this are giong for 150kminimum in surrondings areas, this house is on the border line of one of the most expensive areas in birmingham.

    i dont plan on selling this house for atleast 5 years, i dont think people will drop thier prices that much in years time, they will hang on to them until prices start rising again

    this house was sold for 119k in 2006
  • If within 2 years you managed to save 25% deposit, why didn't you decide to wait another 2 years and get 50% regardless of the trend of house prices?

    4 years in total doesn't seem like a long wait, when it would knock your mortgage payments way down.
  • THSHARIF
    THSHARIF Posts: 38 Forumite
    I can put down 40% know but i am thinking of holding on for a bit and make a bulk payment each year ie. 10%, of the capital sum.

    it took me and my partner longer than 2 years to save this .

    i might consider renting this house in 3 years time and using the rest saved as a deposit on another house
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