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1st time buying a flat - and so so sorry for this!!!

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Comments

  • Suziflooze
    Suziflooze Posts: 12 Forumite
    You've already exchanged the money, you've already exchanged contracts, your decision is made and pretty clear. If you pull out you will lose on the exchange rate, you will incur penalties and you'll totally mess everyone around. If you continue you will own a property in a good area, if you have done your research (dubious) you will attract a good rental income which will start to pay off your investment and hopefully cover your costs and eventually become an asset. I presume this was a long erm plan to rent as an investment (otherwise a bit nuts) so you can ride out the recession, and if you bought well your property should gain value as well as being paid off by your rent income...
  • DannyboyMidlands
    DannyboyMidlands Posts: 1,880 Forumite
    As suzi says, the decision is already made. You need to try to relax.

    I think that you are focusing in too tight on day to day movements in the exchange rate.

    Yes, this can look alarming:

    http://www.xe.com/currencycharts/?from=GBP&to=USD&view=1W

    But this not so much:

    http://www.xe.com/currencycharts/?from=GBP&to=USD&view=5Y

    I had the same problem when I first started spread betting. Focusing on hour by hour fluctuations. Assuming that you plan to hold this flat for several years, you need to zoom out a bit.
  • jumperabv3
    jumperabv3 Posts: 1,231 Forumite
    Part of the Furniture 1,000 Posts
    Suziflooze wrote: »
    if you have done your research (dubious) you will attract a good rental income which will start to pay off your investment

    No need to be dubious - I have a very good friend who knows the area, I have no doubts the flat is in great location and very solid, I don't mind being flexible on the rent, I am not looking to make "millions" out of it - I just don't wanna lose my "pants" (trousers) seeing the UK economy sinking...

    I have faith in the UK, it's not the first time the GBP-USD touched the $1.52 area, I understand it - it just happened too fast, just too fast, that I feel whatever I do - is going against my odds ... the completion by the way is only in 3 months time ....

    I have no clue what to do with the money right now, I was thinking of buying USD as a "proetection" against further falls of the GBP but what if it would go up?
    Perhaps I can buy an option that would protect me against further falls of the GBP, just have an option in case the worse come to worst ... and if not just lose the premium ... I am not even sure where to do that, I just know some people do that ...
  • jumperabv3
    jumperabv3 Posts: 1,231 Forumite
    Part of the Furniture 1,000 Posts
    DannyboyMidlands wrote: »
    As suzi says, the decision is already made. You need to try to relax.

    I think that you are focusing in too tight on day to day movements in the exchange rate.

    Yes, this can look alarming:

    http://www.xe.com/currencycharts/?from=GBP&to=USD&view=1W

    But this not so much:

    http://www.xe.com/currencycharts/?from=GBP&to=USD&view=5Y

    I had the same problem when I first started spread betting. Focusing on hour by hour fluctuations. Assuming that you plan to hold this flat for several years, you need to zoom out a bit.

    You guys are not worried prices in London will fall just like the GBP is falling now?
    Yes, it's my first time I'm investing so you can imagine how it feels - fluctuations of 1% up and 2% down are normal .... this is very abnormal but I guess god knows what, these Greek or Germans are doing right now ... I have no doubts the Euro will stop being a currency ... the question is how this would affect the UK? Speculations ... perhaps ... just no fun to be in the middle of it.
  • missile
    missile Posts: 11,805 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    jumperabv3 wrote: »
    I am looking to buy to let, .... I just wanted a safe / solid place to invest in, my return after all fees taken into consideration would be around 3.6% - I'm not looking into high yields really, didn't wanna be greedy, just wanted a safe place to put the money in ... and now I'm all worried..

    Property is not as safe as it once was, some "experts" are predicting further falls in London house prices.
    There are many risks you may not have thought of(?) e.g. Dry rot, wood worm, tenant doesn't pay and trashes your property. You have to go to court to evict.
    Have you factored in the costs of buying and selling?
    3.6% is a poor ROI. You could get a similar risk free return in an offshore sterling or US$ savings account.

    I note from a.n.other post you have recently moved to US. Your investment would have made sense if you had wanted to retain a foothold in UK proper market. However I understand you have no plans to return and I would suggest a better investment would be a property in NY which would be easier to manage.

    I am sorry to be a pesemist, but if you are worried now, you may be a nervous wreck when you have a problem tenant.
    You should prepare an exit strategy, before making any investment :(
    "A nation's greatness is measured by how it treats its weakest members." ~ Mahatma Gandhi
    Ride hard or stay home :iloveyou:
  • blargh
    blargh Posts: 29 Forumite
    Bufger wrote: »
    GBP isnt getting weaker against the USD, its getting stronger

    £ has been dropping like a stone against the dollar recently... 1000 pips down in a month!
  • Out,_Vile_Jelly
    Out,_Vile_Jelly Posts: 4,842 Forumite
    Part of the Furniture 1,000 Posts
    If currency fluctuations are freaking you out so much, why did you choose to sink ALL your savings into a single investment in a foreign country?
    They are an EYESORES!!!!
  • DannyboyMidlands
    DannyboyMidlands Posts: 1,880 Forumite
    jumperabv3 wrote: »
    You guys are not worried prices in London will fall just like the GBP is falling now?
    Yes, it's my first time I'm investing so you can imagine how it feels - fluctuations of 1% up and 2% down are normal .... this is very abnormal but I guess god knows what, these Greek or Germans are doing right now ... I have no doubts the Euro will stop being a currency ... the question is how this would affect the UK? Speculations ... perhaps ... just no fun to be in the middle of it.

    I don't think that a falling GBP will cause London prices to fall. If anything it will prop them up because London property will get cheaper for foreign buyers.

    Prices falling for other reasons is a whole different can of worms..............
  • ILW
    ILW Posts: 18,333 Forumite
    I would suspect a lot of East London property will take a hit after the Olympics.
  • Suziflooze
    Suziflooze Posts: 12 Forumite
    I think it's possibly cold feet... You have already changed the money so you won't lose any more unless you change it back and pull out, so the fluctuations won't affect your purchase any more right now. Presumably this is a long term investment which, as you say you have down loads of research on, will pay for itself, I.e. the rent should cover the costs, you said it was savings so no mortgage, so even IF house prices drop, you can hold onto it until they come back up again presumably... You are not looking to sell it again now, I would imagine we are talking years...? In the meantime you are making rental income...

    Anyhow you stand to lose more money if you pull out now and change back to $$ in exchange rate and penalties than any likely future loss I would have thought because you will be making rental income as you said this is from savings not a mortgage...
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