Viewing / Buying a house

[imavillan]

On 01/09/2018 at 21:46, Xela said:

Good luck @NurembergVillan! Hope it all goes smoothly

I know what you mean about having the safety net of having the money in the bank. Its a nice feeling to have that sitting there and it gives you one less thing to worry about when you go to bed!

I'm in a position where i could buy a bigger place than where I am now but it would reduce my safety net. I'm not sure I want that to happen! 

 

It all depends on your circumstances.

How old you are, married, kids, good job with a good pension, whats the safety net for etc etc but my advice would be buy the bigger place as in the long term you will only gain and gain more pro-rata on a more expensive and bigger place.

Historically house prices have only gone in one direction and that will not change, sure there may be the odd blip but thats all it will be.

As an example, i had a good well paid job with a very good pension. When i bought the house i am in now some 15 years ago it was a bigger house than i needed and it stretched my budget for a while. I always had in mind that this would one day compliment my pension (sell and downsize). Which it is. Now with the price of property having gone up my house has gone up a lot more giving me a lot more equity to play with.

There is a massive shortage of property in the UK, we are only a small island with a growing population. Supply and demand and all that. I see your location is Sutton Coldfield, an area of high demand. An area with good public transport links, good access to the motorways, good schools. A desirable area. I do not see that changing, only increasing. Birmingham is being re-developed into something we could never have imagined. HS2 is coming and many London based companies are re-locating to Birmingham. Sutton will be/is a great place of interest for people to live in.

Long term property gain is better than a short term liquid safety net. After all, it you desperately needed the safety net you have the gains/equity from your property.

 

[NurembergVillan]

Our mortgage offer was issued this evening, so it's just a case of going through the legal machinations now.  Very exciting!

Also a bit nervous, as we're in rented accommodation so will need to put our notice in.  If the seller has a change of heart we'll be homeless!

[lapal_fan]

15 hours ago, NurembergVillan said:

Our mortgage offer was issued this evening, so it's just a case of going through the legal machinations now.  Very exciting!

Also a bit nervous, as we're in rented accommodation so will need to put our notice in.  If the seller has a change of heart we'll be homeless!

Good luck chuck.

I imagine living in rent accommodation isn't ideally, let alone with a nipper. 

It was bad enough moving into my parents house for 3 weeks whilst we awaited our sale to go through.

Fingers crossed for you

[Stevo985]

I'll probably be looking to buy next year.

Fortunately, I'm letting my house out at the moment so I'm in a rented flat. So I'll be lucky that I can sell my house and get everything done before I buy somewhere else (or at least have a comfortable overlap) so won't have that stressful period of having to get everything to align perfectly and having a chain to worry about.

My mom moved at the start of this year and the stress was **** ridiculous. And I wasn't even the one moving.

[NurembergVillan]

Our mortgage offer arrived by email the day before we went on holiday so we've spent a week making plans and getting all excited.

Now we're home and have the hard copy but noticed that the repayments were far higher than the broker had quoted us.  We've reviewed the terms and the loan duration is noted as 17 years, whereas naturally we requested 25-28 years.  I'm only 39 so I'd like to think I have a good stretch in front of me!

If we need to get that changed is it likely to bugger everything up?  I've emailed our broker, but obviously it's a Sunday...

Stressed out now, as we really love the house but can't afford the repayment terms.  They're £600 a month more than we were expecting.

[villarule123]

They should let you borrow up to the retirement age, so I don't think you'll have a problem upping the period. Odd that they would up it without conferring with you. 

[NurembergVillan]

17 minutes ago, villarule123 said:

They should let you borrow up to the retirement age, so I don't think you'll have a problem upping the period. Odd that they would up it without conferring with you. 

Our KFI stated a 28 year term taking me to 67.

Seems so bizarre that we've now received a 17 year term offer.

[Dr_Pangloss]

22 minutes ago, NurembergVillan said:

Our KFI stated a 28 year term taking me to 67.

Seems so bizarre that we've now received a 17 year term offer.

In all likelihood they've **** up and had a fat finger moment. 

It's an annoying process, I'm buying right now, I've agreed everything, they 'accepted' me, took money off me for the mortgage fee and surveys and have now turned around and asked for more details about me RE affordability, despite giving them a rainforests worth of documents and having a 2 hour meeting to discuss it all. It's as though they want to drag things out as much as possible.

Edited September 16, 2018 by Dr_Pangloss

[NurembergVillan]

2 minutes ago, Dr_Pangloss said:

In all likelihood they've **** up and had a fat finger moment. 

It's an annoying process, I'm buying right now, I've agreed everything, they 'accepted' me, took money off me for the mortgage fee and surveys and have now turned around and asked for more details about me RE affordability, despite giving them a rainforests worth of documents and having a 2 hour meeting to discuss it all. It's thought they want to drag things out as much as possible.

It's so painful.  I'm absolutely on the floor this morning, even though your first line is likely accurate.

Seems it's not uncommon for extra details to be requested, usually over something fairly trivial.  Hope it all goes well for you.

Reading Mark Carney this week suggest house prices could drop by a third if there's a no deal Brexit put the willies up me as well.

[Dr_Pangloss]

5 minutes ago, NurembergVillan said:

It's so painful.  I'm absolutely on the floor this morning, even though your first line is likely accurate.

Seems it's not uncommon for extra details to be requested, usually over something fairly trivial.  Hope it all goes well for you.

Reading Mark Carney this week suggest house prices could drop by a third if there's a no deal Brexit put the willies up me as well.

I guess what's vexing is that they've already taken a lot of my money, so they're happy to do that even if they're not 100% sure I can afford (which I can), just absolutely c**tish IMO. 

Also regarding your last point, I've felt prices will drop for a while and a big drop may happen, I've bought near the top of the market so am braced to lose a lot of equity. In my case I'm not buying for an investment so can probably swallow that pill over the long run but it is a bit annoying. The price of the house I've bought has gone up £90k in two and a half years, ridiculous. 

[NurembergVillan]

17 minutes ago, Dr_Pangloss said:

I guess what's vexing is that they've already taken a lot of my money, so they're happy to do that even if they're not 100% sure I can afford (which I can), just absolutely c**tish IMO. 

Also regarding your last point, I've felt prices will drop for a while and a big drop may happen, I've bought near the top of the market so am braced to lose a lot of equity. In my case I'm not buying for an investment so can probably swallow that pill over the long run but it is a bit annoying. The price of the house I've bought has gone up £90k in two and a half years, ridiculous. 

That's kinda the way I'm looking at it.  We're buying this as a family home, looking at where the kids will go to school once old enough etc.  Negative equity is an issue if we come to sell, not while we're paying the mortgage.  Unless we want to remortgage and the value has tanked...

[Davkaus]

39 minutes ago, NurembergVillan said:

Negative equity is an issue if we come to sell, not while we're paying the mortgage.  Unless we want to remortgage and the value has tanked...

Yup, you're must vulnerable in the first few years as even a relatively minor price correction could put you in to negative equity. How long is your fixed term?

No sense in trying to time the market, though. I know a couple who could have bought a house at any point in the last 15 years who keep going on about a collapse in house values. It'd have to be some collapse to make up for how much they've wasted in rent/missing out on the price increases.

Edited September 16, 2018 by Davkaus

[Xela]

2 hours ago, NurembergVillan said:

Our mortgage offer arrived by email the day before we went on holiday so we've spent a week making plans and getting all excited.

Now we're home and have the hard copy but noticed that the repayments were far higher than the broker had quoted us.  We've reviewed the terms and the loan duration is noted as 17 years, whereas naturally we requested 25-28 years.  I'm only 39 so I'd like to think I have a good stretch in front of me!

If we need to get that changed is it likely to bugger everything up?  I've emailed our broker, but obviously it's a Sunday...

Stressed out now, as we really love the house but can't afford the repayment terms.  They're £600 a month more than we were expecting.

Probably just an error. If they have approved you on a higher repayment then there will be no issue in extending the term as long as its runs to state pensionable age and no longer. 

Frustrating though! 

[Xela]

1 hour ago, NurembergVillan said:

Reading Mark Carney this week suggest house prices could drop by a third if there's a no deal Brexit put the willies up me as well.

'Experts' have been predicting a crash for 10-15 years and it hasn't happened. A few minor blips for a month or two but nothing massive and they soon start going uo

There is a shortage of homes in the UK so its a simple case of demand outstripping supply 

[Stevo985]

The house price crash post Brexit stuff seems to be all over the place. 

I’m really really considering selling my house. Get the money in the bank while I can and then wait for Brexit to see what the impact is. 

If prices crash then I’ll have cashed in at the right time. 

 

As as I said earlier, I’m considering buying a place with the OH next year so this could work in my favour. I’ll be kicking myself if prices fall after Brexit and I’ve not done this. 

If I sell and prices don’t fall then I’ve not really lost much. The downside of the other way is worse. 

[NurembergVillan]

2 hours ago, Davkaus said:

Yup, you're must vulnerable in the first few years as even a relatively minor price correction could put you in to negative equity. How long is your fixed term?

No sense in trying to time the market, though. I know a couple who could have bought a house at any point in the last 15 years who keep going on about a collapse in house values. It'd have to be some collapse to make up for how much they've wasted in rent/missing out on the price increases.

We're currently paying £1700 a month in rent, and the KFI on the new gaff was for about £1280 a month.  Plus the council tax and utilities will be a £100 a month each lower.

We've grabbed a 5 year fixed so we'll have the stability of payments over that period.

In terms of prices, we've kinda benefitted to this point in that we own my parents house and were able to draw some equity from that as the deposit on this one.  It's increased in value about 30% in 5 years.

1 hour ago, Xela said:

Probably just an error. If they have approved you on a higher repayment then there will be no issue in extending the term as long as its runs to state pensionable age and no longer. 

Frustrating though! 

Broker called not long ago saying he thought it would be an error.  He said if anything they'd want a longer term to make it more affordable rather than a shorter one.

1 hour ago, Xela said:

'Experts' have been predicting a crash for 10-15 years and it hasn't happened. A few minor blips for a month or two but nothing massive and they soon start going uo

There is a shortage of homes in the UK so its a simple case of demand outstripping supply 

There are too many powerful people with too much invested in property for a massive crash to ever be allowed, surely?

[Dr_Pangloss]

36 minutes ago, NurembergVillan said:

We're currently paying £1700 a month in rent, and the KFI on the new gaff was for about £1280 a month.  Plus the council tax and utilities will be a £100 a month each lower.

We've grabbed a 5 year fixed so we'll have the stability of payments over that period.

In terms of prices, we've kinda benefitted to this point in that we own my parents house and were able to draw some equity from that as the deposit on this one.  It's increased in value about 30% in 5 years.

Broker called not long ago saying he thought it would be an error.  He said if anything they'd want a longer term to make it more affordable rather than a shorter one.

There are too many powerful people with too much invested in property for a massive crash to ever be allowed, surely?

Well unlike 2008, real estate is not as badly exposed since the 'financialisation' of housing ground to a bit of a halt and banks added an extra layer of protection in terms of lending criteria and getting rid of zero deposit products (these have only recently come back on the market). Where prices might go down is if interest rates go up sharply - base rate rises filter into mortgage markets almost instantly and this acts as a disincentive in terms of people getting a mortgage. Secondly, falling demand due to Brexit will have an impact, since there will be less people on the property market if it is harder to work and stay here for non-British Europeans. 

I'd say over the next 5 years the base rate will not go up too much, because the BoE will be worried about a weak post Brexit economy, they will keep the interest rate low to try and encourage lending. In terms of demand falling due to Brexit, I'd imagine this will be a regional thing, London prices are slowing and they will almost certainly decline further. This may not be the case in Birmingham and other parts of the country, also, other factors are always at play such as the desirability of a particular area (quality of the area, schools etc), which causes differences in prices. 

Only thing I'd say, and this is just a personal view, but that is house price increases have been so insane that they simply cannot keep rising on trend, because at this rate extremely few people will be able to afford a house in 15-20 years time. There will have to be a massive loosening of supply somewhere and it's highly likely that a government will get voted in that will directly intervene in the housing market in an attempt to drastically reduce prices, such will be the general disdain viz affordability.

[Kingman]

It is wrong to blame a likely fall in house prices on Brexit, to do so is masking Mr Carney’s failure to increase interest rates in 2014.

The government  and the bank of England have a bit of a quandry, our economy is reliant on the  artificially high value of our property stock but the high value of property is causing a generational disparity between those who own property and those that want to own property.

Interest rates used to be an effective way of controlling the economy but because that control  has been effectively disabled because of the reliance on property values, there is no real control over the economy.  Blame it on Brexit seems to be emerging as a very convenient way of  disguising the fact that our economy has not properly recovered from the crash in 2008, 

It seems to me that our economy has been circling the drain for decades; the last 10 years illustrating a period of ever-more desperate props to stimulate growth, along with all the nasty side effects this cheap debt has created (asset bubbles and wealth inequality).

We're long overdue a natural correction and Brexit will both serve as a catalyst that accelerates this process as well as the excuse the establishment can use to simultaneously wash their hands of the whole disgraceful situation and blame the years of misery to come on the voting public.

It appears that the spectre of Brexit has already had a profound and measurable effect on our economy, first it's knocked a good 20% off the strength of our currency versus the Euro, which continues to drive up real-world inflation. Secondly it could be argued that it's singularly responsible for the flat-lining / decline in house prices in the three most expensive cities in the UK (London, Oxford, Cambridge) - curiously, according to Hometrack, the distinct upward price trend in these three areas came to a distinct halt in June 2016. Certainly no bad thing, but arguably a measure of its effect on sentiment. 

Sentiment is getting trashed now. Yes the financials and all the other variables are important but  the market has turned end of. The crash is on and It would take something like HTB on all property now to boost it. Can’t see that happening. It would not create any new council tax income? Would not create jobs? No homes would have guarantees? It would not line the pockets of party donors? or house builders? stamp duty contribution? Done that not going to help. Interest rate lowered? 0.25% not going to change a thing? 

The govt surely couldn't sell another help to buy scam to the electorate, what with Brexit, taxes and austerity biting more. 

HTB = you can't afford somewhere, well we will give you a house you can afford, topped up with a 20% loan on top that you can pay back in 5 years time. "Genius" 

The logic of the whole thing is ****, you can't afford somewhere so here is an extra loan. The real value is minus the HTB loan on most cases, 

It is a truly awful scheme and will either be bailed out by tax payers or HTB on used houses will be re introduced in some way so that new HTB owners can sell to someone. 

Help to borrow was first introduced in April 2013, I wonder how many of the first owners have not budgeted for the 6th year onwards for re-payments of the loan on top of the mortgage + interest rate rises and are still keeping up with the Jones's? Designer clobber, PCP cars, latest i-gadgets, Sky tv subscriptions?

The next 6 months will be very telling for all,  think Carney's reasoning is that prices will fall in the event of a no-deal Brexit as a consequence of a disastrous economic environment (a depression, stagflation, or an interest rate hike to defend Sterling). There might be fewer people in a position to buy in such scenarios. 

[Kingman]

London house prices falling at fastest rate for nine years

"Prices have not dropped more rapidly since September 2009 when they fell 3.25 per cent while the market reeled  from the impact of the financial crisis."

https://www.standard.co.uk/news/london/london-house-prices-falling-at-fastest-rate-for-nine-years-a3940096.html

No problem, just slash interest rates like they did before!..

[Dr_Pangloss]

18 minutes ago, Kingman said:

London house prices falling at fastest rate for nine years

"Prices have not dropped more rapidly since September 2009 when they fell 3.25 per cent while the market reeled  from the impact of the financial crisis."

https://www.standard.co.uk/news/london/london-house-prices-falling-at-fastest-rate-for-nine-years-a3940096.html

No problem, just slash interest rates like they did before!..

Slashing interests rates would serve to increase prices, all things being equal, and there's statistical evidence out there to suggest that is the case. Low interest rates make mortgages cheaper and increase demand (hence increasing prices), they also reduce the value of saving through conventional measures and incentivise home buying as an investment over things like savings accounts.