Reply to: House Buying

[Mordac]

Unless you come into a large wedge of cash, never a "great time" to buy a house.

But, like the rest of us, do it anyway. If you get a Halifax Mortgage they give you some picture hooks and a nice socket set.

Good Luck, we're all counting on you.

qh

There isn't really a bad time to buy a house (assuming it's somewhere for you to live), but there is definitely a bad time to sell one.

[Jess@ContractorFinancials]

You're absolutely right, past performance doesn’t necessarily dictate the future direction of travel for house prices. The point I wanted to make clear is you can expect good and bad times in the housing market and as a few people have already mentioned, there may be other options if you cant/don’t want to sell further down the track.

I suppose the question is really "why buy"? If its purely an investment and you're relying on the value increasing, as with any investment there are risks and you'll probably be more concerned by news of a drop in house prices.

If you're buying a home, you'll have a more emotive reason for buying (all the benefits of not renting or living with your parents) so to a degree its more a question of life choice - although we all like to see the value of our homes increase.

[eek]

Hi Vik845,

You’ve hit on a question that every contractor who owns or is buying a home is asking. House prices are cyclical so you can expect the odd peak and trough, one of the joys of home ownership. Over the long term though property prices perform well and I presume you’re buying a “home” so short term fluctuations shouldn’t necessarily deter you (you might waste more money renting over that same period).

Lenders have been reducing their rates since the Brexit vote, its hard to say how much further they could drop if at all but this is the best I’ve ever seen mortgage rates.

Over the long term (last 25 years) property prices have performed well - however past performance is not an indicator of future performance.....

Given that you are providing investment advice in there (albeit inadvertently) are you suitable qualified to be saying such things...

[Jess@ContractorFinancials]

House Buying

Hi Vik845,

You’ve hit on a question that every contractor who owns or is buying a home is asking. House prices are cyclical so you can expect the odd peak and trough, one of the joys of home ownership. Over the long term though property prices perform well and I presume you’re buying a “home” so short term fluctuations shouldn’t necessarily deter you (you might waste more money renting over that same period).

Lenders have been reducing their rates since the Brexit vote, its hard to say how much further they could drop if at all but this is the best I’ve ever seen mortgage rates.

[fullyautomatix]

...and even if prices stagnate or drop the rental returns are good enough to generate a tidy little profit margin



Which brings up a good point - vik845, if you were forced to move, would the rental cover the mortgage and bills? Pretty impossible in London, but achievable elsewhere. Worth a thought.

[vik845]

...and even if prices stagnate or drop the rental returns are good enough to generate a tidy little profit margin



Which brings up a good point - vik845, if you were forced to move, would the rental cover the mortgage and bills? Pretty impossible in London, but achievable elsewhere. Worth a thought.

Well if I proceed further with the property which is quite likely, it won't impact me much as my mortgage will be quite similar to rent what currently I pay(maybe £100-£200 extra).

[quackhandle]

Unless you come into a large wedge of cash, never a "great time" to buy a house.

But, like the rest of us, do it anyway. If you get a Halifax Mortgage they give you some picture hooks and a nice socket set.

Good Luck, we're all counting on you.

qh

[mdhd]

Just to add to this, here's simple maths for you:

House Price: 300K
LTV: 80%
Interest Rate 1: 3%
Interest Rate 2: 2.5% (if BoE drops interest rate to 0%)

Over 2 years (which is likely to be your deal/fixed rate period) option 1 will cost you £1465 more than option 2.

And if you wait for option 2 for let's say 2 months, you will already lose more than £1465 in rent. And not to mention you'd be paying £553 towards your repayment each month. So the difference is really negligible.

In simple terms, if you are looking to buy-to-live then go ahead and do it.

Interest rates may well come down, but not by much. BOE base rate is already very low and may come down .25% in the near future. I don't think this is going to make much difference to your mortgage rate really, as rates are already very low if you have a reasonable deposit. Don't think the market will crash, but may move downwards slightly. Too many factors to know your situation., such as where are you looking to buy / type of house etc. Also, don't forget that until you exchange contracts you are not tied to anything (if iin England or Wales, Scotland is different). If the market moves down significantly in your area before you exchange (usually 8weeks+ in England / Wales) you can always change you offer based on market movements.

Whether it's a good time or not depends on you and your preferences. Personally I would prefer to buy my own place than pay rent to someone else. In the long term, chances of your property being worth less than you pay for it is very slim. Another way to look at it is how much would it cost you to rent / buy a similar place. If it isn't a massive difference surely it's better to buy than rent (as long as you don't buy a money pit), as you will be paying off the principal rather than rent to someone else?

[TanyaWWW]

Yup

...and even if prices stagnate or drop the rental returns are good enough to generate a tidy little profit margin



Which brings up a good point - vik845, if you were forced to move, would the rental cover the mortgage and bills? Pretty impossible in London, but achievable elsewhere. Worth a thought.

[eek]

You might to keep quiet about that sort of thing...

HMRC have shedloads of contractors up there. They are also very into agile...

Plus I do like warning / scaring people so if the worst does happen I can say told you so....

[Mordac]

You seriously think there is any upside left in house prices in this country...

House prices down south bear no resemblance to what the local market can sanely afford to pay.

And the market is going to become saner as the tax relief changes are implemented between 2017-21 assuming that they don't go the whole hog and decide to allow no tax relief on loans on residential property*.....

* from an interesting drink last week with my friends in HMRC newcastle...

You might to keep quiet about that sort of thing...

[MrMarkyMark]

Last heard, Suity was sorting the radiator pipes out.

Is that some of the new tech as being implemented on his new BPM system?

[MrMarkyMark]

* from an interesting drink last week with my friends in HMRC newcastle...

[eek]

I'm still proceeding with the purchase of my first investment property - even if the bank rate dropped tomorrow it'd take a while to filter through to high street banks dropping the rates on their mortgage products

There was talk of Brexit causing a 18% drop in house prices - but I believe it wasn't a 18% drop from where prices are today, but expecting prices to be 18% less than they would've been if we remained. Big difference there.

You can pretty confidently assume we're not in a massive tv-renovation-show-fuelled boom like the lead up to 2007, so I think it's a decent time to buy, just don't over-extend yourself. Best of luck

You seriously think there is any upside left in house prices in this country...

House prices down south bear no resemblance to what the local market can sanely afford to pay.

And the market is going to become saner as the tax relief changes are implemented between 2017-21 assuming that they don't go the whole hog and decide to allow no tax relief on loans on residential property*.....

* from an interesting drink last week with my friends in HMRC newcastle...

[d000hg]

Nobody knows.

If you are looking to buy as an investment, maybe hold tight.

If you are looking for a home to live in for a significant time - go ahead but get a mortgage you could still afford if rates went up.