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Hello everyone. I am not a regular contributor on this particular forum but i would value some advice please with regard to being a prospective first time house buyer. Here is my situation.
I am presently renting a 4 bedroom semi detached house paying weekly rent of £110 or £6,000 yearly.
I have recently been offered the same house to buy and as i am getting married in the summer it is something i would like to consider.
I have been offered the house for £115,000 but i would expect i could negotiate this price a little downwards.
As it happens i have just over that ammount presently in savings which is nearing the end of a year long fixed term deal with a net rate of interest of approx 3%.
If i was to buy the house it would be a straight cash sale. The money i am presently paying in rent could then be saved effectively giving me an annual yield of between 5-6%.
My situation is complicated in my eyes as i live in the north of ireland which experienced the biggest % rise in house prices out of any region in the uk in the two years prior to the housing crash. Although they have fallen markedly since i am not sure if they are at the bootom yet and represent true value.
If the house i am thinking about buying was going to be a house for life future price rises or decreses would not be a big problem but i would see it more as a house for the next 3-5 years so pretty much a home and an investment rolled into one.
My big concern about a future housing price crash has to do with my basic schoolboy understanding of economics and the affect interest rates has on house prices.
Am i right in thinking present low interest rates are not sustainable and were they to rise sharply housing prices would suffered another mini collapse. Again my basic economics would say the recent hosuing crash was not as bad as it should have been as it was cushioned by very low interest rates.
Hoping for some helpful replies.
I am presently renting a 4 bedroom semi detached house paying weekly rent of £110 or £6,000 yearly.
I have recently been offered the same house to buy and as i am getting married in the summer it is something i would like to consider.
I have been offered the house for £115,000 but i would expect i could negotiate this price a little downwards.
As it happens i have just over that ammount presently in savings which is nearing the end of a year long fixed term deal with a net rate of interest of approx 3%.
If i was to buy the house it would be a straight cash sale. The money i am presently paying in rent could then be saved effectively giving me an annual yield of between 5-6%.
My situation is complicated in my eyes as i live in the north of ireland which experienced the biggest % rise in house prices out of any region in the uk in the two years prior to the housing crash. Although they have fallen markedly since i am not sure if they are at the bootom yet and represent true value.
If the house i am thinking about buying was going to be a house for life future price rises or decreses would not be a big problem but i would see it more as a house for the next 3-5 years so pretty much a home and an investment rolled into one.
My big concern about a future housing price crash has to do with my basic schoolboy understanding of economics and the affect interest rates has on house prices.
Am i right in thinking present low interest rates are not sustainable and were they to rise sharply housing prices would suffered another mini collapse. Again my basic economics would say the recent hosuing crash was not as bad as it should have been as it was cushioned by very low interest rates.
Hoping for some helpful replies.
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Paddletoe
You are probably right.. The short term furture of teh housing market depends on low interest rates. It is going to be very difficult to raise rates to where they were 2 years ago any time soon. For that reason I woudl not be overly concerned!
As the future of th UK s banks also depends on the value of peoples homes I would not be too concerned about a new property crash! BOE and governemnt are committed to a stable housing market. Expect inflation to be controlled by higher taxes going forward, and not necessarily increasing interst rates. JUST A THOUGHT!
You are probably right.. The short term furture of teh housing market depends on low interest rates. It is going to be very difficult to raise rates to where they were 2 years ago any time soon. For that reason I woudl not be overly concerned!
As the future of th UK s banks also depends on the value of peoples homes I would not be too concerned about a new property crash! BOE and governemnt are committed to a stable housing market. Expect inflation to be controlled by higher taxes going forward, and not necessarily increasing interst rates. JUST A THOUGHT!
prices thru out south wales are rising as estate agents report their biggest sales since 2008.
Problem in my area is that Estate Agents are getting competitive,. They are driving up asking prices in an attemp to get the property on the market. I noticed that asking prices are substantially higher than November/December.. Properties seem to be hanging around for longer, and there appears to be more properties available, but sales are slow..
This could be a testing time for the housing market , as there may e more propeties than buyers for the first time in ages
On a positive note, Lenders appear to be offering better deals. Fixed rates are falling and one lender offers a 4 year Fixed at 4.49%.. NOT BAD!
This could be a testing time for the housing market , as there may e more propeties than buyers for the first time in ages
On a positive note, Lenders appear to be offering better deals. Fixed rates are falling and one lender offers a 4 year Fixed at 4.49%.. NOT BAD!
Thanks for the replies so far. Buying my first house is a big decision for me as i will be a cash buyer first time around and in a good position in terms of being a desireable buyer for most sellers.
When it comes to buying a second home sometime in the future i wont be in such a good position as i will then be in a chain having to sell first.
Thats why i want to make the right decision now. I guess the question i am asking is this the right time to buy with still some uncertainty in the market or should i wait another year to 18 months by which time things should have consolidated.
I am not looking to see any house i would buy to increase in value anywhere near the rate they did in the past. I just want to know i am paying a true and fair price.
Also with the capital i presently have and the current rent i am paying does it make sense to buy the house i am presently renting or to buy it?
When it comes to buying a second home sometime in the future i wont be in such a good position as i will then be in a chain having to sell first.
Thats why i want to make the right decision now. I guess the question i am asking is this the right time to buy with still some uncertainty in the market or should i wait another year to 18 months by which time things should have consolidated.
I am not looking to see any house i would buy to increase in value anywhere near the rate they did in the past. I just want to know i am paying a true and fair price.
Also with the capital i presently have and the current rent i am paying does it make sense to buy the house i am presently renting or to buy it?
carry on renting, if market falls only 2-4% a year (prices wont be higher than they are now in 5 years) you are better off renting
In my opinion the threat of negative equity for a first time buyer is too much of a risk and an equal balancer against the idea that renting is wasting money.
a four bedroom house for £115,000 and you will not have a mortage on it,you will save £6000 a year in rent
sorry didnt finish,so the house price would have to drop a long way for you to lose money over 3-5 years
Chisel/creditor
well,well, the lawyer and his client in tandem again, what a coincidence!!
Is it me or does the first few posts on this thread sound like a script being performed by the amateur dramatics society?
well,well, the lawyer and his client in tandem again, what a coincidence!!
Is it me or does the first few posts on this thread sound like a script being performed by the amateur dramatics society?
crediter 12 Mar 12:56
prices thru out south wales are rising as estate agents report their biggest sales since 2008.
----------------------------------
How would you know, you live in Epsom, remember.
prices thru out south wales are rising as estate agents report their biggest sales since 2008.
----------------------------------
How would you know, you live in Epsom, remember.
rubbish gazo, depending on how long the mtg is then the actual repayment could be less than 2
and if its a total cash payment then i would wait until July of this year.
potlis ....potless more likely..good name ...suits ya lol.
yes dimwit ...2 daughters live in abernant ...thats wales to you dimbo...a son lives in sussex...nother daughter in redhill....all in england in case you just arrived.
paddle why chuck 6k a year away ...youll end up potless ...have to buy ;take no notice of the renters ..they know f.a.
paddletoe 12 Mar 09:45
Hello everyone. I am not a regular contributor on this particular forum but i would value some advice please with regard to being a prospective first time house buyer. Here is my situation.
I am presently renting a 4 bedroom semi detached house paying weekly rent of £110 or £6,000 yearly.
I have recently been offered the same house to buy and as i am getting married in the summer it is something i would like to consider.
I have been offered the house for £115,000 but i would expect i could negotiate this price a little downwards.
As it happens i have just over that ammount presently in savings which is nearing the end of a year long fixed term deal with a net rate of interest of approx 3%.
If i was to buy the house it would be a straight cash sale. The money i am presently paying in rent could then be saved effectively giving me an annual yield of between 5-6%.
My situation is complicated in my eyes as i live in the north of ireland which experienced the biggest % rise in house prices out of any region in the uk in the two years prior to the housing crash. Although they have fallen markedly since i am not sure if they are at the bootom yet and represent true value.
If the house i am thinking about buying was going to be a house for life future price rises or decreses would not be a big problem but i would see it more as a house for the next 3-5 years so pretty much a home and an investment rolled into one.
My big concern about a future housing price crash has to do with my basic schoolboy understanding of economics and the affect interest rates has on house prices.
Am i right in thinking present low interest rates are not sustainable and were they to rise sharply housing prices would suffered another mini collapse. Again my basic economics would say the recent hosuing crash was not as bad as it should have been as it was cushioned by very low interest rates.
Hoping for some helpful replies.
Difficult decision paddletoe.
First thing is to ingnore anyone with a VI.
EA etc will always talk up house prices but not many of them seem to be investing
their own money in houses.
At the moment I own my parents house and all the rest of my wealth is in cash.
I'm thinking of buying in the future, but being convinced prices will fall I'm willing to wait.
Although house prices have held up well over the past year,the volumes of sales have been
very low (less than half 2005-7 volumes).
Intrest rates may be low but potential buyers still need tens of 000s as deposit to
take advantage of the best rates.
But,in your position I'd proberbly buy.
I wish I could buy my rented house for less than 20 times my annual rent.
If the value stays the same you save because the rent is much more than the intrest
you recieve.
If values fall moving up the ladder in 3-5 years will cost less.
The biggest advantage of buying is not having to worry about having all your wealth
in cash.
It certainly not without risk.
Hello everyone. I am not a regular contributor on this particular forum but i would value some advice please with regard to being a prospective first time house buyer. Here is my situation.
I am presently renting a 4 bedroom semi detached house paying weekly rent of £110 or £6,000 yearly.
I have recently been offered the same house to buy and as i am getting married in the summer it is something i would like to consider.
I have been offered the house for £115,000 but i would expect i could negotiate this price a little downwards.
As it happens i have just over that ammount presently in savings which is nearing the end of a year long fixed term deal with a net rate of interest of approx 3%.
If i was to buy the house it would be a straight cash sale. The money i am presently paying in rent could then be saved effectively giving me an annual yield of between 5-6%.
My situation is complicated in my eyes as i live in the north of ireland which experienced the biggest % rise in house prices out of any region in the uk in the two years prior to the housing crash. Although they have fallen markedly since i am not sure if they are at the bootom yet and represent true value.
If the house i am thinking about buying was going to be a house for life future price rises or decreses would not be a big problem but i would see it more as a house for the next 3-5 years so pretty much a home and an investment rolled into one.
My big concern about a future housing price crash has to do with my basic schoolboy understanding of economics and the affect interest rates has on house prices.
Am i right in thinking present low interest rates are not sustainable and were they to rise sharply housing prices would suffered another mini collapse. Again my basic economics would say the recent hosuing crash was not as bad as it should have been as it was cushioned by very low interest rates.
Hoping for some helpful replies.
Difficult decision paddletoe.
First thing is to ingnore anyone with a VI.
EA etc will always talk up house prices but not many of them seem to be investing
their own money in houses.
At the moment I own my parents house and all the rest of my wealth is in cash.
I'm thinking of buying in the future, but being convinced prices will fall I'm willing to wait.
Although house prices have held up well over the past year,the volumes of sales have been
very low (less than half 2005-7 volumes).
Intrest rates may be low but potential buyers still need tens of 000s as deposit to
take advantage of the best rates.
But,in your position I'd proberbly buy.
I wish I could buy my rented house for less than 20 times my annual rent.
If the value stays the same you save because the rent is much more than the intrest
you recieve.
If values fall moving up the ladder in 3-5 years will cost less.
The biggest advantage of buying is not having to worry about having all your wealth
in cash.
It certainly not without risk.
JML 12 Mar 22:17
The biggest advantage of buying is not having to worry about having all your wealth in cash.
amen to that
you need to figure out which 'risk' bothers you most - the risk of the value dropping and negative equity (if you have a mortgage), or the risk of seeing rent + inflation eating away at your cash (because, lets face it, sterling is on shaky ground these days... and there is a very big incentive for our dear leaders to keep the property market inflated no matter what)
The biggest advantage of buying is not having to worry about having all your wealth in cash.
amen to that
you need to figure out which 'risk' bothers you most - the risk of the value dropping and negative equity (if you have a mortgage), or the risk of seeing rent + inflation eating away at your cash (because, lets face it, sterling is on shaky ground these days... and there is a very big incentive for our dear leaders to keep the property market inflated no matter what)
Thanks a lot for everyone who has taken the time to reply. Its always good to see different points of view in order to get a balanced look at things.
On the one hand my cash is doing not very much at the momen and as some rightly say will probably get eaten away by inflation sometime soon.
Again, i must stress my views on the housing market come from very basic undestanding of economics.
To me it seems the housing boom in the three to four years prior to the collapse was all based on one massive pyramid scheme. The value of peoples rising house prices during that time was just an illusion of wealth. Then people rightly started to ask where was all the money coming from. Wealth or rather the illusion of value in houses was being created out of nothing.
The normal thing which should set a value on homes should always be a factor of average wages and that does not seem to have happened yet.
Also, the affect of interest rates and supply and demand has not run its normal course yet and i am worried that that might have a big affect yet.
All, in all i still want to buy a house but its a big step for me and i want to buy a house where the price is a true price and set by good economic principles which i am not sure is the case yet.
On the one hand my cash is doing not very much at the momen and as some rightly say will probably get eaten away by inflation sometime soon.
Again, i must stress my views on the housing market come from very basic undestanding of economics.
To me it seems the housing boom in the three to four years prior to the collapse was all based on one massive pyramid scheme. The value of peoples rising house prices during that time was just an illusion of wealth. Then people rightly started to ask where was all the money coming from. Wealth or rather the illusion of value in houses was being created out of nothing.
The normal thing which should set a value on homes should always be a factor of average wages and that does not seem to have happened yet.
Also, the affect of interest rates and supply and demand has not run its normal course yet and i am worried that that might have a big affect yet.
All, in all i still want to buy a house but its a big step for me and i want to buy a house where the price is a true price and set by good economic principles which i am not sure is the case yet.
crediter 12 Mar 20:43
yes dimwit ...2 daughters live in abernant ...thats wales to you dimbo...a son lives in sussex...nother daughter in redhill....all in england in case you just arrived.
--------------------------------------------------
Another chapter added to that novel.
I will be at Epsom spring meeting (21st April) happy to make myself known, you could explain it all to me in greater detail dip$hit, you may need to remortgage to get in!!
Bring the lawyer with you.
yes dimwit ...2 daughters live in abernant ...thats wales to you dimbo...a son lives in sussex...nother daughter in redhill....all in england in case you just arrived.
--------------------------------------------------
Another chapter added to that novel.
I will be at Epsom spring meeting (21st April) happy to make myself known, you could explain it all to me in greater detail dip$hit, you may need to remortgage to get in!!
Bring the lawyer with you.
Its is in the north of ireland. Its a 6 year old house in very good condition. I am pretty sure when it was first built it was sold for about £60,000. At the height of the property boom it would have been valued at around £170,000 although that was due to obscene price increases in this area during a two year period.
Despite the new asking price seeming good i still think prices in the area where i live are over valued.
In the years just prior to the propery boom here we had a very large influx of foreign nationals from eastern europe and Portugal coming over to work. A lot of the propery boom was due to a large number of new people needing houses so the buy to let market soared.
However, in addition to lots of the Polish immigrants in particular losing their jobs in the building industry they have affectively had to take a huge drop in earnings over the past four years. Four years ago the polish zlotny was was trading at double waht it is now against sterling. When Polish workers go home now they their sterling is worth half what is was 4 years ago.
Despite the new asking price seeming good i still think prices in the area where i live are over valued.
In the years just prior to the propery boom here we had a very large influx of foreign nationals from eastern europe and Portugal coming over to work. A lot of the propery boom was due to a large number of new people needing houses so the buy to let market soared.
However, in addition to lots of the Polish immigrants in particular losing their jobs in the building industry they have affectively had to take a huge drop in earnings over the past four years. Four years ago the polish zlotny was was trading at double waht it is now against sterling. When Polish workers go home now they their sterling is worth half what is was 4 years ago.
Potlis
Why are you being such a muippett. Is it against the law to have an opinion these days?
Some of the posts are laughable. How about the one where a First Time buyer gets into negative equity with no mortgage?? WTF
Regards paying cash. Not a problem, you can always remortgage to capital raise if you need to get some of your cash out in the future. As long as you buy the property at a good price, I can not see a massive problem. It sounds ample size for teh poster and his family to live in, and even if he decided to move in the future, the next property is going to be chaeper anyway! When paying cash , the threat of falling prices is not as great as when you have finance.
Why are you being such a muippett. Is it against the law to have an opinion these days?
Some of the posts are laughable. How about the one where a First Time buyer gets into negative equity with no mortgage?? WTF
Regards paying cash. Not a problem, you can always remortgage to capital raise if you need to get some of your cash out in the future. As long as you buy the property at a good price, I can not see a massive problem. It sounds ample size for teh poster and his family to live in, and even if he decided to move in the future, the next property is going to be chaeper anyway! When paying cash , the threat of falling prices is not as great as when you have finance.
Thank you Chisel for taking the time to give your opinions. Its always helpful to read differing viewpoints in general and in reference to my specific question especially helpful to give a prospective first time home buyer a better understanding.
chisel 17 Mar 09:46
Potlis
Why are you being such a muippett.
----------------------------
Don't know, what is a muippett?
Potlis
Why are you being such a muippett.
----------------------------
Don't know, what is a muippett?
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