The Housing Market...

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Hi people,

I was just wondering what some of your opinions were on the housing market? (In the UK).

My situation is that I have a deposit (Unfortunately at age 26 I’ve had to borrow 10K from my parents (and very grateful I am for it!))

I've also worked out that I need on top of that around 8k to cover costs (buying furniture, legal fee's, stamp duty etc) and that also includes 1k to 2k as a reserve so I don’t have to go into my ISA should my car needs servicing or should there be any other unexpected costs.

(If I’m pay £1000 for a mortgage per month I won’t be afford that much in savings).

Now I can probably have 8k to my name around April or May.... so by then I will be ready to get myself a 120k - 140k two bedroom house (I don’t want a one bed property and I couldn’t afford much more).

What do you guys and girls think I should do?

- Should I buy in April? (Obviously not maxing myself out incase of interest rises).

Or

- Wait and continue saving in the hope house prices may fall by 10% or more (Due to global credit crunch?).

Now I’m not in a great rush to buy, I can continue to rent putting £600 a month away.... but then I run the risk of prices continuing to rise..... but sod's law dictates that if I do buy then prices will fall and I could have got a better house for the money if I had waited!!!!

Any thoughts?

 

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A few sites should help you:

www.housepricecrash.co.uk the main forum is good

&

www.propertysnake.co.uk the site estate agents are trying to close!"

Enjoy

 

Hi Mattwest,

I felt like I should post since I'm also 26 and have just finished buying my first house. Firstly your 10k deposit will be very useful I had more or less the same as a deposit and basically it means depending on how much you are looking to borrow banks will look more favourably than they would if you were asking for 100% mortgage. Anyways with that amount you would probably be looking at a 95% mortgage. All in all I would say find a good mortgage advisor and they will find the best mortgage for you and advise you on all this stuff, which is great for a first time buyer.

I think you should probably start looking in April but bear in mind that it may take a while to find something you want and make a successful bid on it.

The market does seem to be slowing down, While my wife and I were looking more and more fixed price have appeared, and less houses are selling for stupid amounts.

Anyways good luck and all the best whatever you decide.

P.S. We found waiting to have your mortgage approved takes ages even after getting one in principle so look into that first.

 

I would also advise you book the property viewings yourself and view the property you're interested in don't go through a broker as they'd charge you in the range of £6k and above.

Sadly, most times you are not told of the fee till your offer has been accepted and payment going through so be forewarned.

Another thing to be aware about is the estate agents I would not trust non of them so when they ask you how much is your highest budget on a property give them an approximation.

The reason being that they'd bypass you for others that have a higher budget on a similar property you're looking to buy and would not even inform the seller a potential buyer is interested. Remember estate agents are con men and women and yes am talking from experience.

Lastly, if you put in an offer in the house you feel is worth the offer you've put in and get a call from the estate agent asking you to top it up so no with a big capital NO.

To be honest most of the times if they are not happy with the offer you've put in they would not even inform the seller of this and just tell you your offer was too low and was declined by the seller. A big lie as in the first place your offer was not even presented to the seller, so thread carefully.

Again this is where the law is in jeopardy as I believe the offer of a potential buyer should be put in writing to both the seller and the potential buyer. Unfortunately again this is sadly not the case hence estate agents are being dubious time after time.

Apparently, by law in the UK not sure about other countries an offer regardless of how low should be presented to the seller. This is where the law is flawed as an offer is meant to be told verbally to the seller with the potential buyer hoping it would be communicated to the seller. Obviously, hence the estate agents can run loose and keep lying to the potential buyer telling what they want to hear or even not want to hear.

I think a little is a enough as if I knew what I know now about buying a property and the potential pitfalls with estate agents I would have not gone through a lot of hassle.

It is rather unfortunate that in a modern society there as housing estate agents all over the world looking to rip hard working citizens off each time again and again.

I suppose they get away with these type of dubious fraudulent acts because there isn't proper legislation in place and the process is not transparent between seller, estate agent and most importantly sincere investors and hard working earners. Just be careful and don't let any estate agent talk you into paying a penny more than the initial offer you've put in.

Best wishes, and remember don't stress you're to a large extent calling the shots

 

I think your getting "UK" confused with "England". The process of offers in Scotland is completly different to England.

 

Glad it doesn't work that way in the States...

 

Hi Drum_Dude, yep! you're correct the way it works in England and not Scotland. I really do wish England can adopt the way it works in Scotland and then again their pride might prohibit them from adopting the Scottish way

 

I am hoping there is a house price crash then maybe I will be able afford a place of my own

There just been a report in the local paper today stating that house prices in my area are 9 times the average salary.

 

I blame people that buy the houses especially the one's that are overly priced. I once recently went to view a property that was bought for £230,000 a 3 bed house in South East of London Thamesmead. The house was owned for just a little near a yr and was repossesed.

Guest how much the bank was trying to resell it for? £209,000 I viewed it with my wife and we were thinking we might get a bargain and we both could not belief someone paid the above for it. Simply put I would not have even paid £185,000 to start with. There you go so go figure

 

yeah housing is crazy, here in fl the housing market went completely crazy. we purchased our home when i was 20 so that was 5 years ago now. we had it built in a very nice upper-middle / upper class neighborhood for about 140k now it is worth about 280k and that is with the 12% drop in median home prices. i can't imagine paying that kind of loot for a house, but if you don't want to live in the ghetto here in orlando get ready to pay a minimum of 220k or better.

 

The problem where I live is the North/South devide.

I live in an area where there is lots of country side and nice peacfully areas, we have had lots of Southerners up here buying lots of properties and then renting them for a while then re-selling this has caused a massive surge in the prices up here.

The wages down south are a lot more than the North but it used to be that it was because living expenses are higher but is not the case anymore, there is still a gap in living costs but not that much but whereas the south seems to still get the pay increases in line with inflation and living costs the North doesn't and that really pisses me off.

My friend bought a house 5 years ago for 45k (3 bed terrace house) he has just sole it for 145k that is f****** outrageous.

 

Housing prices are mad, and to be honest my wife and I have been REALLY lucky in getting the house we did. Housing prices are really nuts in Aberdeen. Where I have heard of houses selling for double the asking price, and more. That has got to be crazy, especially when you get a house valued and discover its not worth much more than the asking price.

 

I just hope we haven't scared MattWest from buying a property?

 

House prices are unreal down south. Where I live, a 2 bed terrace house with tiny garden is 8x my salary.

I think something dramatic will have to happen for the average young family with no savings or help from relatives to be able to get on the property ladder. I think we could be looking at a market dip in the next few years or so.

I plan to rent and save as much money as I can in the hope that one day I can afford a permanent home for my family.

 

Houses in good areas will appreciate in value because people want to live there... it's as simple as that.

I bet your friend isn't complaining one bit. And you know what? The new owner isn't complaining either... because he obviously wanted the house enough to pay that much. Otherwise, it'd never have sold for that much.

Supply and demand... it *really* works, guys. If you have what people want, people will buy it for the price THEY want to buy it at. If the price is too high... it doesn't get bought. Quite elegant in its simplicity.

 

I should have mentioned that this area where this house is, isn't an area I would want to live and also the only reason the houses have gone like that in that area are because of people on good incomes from down south jumping on the DIY and rental bandwagons.

Then selling the houses back to people in the North who can't afford them but try and end up getting burned.

But you are right my mate isn't complaining

 

Well, SOMEONE wants to live there... otherwise, the house would have never been sold at the price it did.

 

We have too many people wanting a place of their own and not enough space for houses.

Something your country does have is space we don't.

And also your houses are much larger than ours which also makes a difference, it also seems to me that more people over here want their own place and will pay more than they can to get it.

Your country also has lifetime mortgages I believe, that is very rare over here its usually 25 years over here but there are some that are 40 but thats it.

I think we need to adopt the US approach to mortgages and housing or we are really gonna be screwed over here.

 

The house prices are silly, my girlfriend and I were looking for 2 bed places in NW London - £230k+ and that is nearly 5 times our salary. We have decided to wait some time (maybe a year or 2) before looking again - why?? House prices are set by everyone thinking that house prices always rise.... well they don't!

I had read so many discussions on how they always rise, how it will/will not be a crash - at the end of the day, am I willing to pay a mortgage for £1200 a month for a sh*t hole... no.

Will house prices rise forever - get real - we can't afford it - money doesn't grow on trees, and that includes credit!
Am I worried about being priced out and won't be on the ladder - no - why? Because I serious can't believe that everyone else has more money than me and is better paid than I am - if they were that statement would be true and I won't get on the ladder, fact of the matter is they aren't and most people earn less than I do (according to the stats) so I'm not worried in the slightest.

There will be people who will argue against this, and in most discussions it are those who have a house and don't want to face the reality that maybe they have bought a house that may just be a tad overpriced (please not different from being affordable).