completely off topic - house buying?

Discussion in 'Cambridge Weight Plan' started by Sambucca, 20 September 2007 Social URL.

  1. Sambucca

    Sambucca Gold Member

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    Hi All

    I am in the process of buying a house at the moment. We are living in rented accomodation and have been given 2 months notice to quit by the landlord as he has got planning permission to develop the land so we have to move soon.

    With all the uncertainty in the banking world at the moment I am not convinced that now is the right time to buy a house and am getting cold feet. The last thing I want is for mortgage rates to spiral, or for house prices to crash which has been predicted for some time now but is getting scarier for me because of what is happening with Northern Rock etc.

    The house that we are planning to buy is in good condition but owned by a pensioner so needs a bit of modernisation - new kitchen, bathroom and redecorating but structurally is fine. We negotiated 7k off the asking price in view of the work needed.

    What would you do??
     
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  3. icemoose

    icemoose The Diet Guy

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    We WERE selling ours but are now staying put due to the fact interest rates are not looking good in the medium term and also house prices are starting to crumble and I don't want to be left with negative equity.

    M.
     
  4. LucyLou

    LucyLou Silver Member

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    Ooh its a tricky one.

    I bought a house in 2005 and my mortgage interest rate is one of those tracker mortgages so weve had 11 interest rate hikes since we moved in. On saying that things cant get much worse with the banks and housing so I know for Ireland it will eventually get better?

    Im not sure if it works the same in the UK Sam? If you love the house then go for it but if you just really like it and have to do lots of work to it maybe its worth re-considering?
     
  5. Karen

    Karen Serial Foodie!

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    a house will always gain back its value eventually. dunno how i would go with the interests rates though. one thing is for sure...renting doesnt get u any kind of investment. xxx
     
  6. misscooks

    misscooks Member

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    People have been predicting the house market will crash for years. My sister was in the same situation as you four years ago, they moved to rented accomodation after they sold their house as everyone said that house prices whould crash at that time - four years later still in rented as house prices have risen so much they have now been priced off the property ladder. My husband is in finanance, he discusses this issue a lot. Every year they wheel 'property experts' out on telly, and lots of people get scared off buying. We bought at xmas, house prices in this country are mad, but the point is, people will always find a way to buy them. In a small country where land is a premium, housing market will always be boyant.

    Good luck with your decision!
     
  7. Sambucca

    Sambucca Gold Member

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    Thanks guys,

    its the uncertainty Im scared of. Negative equity is one thing I am worried about as well as the interest rates.

    I just have a feeling in the pit of my stomach that now might not be the right time. I cant explain the feeling, Ive never felt like this before and I am usually the one that likes to take risks and my hubby is the sensible one.

    I would love to be a home owner again and so would hubby. He is really good at DIY and could do the work this house needs by himself and possibly add a little value.

    However, we cant afford to lose money if prices go down, and cant afford spiraling mortgage payments if rates go up. Renting in our area works out to about half the price of a mortgage and I know that renting is "dead money" but we could save the difference between rent and mortgage payments towards a bigger deposit when the market settles down again....

    Any more thoughts from anyone? Would really appreciate as many opinions as poss.
     
  8. Mrs Roch

    Mrs Roch Silver Member

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    Hi Sam

    I think alot depends on whether this house is likely to be your last house (so to speak) or whether you're buying to do-up re-sell and make money....

    If it's a long term move, I don't think I'd be overly scared off with all the predictions that are flying around but if it's a projec to re-sell then I might re-consider...

    Saying that... it sounds to me that you've got the house for a good price and the seller has taken into consideration the work that you'll have to do so with all the improvements you're planning I can't see how you'd fail to make money on the house...

    Sorry my thoughts are bit mixed... (probably lack of food..! :D)

    H x
     
  9. minime

    minime Gold Member

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    Surely, the equity would only matter if you were buying with the intention of selling. We have equity in our house as we bought it 10 years ago, but it means nothing unless we sell, and use it to buy something even more expensive. Are you buying somewhere to live long term, if so, you were happy to buy at the price negotiated, even if the value goes down, surely if you are happy living there it won't matter. Even if there is a crash, it will pick up again in the long term.
     
  10. Debz

    Debz Cambridge Counsellor

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    I had such a bad experience buying and selling last time that I'm convinced there's probably never a good time to do it and at some point you just have to bite the bullet and go for it.

    We sold and bought in 2004. I think our current mortgage is one of those fixed rate things. I don't even know if those exist at the moment. My eldest niece is a mortgage advisor and she'll be doing whatever it needs next year when the term expires.

    I'd say ask a mortgage advisor what the highest rates were when they went sky high, work out whether you could afford the mortgage if it went that high and if you could fine, if not - more time to ponder.

    When we bought our first house in 1997 we got caught up in a whole heap of 'what ifs'. It's a difficult one. Good luck!
     
  11. Sambucca

    Sambucca Gold Member

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    this wouldnt be a "forever" house. Its too small to stay there long term, we were planning to buy this, do it up as quickly as possible and then sell up and get something a bit bigger.

    i used to work as a mortgage adviser debz and I know that the rates did go up as high as 15% in the late 80's. I dont think for a second rates would get that high again, but then house prices (and therefore mortgages) have tripled since then so rates wouldnt have to rise much before people are crippled by their payments and have to start selling up, which then causes prices to tumble.

    Im not an expert, far from it, and its more the interest rates that scare me than the prices crashing because we could continue to live there if the prices went down, but only if we could afford the mortgage payments.

    Am I making any sense at all???? I think the more I worry about it the more I am confusing myself.
     
    Last edited: 20 September 2007
  12. MsJMC

    MsJMC Strong women stay slim

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    House prices really need to fall , I own mine , but if things stay as they are i'll have my kids living with me and their kids too , we are going backwards here , like my mum and dad living with their mums and dads . Yes mike i heard they were crumbling , which its a good thing . Theres no first time buyers .
     
  13. MsJMC

    MsJMC Strong women stay slim

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    But its all a gamble , i think the last crash we had was back in 1993 , and they started picking up in 1996 . But as where a three bed house in 1989 was around 89,000 , it went right down to 45,000 in 1993 and started to peak up around 1996 and now look for a three bed its 175,000 . Cristal ball tell us all hehe But thats in my area Herts them prices
     
  14. Sambucca

    Sambucca Gold Member

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    thanks missleo.

    Prices are daft here too. We bought a very similar house to the one we are looking at now, on the same road funnily enough for 90k in 2001. we sold for 145 in 2004 and invested the money in a pub. After 4 years we have moved back home as my husband was offered a job that was too good to refuse. Now this house on the same road was on at 179,950 and we've secured it for 173, so thats double what we paid only 6years ago. Its crazy.

    I do think its got to stop somewhere and this northern rock business could be the straw that broke the camels back - so to speak - and the banks will have to start raising interest rates as the inter bank borrowing becomes more difficult.

    I still havent got a clue what to do though lol.
     
  15. Debz

    Debz Cambridge Counsellor

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    I don't know, I think it's one of those things that could just take ages to decide on.

    But if it's just a case of buying the house to do it up and then move on - not that I know much about any of this, but I think you might be right to question if the time is right.

    Just to scare you - I live in Kent we have a mortgage on a house that's now apparently worth more than £300k. How ridiculous is that? It's a three bed semi, not a mansion. I wish it was a mansion ...
     
  16. stilltoowide

    stilltoowide Full Member

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    hi

    would getting a fixed rate help you at all - one on a portable mortage, so that if you did up and sold quickly you wouldn't get hit with ERC?
     
  17. fatpossum

    fatpossum Silver Member

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    We've decided to 'cut and run' and plan to sell our house next Summer, stash the equity (fingers crossed!) and rent a nice apartment.

    If you think about it the UK is one of the few European countries where people are obsessed with owning property. In most other countries people rent and have the freedom to move about for work etc. But over here we tie ourselves down and limit our ability to be flexible just for the supposed 'security' of a mortgaged property.

    And if you think about it even further it takes a very long time to get to the point where you actually own your mortgaged home. Most people never own it.

    So we're off - really hoping that prices maintain for another until August next year.

    It will lovely not to have a mortgage - we'll feel free!!
     
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  19. kittykat

    kittykat Gold Member

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    well ive been trying to sell my house since end of may and ive reduced the price now 3times with 1 interest !!!! i am looking to rent and stash the cash till things calm down
     
  20. Sambucca

    Sambucca Gold Member

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    Thanks so much for everyones input. Youve all given me a lot to think about.
     
  21. MsJMC

    MsJMC Strong women stay slim

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    Didn't they say them mortage trackers have also gone up too ? What will happen , are we going back to 1993.............. good news for buyers but not for people who have brought over the last few years , it does not look good with no first time buyers ... poor people trying to sell getting silly offers . I do know that people are buying proprties and renting them out but i think there the only ones really that are keeping the market going , if I look in my local paper its , chain free , or loads of pages for renting , and thats 3 bed for 795 , and 2 bed flat for 600pcm , one bed flat 550pcm and then you've got new price , cos they can't sell . Its not good . Well Sam , you are more confused now than before hehe , but whatever you do i hope it goes your way !
     
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