buying a house.?

Question

My partner and i would love to buy a house, in the region of £100,00. we'll need at least 6 months to save for surveys and deposits etc. There is some really nice houses in that price range, but how steady is the market, and how fast are prices going up? I dont want to wait too long, cause it might be too late to get anything decent. any advice, and how long can i afford to save for???

Sorry, im buying in preston lancs!

Answer 1

I can tell you what I know from my experience of buying my homes over the years. My first home was a little flat in 1971 and I have moved 11 times in all, gradually moving up a step until I've now got the house I want!

I think that in the UK it has always been worthwhile buying property as soon as you can, as young as you can. The market goes in cycles and after values drop they come up again. As with shares, look at any 15 year period and you do well over the long term on the investment. There was a 'blip' after August 1988, when property values dropped sharply after a momentous rise just before that date, and it took until about 1994/5 to recover and this led to some people having negative equity (house value dropped so they owed more money than the house was worth). But this was exceptional because it was caused by a disastrous decision by the government of the time to remove the tax allowance for individual partners on mortgages . People rushed to buy before the tax change in August and so prices rose astronomically just before, and dropped just after. And those people who could not afford the repayments sufferred. But those who could afford the payments , well yes they wished they'd bought at a lower price, and it didn't feel nice owing more than the house was now worth, but they held on and paid the mortgage and years later that difference in value became negligible. The drop in value, as with shares, is only a disaster if you HAVE to sell, and sell at a bad time. For example, I know a house that sold for £80,000 in July 1988 (next door to me) and it dropped to a value of £60,000 by the end of 1988. It was a lot then. People who bought it in July felt sick at the time. But now that house is worth about £200,000 plus. It's not a lot of difference now. And that is just about the worst scenario possible. It is generally considered to have been exceptional in the history of the property market.

I have received two pieces of good advice from ancient relatives: 1) put your money in bricks and mortar, and 2) leave a bit of profit for someone else. You'll not manage to always drive the best possible bargain, to always sell at the very top price and to buy at the bottom price. Don't worry about it.

Location,location, location - that's an important point. Only buy a property if other people are after it! In a place that's popular, where homes sell fast. Then when it comes to selling and you want to sell so you can buy your next house, it will sell fast. That doesn't mean that you have to go for the most expensive areas. Just fairly popular areas.

I wouldn't trust the predictions about house prices. You read conflicting opinions from experts so don't know which ones to believe and I guess you wouldn't know which one of the answers here to believe either! I'd say that it does not matter, as in the long run you'll do well, as long as you don't go and buy in an area that is obviously on the slide such as a town in which the main industry has all gone bust and everyone's unemployed.
If you want your own home, then buy your own home, and enjoy it; never mind if the market's going up or down at this very moment.

You might think of saving up just 5% of the value: £5000, and getting a 95% mortgage. You won't have stamp duty to pay as the price is under £125,000. Solicitor's fee will come to about £500 to £600. Mortgage arrangement fees and survey (valuer's) fee (about £500 to £800 ) can often be added to the mortgage. You can ask the bank/building soc. to upgrade their standard valuation that they do, which is often very cursory, to a home report or full survey, and give you a copy of the report.

That leaves about another £200 to £300 to pay on things like local authority searches and environmental checks, ( amount depending on the area) . Maybe you can do your own removal. So you need to save about £6000 in all. Ah, but then, nothing left for furniture? Doesn't matter. Bricks and mortar first! It's fun being creative with second hand stuff, and relatives will give you things.

I hope this helps, and sorry if I've told you what you already might know!

Answer 2

It might pay for you to act now and obtain a mortgage as experts are forecasting another interest rate rise next month. Okay, it might only be 0.25% but thats £15 per month extra on a £80,000 mortgage - and there could be another rise in the near future if there is a threat of further inflation. On the other hand, it could slow down house price inflation, but then there are other factors driving up the house prices. You might want to consult with an independent mortgage broker to see what your options are.

Answer 3

Depends on your area. As far as saving money - you can always have the sellers help you out with some of that stuff, a survey should be paid for by a seller no matter what, but you can also write in the purchase agreement "seller to pay $3500 towards buyers closing costs and pre-paids" That way all of your fees and such (with the exception of your earnest money deposit) are taken care of by the buyers. NOTE: For a buyer to agree to do this, it usually takes a full price offer, or close to it.

Good Luck

Answer 4

In response to 'chanda's' reply - the BUYER pays for a survey in the UK not the seller. Buy as soon as you can afford it....here in Northern Ireland the house/apartment prices are getting out of all buying for first time buyers. (Some of the apartments are starting at £200,000! and it's not like they are large apartments)
(I put on a question just a few minutes ago so the replies will be interesting.) Buy as soon as you can would be my advice.

Answer 5

Prices are going up steadily at the mo. 100k wont get you anything where I live, well not a house. Suggest you save as much as possible and this will reduce the amount you need to borrow and looks more favourable when you get a mortgage.

Answer 6

I do conveyancing in Preston and I would say that although the market is pretty stable at the moment, its always very difficult to know how it will go. I would advise you to go and see a financial advisor and buy as soon as you can afford to.

Answer 7

it depends on your area. (may help if you add it into your question) but at the moment house prices in my area are pretty steady as is the case nearer christmas, but dont hold out to long, if you have your eye on something particular go for it thats what mortgages are for.

Answer 8

It will depend on where you live/want to live. I would keep a weekly check on those areas and if things start moving up again buy quicker, but save as much as you can.

Answer 9

House in the south went up 11% in the last year..
£100.000??? where are you buying?

Answer 10

Apply for a mortgage at www.surefirefinance.co.uk and they will let you know what you can borrow.