House buying advice..please

[briantherobot]

Hi all,
Looking to get some advice and insight into your own house buying experiences.

We are weighing up the best approach to move house, we are currently in a small (starter home) now in a position to move up the ladder. The question we're asking ourselves is should we really stretch to our maximum affordability or should be rather more conservative and take a smaller step. We have no dependants and are both mid to late twenties.

I have heard whilst you are young you should stretch yourselves to the maximum but not too sure if this advice is current in today's housing, job market etc..

Any of your advice and past experiences would be great to hear.

[covmutley]

How secure are your jobs? Potential for promotion? Family who could support you if the worst happened? etc
etc?

My friends who have stretched themselves have all done well i think. Their wages have gone up over time, as have their house prices.Their mortgage rates have gone down. As LTV rate increases, mortgages become cheaper still.

[P1ato]

Cost of moving is so high it makes sense to move as little as possible and buy the best house you can afford. Good luck!

[loafer123]

My best advice...try and buy empty houses and when you do bid for it, bid low.

Most people don't have the imagination to see themselves living in a house with nothing in it, so you'll get a bargain.

I have literally saved and made hundreds of thousands by applying this life lesson.

[GG89]

loafer123 said:

My best advice...try and buy empty houses and when you do bid for it, bid low.

Most people don't have the imagination to see themselves living in a house with nothing in it, so you'll get a bargain.

I have literally saved and made hundreds of thousands by applying this life lesson.

Can't really see a massive saving just because the house is empty. I bought an old empty flat that had just been refurbished - fresh painted walls and neutral carpets, perfect blank canvas.

[Jockman]

Take out life assurance whilst young.

[loafer123]

GG89 said:

loafer123 said:

My best advice...try and buy empty houses and when you do bid for it, bid low.

Most people don't have the imagination to see themselves living in a house with nothing in it, so you'll get a bargain.

I have literally saved and made hundreds of thousands by applying this life lesson.

Can't really see a massive saving just because the house is empty. I bought an old empty flat that had just been refurbished - fresh painted walls and neutral carpets, perfect blank canvas.

I bought a Georgian house in London which had been on the market quoting £750k and put in a cheeky offer of £605k. We settled at £607.5k. They just wanted it sold.

The house I am sitting in now, Regency and in the centre of a good village in Kent, was empty following a divorce and on the market for £850k. We bought it for £695k.

It really works.

[Ginge R]

Jockman said:

Take out life assurance whilst young.

This.

[red_slr]

Personally with rates as they are and they are likely to stay like this for several years I would risk going a lot more heavy on lending if you are confident that your future earnings will continue and rise to meet new demands (kids etc). 25 years sounds like a long time but we are 11 years into one mortgage now and with some overpayments along the way we have around 5 years to run. It goes by in a flash.

[R11ysf]

loafer123 said:

I bought a Georgian house in London which had been on the market quoting £750k and put in a cheeky offer of £605k. We settled at £607.5k. They just wanted it sold.

The house I am sitting in now, Regency and in the centre of a good village in Kent, was empty following a divorce and on the market for £850k. We bought it for £695k.

It really works.

I think the house market is London is so transparent and fluid that the only thing stopping sales is price. I know several people have bought a house or flat without even seeing it as it was the right area/road and the right size - they will be changing the layout and decor anyway so the inside is fairly irrelevant. If you put a lower offer in and they accept it, it is probably because they were chancing their arm at a higher price anyway. I "saved" considerably more on a property than you mention above and the reason was because it was on the market too high.

Offer price vs sales price is not always a good guide, especially in London.

[loafer123]

R11ysf said:

I think the house market is London is so transparent and fluid that the only thing stopping sales is price. I know several people have bought a house or flat without even seeing it as it was the right area/road and the right size - they will be changing the layout and decor anyway so the inside is fairly irrelevant. If you put a lower offer in and they accept it, it is probably because they were chancing their arm at a higher price anyway. I "saved" considerably more on a property than you mention above and the reason was because it was on the market too high.

Offer price vs sales price is not always a good guide, especially in London.

You are absolutely right, it is not a certain bet, but I can assure you as a Registered Valuer, and recently involved in setting standards for the profession, I know what good value looks like, and it is a great starting point for a negotiation.

[JapanRed]

OP : If your income is secure then I would stretch yourself. Interest rates will be low for some time and the cost of moving means you don't really want to be doing it every 5 years

[KingNothing]

I'm late twenties and just about to buy a house with my fiancee, we've went for a 4 bed detatched as a first time buy, and the plan is to not need to move for the whole time we are working. We could have bought a 3 bed semi on the same development we're on for £75k less, but decided to stretch ourselves to buy the bigger house.

[red_slr]

KingNothing said:

I'm late twenties and just about to buy a house with my fiancee, we've went for a 4 bed detatched as a first time buy, and the plan is to not need to move for the whole time we are working. We could have bought a 3 bed semi on the same development we're on for £75k less, but decided to stretch ourselves to buy the bigger house.

That's what we did first time round (3 bed semi rather than 4 bed det) and ended up buying the 4 bed det on the same estate, same street etc.
The only saving grace is that prices have been flat round here so we actually got the house for less than the new build cost. (we of course then spent £50k doing it up - as you do - so wasn't cheaper but hey ho).

[briantherobot]

Hi guys,

Our Jobs are as secure as they can be. Always a tonne of overtime available to me as well.
The main issue is do we want to stretch ourselves and be watching the pennies or shall we stay put and be able to afford the luxuries in life, nice holidays, cars etc etc..

Decisions decisions. Whilst interest rates are low my thoughts are that we should borrow as much as we can and stretch ourselves whilst money is cheap!?

[andrewh]

I would buy the house, i think the max lending multiples with a lot of lenders are only 4x income though as lending has tightened in recent years, so they are leaving the purchaser room for changes in circumstances, items like cars holidays etc can be put on 0% credit cards often upto 30 months interest free in some cases meaning your actually paying less overall due to inflation.

A detached property always makes sense imo, I've only ever lived in semis and terraced properties and it's annoying hearing your neighbours through the walls.

[gangzoom]

Don't assume interest rates will stay low foever. I still remember paying 6% on a 60% LTV house before the last housing market crash. Rates are stupidly cheap now but make sure you dont take on too mu ch debt. No one can predict how things will go in the next few years, having seen/known friends trapped in negative equity last time round, I personally am very cautious about increasing our personal debt burden without a way out when the mark crashes again.

[red_slr]

Lots of good 5 year deals out there though and with a modest overpayment each month you can easily clear 25% of the mortgage in 5 year which brings you into a reasonable position if rate changes come then. If you could not get such good deals then I would be worried.

[gangzoom]

Currently rates are stupidly cheap, we are about to confirm on a 5 year fixed at 1.8%. Set the term to 20 years and will overpay 5% per year if finance allow. By the end of 5 years the loan amount will be much more manageable, and any rate rise have a much less impact.