Buying property in the current market

[Onzlouk]

Would you?

We have got a viewing on a property tomorrow which the wife has already fallen in love with. In order to make this purchase we would need to sell the two properties we already own which shouldnt be too much of a problem as i think we could sell them at an attractive price.

The property price is £295000 and has dropped nearly £100000 due to the 'crunch'. It is an individually designed new build and so we would only make money if the market were to improve substantially in years to come. So any advice? viewing tomorrow, i know the wife loves it, mortgage advisor on friday and my heads a shed.....

[Chainguy]

What advice do you need?

If you can afford it and are happy to see it as a home and not an investment, go for it, and I wish you all the luck and joy with it.

[Davey S2]

If you view it as a long term investment then yes. Even in the current climate property is a good investment if you plan to hang onto it long term.

If its going to be a nice family home for a good few years then go for it. If you are thinking of flipping it for a quick profit in 12 months time then dont bother.

[stuckmojo]

Onzlouk said:

Would you?

We have got a viewing on a property tomorrow which the wife has already fallen in love with. In order to make this purchase we would need to sell the two properties we already own which shouldnt be too much of a problem as i think we could sell them at an attractive price.

The property price is £295000 and has dropped nearly £100000 due to the 'crunch'. It is an individually designed new build and so we would only make money if the market were to improve substantially in years to come. So any advice? viewing tomorrow, i know the wife loves it, mortgage advisor on friday and my heads a shed.....

I wouldn't touch property with a barge pole until 2010, at least.

[2something]

Just make sure you can sell your other two properties, thinking you can sell them, isn't the same as knowing.

This is advice is the same as I would have given 2 years ago and is nothing specific to the credit crunch.

[cjs]

You may want to wait and see what the 'Government' are going to do re Stamp Duty. The Market is just about dead at the moment due their indecisiveness and lack of leadership on this matter. There may be a Stamp Duty 'Holiday' to try and kick start the market, last thing you want to do is pay Stamp Duty only to find out it is cut a week later!

[Onzlouk]

What about the potential of a stamp duty holiday? thats nearly £9000, or are we only talking holidays for the 1% bracket?

[rude-boy]

2something said:

Just make sure you can sell your other two properties, thinking you can sell them, isn't the same as knowing.

This is advice is the same as I would have given 2 years ago and is nothing specific to the credit crunch.

What he said about your current 2.

As others above have said about the 'new' one. If you are in it for a home and son't think you will be moving for a good 3-4 years it's a fine move. If you are thinking you might be on the move again in 12 months then i would sell and go rented whilst this st plays itself out.

[YZF600R]

Onzlouk said:

Would you?

We have got a viewing on a property tomorrow which the wife has already fallen in love with. In order to make this purchase we would need to sell the two properties we already own which shouldnt be too much of a problem as i think we could sell them at an attractive price.

The property price is £295000 and has dropped nearly £100000 due to the 'crunch'. It is an individually designed new build and so we would only make money if the market were to improve substantially in years to come. So any advice? viewing tomorrow, i know the wife loves it, mortgage advisor on friday and my heads a shed.....

If you plan to a) live there a long time (10ish years +) or b) retain it as an investment for a long time (same period) then the value will always go up. (Obviously, it will go down first before going up. However, provided you can comfortably afford the mortgage payments both now; assuming a few percent increase in interest rates and have some money set aside to pay the mortgage if you/your wife is made redundant then go for it.

Market has dropped ~10% since the peak, so for it to come down 25% it must have been very overpriced (or an utter bargain) now.

[scotal]

Is your loan to value going to be over 75%? Even on new build houses some lenders are being very coy about large loans.

[rude-boy]

Onzlouk said:

What about the potential of a stamp duty holiday? thats nearly £9000, or are we only talking holidays for the 1% bracket?

They will do nothing until the market has totally collapsed or the budget has come around.

Personally i think they will do nothing. There has been talk of SDLT going since before it was even introduced...

[schmalex]

cjs said:

You may want to wait and see what the 'Government' are going to do. The country is just about dead at the moment due their indecisiveness and lack of leadership

Helped you out a little there

[VladD]

2something said:

Just make sure you can sell your other two properties, thinking you can sell them, isn't the same as knowing.

This is advice is the same as I would have given 2 years ago and is nothing specific to the credit crunch.

I couldn't agree more with this. The woman who bought ours 7 months ago assumed that her current buyer was going to be OK. She got a bridging loan and bought ours and then her buyer pulled out. She still hasn't got as buyer for her old house and still hasn't fully moved in to our old one.

[Plotloss]

rude-boy said:

Onzlouk said:

What about the potential of a stamp duty holiday? thats nearly £9000, or are we only talking holidays for the 1% bracket?

They will do nothing until the market has totally collapsed or the budget has come around.

Personally i think they will do nothing. There has been talk of SDLT going since before it was even introduced...

So was this stamp duty stuff leaked?

As surely the idea that you can get away without paying tax 'at some point in the future' is going to be enough to put buyers of all kinds off for the foreseeable thus perpetuating the fall.

[ln1234]

The stamp duty dithering about by the government has to be the worst way ever of dealing with such sensitive issues as housing. A guy from work who was about to purchase a place in the next few weeks is not having serious doubts. Maybe it's a blessing in disguise for buyers?

[pano amo]

I've got my house on the market and actively on the look out to scale up. The value of my house has fallen as has the value of the houses I'm looking at. Because they are more expensive, relatively speaking its better for me.

You can do two things: you can sit on your hands and see you property as purely an investment, glue yourself to newspapers, tv etc and hang on every word about it going up, down, back up etc for the next 2 or 3 years OR you can get on with you life and move because you want to. I've choosen the latter. I know the area I want to go to, I know what it will offer me so I'm off asap.

[Neil_H]

Personally I'd be tempted to wait a bit longer as things will probably get worse before they get better. Timing it right may be difficult though, if you have 3 contracts to process.

[Chainguy]

pano amo said:

I've got my house on the market and actively on the look out to scale up. The value of my house has fallen as has the value of the houses I'm looking at. Because they are more expensive, relatively speaking its better for me.

You can do two things: you can sit on your hands and see you property as purely an investment, glue yourself to newspapers, tv etc and hang on every word about it going up, down, back up etc for the next 2 or 3 years OR you can get on with you life and move because you want to. I've choosen the latter. I know the area I want to go to, I know what it will offer me so I'm off asap.

Well said. I really don't care if my house falls 20% in value, because, as I'm looking for the next move up in the next couple of years, it means the next one up has fell 20% as well.

Some sample numbers. 20% off £300,000 compared to 20% off £600,000. Oh yes please.

Bring it on

[siscar]

YZF600R said:

Market has dropped ~10% since the peak, so for it to come down 25% it must have been very overpriced (or an utter bargain) now.

Not necessarily, it is a complex thing to measure. You can measure the prices of properties that are completing now, but they will have been agreed some time ago. Or you can measure asking prices, they may be down but not necessarily as much as they need to be to sell.

Buying new build at a substantial discount could be a good thing right now. The thing about new build is that the builder is financing it at the moment and they may be willing to let it go at a bargain price to get some cash flow. Plus it does no harm to go in even lower in today's climate. But shifting your current 2 may not be easy, even at bargain prices, nothing is moving at the moment - I think it was 17,000 completions in July as opposed to well over 100,000 in the previous two Julys.

[rude-boy]

Plotloss said:

[
So was this stamp duty stuff leaked?

As surely the idea that you can get away without paying tax 'at some point in the future' is going to be enough to put buyers of all kinds off for the foreseeable thus perpetuating the fall.

I haven’t followed all the ins and outs as it’s all pie in the sky but the gist of what I got is that it was on the agenda for a meeting as something to be discussed ‘in-house’, as would the ‘council house mortgages’, using NR as the vehicle for FTB lending for Key Workers and other ideas you and I and a few others might come up with if it was our job to see what could be considered to kick start the market.

Someone mentioned this/passed a copy of the agenda for the meeting to a journo. They then did what journos do…