Property/mortgages and what to do
Discussion
Just thought i'd run some of my thoughts by some of the more experienced people on here. I have a fair chunk of equity in my house and a lump of cash to invest, my thoughts are that given the property market is on the downward slope my equity is starting to erode so if I sell my house now while I can get the best price and minimise the loss of the equity, move into rented accommodation for 6months or so while the market falls further, invest the equity and cash lump into high interest accounts or maybe even some short term investments that hopefully will pay for the rent and then when the market is low, put it all back in as a nice deposit on a property that has dropped singnificantly. My thinking is that if a 300k house goes down 15% then it will lose 45k but if I can get out while I can and the next house which is around 600k loses 90k then I am in effect gaining 45k for doing nothing and suddenly this sort of property is affordable and can only go back up in time, seems like a plan to me.
Does this seem like a sound idea or are there pitfalls I am not considering?
Does this seem like a sound idea or are there pitfalls I am not considering?
There is a big pitfall.
You don't know when the prices will go up and down. If you did, everyone would do it.
For example, lets say you buy when prices are 10% down. If the prices drop another 10% after that you have lost everything you have 'gained'.
Once you factor in the cost of moving, rent, estate agents fees, solicitors, surveyors, HIP, and the new mortgage cost and stamp duty, this eats into your 'profit' as well.
There are a couple of financial advisors who have been interviewed a couple of times for the Panorama type 'doom and gloom' property crash type journalism. They are quick to advocate that people should sell up and rent. One even showed the fact that he had a 2 year lease on a 5 bed detached property in the country which must be costing him £2k a month.
What they were not so quick to tell you that they both did this a couple of years ago, and since that time, property increased about 10% year on year in those two years until now it has levelled out. So effectively, for them, they don't even break even on their plan until prices drop by 20%, let alone the rest of the costs detailed above.
It just shows, not even the 'experts' know.
If you live in a house you like, stay in it and enjoy it. Thats what a house is for. Prices will go down, then they will come back up, who knows when. If you want to try a high risk strategy, IMHO I wouldn't do it with the roof over my head.
You don't know when the prices will go up and down. If you did, everyone would do it.
For example, lets say you buy when prices are 10% down. If the prices drop another 10% after that you have lost everything you have 'gained'.
Once you factor in the cost of moving, rent, estate agents fees, solicitors, surveyors, HIP, and the new mortgage cost and stamp duty, this eats into your 'profit' as well.
There are a couple of financial advisors who have been interviewed a couple of times for the Panorama type 'doom and gloom' property crash type journalism. They are quick to advocate that people should sell up and rent. One even showed the fact that he had a 2 year lease on a 5 bed detached property in the country which must be costing him £2k a month.
What they were not so quick to tell you that they both did this a couple of years ago, and since that time, property increased about 10% year on year in those two years until now it has levelled out. So effectively, for them, they don't even break even on their plan until prices drop by 20%, let alone the rest of the costs detailed above.
It just shows, not even the 'experts' know.
If you live in a house you like, stay in it and enjoy it. Thats what a house is for. Prices will go down, then they will come back up, who knows when. If you want to try a high risk strategy, IMHO I wouldn't do it with the roof over my head.
JustinP1 said:
There is a big pitfall.
You don't know when the prices will go up and down. If you did, everyone would do it.
For example, lets say you buy when prices are 10% down. If the prices drop another 10% after that you have lost everything you have 'gained'.
Once you factor in the cost of moving, rent, estate agents fees, solicitors, surveyors, HIP, and the new mortgage cost and stamp duty, this eats into your 'profit' as well.
But it is going down so buying now is by no means safe, 10% off seems to be the norm from what i can see at the moment having talked to loads of agents and done my research in my areas, so waiting longer could mean 10-20% off at some point, those costs are all costs I am going to have to incur anyway as we are going to move, when however is what we are looking at, but if the market drops further then all these costs will also go down, so i see it as a positive. You don't know when the prices will go up and down. If you did, everyone would do it.
For example, lets say you buy when prices are 10% down. If the prices drop another 10% after that you have lost everything you have 'gained'.
Once you factor in the cost of moving, rent, estate agents fees, solicitors, surveyors, HIP, and the new mortgage cost and stamp duty, this eats into your 'profit' as well.
Yes I also need to sell my house and this is the key really but I'm realistic, if I'm going to knock 10% off then so is the person wanting to buy mine so I would just reduce and go for a quick sale to be able to be in a position to move if need be.
taffyracer said:
Just thought i'd run some of my thoughts by some of the more experienced people on here. I have a fair chunk of equity in my house and a lump of cash to invest, my thoughts are that given the property market is on the downward slope my equity is starting to erode so if I sell my house now while I can get the best price and minimise the loss of the equity, move into rented accommodation for 6months or so while the market falls further, invest the equity and cash lump into high interest accounts or maybe even some short term investments that hopefully will pay for the rent and then when the market is low, put it all back in as a nice deposit on a property that has dropped singnificantly. My thinking is that if a 300k house goes down 15% then it will lose 45k but if I can get out while I can and the next house which is around 600k loses 90k then I am in effect gaining 45k for doing nothing and suddenly this sort of property is affordable and can only go back up in time, seems like a plan to me.
Does this seem like a sound idea or are there pitfalls I am not considering?
Where is your house? Does this seem like a sound idea or are there pitfalls I am not considering?
Property market in 4 years will be in a much better situation than it is today.
Depending on where you are and income, equity etc, right now is a very good time to upgrade. I have two friends of mine, both have upgraded and bought new homes. They will rent out their current homes and wait for 4 years to sell it. Ok, they have the budget to do this and i have worked out a 4 year plan for them to pay for it.
In 4 years, they will be able to sell their older house for stronger money (not a huge increase but better than the offers they will get at the moment), the rent pretty much covers their mortgage (they are able to leave 20% equity in theold house). I negotiated the purchase of their new houses and i think they will see in between 20-30% growth on the price paid in the next 4 years.
It all depends on where your property is.
E-mail me anytime if you have property issues !!
If you're moving anyway regardless of the market, you will only incur the rent on the stopgap house and two sets of house removals and maybe a bit of storage.
I personally think the market is going to come down by a fair chunk. There's a new development near me offering 25% gifted deposit to flog their apartments.
I Imagine I'll be looking at finally getting on the ladder sometime in early 2009. I just see no point whatsoever in paying over the odds for something that in my opinion will be significantly cheaper in a years time.
However, that is my opinion. Not a recommendation of what you should do. If you feel it's woth a punt then do it. If not, and prices miraculously start shooting skywards again, or remain stable... then you could potentially s
t out for a few grand.
Depends on your attitude to risk I'd say
I personally think the market is going to come down by a fair chunk. There's a new development near me offering 25% gifted deposit to flog their apartments.
I Imagine I'll be looking at finally getting on the ladder sometime in early 2009. I just see no point whatsoever in paying over the odds for something that in my opinion will be significantly cheaper in a years time.
However, that is my opinion. Not a recommendation of what you should do. If you feel it's woth a punt then do it. If not, and prices miraculously start shooting skywards again, or remain stable... then you could potentially s
t out for a few grand.Depends on your attitude to risk I'd say
KingRichard said:
There's a new development near me offering 25% gifted deposit to flog their apartments.
New Build apartments are suffering more than any other type of property in the market place. Hardly an example of what property prices are going to do.I'd rather pay asking price for a house in Fulham than a new build flat with 25% off nearly anywhere else in the country.
New build flats and crap, over supplied property will be the ones that could lose chunks. Any decent property in a good location won't suffer too much at all
JustinP1 said:
There is a big pitfall.
You don't know when the prices will go up and down. If you did, everyone would do it.
For example, lets say you buy when prices are 10% down. If the prices drop another 10% after that you have lost everything you have 'gained'.
Once you factor in the cost of moving, rent, estate agents fees, solicitors, surveyors, HIP, and the new mortgage cost and stamp duty, this eats into your 'profit' as well.
There are a couple of financial advisors who have been interviewed a couple of times for the Panorama type 'doom and gloom' property crash type journalism. They are quick to advocate that people should sell up and rent. One even showed the fact that he had a 2 year lease on a 5 bed detached property in the country which must be costing him £2k a month.
What they were not so quick to tell you that they both did this a couple of years ago, and since that time, property increased about 10% year on year in those two years until now it has levelled out. So effectively, for them, they don't even break even on their plan until prices drop by 20%, let alone the rest of the costs detailed above.
It just shows, not even the 'experts' know.
If you live in a house you like, stay in it and enjoy it. Thats what a house is for. Prices will go down, then they will come back up, who knows when. If you want to try a high risk strategy, IMHO I wouldn't do it with the roof over my head.
Sound advice. You don't know when the prices will go up and down. If you did, everyone would do it.
For example, lets say you buy when prices are 10% down. If the prices drop another 10% after that you have lost everything you have 'gained'.
Once you factor in the cost of moving, rent, estate agents fees, solicitors, surveyors, HIP, and the new mortgage cost and stamp duty, this eats into your 'profit' as well.
There are a couple of financial advisors who have been interviewed a couple of times for the Panorama type 'doom and gloom' property crash type journalism. They are quick to advocate that people should sell up and rent. One even showed the fact that he had a 2 year lease on a 5 bed detached property in the country which must be costing him £2k a month.
What they were not so quick to tell you that they both did this a couple of years ago, and since that time, property increased about 10% year on year in those two years until now it has levelled out. So effectively, for them, they don't even break even on their plan until prices drop by 20%, let alone the rest of the costs detailed above.
It just shows, not even the 'experts' know.
If you live in a house you like, stay in it and enjoy it. Thats what a house is for. Prices will go down, then they will come back up, who knows when. If you want to try a high risk strategy, IMHO I wouldn't do it with the roof over my head.
In 6/12 months the full extent/likely longterm effect of the property market issues will be clearer and more importantly the impact/severity of the economic downturn.
Currently it is still a falling market and no one has any idea where the bottom is.
stimmers said:
KingRichard said:
There's a new development near me offering 25% gifted deposit to flog their apartments.
New Build apartments are suffering more than any other type of property in the market place. Hardly an example of what property prices are going to do.I'd rather pay asking price for a house in Fulham than a new build flat with 25% off nearly anywhere else in the country.
New build flats and crap, over supplied property will be the ones that could lose chunks. Any decent property in a good location won't suffer too much at all
We're not all buying and selling every day you know
If you had planned to upgrade and move imminently anyway, now may be a good time to put yours on the market and hope for a good offer.
IF you get one, rent for 12-24 months and see what is what, if not, oh well.
Ultimately if prices do go down and you are looking to upgrade, then you will be in a better position no matter what, as you say though, if prices continue to move downward, it is better to get out sooner rather than later... though you have to factor in all the hassle.
Personally I'd just try to cut back outgoings/cars and save more cash up for when you want to upgrade. I doubt you are going to lose too much on your property as it is, and its a hell of a lot of hassle for a few K IMO.
IF you get one, rent for 12-24 months and see what is what, if not, oh well.
Ultimately if prices do go down and you are looking to upgrade, then you will be in a better position no matter what, as you say though, if prices continue to move downward, it is better to get out sooner rather than later... though you have to factor in all the hassle.
Personally I'd just try to cut back outgoings/cars and save more cash up for when you want to upgrade. I doubt you are going to lose too much on your property as it is, and its a hell of a lot of hassle for a few K IMO.
stimmers said:
taffyracer said:
Just thought i'd run some of my thoughts by some of the more experienced people on here. I have a fair chunk of equity in my house and a lump of cash to invest, my thoughts are that given the property market is on the downward slope my equity is starting to erode so if I sell my house now while I can get the best price and minimise the loss of the equity, move into rented accommodation for 6months or so while the market falls further, invest the equity and cash lump into high interest accounts or maybe even some short term investments that hopefully will pay for the rent and then when the market is low, put it all back in as a nice deposit on a property that has dropped singnificantly. My thinking is that if a 300k house goes down 15% then it will lose 45k but if I can get out while I can and the next house which is around 600k loses 90k then I am in effect gaining 45k for doing nothing and suddenly this sort of property is affordable and can only go back up in time, seems like a plan to me.
Does this seem like a sound idea or are there pitfalls I am not considering?
Where is your house? Does this seem like a sound idea or are there pitfalls I am not considering?
Property market in 4 years will be in a much better situation than it is today.
Depending on where you are and income, equity etc, right now is a very good time to upgrade. I have two friends of mine, both have upgraded and bought new homes. They will rent out their current homes and wait for 4 years to sell it. Ok, they have the budget to do this and i have worked out a 4 year plan for them to pay for it.
In 4 years, they will be able to sell their older house for stronger money (not a huge increase but better than the offers they will get at the moment), the rent pretty much covers their mortgage (they are able to leave 20% equity in theold house). I negotiated the purchase of their new houses and i think they will see in between 20-30% growth on the price paid in the next 4 years.
It all depends on where your property is.
E-mail me anytime if you have property issues !!
In your opinion
"In 4 years, they will be able to sell their older house for stronger money "
In your opinion
NoelWatson said:
stimmers said:
taffyracer said:
Just thought i'd run some of my thoughts by some of the more experienced people on here. I have a fair chunk of equity in my house and a lump of cash to invest, my thoughts are that given the property market is on the downward slope my equity is starting to erode so if I sell my house now while I can get the best price and minimise the loss of the equity, move into rented accommodation for 6months or so while the market falls further, invest the equity and cash lump into high interest accounts or maybe even some short term investments that hopefully will pay for the rent and then when the market is low, put it all back in as a nice deposit on a property that has dropped singnificantly. My thinking is that if a 300k house goes down 15% then it will lose 45k but if I can get out while I can and the next house which is around 600k loses 90k then I am in effect gaining 45k for doing nothing and suddenly this sort of property is affordable and can only go back up in time, seems like a plan to me.
Does this seem like a sound idea or are there pitfalls I am not considering?
Where is your house? Does this seem like a sound idea or are there pitfalls I am not considering?
Property market in 4 years will be in a much better situation than it is today.
Depending on where you are and income, equity etc, right now is a very good time to upgrade. I have two friends of mine, both have upgraded and bought new homes. They will rent out their current homes and wait for 4 years to sell it. Ok, they have the budget to do this and i have worked out a 4 year plan for them to pay for it.
In 4 years, they will be able to sell their older house for stronger money (not a huge increase but better than the offers they will get at the moment), the rent pretty much covers their mortgage (they are able to leave 20% equity in theold house). I negotiated the purchase of their new houses and i think they will see in between 20-30% growth on the price paid in the next 4 years.
It all depends on where your property is.
E-mail me anytime if you have property issues !!
In your opinion
"In 4 years, they will be able to sell their older house for stronger money "
In your opinion
We shall see
NoelWatson said:
"Property market in 4 years will be in a much better situation than it is today. "
In your opinion
"In 4 years, they will be able to sell their older house for stronger money "
In your opinion
You must be a hell of a lot of fun to be around Noel. Out of interest, are you looking to upgrade your current home on the "cheap"? Do you have shares in a repossession agency? You seem hell bent on talking the market down? I'm interested to know why.In your opinion
"In 4 years, they will be able to sell their older house for stronger money "
In your opinion
ETA Stimmers did you see the OFT is going to look at the sale and leaseback property people out there, they have it in their heads that the market needs "regulating"
Edited by scotal on Monday 19th May 16:34
scotal said:
NoelWatson said:
"Property market in 4 years will be in a much better situation than it is today. "
In your opinion
"In 4 years, they will be able to sell their older house for stronger money "
In your opinion
You must be a hell of a lot of fun to be around Noel. Out of interest, are you looking to upgrade your current home on the "cheap"? Do you have shares in a repossession agency? You seem hell bent on talking the market down? I'm interested to know why.In your opinion
"In 4 years, they will be able to sell their older house for stronger money "
In your opinion
ETA Stimmers did you see the OFT is going to look at the sale and leaseback property people out there, they have it in their heads that the market needs "regulating"
Edited by scotal on Monday 19th May 16:34
stimmers said:
NoelWatson said:
stimmers said:
taffyracer said:
Just thought i'd run some of my thoughts by some of the more experienced people on here. I have a fair chunk of equity in my house and a lump of cash to invest, my thoughts are that given the property market is on the downward slope my equity is starting to erode so if I sell my house now while I can get the best price and minimise the loss of the equity, move into rented accommodation for 6months or so while the market falls further, invest the equity and cash lump into high interest accounts or maybe even some short term investments that hopefully will pay for the rent and then when the market is low, put it all back in as a nice deposit on a property that has dropped singnificantly. My thinking is that if a 300k house goes down 15% then it will lose 45k but if I can get out while I can and the next house which is around 600k loses 90k then I am in effect gaining 45k for doing nothing and suddenly this sort of property is affordable and can only go back up in time, seems like a plan to me.
Does this seem like a sound idea or are there pitfalls I am not considering?
Where is your house? Does this seem like a sound idea or are there pitfalls I am not considering?
Property market in 4 years will be in a much better situation than it is today.
Depending on where you are and income, equity etc, right now is a very good time to upgrade. I have two friends of mine, both have upgraded and bought new homes. They will rent out their current homes and wait for 4 years to sell it. Ok, they have the budget to do this and i have worked out a 4 year plan for them to pay for it.
In 4 years, they will be able to sell their older house for stronger money (not a huge increase but better than the offers they will get at the moment), the rent pretty much covers their mortgage (they are able to leave 20% equity in theold house). I negotiated the purchase of their new houses and i think they will see in between 20-30% growth on the price paid in the next 4 years.
It all depends on where your property is.
E-mail me anytime if you have property issues !!
In your opinion
"In 4 years, they will be able to sell their older house for stronger money "
In your opinion
We shall see
scotal said:
NoelWatson said:
"Property market in 4 years will be in a much better situation than it is today. "
In your opinion
"In 4 years, they will be able to sell their older house for stronger money "
In your opinion
You must be a hell of a lot of fun to be around Noel. Out of interest, are you looking to upgrade your current home on the "cheap"? Do you have shares in a repossession agency? You seem hell bent on talking the market down? I'm interested to know why.In your opinion
"In 4 years, they will be able to sell their older house for stronger money "
In your opinion
ETA Stimmers did you see the OFT is going to look at the sale and leaseback property people out there, they have it in their heads that the market needs "regulating"
Edited by scotal on Monday 19th May 16:34
I've wanted more regulation for years and hopefully it will see the end of the scam cowboys who steal people's houses and wreck lifes
NoelWatson said:
stimmers said:
NoelWatson said:
stimmers said:
taffyracer said:
Just thought i'd run some of my thoughts by some of the more experienced people on here. I have a fair chunk of equity in my house and a lump of cash to invest, my thoughts are that given the property market is on the downward slope my equity is starting to erode so if I sell my house now while I can get the best price and minimise the loss of the equity, move into rented accommodation for 6months or so while the market falls further, invest the equity and cash lump into high interest accounts or maybe even some short term investments that hopefully will pay for the rent and then when the market is low, put it all back in as a nice deposit on a property that has dropped singnificantly. My thinking is that if a 300k house goes down 15% then it will lose 45k but if I can get out while I can and the next house which is around 600k loses 90k then I am in effect gaining 45k for doing nothing and suddenly this sort of property is affordable and can only go back up in time, seems like a plan to me.
Does this seem like a sound idea or are there pitfalls I am not considering?
Where is your house? Does this seem like a sound idea or are there pitfalls I am not considering?
Property market in 4 years will be in a much better situation than it is today.
Depending on where you are and income, equity etc, right now is a very good time to upgrade. I have two friends of mine, both have upgraded and bought new homes. They will rent out their current homes and wait for 4 years to sell it. Ok, they have the budget to do this and i have worked out a 4 year plan for them to pay for it.
In 4 years, they will be able to sell their older house for stronger money (not a huge increase but better than the offers they will get at the moment), the rent pretty much covers their mortgage (they are able to leave 20% equity in theold house). I negotiated the purchase of their new houses and i think they will see in between 20-30% growth on the price paid in the next 4 years.
It all depends on where your property is.
E-mail me anytime if you have property issues !!
In your opinion
"In 4 years, they will be able to sell their older house for stronger money "
In your opinion
We shall see
Guess we'd better agree to totally and utterly 100% disagree
To the OP,
I dont have a vested interest in the UK market (I dont own and dont plan to buy) and my opinion is common sense has to prevail eventually, house prices are hugely inflated and they wont be recovering fast from any drop. Definately a very good plan to sell and take a rental - take a flexible rental contract and buy whenever you fancy with the cash in your hands - strong position!
I dont have a vested interest in the UK market (I dont own and dont plan to buy) and my opinion is common sense has to prevail eventually, house prices are hugely inflated and they wont be recovering fast from any drop. Definately a very good plan to sell and take a rental - take a flexible rental contract and buy whenever you fancy with the cash in your hands - strong position!
stimmers said:
NoelWatson said:
stimmers said:
NoelWatson said:
stimmers said:
taffyracer said:
Just thought i'd run some of my thoughts by some of the more experienced people on here. I have a fair chunk of equity in my house and a lump of cash to invest, my thoughts are that given the property market is on the downward slope my equity is starting to erode so if I sell my house now while I can get the best price and minimise the loss of the equity, move into rented accommodation for 6months or so while the market falls further, invest the equity and cash lump into high interest accounts or maybe even some short term investments that hopefully will pay for the rent and then when the market is low, put it all back in as a nice deposit on a property that has dropped singnificantly. My thinking is that if a 300k house goes down 15% then it will lose 45k but if I can get out while I can and the next house which is around 600k loses 90k then I am in effect gaining 45k for doing nothing and suddenly this sort of property is affordable and can only go back up in time, seems like a plan to me.
Does this seem like a sound idea or are there pitfalls I am not considering?
Where is your house? Does this seem like a sound idea or are there pitfalls I am not considering?
Property market in 4 years will be in a much better situation than it is today.
Depending on where you are and income, equity etc, right now is a very good time to upgrade. I have two friends of mine, both have upgraded and bought new homes. They will rent out their current homes and wait for 4 years to sell it. Ok, they have the budget to do this and i have worked out a 4 year plan for them to pay for it.
In 4 years, they will be able to sell their older house for stronger money (not a huge increase but better than the offers they will get at the moment), the rent pretty much covers their mortgage (they are able to leave 20% equity in theold house). I negotiated the purchase of their new houses and i think they will see in between 20-30% growth on the price paid in the next 4 years.
It all depends on where your property is.
E-mail me anytime if you have property issues !!
In your opinion
"In 4 years, they will be able to sell their older house for stronger money "
In your opinion
We shall see
Guess we'd better agree to totally and utterly 100% disagree
See Taleb - scandal of prediction.
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