Should I buy somewhere if I can?

[dontfollowme]

At the moment I rent a nice flat from a large commercial landlord but I'm considering buying another flat somewhere. My stumbling blocks are:

1. I may not be able to buy as nice a flat/house than the one I am currently renting. I assume a commercial landlord would not sell one flat in a development of rentals?
2. The government help to buy scheme appears to favour buying something at is newly built where I would prefer something with more character
3. It does seem logical to buy and compromise on area/commute/style of property

I might add to this as I think of more things

[moles]

Wait until January the second part of the help scheme comes into play I think and that is for all houses not just new builds

[dontfollowme]

I'd definitely prefer living in a tiny house or flat in a better area but then I guess most people would.

[Sarnie]

I'd rather buy in a lesser area and be buying my own house with a view to saving/overpaying the mortgage. With a longer term plan of eventually getting a place in the area I really wanted to live in, rather than throwing money away on rent.....

[jdw1234]

If the fundamentals of the housing market are so good, why is the Government coming up with all these ridiculous gimmicks to try and prop it up.

In my opinion - I'd wait until the end of "help to buy" and all the other schemes and see what property prices/transaction numbers are doing then. Until then, save as much as possible so you are in the best position to buy.

[Tino]

I think in the short term, the help to buy scheme may raise house prices, as suddenly there might be an influx of demand, but the same supply as we have now.
if you have the finances to move out now, then it might be a good idea. Speak to the commercial landlord, they mat be looking to free up some cash, but I suspect if its a particularly nice property, it will be at a premium.
I used to be in the get as much as you can for your money camp, but lived in an area that went from bad to worse, and also experienced living in some nice areas, so settled for a smaller place in a nicer area.
Look at the future, if there is a chance that you will have children, stretch and get that 2 bedroom property now.
Consider ground rent, communal repair costs etc in larger blocks. You will have more control of costs if in a maisonette of converted house.

[dontfollowme]

I have emailed the commercial landlord, my thinking being if I am potentially buying a 1 bed flat then my current one fits my requirements pretty well.

I will probably use until January to increase my deposit further.

[GrizzlyBear]

Sarnie said:

rather than throwing money away on rent.....

I hear this occasionally, people seem to think rent is dead money, personally I think it is no more dead money than Mortgage interest, so I would not let that drive your decision.

[GrizzlyBear]

jdw1234 said:

If the fundamentals of the housing market are so good, why is the Government coming up with all these ridiculous gimmicks to try and prop it up.

I think this sums up all these schemes (and there have been quite a few), I think I would try to buy when these Schemes are not in operation as effectively they are just providing easier access to credit (and on terms the banks would not offer on their own), so what happens when the scheme is withdrawn?

[Mr Whippy]

GrizzlyBear said:

jdw1234 said:

If the fundamentals of the housing market are so good, why is the Government coming up with all these ridiculous gimmicks to try and prop it up.

I think this sums up all these schemes (and there have been quite a few), I think I would try to buy when these Schemes are not in operation as effectively they are just providing easier access to credit (and on terms the banks would not offer on their own), so what happens when the scheme is withdrawn?

I had a brief read and the amount you begin paying (actually RPI/CPI corrected?) after a few years is pretty high. It also isn't clear if you actually begin repaying the extra amount either.

It looks like it's simply an 'interest only' chunk of mortgage that sticks with you for the life you owe it, that attracts payments to keep it stuck still.

Since RPI/CPI are ahead of inflation and interest rates it seems really crap to bother any way?!



I can only see it being worse off using this system in the longer run, because when you come out of the current stimulated offerings, interest rates may well be higher, property prices may soften, or CPI/RPI may be high still. In any event you would have been better off not bothering.


It's all going to end in tears again. Stretching yourself to buy some 3 storey rabbit hutch built to the finest margins to line the pockets of developers and greedy land owners on crammed in brown field site st holes. No thanks.

Dave

[Chunk49]

moles said:

Wait until January the second part of the help scheme comes into play I think and that is for all houses not just new builds

This. And re the answer to the subject of the post - if you believe this:

http://www.guardian.co.uk/money/2013/jul/22/house-...

then the answer has to be buy. My gut is the prediction is too optimistic.

[Mr Whippy]

Chunk49 said:

moles said:

Wait until January the second part of the help scheme comes into play I think and that is for all houses not just new builds

This. And re the answer to the subject of the post - if you believe this:

http://www.guardian.co.uk/money/2013/jul/22/house-...

then the answer has to be buy. My gut is the prediction is too optimistic.

The housing market is a ladder.

Without people at the bottom hopping on the activity further up is going to be limited and that will hurt values imo.


The triple combo of low interest rates which will eventually rise, high inflation squeezing salaries further, and very low employment by the FTB'er demographic then I can't be optimistic at all about house price rises.

Indeed all prices rising will do is mean those that are already hopping across on the ladder will pay more in tax/charges for doing so. They sell for more, they pay more for their next one.

Only those who fell into negative equity will kinda benefit from this, but even that is questionable because if they are so short on equity a move will still cost the same if everything else goes up too.


The more they rise, the more likely it'll slump harder imo.

Dave