Buying your first house in the UK in 2007

i am translating "cheap" in your question to actually mean "even vaguely affordable", is that about right?

Yeah, pretty much. We can afford up to about £150k. Exeter's an odd market, though, cos it's small.

if you're looking at this mainly as an investment there's a football club around there that could use the money...

Yeah, but living in a football stadium would be rubbish. You'd have to bath with the players on a Saturday.

'investment'

'football club'

hahahahahahahaha

'investment'

'housing market'

'2007'

hahahahaha

When I was looking for a flat I asked the estate agent not to show me ex-council properties - less snobbery than not wanting to live in the middle of an estate (okay, snobbery then). In the end, the one ex-council flat I was shown was the one I bought - sizeable, solid and $15k cheaper than anything like it.

i dunno about exeter tbh, so you'll have to judge the prices. look at ourproperty.co.uk to see past prices on the surrounding streets for comparison. check out the rental prices for the same type of place in the same type of area as well, because they cant stay out of whack for ever

id choose a house over a flat if its possible, id choose a shabby place in a nice street over a nice place in a shabby street, i wouldnt buy a new build, id remember that if a place needs work doing its usually not that much money, it just seems a hassle is all

id make sure your mortgage multiple isnt excessive, id get a longer fixed rate as you'll only have to spend ££ arranging another fix in 2 years otherwise, and theyll say when you spread the arrangement fee over 25-30 years its nothing, but its only to get you the initial period, so its actually spread over 2 years - also if you take a fixed rate out of less than 5 years, id make sure you could pay the mortgage if interest rates were 10% instead of 5.5%

id make sure you have the facility to overpay the mortgage to bring the capital down, but i wouldnt necessarily do that. rates are going up and yours will be fixed, so you might be better putting hte rest of your money in high interest savings, then overpaying in bulk periodically

and dont bank on prices going up, esp outside of london.

and itll cost a lot of money to actually buy, solicitors, surveys, stamp duty etc, more than you think!

and if youve got the sizeable deposit, you might not want to put it all down. as above you might be better with a good portion of it in savings, and the ability to overpay it at any point, the interest you will get in savings (certainly ISAs) will be better than the interest saved on the mortgage (might have to look into tax stuff here though)

Thanks for all this!

i wouldnt listen a thing the estate agent says it will basically be lies, dont offer the asking price unless its really amazing, certainly dont put in above, offer what you think, dont be afraid to offer 10%+ below, dont feel pressured to cave. not many buyers in summer. get your mortgage sorted out early, dont be scared to pull out if something better comes along. money lost on a survey is a pittance compared to the price of a house. so keep looking for other places even if you have offer accepted. remember you hold more cards than you think you do. they only have one house to sell you have a million you can buy. a victorian place is less likely to be subject to the vagaries of the market. dont subject your neighbours to Embrace.

if you see an occupied place you will see it at its best. a vacant place is kind of better because you see it as it really is

Gareth said you'll only have to spend ££ arranging another fix in 2 years otherwise

You don't necessarily have to pay. I renegotiate every 2 years and have done so around 5 times without paying a penny. You can usually either transfer to whatever their latest discounted rate is (what I do), or switch to another provider, who will often pay transfer fees to get your business. Adnittedly there might be surveyors fees involved in this too, but I have heard of them being paid/waived.

id make sure you have the facility to overpay the mortgage to bring the capital down, but i wouldnt necessarily do that. rates are going up and yours will be fixed, so you might be better putting hte rest of your money in high interest savings, then overpaying in bulk periodically

OTM, but you would need to have a fair amount of cash sloshing about to get really really good investment rates. As for overpaying in bulk - check what the maximum amount (per month/per year) is - there are often penalty fees.

The last time we remortaged a VERY NICE PERSON told us that by law there has to be provision for you to overpay by 6(?) months repayments or 10% of the outstanding mortgage (whichever is greater) every year, but most companies FOR SOME STRANGE REASON don't advertise this or try and charge you for it as an extra.

Haha, the place we looked at on Saturday was occupied and totally NOT at its best! But that guy was a fucking spacecake.

yes i think most overpayment mortgages allow 10%, but if interest rates continue to rise (which surely they must, they're still very low), then putting money elsewhere will look a better option

See lots of places.

Don't (and I'm not suggesting that you will!) do what a lot of people do - which is to invent a fantasy property that is based on the best features of the houses that they have seen, and to search fruitlessly until you find it, which you won't. You can only buy what'e for sale.

Don't take notice of decor - you can easily make a place look how you want.

When you see a place that you really want, chances are that lots of other people will want it to. You will have to stay on top of every detail of the process every flippin' minute of every day until you have secured it (i.e exchanged contracts). The estate agent will lie and not return your calls, the solicitor will lie and not return your calls and the everyone else involve will....you get the idea. The way that you win dream home is to be one step ahead of these lying b'stards who cannot operate a telephone all the time.

A good idea is to try and forge a personal relationship with the seller, get to know them and show them that you're serious and trustworthy. They will often stick by you if there are delays and hitches, which there WILL BE!

Watch out for this : You put in an offer. It is accepted. But the lying b'stard estate agent is still marketing the property to try and get a higher offer. He can then play you off against the other party to maximise his commission and get the best price. This is not illegal, but is unethical. I know some really nasty tricks to make the estate agent's life difficult and waste their precious time if this happens, but it will probably mean that you won't be able to buy another property from that estate agent, unless you do it very subtly. Hopefully this won't happen to you.

When you look at properties try and find out as much about the seller as possible and what their reasons for selling are. There are quite a few people who put their houses up for sale, but have no real incentive or motivation to move - they just kinda fancy moving if their dream home comes up for sale. It won't, so don't waste any effort on them.

You can put in more than one offer at once. I once had 5 in at once.

You are a not selling a property (that's right, innit?) so are in a great position to move fast. That will give you an advantage over many buyers.

Oh and Nick......good luck!

A good idea is to try and forge a personal relationship with the seller, get to know them and show them that you're serious and trustworthy. They will often stick by you if there are delays and hitches, which there WILL BE!

This is bastard important!

We're not selling, aye. It's kind of scary but kind of exciting, too. We're looking at a couple on Wednesday morning.

Hoorah for (almost) being a homeowner!

I guess a lot of the home-buyer laws and things are different in Scotland, but we put in the offer on our flat subject to survey. The survey was fine, the offer was accepted and every day I thank God we were so lucky on our first attempt.

(We bought in December '06 so I nearly apply for this thread :)

And Dr C - OTM about looking past the decor, Mr thought this was going to cause me problems when we initially spent hours on property websites such as GSPC etc.

I was put off by nasty fireplaces, bad flooring, ugly tiles until we actually viewed the flat we had now and fell in love with it's potential and location, despite it's horrific fireplace and massacre red walls.

Yeah, it's not decor you have to worry about, it's 40-y-o heating systems and wiring. Not only will you not be able to live with it, you won't be able to sell the place when you eventually decide to move. Some people might say that you shouldn't even consider buying places like that, considering the expense and upheaval of getting stuff of that nature done once you've moved in and, having gone through it, I'd be inclined to agree with them. Still, only 16 months on and we're about to start on the kitchen (which still has pocket of brick dust from the May '06 rewire...). At least my 2-y-o has a nice room.

OTM

My boiler packed in a few days after moving in. Consider reserving some of that deposit money for an overhaul of things like the heating system, wiring, windows. So much easier to do before you move in. Check for things like pipes running through concrete floors in 60s/70s housing (and some earlier and later), my boss found this out to his cost recently when a pipe burst that was embedded in the concrete (no barrier between the copper and the corrosive concrete) and had to rip apart his entire living room and re-route all of the plumbing.

Also if you do do the heating system, look at getting the highest efficiency you can as by the time you come to sell efficiency will definitely be in the HIP and might be factored into stamp duty etc. Look at condensing boilers, Micro CHP, solar pre-heat, biomass etc. In theory there are grants for this shit but they are hard to get. (don't forget loft lagging and Cavity wall as well).

I don't agree that you should be put off by work that needs doing (unless it's unliveable). The only way we could afford our lovely flat in a gorgeous area was because it was the skankiest building in the row and didn't have central heating, was in pretty bad nick etc - as this is generally a posher area I think the price was relatively low because most people looking in that area expect to pay for a nice/modern finish. Actually paying the deposit etc really took it out of us financially but once you're back on your feet you can make upgrades as and when.
First thing we did was put central heating in, next on list is replace old holey rattly windows. You can do it at your own pace which is cool as long as you're planning to stay there long enough for it to be worthwhile.

I'd be interested as to where you end up in Exeter, as it doesn't seem to have the huge scale of type of prices/properties you get in bigger cities.

The thing about our place is that it wasn't yr archetypal fixer-upper - it was a quite well-maintained 1951 semi that had been home to the same family since the mid-'60s. They'd somehow raised four kids there with a single gas fire in the lounge and slightly dubious-looking gas heaters in the hall and on the landing (one hadn't worked for months); oh, and an immersion heater for the hot water. There was only one socket in each room and, while the kitchen had wiring that seemed to date from the early '90s (though done badly, as our GCH engineer discovered when he drilled through some strangely-situated cables), the rest of the house (judging by the fusebox under the stairs) was certainly '60s or earlier. They were on a card meter too.

I mean, what you've never had you don't miss, and it obviously was fine for them (I grew up with even less mod cons than this), but we felt we needed to get radiators on the walls and some modern switchgear under the the stairs (we had a NICEIC report done and it was borderline unsafe). We did the floors too, installed patio doors (again it comes from expectation - you have a lovely patio and you just...look at it through this little window? You have to walk round the side of the house to get to it?) and decorated every room.

We went horribly over-budget (and had a second kid in the meantime) and still have the kitchen (post-rewire plasterer sort of "forgot" to fill in the chased-in cables and the installation of the boiler wiped out a lot of storage; floor, worktops, cabinets, sink, layout = ugh) and the garden (nearing jungle status, dangerous steps, collapsing walls).

Sometimes I wonder why we bought this place but then I look in the paper and see the prices for comparable properties in this area and think we might've done quite well.

i like your gaff jonesy

going to the back of the garden is like tackling Snowdon

we had similar with ours, just stupid little things like the previous owner had run an extra plug socket off the cooker fuse so the bloke who was fitting the kitchen wouldn't reattach it, so i had to get a sparky in who took one look at the fusebox and said "you'll be having a new one then" and bang, there goes £500...

we are contemplating moving again, but the whole thing gives me the screaming effing abdabs.

i keep being told not to buy a new build - why is this? i'm currently renting a room in a 20-year-old ex-yuppie new build and it's by no means falling apart. new build advice/experiences would be appreciated, also some justification from the nay-sayers (gareth?).

:) I like it my gaff too - I just wish I could spend more time enjoying the place rather than reworking it. After the kitchen and the garden, you know there'll be something else (carport? Shed?). This is the lot of the cash-strapped homeowner, I suppose. Little-by-little, make it your own, do as much as you can yourself.

charlie, i think 20 year old is probably not too bad, it's the brand new stuff that is:

a. tiny
b. gardenless
c. built by poles for 20p an hour

if a house/flat is edwardian it's clearly built to last ;)

What do you guys think of this?

http://www.bradleys-estate-agents.co.uk/properties-sales-brdrps-EXE060293-1181220400

I know you're not going to know the area, but... it's very central, quite busy, but two floors up and the lower, quieter and of a busy street wioth lots of pubs and boutiques and so on at the top end. If you know Bristol it's like a mini Park Street equivalent.

What would be the problematic issues you'd look for with this property?

Build quality on most of the new builds in our village is very poor, possibly that's why people caution against one?

Gareth's advice seems good.

Smaller house in better area is much better than larger property in undesirable area. Whatever it is that makes the underirable area so is something you'll have to live w/for a good few years.

DUDE, it's above a tat shop, BUY IT!!!

i'd certainly look carefully at the state of the sash windows, on the second floor they wll be a BUGGER to replace. wonder why there's no pics of the bathroom...

also, is there a window in the kitchen? it almost looks like there isn't...

Also, check where the Chinese next door vents its kitchen.

The kitchen is open-plan with the living space, so windows at front. We're looking at it on Wednesday morning, and also this one; http://www.bradleys-estate-agents.co.uk/properties-sales-brdrps-BNH070414-1181552579

Jonesy take note of what's downstairs...

Re. the tat-shop one; the first-floor one, almost same dimensions but laid out differently (living smaller, second bedroom larger), is also on the market, but at £152,000. The area's undesirable because there's a Walkabout bar 300 yards up the road which is frequented by squaddies and students, and a gaggle of other pubs too. No allocated parking, put residents permit parking nearby. Very convenient for town, campus, train stations, etcetera.

Has no-one really not said location, location, location, yet?

Think about when you want to sell it on. Which may seem daft but put yourselves in the shoes of the seller now. They're probably playing up the 'quiet' aspects. When we sold our last house all everyone asked us about noise and neighbours. People want a bit of a quiet (at least some of the time). The houses in our road keep on going up and people keep buying 'em because it's a quiet cul-de-sac with a field at the end, and despite the fact it's in an unfashionable part of the unfashionable east midlands.

The second one is above a hi-fi shop so expect noise during shop hours obv. The first one seems to belong to a surfer dude. I don't know if this is good or bad.

Also ask them why they're moving. Then sue them later when they lie.

The first one is on a lease. I've never bought anything on a lease. Does it matter?

I can probably match the hi-fi shop for noise, if needed.

But they'll be playing all those over-compressed CDs!

Not when I live upstairs, they wont.

also living above subway = entire flat smelling of proving bread forever (a bad thing, in my opinion)

That's a good point.

http://www.rightmove.co.uk/viewdetails-14595761.rsp?pa_n=2&tr_t=buy

Aye, we've spotted that one. It's a possibility. What does 'offers in region of' mean, at a practical level? 10% less?

I can probably match the hi-fi shop for noise, if needed.

I hope you like Hotel California, Diana Krall and Sting. You'll be hearing them a lot.

I hope they like Rita Lee and Acoustic Ladyland.

id make sure your mortgage multiple isnt excessive, id get a longer fixed rate as you'll only have to spend ££ arranging another fix in 2 years otherwise, and theyll say when you spread the arrangement fee over 25-30 years its nothing, but its only to get you the initial period, so its actually spread over 2 years - also if you take a fixed rate out of less than 5 years, id make sure you could pay the mortgage if interest rates were 10% instead of 5.5%

id make sure you have the facility to overpay the mortgage to bring the capital down, but i wouldnt necessarily do that. rates are going up and yours will be fixed, so you might be better putting hte rest of your money in high interest savings, then overpaying in bulk periodically

This fills me with fear. The idea of me sitting around with loads of spare money and saying "what on earth shall I do with this? i know - i'll overpay some of the mortgage" just seems like a wild fantasy, probably involving the lottery.

I've just gone for a variable rate again for another two years because the fixed rate ones are much more expensive than the (discounted) variable ones. I know interest rates could go up, in fact they probably will go above 6% some time this year, but until they do I'm better off, and they probably won't go much higher than that, and they might go back down again some time next year. If they went up to anything remotely like 10% I'd be completely fucked, but then surely nearly everyone would be? It would be even worse than the meltdown at the start of the nineties.

Don't spend the entire budget on the house/flat: you *always*need to spend more money on repairs and such. Everyone I know (incl my parents) have miscalculated on this aspect.

What does 'offers in region of' mean, at a practical level? 10% less?

i think it depends on the place. all this crap about gazumping is overplayed, if it was going to go quick, it would already be gone, right? you'll have to judge - to me, looking at other stuff around ex4, that one seems well priced, but there could be reasons for this. but dont forget you can pull out or lower your offer post-survey, so your not committed

they probably won't go much higher than that, and they might go back down again some time next year. If they went up to anything remotely like 10% I'd be completely fucked, but then surely nearly everyone would be? It would be even worse than the meltdown at the start of the nineties.

DINGDINGDING well spotted

^^ just because it'll fuck a lot of people up doesn't mean it won't happen

...but when we had the crisis in the early 90s, first of all inflation was much higher than it is now (and had been higher throughout the 80s than it has been for the past decade or more) which meant that banks had to have higher interest rates, and secondly we were locked into the ERM and had to follow German interest rates (or something).

Now we're in such a long period of low inflation that people have been getting their knickers in a twist about inflation hitting 3%. The Bank of England are supposed to keep it within a certain range - if they think it's going to go too high then they'll raise interest rates.... but only within reason, surely? I can't see a meeting of the committee sitting down and saying "well, what with the increased problems with energy costs, and some exhuberant pay deals, I think on balance there's a danger of inflation overshooting the Chancellor's targets again so we need to double interest rates and trigger a massive recession the like of which this country has never seen leading to half of the nation having their homes reposessed."

whats 'within reason'? and do the inflation figures count the one thing that has inflated the economy most of all - houseprices?

you're probably right that they wont go anywhere near like as high before (but i also wouldnt be fooled by things like '6% is the new 10%')

There is no way they are going to go anywhere near 10%, I bet my house on it.

I put this here as a challenge to future generations to look it up and say "Ha! You were wrong, grandad".

Seriously though even if it does go up a bit - hang on in there. There are a few of us on here who have lived through this, a friend of mine was in so-called "negative equity" for a few years but stayed put and is now sitting on a goldmine.

Literally, they found gold in his backyard...

Did he live in Them Thar Hills?

The choice I had to make the other day was between a variable one which is currently 5.38% (actually lower than the base rate - I don't understand how this is possible) on a discount for two years and the equivalent two-year fixed rate deal which was 5.78%. I went for the variable. If interest rates don't change at all for two years I'll be much better off with what I've chosen. If they go up by half a percentage point in the near future and stay there for the rest of the two years I'll be slightly out of pocket, but no problem. If they go up by a whole percentage point and don't come back down, it'll be annoying and costly, but not the end of the world. If they go up by four whole percentage points I will be fighting tens of thousands of other people to get to the tastiest morsels at the bottom of other people's dustbins. Most predictions I've looked at say there'll probably be another couple of rate rises within three months or so, then things will probably stay as they are for a year, then maybe start to come back down after that.

if they get ahead of inflation instead of chasing it, then yes, but they seem reluctant to do that for fear of knocking the housing market over (cake and eat it syndrome)

Bumpity.

jesus, buying a house is absolutely fucking terrifying. this thread, while extremely helpful (thankyou) is not making me any less shit-scared.

have you been to see the one i linked yet? that looks good, compared to the others on there

inflation is way above 3% people, jesus.

Is that one above the shop near the station/ Imperial?

inflation is way above 3% people, jesus.

-- That one guy that quit

which is why i wouldnt bank on interest rates stopping at 6

My latest fix lasts till December 2009 so fingers crossed it'll peak and drop back before then.

inflation is not above jesus

Nor is above 3% any more, if you use the Consumer Price Index as the measure, which I think is what Nasty, Brutish & Short was referring to - it's been the official one, for which the Bank of England has targets, since 2003.

I remortgaged just before Christmas and got a fixed-rate deal and BOY am I glad. Think the interest rate has risen four or five times since (I've lost count).

If you're looking for an up-and-coming area, find somewhere that has a Blockbuster and no other chain stores. This worked for me (actually it was Global Video but what the hey) and my flat is worth quite a bit more than it was in 2003.

Having said that, the thing I value most is having neighbours I know and get on well with. It's really nice to have a chat over the privet and be all domestic like. So do try to find out what the neighbours are like.

The two things I wish I'd known before I moved in are:
- My bedroom is 25m from the main route of all the Orange walks, so I get woken by ye pipes and drums early every weekend at this time of year
- I may have had the budget to fix the rising damp the survey picked up, but I really didn't have the energy and am still recovering after all this time. I wouldn't ever take on another flat knowing there was major work to do (I guess you can't help the odd bit of surprise fixing).

Nor is above 3% any more, if you use the Consumer Price Index as the measure, which I think is what Nasty, Brutish & Short was referring to - it's been the official one, for which the Bank of England has targets, since 2003.
I know desperately little about these matters, but our wise business desk bod tells me that this is only so low because the CPI excludes just about everything to do with property -- rent, mortgage payments, house prices. If they were included, you'd get a much more accurate picture of inflation. Which, he says, is soaring.

"Do I buy a house just now," I asked
"In markets the time to sell is when the last bear turns bull," I think he replied. "Tthe time to sell your house is when the last cynic starts buying. The people that have held out that long waiting for the crash buy, there's nobody left to prop it up, it crashes".
"Does that answer my question?"
"No. But if you do buy, be prepared to have to stay there a while, paying a bigger mortgage. The price always goes up, in the long game"

that pretty much covers it (not convinced about rents rising though - i pay less rent than i did 5 years ago - market is saturated with places to rent because of buy-to-let)

as far as i can tell the official inflation figures are basically kind of meaningless, considering they dont include the most inflationary thing of all. but because cheap imported bits of electronic tat stay cheap apparently inflation is low;) and you can pretend inflation is whatever you like, but markets won't be fooled, and this is why you shouldn't bank on interest rates staying as incredibly low as they are right now

i think hes kind of right about it being a pyramid scheme (hence rate cut of 2005 to bring more people into the game), but its also the fact that prices can only be high if people have money to spend, and people only have money to spend if banks lend them those sums. banks tighten their belts and theres less money, and therefore less buyers, and prices come down.

yes when it happens people are going to be stuck where they are, not able to move (with many having to let go because of being overextended). im still not entirely convinced that property 'always' goes up in the long run (as people mix up real and nominal prices)

as stated upthread, the real problem now is that a crash can have severe repercussions for the uk economy, seeing as it appears to be basically propped up by credit fuelled consumer spending, which will stop immediately

the impending collapse of buy-to-let is i guess just the latest of endowment mortgages, dotcom shares, stock market crash, etc etc, where the great british public saw an opportunity to throw their money down a well

anyway, whats interesting is that in britain - we've separated out our society in such a way that many of us think that current times are the default setting, the traumas of 73-85 and the transition away from manufacturing a distant memory, as we have all become 'rich' through heavy borrowing, but this doesnt mean there aren't other transitions ahead

the impending collapse of buy-to-let is i guess just the latest of endowment mortgages, dotcom shares, stock market crash, etc etc, where the great british public saw an opportunity to throw their money down a well

OTM. I just wish the 'inevitable' would hurry up and happen so I can buy a house. Been waiting since 2005.

If buy to let crashers there is a danger that any price drop will be knocked out by an inrush of pent up first time buyers.

Average cost of moving house is now £22,000

That's a slightly bizarre survey.I can't begin to explain why 'cos I've got to take the kids to school but I think it can be safely ignored.

as far as i can tell the official inflation figures are basically kind of meaningless, considering they dont include the most inflationary thing of all. but because cheap imported bits of electronic tat stay cheap apparently inflation is low;) and you can pretend inflation is whatever you like, but markets won't be fooled, and this is why you shouldn't bank on interest rates staying as incredibly low as they are right now

But the Bank of England's base rate is set by a committee who are told to try to keep inflation within a range determined by the government, and the government chooses to define inflation as something which excludes house prices. If the prices of 'cheap imported bits of electronic tat' and all other goods continue to rise at a rate that falls within the government's target band and are expected to do so for the forseeable future then there is no reason for the Bank of England to increase interest rates. If the government suddenly decided to include house prices in the measure of inflation, but kept the same target band, then the Bank of England probably would raise rates considerably higher - but if this then triggered the house price crash that everyone is predicting then this would also lead to deflation and inflation would be below the government's target and so the Bank of England would have to start cutting the interest rate to bring inflation back up. Wouldn't it?

CPI doesn't exactly exclude everything to do with housing - it tracks rental prices. These are often out of sync with house price increases, yes (and, of course, mortgage repayments), but there are good reasons for taking them out of the equation in a lot of cases, because they skew things so heavily, and house price rises at least, if not mortgage repayments, affect people in different way to other costs of living. It's not just a "massage the figures" thing.

The RPI (including mortgage repayments) is currently at 4.3%, which is down from a high of 4.8% two months ago, so it's not really soaring any more. It's still much higher than it was a year ago, but the recent trend is down.

x-post

If buy to let crashers there is a danger that any price drop will be knocked out by an inrush of pent up first time buyers.

well, yes, you would think so, except.

once theres a glut of property from buy to let crashing, buyers will be much more choosy, so you better be selling the right kind of flat in the right kind of area, plus buyers will know they now have the upper hand. also, in a falling market, people will pull out much more easily if other places keep on popping up, slightly lower each time

secondly, the conditions that help a buy to let crash may also affect first time buyers, banks more cautious, rates higher etc, in relative terms it mightnt become any easier to buy

thirdly, sentiment. if the newspapers are screaming crash, just as theyve screamed 'buy at any cost', buyers will be a LOT more wary

Would you contemplate buying RIGHT now?

In Exeter... huge new shiny shopping redevelopment in centre of town about to open, university, Met Office, apartment developments all over the shop...

Also, what's etiquette of making an offer on somewhere newly refurbished? And what does 'offers in region of' mean? 10% below? More? Less?

I wouldn't spend too much time worrying about and overanalysing the economic conditions today and what they might be in 2, 5, 10 years. Nobody knows, least of all economists.

If you want to do it, can afford to and are feeling up to the task, then DO IT!

On the offer thing - you have to develop a sense of what's a fair price for that particular property vs what you can afford and what other proerties are going for. Of course the seller doesn't care what you afford or what other properties are selling for, so can hold out for an unfair price...

But as a rule of thumb, if it's a decent place and you would move on it if the offer was accepted I wouldn't offer less than 10% below the asking price. Maybe 7-8% less if it's really nice, but there are lots of variables.

if you find somewhere great, and you can afford it, and you have leeway as well (which you should, with there being two of you and a reasonable deposit), then i'd still go for it. you can wait an eternity waiting for the 'right moment'

(one caveat though: apartment developments all over the shop is an argument for lower not higher prices, oversupply and all that).

put in the offer of what you think is right (some places are priced very well, others badly, so theres no blanket rule of what to offer)

after that, KEEP LOOKING, constantly, if something better comes up, either pull out or lower your offer. if by the time it happens you're still with the same place, its beat off a lot of competition to stay there

Oh yes I think go for it. What's the absolute worst that could happen? You lose the house, you end up having to rent again? I can think of a lot worse things. And anyway that won't happen (probably).

i saw this thing on nosenight where the idea of blanket inflation rates was being pooh-poohed, not just in terms of north/south, urban/rural but young/old because some things are becoming more expensive (eg fuel) quicker than other things...

Well yeah, we all have our own inflation rates. In recent years I've personally been subject to deflation, what with a lower-than-ever rent and cheaper music, electronics, clothing and (in the slightly longer term) air-travel. I've never had it so good!

The kitchen is open-plan with the living space, so windows at front. We're looking at it on Wednesday morning, and also this one; http://www.bradleys-estate-agents.co.uk/properties-sales-brdrps-BNH070414-1181552579

Jonesy take note of what's downstairs...

-- Scik Mouthy, Monday, June 11, 2007 1:50 PM (2 days ago) Bookmark Link

Well, what did you think?

one day you'll suffer inflation Alba, just like all the rest of us!

We've had an offer accepted. Not on either of the properties we looked at this morning... We saw a two-bed maisonette conversion, the top two floors of a big town house, very central, at 4pm, and we'd had an offer accepted by 4.45pm. I am slightly bemused. It is a beautiful property though.

So, I know this is dumb, but you mean two bedroom property then?

Yeah, two bedroom maisonette. Large bathroom, open-plan kitchen / living room, landing, stairs, one bedroom on each floor. Incredibly light and airy, nice part of town; exactly what we were looking for, I think.

I'm probably spoiled or desperate for my kids to have some private space: I'd opt for three bedrooms. :-(

No link to the propery? I love watching houses!

So when will you know for sure if you have it?

I dunno yet; the other flats in the building are still being converted / refurbished; ours is 99% done, just needs a fridge freezer fitting and a cupboard door, but as it's at the top we'd have to walk past builders everyday.

You do realise posting links to property = hello, please come and stalk me.

We've just been diddled out of another house due to estate agents talking pish to us. I *hate* housebuying.

Yeah, it's bad enough telling my brother the address, let alone you lot...

go see the house i linked!

We're gonna arrange to see that on Saturday.

You moving, Ailsa?

Um, yeah. We REALLY need to catch up for a pint soon, don't we?

I'll email you.

Yes we do!

Consider yourself emailed.

"It's not just a "massage the figures" thing."

Id agree with this, re basic economic model; net sector approach of householders vs producers. Id hazard a guess most of the money isn’t really leaving the household sector.

I see you’ve bought a place, congratulations. My advice is a bit redundant but for others Id say most impt is NEVER TRUST AN AGENT. EVER. Im too trusting and I paid slightly on the high side, next time round I wont worry about manners so much. Be cheeky and put in a lowish bid to start with.

Also as nice as it is, don’t get fooled by the swanky new kitchen/bathroom thing, its often cheaper to renovate than you might think. Invest all your deposit into the home, and remind yourself you’re not paying a variable rate of 10.5% like NZ! Yes 10.5% :(

how was the house on saturday, scik?

that bad?

I has a new house (sort of, subject to lots of complicated technical legalish stuff)!

congratulations!

for uk people interested in the us situation:
http://www.bloomberg.com/apps/news?pid=20601087&sid=a.YQgRkCGscI&refer=home

difficult to tell how similar/dissimilar us and uk is over this. americas problems seem to be led by subprime and then oversupply, i cant really tell how prevalent subprime is in the uk, but it seems the major lenders themselves have been too happy to lend out unrealistic amounts to people. i guess the difference means lenders here wont go to the wall in the same way?

so the uks problems are likely to be led by overzealous lending also(esp interest only mortgages) but by major banks? and then buy-to-let, mewing to an extent, and then oversupply but only in certain sectors?

i guess buy-to-let will be the equivalent of the dotcom thing, and interest only mortgages the equivalent of endowments (as people are unlikely to have been wise about what to do with the rest of their money - if there is a 'rest of their money', that is)

with the us, spain, ireland (aus/nz?) all running into difficulties, uk is sure to follow, but itll be interesting to see how they try steer the ship through the rocky waters ahead

will it be
a) sharp shock of higher interest rates, big drop in consumer spending, recession, nominal price drops - 90s style
b) chasing inflation through incremental rises, nominal prices dont drop, moneys worth less in your pocket every day, inflation inflation inflation - 70s style

first would be more painful, but the second would drag out for a very long time

looking like rates are going to hold again at 5.5, will they try hide 5.75 in the august holidays? 6 by october? or by christmas? is that too little too late, spectre of further rises next year? all beginning to point more towards scenario b)

what did your mortgage advisor say, scik? its definitely worth getting that sorted as early as possible, it will hold for 3 months i think, even if you dont go through on this particular house

i hope a big crash will happen soon.

so i can buy a house

ken c is the voice of a generation

Too true.

i hope a big crash will happen soon.

so i can buy a house

-- ken c, Wednesday, 20 June 2007 09:55

except

a) a 'proper' crash is likely to come with higher interest rates and much more cautious banks. houses may become cheaper but the money you need to borrow to get them will become more expensive

b) big decline in consumer spending as people arent able to spend on cheap credit, plus need to cut costs to service their debt, means recession, means might lose your job

especially if people stop eating chocolate

i still don't care about buying a house. defy the system, even it means you end up worse off in the end. rock and or roll.

Can anyone trace the origins of the UK's obsession with home ownership?

We're pretty much unique in Europe in this regard - my friends in Germany and France just laugh at the insane amounts of lifelong debt we Brits gleefully sign ourselves up for, while they live in lovely long-term lease not wildly expensive properties - and (if possible) slowly save for a holiday home for their dotage.

Are we Brits all mad? Or just too weak/ill-equipped to argue?

bit of both

in France it's considered somewhat strange behaviour to think about buying a house before you're in your late 30s, at the earliest

Huh? I think most people here will be in their late twenties or something. Late 30s is considered... late.

Can anyone trace the origins of the UK's obsession with home ownership?

We're pretty much unique in Europe in this regard - my friends in Germany and France just laugh at the insane amounts of lifelong debt we Brits gleefully sign ourselves up for

1. because in germany the rights of the tenant are properly protected rather than the unregulated laissez-faire free for all we have here

2. lifelong debt indeed, but theoretically one day no outgoings when mortgage paid off

3. sentiment

4. not really a conscious factor, but sometimes govts encourage people to borrow/spend/'invest' making money cheap, and other times they encourage to save. im sure in the next 5-10 years the idea of property owning may come to be seen as less fashionable (certainly the bottom end of the market and the get on the ladder at any cost thing will disappear)

lovely long-term lease not wildly expensive properties

Answer is in the question - these don't exist here!

which means: hope you havent bought one of these

http://www.flickr.com/photos/ahayes/404436598/

in France it's considered somewhat strange behaviour to think about buying a house before you're in your late 30s, at the earliest

That may have been the case fifteen years ago, but it isn't now. Rents have become ridiculous in Paris (although still not as ridiculous as in London), and anyone who can scrape up the finance (easier than it used to be) is buying. Stories about real estate now staple in the media.

or one of these

http://www.flickr.com/photos/charltonlido/458837686/in/set-72157594561590745/

doesnt france have some weird two-tier market, one for french people, and one for mad dogs and englishmen looking to make a killing without doing any work?

australia certainly penalises foreigners super-harshly should they have the temerity to express an interest in buying property there.

doesnt france have some weird two-tier market, one for french people, and one for mad dogs and englishmen looking to make a killing without doing any work?

No, never heard that. There is a wealth tax though, applicable to second homes and not primary residences. What France does have is a pretty expensive conveyancing model which probably slows down the market somewhat.

In fact, for all you wealthy investors out there, the French market is set to fly, given that Sarkozy has promised that interest on home loans will be deductible from income tax.

nathalie i thought you lived in belgium!

i knew rents were high in Paris, but i didn't realise young people were buying houses more - maybe this is a difference in the kinds of people you know there, Zelda, and the kinds of people i know

Maybe! Nonetheless, I think there's been a significant swing towards buying, in a hitherto renting culture.

...Sarkozy has promised that interest on home loans will be deductible from income tax.

-- Zelda Zonk, Wednesday, June 20, 2007 10:50 AM (19 minutes ago) Bookmark Link

Please explain further. Or link. Thank you.

http://www.expatica.com/actual/article.asp?subchannel_id=25&story_id=40688

The bill also proposes tax credits of 20 percent of the interest paid for the first five years of repayments for home loans.

This measure, according to opinion polls, is one of the top topics of conversation among French people at the moment.

And there are a lot of other Sarkozy-related reasons why the housing market in France is set to boom.

I do, TH, I do. sorry if my post seemed confusing.

Hah, and now a different username will even confuse you more.:-D

And here was me thinking the Parisian market looked cheaper than London, and me wanting to sell up and move...

Well, Paris is still much cheaper than London, and even with a price hike, it will certainly remain so. It's the silly money earned in the City that fucks up the London market, and Paris has no equivalent to that.

Yeah, but I rely on that City Money to pay my mortgage. I'd have nowhere to work in Paris. :-(

(my info re: French young people not really buying houses comes from a Bordeaux perspective by the way)

...This measure, according to opinion polls, is one of the top topics of conversation among French people at the moment

Welcome to our world.

my point about the two-tier market wasn't really about paris either, but about...southern france i guess (or wherever english people have gone to buy crumbling farmhouses)

Welcome to our world.

Exactly. Sarkozy wants a UK-style home-owning democracy. Shades of Thatcher in the 80s.

lots of properties in the rural north west snapped up by brits i think

Yep. Lots of Brits, Germans, Dutch buying in Brittany, Normandy. Still incredibly cheap there compared to the other side of the channel.

Can anyone trace the origins of the UK's obsession with home ownership?

I would guess the whole 'right to buy' thing for council tennants coupled with the 80s boom in house prices.

We're pretty much unique in Europe in this regard - my friends in Germany and France just laugh at the insane amounts of lifelong debt we Brits gleefully sign ourselves up for, while they live in lovely long-term lease not wildly expensive properties - and (if possible) slowly save for a holiday home for their dotage.

Those aren't the choices facing people in Britain. My mortgage isn't substantially different from what my rent was, so it's not necessarily costing me (much) more to 'own' a flat. In thirty-odd years time I'll have to retire and take a massive cut in my income. Rent/Mortgage has always been my biggest expense - hopefully it will be paid off when I retire, whereas if I was still renting I would have to keep paying until I died.

the thing that bemuses me right now is interest-only mortgages being sold to people. that way people what people would have paid off in capital they can now invest somewhere else.

of course the logical extension of this argument is that if you rented you would have even more money to invest this way as rent will be lower than the interest on a mortgage

ie for the above to actually work house prices must continue to grow faster than wages... for the length of your mortgage

Is that true, though? I would have said rent was higher than an interest-only mortgage, but lower than a repayment mortgage. (xpost)

i think rent and interest only are kind of comparable, but you have to factor in, that with rent, your deposit is still in the bank getting interest, with an interest only your deposit is gone

True. Another factor: your mortgage repayments would stay the same every month for 20-30 years (well, they'd go up and down in line with the interest rate, but they would stay broadly the same in nominal terms and would gradually fall in real terms), whereas your rent will rise in line with inflation. So even if, for example, they're both £700 a month in 2007, by 2030 the mortgage might still be £700, but the rent could be £3,000 a month.

absolutely true, and this is the argument for buying in a nutshell, some pain now but win out in the longer term, right?

but it also requires that property increases of more than 5% a year continue for all of those 23 years, something which is..debatable. if you put your money somewhere else for those 23 years (or perhaps for 6-8 of those 23 years) it may well grow faster than it would have done in your hosue, offsetting your increased rent. houses have been the best place to put it for the last 10 years (not the last two if you live in the north though), doesnt mean that is the default best place

also rents have remained static for pretty much all of the latter half of the boom (though you are right, they are likely to start rising in the next 2 years)

also when rates are low money is cheap, disincentive to save, as assets rise faster than money. if rates go high, then the opposite will be true

unless we're going to go 70s style

Hi. Tell me about extending the lease on a leasehold flat.

Ours is down to 80 years or so, so we should do something about it. Asked the solicitors of the freeholder about extending or possibility of buying freehold and got very curt response with a no to buying and a request for £117 to value the lease.

Anyone know roughly how much they are going to charge us? Are they going to use this as an opportunity to massively increase the ground rent? Are they allowed to just say no to a request to buy the freehold?

Ta.

Also, I like blueski's attitude, despite my home-owning, cat-owning, parent, bourgeois existence.

By the time we pay the mortgage off, we'd get housing benefit for rent anyway.

The main problem I had with renting was the insecurity, having to move every 12 months or so for one reason or another. That and not being able to screw things in walls. The first thing I did when we bought our flat was go to Argos and get an electric drill and make holes in the wall. Happy days.

I'm still too scared to make holes in the walls. But I did paint all the walls purple and fuchsia.

God, reading this thread is just like being at work. ARGH!

i've only ever rented yet i put holes in walls with abandon - that's what the walls are there for!

You're right. Thye're gonna keep your deposit anyway. Damn my timidity!

Jamie, good luck extending your lease.... We gave up in the end and sold ours with a 62 year lease, as they were asking £17K to extend. We obviously could have contested and even gone to the leasehold tribunal, but we just wanted to sell.

http://www.lease-advice.org/ is your friend, everything you've ever wanted to know about extending your lease, and lots more besides. It should answer your questions above - they can't refuse to sell you the freehold; legally it's set out how much extending the lease/buying the freehold should cost, but it involves getting a valuation as it involves the difference in value between the flat now and the flat with an extended lease/freehold etc; and legally they can't increase the ground rent, though they'll give it a bloody good try.

Fill the holes up with toothpaste when you leave.

Jamie, spackle and white paint is very cheap

Colgate, even cheaper </person you'd never want to rent to>

So did you have trouble selling with a 62-year lease? I thought mortgage companies were iffy on lending on properties with less than a 75 (or 70, can't remember) lease.

Will check out that site. Cheers.

17K? Ouch!

thats interesting that its so much just to extend the lease. wonder how much it would be to get a share of the freehold

not looked at this at all, but it seems the only reason to charge so much would be to discourage renewal thereby devaluing the leasehold flat with the hope of picking it up cheap when the leasehold flat owner eventually moves on (because the freeholder would now be the only person for who the leasehold flat now represents an attractive deal)

?

what about 'No More Nails'?

They didn't seem to have a problem getting a mortgage, nor did we when we bought it 4 years previously. We didn't have as much interest in it as we would have if there hadn't been a problem with the lease, but it didn't take that long to shift it.

It's crazy really. The estate agents reach the asking price by taking off how much it would cost to extend the lease from the price they'd value it at with a good lease. But the way to work out the lease extension price is to half the difference between the value as it is now against how much it would be worth with the extended lease.... chicken/egg situation. We paid for a valuation and it came back at £8K, but our solicitor messed up serving notice on the freeholder but didn't realise or tell us until three months later, so we didn't have time to go through the official channels to wear the freeholder down.

It's not that much more to buy the freehold, but you have to have the other flat/flats agree to it too - you can't just buy your own. We were terraced upstairs downstairs so could have bought the freehold with downstairs, but they weren't interested and we couldn't afford to buy the freehold for both.

The freeholder asks for so much money because they know people are too scared to not extend the lease and don't know what their rights are and don't realise that there's an act of parliament been passed which sets out the criteria for extending the lease, including how to work out how much it costs. So people fork out the cash because they don't realise there's an alternative.

http://www.lease-advice.org/decisions/pdf/1450_dir/1450_page1.htm

^ this one came out at 17k also

No more nails is good for skirting boards, not picture hanging.

£17k to buy the freehold for 4 flats, which would make it £4,250 for each flat to buy their freehold, I'd go for that!

oh yes, didnt notice there were 4, and it was for freehold

http://img.photobucket.com/albums/v236/njsouthall/Places/IMG_7598.jpg
http://img.photobucket.com/albums/v236/njsouthall/Places/IMG_7632.jpg
http://img.photobucket.com/albums/v236/njsouthall/Places/IMG_7620.jpg

http://img.photobucket.com/albums/v236/njsouthall/Places/IMG_7607.jpg
http://img.photobucket.com/albums/v236/njsouthall/Places/IMG_7615.jpg
http://img.photobucket.com/albums/v236/njsouthall/Places/IMG_7646.jpg

http://img.photobucket.com/albums/v236/njsouthall/Places/IMG_7639.jpg
http://img.photobucket.com/albums/v236/njsouthall/Places/IMG_7604.jpg
http://img.photobucket.com/albums/v236/njsouthall/Places/IMG_7606.jpg

http://img.photobucket.com/albums/v236/njsouthall/Places/IMG_7608.jpg
http://img.photobucket.com/albums/v236/njsouthall/Places/IMG_7611.jpg

Oh wow! Congratulations. Looks fantastic!

It looks great - and echo the congratulations.

Slightly envious that when I got my first flat in the 90s, I moved in with a CD/radio 'beatbox' and an air-mattress - no computers, no widescreen TV, no expensive stereo, no over-filled wine-rack.

Nearly five years later, we're selling.

http://www.naomijryan.co.uk/content/sale/st-leonards6.ashx

Good luck! I love maisonettes. Our experience with our crazy neighbours who share our building means we're determined to get an actual house next. Where are you looking to move to?

Still in Exeter, and ideally just around the corner. We'll probably not be able to afford that, though, so will almost certainly head a mile or so further out.

Our wine rack was never that full again.

We got offered asking price. Which we didn't expect.

Good stuff. Tbf, based on those pics you got the place looking great whilst you were there. How's the house search going?

I like the idea of this thread as a form of time travel. If I read the whole thing I will know exactly how to buy a house in the UK in 2007.

We've viewed six so far, with another five or six booked to view over the next few days. Em is in love with one of them but it's at the top of our budget... It is a very nice house though, and one we could stay in for a decade or more. It'd take teenage kids. (We have no kids right now!)

Just done various phonecalls and we've now officially accepted, providing we can find somewhere to bid on in a timely fashion! Which shoudn't be a problem.

Crazy madness.

Congratulations! Go for the one you love I reckon.

Oops, this whole thread is excellent, I'm all ashamed of my glib contribution now. Will memorise for future reference.

There's one more that I'm viewing tomorrow morning (Emma's working) which I've got high hopes for, but I've booked a second viewing on the one we fell in love with for Monday morning, and told them we've had an offer accepted. Which made the agent excited!

But yeah, I reread much of this thread yesterday, and it is really awesome.

congrats

Just been re-reading loads of my posts on this thread from 5 years ago which I have no memory of making. In case anyone's been on tenterhooks for 5 years, I can reveal: my gamble on variable rates paid off massively as interest rates fell to the floor and stayed there, and Ned T Rifle was right - there was no way on earth they were ever going to rise to 10%.